State Board Report
Effective enforcement was the topic of an Annual Meeting panel session that looked at communication with the PCAOB, among the boards and with NASBA. PCAOB Director? Division of Enforcement Claudius Modesti told the boards, “I am open minded in thinking about coordinating our efforts.” He explained, “If there are avenues where we can build in a coordinate effort to make sure bad actors are addressed, that is important to me.” He briefly reviewed several cases that the Division of Enforcement had concluded: James L. Fazio, CPA; Deloitte & Touche, LLP; Stephen J. Nardi, CPA; Ann Marie Fitzpatrick, CPA; Kantor, Geisler & Oppenheimer, PA, et al; Timothy L. Steers, CPA; Wiseneck, Andres & Company, PA, et al; and Jaspers & Hall, PC, et al.
“With state regulators, as we receive complaints or tips, if I see there is anything that comes close to state litigation, I send it to my contacts,” Mr. Modesti stated. “If we get a request from boards, we will follow up and work with you. We are trying to do our part to do what you need us to do. I consider this to be a collaborative effort.”
Noel Allen, NASBA legal counsel, presented an interstate enforcement compact that had originally been drafted by the NASBA Legal Counsel Committee about three years ago (and can be found on the NASBA Web site with other documents from the 2008 Annual Meeting), but has gained new relevance as mobility legislation has boards concerned about interstate enforcement. “The bottom line is cooperation and coordination,” Mr. Allen said. “You can have enforcement compacts that support the work of other states. Most states will probably not need legislation to adopt the model enforcement compact. If your state has UAA language, then you could probably adopt it by rule.”
The compact can serve to organize enforcement going forward, but Mr. Allen said, “The critical missing element is going to be the Accountancy Licensee Database. Then the boards will know all the states that matter in a case.” He cautioned the boards to avoid the temptation of “piling on, “ allowing multiple cases to be built on the same offense, and becoming almost a “stealth tax.”
NASBA Senior Vice President Ken Bishop presented some ideas on services related to enforcement that NASBA might offer to the member boards. These include: developing a Certified Regulatory Investigator’s program specifically for the accounting profession; investigative services and support for smaller states that don’t have the budget for an investigation staff; applying the major case concept to better utilize expertise from around the country; and providing subject matter experts to support investigations. Mr. Bishop said 2008? 09 NASBA Chair Tom Sadler is inaugurating a new committee that will look at the efficiency of investigations and best policies and practices. Vice President Bishop encouraged the boards to give him feedback on what services they might consider using and which they would not use.
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