Date of Adoption: April 28, 2000.
Purpose: To clearly prescribe the bases for the board to impose discipline against Washington CPAs and CPA firms.
Citation of Existing Rules Affected by this Order: Amending WAC 4-25-910 What are the bases for the board to impose discipline?
Statutory Authority for Adoption: RCW 18.04.055(11), 18.04.295, and 18.04.305.
Adopted under notice filed as WSR 00-07-015 on March 3, 2000.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0. Effective Date of Rule: June 30, 2000.
May 9, 2000
Dana M. McInturff, CPA
AMENDATORY SECTION(Amending WSR 94-23-070, filed 11/15/94, effective 12/16/94)
Bases for imposing discipline.)) What are
the bases for the board to impose discipline?
specifies sanctions the board may impose based on a listing of
general causes)) authorizes the board to revoke, suspend, refuse
to renew a license and/or certificate, impose a fine not to
exceed one thousand dollars, and recover investigative and legal
costs for the specific acts listed below.
The following are specific ((
acts are)) examples of
prohibited (( activities)) acts that constitute grounds for
discipline under RCW 18.04.295 and 18.04.305. The board does not
intend this listing to be all inclusive.
(1) Fraud or deceit in obtaining a CPA license and/or
as a certified public accountant, or in obtaining a
license, within the meaning of RCW 18.04.295(1), includes but is
not limited to)).
(2) Making a false or misleading statement in support of
another's application for ((
certificate or)) a license and/or
(2)(a))) (3) Dishonesty, fraud, or negligence while
representing oneself as a CPA(( , within the meaning of RCW 18.04.295(2), includes)) including but (( is)) not limited to:
(i))) (a) Practicing public accountancy in (( this))
Washington state prior to obtaining a license;
(ii))) (b) Making misleading, deceptive, or untrue
(iii))) (c) Engaging in acts of fiscal dishonesty;
(iv))) (d) Purposefully, knowingly, or negligently failing
to file a report or record, or filing a false report or record,
required by local, state, or federal law;
(v))) (e) Unlawfully selling unregistered securities;
(vi))) (f) Unlawfully acting as an unregistered securities
salesperson or broker-dealer;
(vii))) (g) Discharging a trustee's duties in a negligent
manner or breaching one's fiduciary duties; or
(viii))) (h) Withdrawing or liquidating, as fees earned,
funds received by a CPA from a client as a deposit or retainer
when the client contests the amount of fees earned, until such
time as the dispute is resolved.
(b))) (4) The following shall be prima facie evidence that
a (( certified public accountant)) CPA has engaged in dishonesty,
fraud, or negligence while representing himself or herself as a
(i))) (a) An order of a court of competent jurisdiction
finding the CPA to have committed an act of negligence, fraud, or
dishonesty or other act reflecting adversely on a CPA's fitness
to represent himself or herself as a CPA(( .));
(ii))) (b) An order of a federal, state, (( or)) local or
foreign jurisdiction regulatory body finding the CPA to have
committed an act of negligence, fraud, or dishonesty or other act
reflecting adversely on a CPA's fitness to represent himself or
herself as a CPA;
(c) Cancellation, revocation, suspension, or refusal to renew the right to practice as a CPA by any other state for any cause other than failure to pay a fee or to meet the requirements of continuing education in the other state; or
(d) Suspension or revocation of the right to practice before any state or federal agency.
(5) Conviction of a crime or an act constituting a crime under: Federal law; the laws of Washington state; or the laws of another state, and which, if committed within this state, would have constituted a crime under the laws of this state.
(3))) (6) A conflict of interest(( , within the meaning of
RCW 18.04.055(2), includes but is not limited to)) such as:
(a) Self dealing as a trustee, including, but not limited to:
(i) Investing trust funds in entities controlled by or related to the trustee;
(ii) Borrowing from trust funds, with or without disclosure; and
(iii) Employing persons ((
or entities related to the
trustee)) related to the trustee or entities in which the trust
has a beneficial interest to provide services to the trust
(unless specifically authorized by the trust creation
(b) Borrowing funds from ((
any)) a client unless the client
is in the business of making loans of the type obtained by the
(( licensee)) certificateholder and the loan terms are not more
favorable than loans extended to other persons of similar credit
(4))) (7) A violation of (( a rule of professional conduct
promulgated by the board, within the meaning of RCW 18.04.295(4),
includes but is not limited to:)) the Public Accountancy Act or
failure to comply with a board rule contained in chapter 4-25 WAC.
(a))) (8) Violation of one or more of the rules of
professional conduct included in chapter 4-25 WAC(( ;
(b) Violation of one or more of the administrative rules included in chapter 4-25 WAC;
(c))) or concealing another's violation of the Public Accountancy Act or board rules.
(9) Failure to cooperate with the board by failing to:
(a) Furnish any papers or documents requested or ordered to produce by the board;
(b) Furnish in writing a full and complete explanation related to a complaint as requested by the board;
(c) Respond to an inquiry of the board;
(d) Respond to subpoenas issued by the board, whether or not the recipient of the subpoena is the accused in the proceeding.
(10) A CPA's adjudication as mentally incompetent is prima facie evidence that the CPA lacks the professional competence required by the rules of professional conduct.
[Statutory Authority: RCW 18.04.055 and 18.04.295. 94-23-070, § 4-25-910, filed 11/15/94, effective 12/16/94.]