Maryland's Certified Public Accountants (CPAs) are tasked with a myriad of accounting, auditing, and financial management responsibilities but must also practice within the boundaries of professional standards and ethical guidelines. The fundamentals of their licensing agreements make CPAs beholden to the Maryland Board of Public Accountancy, which will scrutinize any action it deems a breach of principles. Yet, investigations can be launched through complaints from clients, employers, and members of the public.
Board investigations need to be taken with the seriousness they deserve, as the implications of disciplinary action can be career-altering for any licensee. Sanctions can leave a CPA without the credentials to care for current clients, practice within a firm, or have any professional responsibility within the highly regulated financial field. Even investigations into baseless accusations can harm a CPA's reputation for years to come.
Understanding how to navigate the Maryland CPA license investigation process is important, but knowing where to turn for help is paramount. The nationwide Lento Law Firm Professional License Defense Team recognizes that state licensing boards—like the Maryland Board of Public Accountancy—have strict standards.
To begin building a strategic defense to protect your CPA license, utilize the valuable resources within the Lento Law Firm. Our team will lead negotiations with Maryland licensing authorities and work on your behalf toward the most favorable outcome possible. To safeguard your professional standing within the accounting field, call us today at 888-535-3686 or submit your details online, and we will contact you.
Maryland Board of Public Accountancy Code of Conduct
Maryland CPAs have dedicated years to gaining the necessary education and expertise to handle delicate financial matters and gain knowledge of the ethical code to which they are bound to promote transparency. State legislation outlines five main areas of responsibilities for licensed CPAs—based on the American Institute of Certified Public Accountants (AICPA) set of ethics and professional conduct—which include the following:
Independence, Integrity, and Objectivity
- Independence Violations: If a CPA has a financial interest in an individual or entity (direct or indirect), they are prohibited from expressing a professional opinion on the matter.
- Breaches of Integrity and Objectivity: A licensee must not knowingly alter facts or have their judgment influenced by others while carrying out professional services, including those conducted in an advisory capacity.
Competence and Technical Standards
- Incompetency: If a CPA cannot perform a function, they are prohibited from accepting any engagement—including those providing advisory services—from any client or joint agreement from a colleague.
- Failure to Follow Auditing Standards: CPAs can practice independently, but their auditing practices must follow those enforced through state legislation. Licensees also must not express the professional opinion that financial statements conform to given standards when they are aware of material departures.
Responsibilities to Clients
- Breach of Confidentiality: Unless compelled by law enforcement or regulatory bodies, CPAs must not disclose confidential client information without the appropriate consent.
- Charging Contingent Fees: Charging contingent or conditional fees for certain services—audits, exams, financial reviews, and others—is prohibited.
- Unsuitable Record Handling and Keeping: Licensed CPAs are tasked with keeping current and former client documents and materials for a designated period and must provide records on request. Any manner of improper storing or processing is a board violation.
Responsibilities to Colleagues
- Improper Actions in Collaborative Engagements: When collaborating on consolidated financial statements or acting upon a referral from another licensed CPA or an unlicensed individual, adherence to designated protocols is essential. This includes conducting audit procedures that may expand beyond the scope of the preliminary engagement.
Other Responsibilities and Practices
- Discreditable Conduct: CPAs are public-facing professionals held to a higher standard, and the board may scrutinize items in their personal lives outside the scope of normal practice.
- Solicitation and False Advertising: A CPA's advertising or any solicitation of their practice must not imply false or misleading guidance or fail to disclose all aspects of services rendered.
- Failure to Respond: If a licensee receives a communication from the board requesting a response, a written response is required within 30 days of the date of the mailing.
- Commissions and Referral Fees: Maryland CPAs cannot receive commissions or charge referral fees for certain client services regarding audits, reviews, examinations, and other information related to financial statements.
- Incompatible Occupations: Engaging in business, occupations, contracts, or other acts that may alter objectivity or independence are prohibited.
- Restrictions on Firm Names and Forms: Firm or CPA practice names must not mislead clients about the firm's ownership, capability, or structure, and the licensee's practice must be carried out in a legally recognized manner.
Failing to adhere to rules or breaching the terms of a Maryland CPA license agreement can quickly lead to a board investigation and subsequent adverse action on one's credentials. As mentioned before, allegations can come from any source through complaints. It isn't just clients, colleagues, or compliance officers who can submit complaints to the Maryland Board of Public Accountancy—anyone can.
Maryland CPA Complaint Procedure and Adjudication Process
The board's complaint form can be submitted electronically, and complainants must submit all supporting documentation within 30 days of filing. Documentation required includes the following:
- A detailed explanation of the specific allegations against the CPA involved.
- Copy of the contract, engagement letter, or other agreement with the CPA to provide services, if applicable.
- Copies of all addenda to the contract or the agreement.
- A copy of the final product, audit, or service delivered by the CPA, including any correspondence the board may consider.
The board will allow the CPA—the respondent—to reply to the complaint. Afterward, a board investigator will determine whether there is enough evidence to support the complaint and if it falls within the board's jurisdiction. The CPA is then sent another request to respond within 30 days regarding any further information once the validity of the complaint is substantiated. The Maryland Board of Public Accountancy then forms a Complaint Committee to review the following:
- The issues identified in the complaint.
- The CPA's responses.
- Relevant provisions of the Maryland Public Accountancy Act.
- The board's professional accounting standards and regulations.
If the Complaint Committee determines that a violation may have occurred, the facts of the case are reviewed by the Maryland Office of the Attorney General (OAG) to determine whether sufficient evidence exists to proceed with a formal hearing. When the facts do not support a violation, the case is closed, and a notice is sent to both the complainant and respondent explaining why the board is not proceeding with charges. If the OAG determines sufficient evidence exists, formal charges are filed.
Formal hearings are conducted by the Maryland Office of Administrative Hearings (OAH). CPAs will receive a notice of hearing detailing the charges, the hearing date, and their rights during the proceedings—which includes the right to be represented by an attorney. Prior to the hearing, the OAH recommends a pre-hearing conference to clarify issues and open the door for a potential settlement. An Administrative Law Judge (ALJ) will preside over the formal hearing and conduct it like a trial court.
During the hearing, both the board (typically represented by an OAG attorney) and the CPA (typically advised by a legal professional) have the opportunity to present evidence, call and question witnesses, and make arguments in favor of their position. After considering all evidence and arguments, the ALJ decides whether the CPA violated professional standards or regulations. The decision is then sent back to the board, which then carries out disciplinary action, after which the decision is final.
Sanctions for Maryland CPAs
The disciplinary actions taken by the board are aimed at penalizing unacceptable behavior, safeguarding the public interest, and deterring future misconduct. Some of the various forms of discipline the board may impose include the following:
- Reprimand: An official censure by the board without restricting the CPA's license.
- Fines: The board may impose fines, which can vary depending on the nature and severity of the violation, but may not be more than $5,000 per violation.
- Mandatory Continuing Professional Education (CPE): CPAs may be required to complete additional CPE credits beyond the standard requirements, such as ethics or specific areas related to the sanctioned misconduct.
- Probation: The CPA's license may be placed on probation for a specified period, during which they must meet certain conditions set by the board, such as CPE, and may involve compliance monitoring.
- License Suspension: A CPA's credentials may be revoked temporarily, during which the CPA is prohibited from practicing as a CPA in Maryland and may need to meet specific requirements before reinstatement.
- License Termination: The Board may revoke a CPA's license, permanently prohibiting them from practicing as a CPA in Maryland, and may or may not have the chance to reapply for licensure.
Even though Maryland CPAs may appeal the board's decision, sanctions are effective immediately. While the board's actions affect those employed or licensed in Maryland, there are also indirect results faced elsewhere. AICPA provides verification tools for employers, and disciplinary action on a license will be included. Moreover, states have provisions barring licensees from applying for credentials in other states until an individual's license is available for reinstatement.
Appealing Maryland Board of Public Accountancy Decisions
CPAs who disagree with a decision made by the board or the ALJ have the right to appeal. The appeal process involves preparing a detailed brief that outlines the errors in the board's decision or the procedural flaws in the adjudication process, such as a lack of substantial evidence, due process violations, or the sanctions imposed that were disproportionate to the alleged misconduct.
An appeal must be filed with the Maryland Circuit Court in the jurisdiction where the CPA resides or has their principal place of business and within a specific time frame, usually 30 days from the date of the board's final decision. Failing to file within this period can result in losing the right to appeal.
In most circumstances, CPAs have the opportunity to present oral arguments in front of a judge in support of their appeal, emphasizing key points of the submitted brief and responding to any questions. The court will review the board's decision under a "substantial evidence" standard, determining whether the decision was supported by the facts of the case and not arbitrary. After reviewing the written briefs and hearing oral arguments, the Circuit Court will issue a decision affirming, modifying, or reversing the board's final decision.
How the Lento Law Firm Professional License Defense Team Can Help Maryland CPAs?
There is no way to forecast how disciplinary action will affect you, even with minor sanctions like reprimands. However, you can be assured that your license remains vulnerable if you fail to match the board with a strong defense.
CPAs facing sanctions from Maryland state authorities may believe an attorney is too aggressive an option to exercise with their professional board. However, the Lento Law Firm will be a valuable resource for many reasons, such as the following:
- We will obtain evidence or witness testimony that can determine the outcome of your case.
- We will explore options to settle before proceedings begin.
- We will advise and represent you at every step of the process.
- We will help you seek further review by appealing to the Maryland Court of Special Appeals if necessary.
The Lento Law Firm offers a wealth of experience and a deep understanding of state laws and the specific regulatory frameworks governing the accounting profession in Maryland and nationwide. We are well known throughout the state and have helped individual CPAs and those at firms in the following counties:
- Allegany County
- Anne Arundel County
- Baltimore County
- Baltimore City
- Calvert County
- Caroline County
- Carroll County
- Cecil County
- Charles County
- Dorchester County
- Frederick County
- Garrett County
- Harford County
- Howard County
- Kent County
- Montgomery County
- Prince George's County
- Queen Anne's County
- Somerset County
- St. Mary's County
- Talbot County
- Washington County
- Wicomico County
- Worcester County
Call the Lento Law Firm at 888-535-3686 today for a consultation about how we will defend your license to practice as a CPA in Maryland. You can also contact us online with your case details, and a member of our Professional License Defense Team will reach out as soon as possible.
