South-Western Legal Studies in Business

CPA May Be Disciplined for Actions Not Directly Related to Public Accountancy
Description Appeals court held that a state board of accountancy could impose discipline on a CPA who lied to her employer about her marital status in order for her ex-husband to have medical insurance. The deceit involved fiscal dishonesty for which discipline could be imposed.
Topic Accountant’s Liability
Key Words Discipline; CPA; Misrepresentation
C A S E   S U M M A R Y
Facts Greenan, who is a CPA, worked at the Port of Vancouver as an account manager. The rules of her health benefit plan required her to notify her employer of any change in her marital status. Since she failed to tell her employer when she got a divorce, the employer provided health insurance for her former spouse for over four years before the fact was uncovered. The cost to the employer was $1,000 a year. Told to file a form to correct the matter, Greenan failed to insert the date her marriage ended, instead only saying that insurance was to end that month for her former husband. Told to provide the actual divorce date, she again failed to do so. The Accountancy Board filed charges against Greenan as a result of the matter. She was disciplined for fiscal dishonesty and misleading misrepresentations while working as a CPA. She was ordered to take an ethics exam, take an ethics course, pay a fine of $1,000 and cover the cost of the Board's investigation. She appealed the Board decision.
Decision

Affirmed. The Washington State Board of Accountancy has jurisdiction to discipline a licensed CPA working as an account manager, for misrepresenting her former spouse's eligibility for health insurance, notwithstanding that the violation did not involve misconduct in the practice of public accounting. The disciplinary statute's plain language, statutory scheme, and legislative history provided the Board with jurisdiction to discipline Greenan for dishonesty, fraud, or negligence while representing herself as a CPA, even while not performing public accounting.

Citation Greenen v. Washington State Board of Accountancy, ---P.3d--- (2005 WL 833898, Ct. App., Wash., 2005)

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