Public Accountancy
Current Issues in Public Accountancy
State Board Requests for Information in a PCAOB Inspection Report
| To: | Managing Partners, PCAOB Registered Firms |
| From: | Daniel J. Dustin, CPA, Executive Secretary |
| Date: | March 17, 2006 |
| Subject: | CPCAF Alert No. 93, State Board Requests for Information in a PCAOB Inspection Report |
I am writing on behalf of the New York State Education Department regarding the recently published Center for Public Company Audit Firms Alert No. 93, State Board Requests for Information in a PCAOB Inspection Report.
Alert No. 93 was written in response to several requests from state boards of accountancy for additional information as a result of the issuance of an inspection report by the PCAOB. The Alert provides that “while member firms may decide to respond to such inquiries [from state boards] by fully cooperating and providing the requested information, the Center believes that member firms should consider responding to any state boards that request details behind information contained in an inspection report by directing such state boards to the PCAOB.”
It appears that the CPCAF’s Alert No. 93 errs by encouraging New York State licensed CPAs and registered public accounting firms to consider directing inquiries initiated by the State Education Department to the PCAOB. It is important to understand that both licensees and firms have a legal obligation to respond to inquires initiated by the New York State Education Department, even if based on an inspection report issued by the PCAOB. Failure to provide a timely response to a Department inquiry could result in the licensee or firm being placed in a position of having violated the Rules of the Board of Regents that have been established in accordance with New York State Education Law. These rules provide that it shall be unprofessional conduct for a licensee or firm to fail to respond within 30 days to written communications from the Education Department and to make available to the Department any relevant records with respect to an inquiry or complaint about the licensee's unprofessional conduct. (Rules of the Board of Regents § 29.1(b)(13))
We have contacted the CPCAF and requested that Alert No. 93 be withdrawn and modified to add clarification to better inform member firms that they may be under a legal obligation to provide information in response to state board requests.
If you have any questions, please do not hesitate to contact this office.
