Everything was going smoothly on your audit until one day the firm stopped answering email. Or the transition to your new firm had everyone in high hopes until your previous auditors refused to release your records.
Though these scenarios are obviously serious breaches of professional courtesy, they may also be ethical violations that the firm’s governing bodies deserve to know about.
Examples of Unethical Accounting Behavior
Not all unkind or frustrating professional behavior are necessarily unethical. However, there are a few cases in which a firm or individual accountant is clearly behaving unethically.
- Practicing without an active CPA license from the state of residence
- Failing to perform services that were agreed upon in a contract
- Refusing or failing to release client records in a timely manner
- Breaking client confidentiality by revealing private information without client’s consent
- Acting in a discreditable way to the profession: examples include lacking integrity, objectivity, independence, or due professional care
- Not having a Peer Review report every three years if performing audits, reviews, compilations, or preparations
If you have experienced a situation like any of those listed above, you may be able to take action against the responsible party.
Where to File a CPA Ethics Complaint
CPA firms and the CPAs who work there are governed by at least two different bodies of rules and professional standards:
- The American Institute of Certified Public Accountants (AICPA)’s Code of Professional Conduct
- Their state’s CPA society’s Code of Professional Conduct (Some state CPA societies adopt the AICPA Code rather than drafting their own — Indiana is an example of this.)
- Their state’s laws and regulations
Depending on the violation, you may want to file a complaint with multiple agencies, as some rules only exist in certain legislation, and some rules are duplicated and carry stacking punishments.
How to Resolve an Ethical Issue
First, reach out to the CPA or CPA firm to resolve any differences. Use certified mail to document the attempts for resolution. If you don’t receive a response or the situation is not resolved, you can file an ethics complaint.
You may file three separate complaints depending on the organization and how egregious the complaint is: One with the state CPA society, one with the AICPA, and one with the state government entity.
File With the State CPA Society
Start with the state CPA society by contacting them on how to file an ethics complaint. In many cases, the state CPA society works directly with the AICPA and the case can be filed in tandem, meaning, you file it with the state CPA society, and they automatically forward the complaint to the AICPA. In cases where the AICPA uses the Joint Ethics Enforcement Program (JEEP) protocol, the state CPA society will investigate on behalf of the AICPA and perhaps in coordination with other state CPA societies.
File With the AICPA
Next, if the state does not file the case to the AICPA (often called the JEEP protocol), click on this AICPA link for instructions on how to file a complaint.
Your letter of complaint should include the name and address of the firm and/or employee in question, an explanation of your complaint, and the steps you have taken to resolve the issue so far.
The AICPA and state CPA societies can only investigate and discipline CPAs that are a member of that entity and the consequences will be limited at the membership level, which means there will be no punitive consequences.The state CPA society or AICPA will notify you if the CPA is not a member and no further action will be taken.
File With the State Government Entity
Regardless of whether the firm is a member of the AICPA and/or their state CPA society, you can submit a complaint to your state’s professional licensing board, state board of accounts, or attorney general. Your state CPA society should be able to tell you which government entity will be best to contact. Depending on the state, they may refer your complaint to a different department.
The government entity will have their own investigation with completely different potential outcomes. If the complaint is egregious, you will want to make sure to file with the state government entity to insure your case is heard, investigated, and resolved.
In addition to these filings, it may also be beneficial to contact a private attorney who can provide legal counsel on whether you deserve compensation for the violations the firm or individual may be guilty of.
Benefits of Filing a CPA Ethics Complaint
Though the process can be time consuming and slow, reporting CPAs’ ethics violations to the proper authorities helps keep organizations like yours safe from predatory business practices. Your effort not only helps you find a solution to your issue, but also protects future clients from experiencing the same hassle.
You add value to the accounting profession when you report unethical behavior, so we thank you for your time.
If you have any questions about this process or what kind of evidence you may need to gather ahead of time, feel free to contact us. Our auditors are here to serve you!