Disciplinary Action Paper

Topics: Certified Public Accountant, Uniform Certified Public Accountant Examination, Audit Pages: 4 (1593 words) Published: December 11, 2012
CPA Disciplinary Action
In January of 1988 the AICPA introduced the Integrity and Objectivity Rule number 102. The rule states that a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent the facts or subordinate his or her judgment to others (AICPA). Rule number 102 has three separate violation interpretations. The first interpretation of rule 102 states that a member that makes, permits, or directs another to make materially false and misleading entries in financial statements is a violation. A second interpretation of the rule states that if a member fails to correct an entity’s financial statements or records that are materially false and misleading when he or she has the authority to correct the entity. The final interpretation of rule 102 declares that the signing of a member or permitting someone to sign a document that is falsely misrepresented is a violation.

Robert Allgyer a CPA at Arthur Anderson LLP violated rule 102 and has received disciplinary actions for the charges that have been brought against him. The charges that Mr. Allgyer was charged with include reckless and knowingly caused the issuance of materially false and misleading audit reports for the company of Waste Management. The AICPA has put Mr. Allgyer under a two year suspension. Mr. Allgyer has also agreed to waive his rights to a hearing and pay a monetary fine of 50,000. In my opinion the actions that were performed by Mr. Allgyer should have required imprisonment for his actions. He was careless and reckless in his actions and I feel that the penalties brought against him were not severe enough. For the AICPA to eliminate further breach of code for this rule, I think that they will have to create more severe penalties. A second option that the AICPA must do is mandate that CPA’s have ethical education on a continued basis.

The general standards rule 201 established by the AICPA is divided into four...
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