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CALIFORNIABOARD OFACCOUNTANCYNewsletterUNDER THE DOMEThe California Legislature adjourned for the year onAug. 31, 2018. Throughout 2018, CBA was very activein the legislative process. Here are a few bills CBA hastaken positions on that may be of interest to licenseesand other stakeholders.Assembly Bill 2138 (Chiu/Low)CBA's Position: Oppose, Unless AmendedSummary: This bill significantly limits a licensingboard's authority to consider an individual's historyof unprofessional conduct and criminal activity whenevaluating an application for licensure. Except forcertain serious felonies or financial crimes, the billprohibits a licensing board from considering crimescommitted by an applicant more than seven yearsprior to the date of application.Governor Brown sign,ed this bill into law.Senate Bill 795 (Galgiani)CBA's Position: SupportSummary: This bill makespermanent CBA's mobilityprogram, which allows qualifiedout-of-state licensees to practicepublic accountancy in Californiawithout providing notice orpaying a fee. The programwas previously scheduledto end Jan. 1, 2019.6CBA's report on the program, California's MobilityProgram for Accountancy - Implementation, Enforcementand Its Consumer Benefits, is available atwww.cba.ca.gov.Governor Brown sign,ed this bill into law.Senate Bill 1492 (Senate Business, Professions andEconomic Development Committee)CBA Position: SupportSummary: This bill includes three changes to theBusiness and Professions Code relevant to CBA. Thefirst two proposals include amendments to the law thatremove or replace outdated language.The third proposal adds Business and Professions Codesection 5100.1, stating that in certain causes fordiscipline against a licensee, CBA shall rely uponthe findings or events as stated in a certified ortrue and correct disciplinaty action of anotheragency.Governor Brown signed this bill into law.For a complete list of all legislationCBA took action on during the2017-18 legislative session, go towww.cba.ca.gov, then under the"Quick Hits" section, click"Laws and Rules," then select"Pending Legislation."

UPDATE SPRING/SUMMER 2018YOUR FEES AT WORKEvery year, CBA is appropriated a maximum amount of funding to carry out its mission of consumer protection.These amounts are based on the prior year's budget and are then adjusted to account for any program changes andadministrative adjustments approved or ordered by the Department of Finance. CBA's total budget for fiscal year2017-18 was 14,089,000.CBA allocates its budget to various organizational units to best attain its consumer protection goals while alsostriving to provide the best customer service to its stakeholders. The chart below depicts all of the organizationalunits comprising CBA and their associated funding levels for 2017-18.FY 2017/18 AllocationsTotal Budget: 14,089,000Renewal 1,474,028 - 10.5%LicensingAdministration 655,124 - 4.6%Administration 3,013,568 - 21.4%Board 184,000 - 1.3%Initial Licensing 1,474,028 - 10.5%Executive 491,343 - 3.5%,,,Exam 818,905 - 5.8% ------Enforcement 5,978,004 - 42.4%FUTURE MEETINGSNov. 15-16, 2018CBA and Committee MeetingsDouble Tree by Hilton Hotel San Diego Downtown1646 Front St.San Diego, CA 92101(619) 239-6800Dec. 6, 2018Enforcement Advisory CommitteeMarriott Fullerton2701 NutwoodAve.Fullerton, CA 92831(714) 738-7800Dec. 7, 2018Peer Review Oversight CommitteeCalifornia Board ofAccountancy2450 Venture Oaks Way, Suite 300Sacramento, CA 95833(916) 263-3680Jan. 17-18, 2019CBA and Committee MeetingsCalifornia Board ofAccountancy2450 Venture Oaks Way,Suite 300Sacramento, CA 95833(916) 263-3680CBA and committee meetings are open tothe public. Consumers, licensees, and allinterested persons are encouraged to attend.As meeting locations are determined, theywill be posted on the CBA website atwww.cba.ca.gov under "Quick Hits,"using the "CBA and Committee Meetings"link. Meeting locations are also available bycalling the CBA office at (916) 263-3680.Public notices and agendas are posted to thewebsite at least 10 days prior to meetings.All CBA meetings are webcast live andarchived at www.cba.ca.gov.7

CALIFORNIABOARD OFACCOUNTANCYNewsletterENFORCEMENT PROCESSWhen CBA receives a complaint, an investigation isconducted. Information regarding a complaint generallyis gathered by enforcement staff, which could includea licensee's appearance before the CBA EnforcementAdvisory Committee.STANDARD TE RMS OF PROBATIONFollowing this investigation, a recommendation ismade to either (1) close the case with no violation of theAccountancy Act or CBA Regulations; (2) require thelicensee to take prescribed continuing education;(3) issue a citation and fine; or (4) refer the case to theAttorney General's Office for review and possiblepreparation of an accusation against the licensee ora statement of issues relating to the applicant. Obey all federal, California, other state, and locallaws, including those rules relating to the practice ofpublic accountancy in California.If charges are filed against a licensee, a hearing maybe held before an independent administrative law judgewho submits a proposed decision to be considered byCBA, or the matter may be settled. CBA may eitheraccept the proposed decision or decide the matter itsel Please note that CBA actions reported here may notbe final. After the effective date of CBA's decision, thelicensee may obtain judicial review of its decision. Onoccasion, a court will order a stay of CBA's decisionor return the decision to CBA for reconsideration.Copies of the accusations, decisions, and settlementsregarding any of these disciplinary and/orenforcement actions are available on the CBA website,www.cba.ca.gov, or by sending a written request to:California Board of AccountancyAttention: Disciplinary/Enforcement Actions2450 Venture Oaks Way, Suite 300Sacramento, CA 95833Please state the licensee's name and license number,and allow 10 days for each request.CBA may revoke, suspend, or impose probation on alicense for violation of applicable statutes or regulations.In addition to any case-specific terms of probation, thestandard probationary terms include: Submit, within 10 days of completion of the quarter,written reports to CBA on a form obtained fromCBA. The respondent shall submit, under penaltyof perjury, such other written reports, declarations,and verification of actions as are required. Thesedeclarations shall contain statements relativeto respondent's compliance with all the termsand conditions of probation. Respondent shallimmediately execute all release of information formsas may be required by CBA or its representatives. During the period of probation, appear in personat interviews or meetings as directed by CBA or itsdesignated representative, provided such notificationis accomplished in a timely manner. Comply with the terms and conditions of theprobation imposed by CBA, and cooperate fullywith representatives of CBA in its monitoring andinvestigation of the respondent's compliance withprobation terms and conditions. Be subject to and permit a "practice investigation" ofthe respondent's professional practice. Such "practiceinvestigation" shall be conducted by representativesof CBA, provided notification of such review isaccomplished in a timely manner. Comply with all final orders resulting from citationsissued by CBA. In the event respondent should leave California to resideor practice outside this state, respondent must notifyCONTINUED ON PAGE 98

UPDATE SPRING/SUMMER 2018ENFORCEMENT PROCESS CONTINUED FROM PAGE 8CBA in writing of the dates of departure and return.Periods of non-California residency or practice outsidethe state shall not apply to reduction of the probationaryperiod, or of any suspension. No obligation imposedherein, including requirements to file written reports,reimburse CBA costs, or make restitution to consumers,shall be suspended or otherwise affected by such periodsof out-of-state residency or practice, except at the writtendirection of CBA. If respondent violates probation in any respect, CBA,after giving respondent notice and an opportunityto be heard, may revoke probation and carry out thedisciplinary and/or enforcement order that was stayed.If an accusation or a petition to revoke probation isfiled against respondent during probation, CBA shallhave continuing jurisdiction until the matter is final,and the period of probation shall be extended untilthe matter is final. Upon successful completion of probation, respondent'slicense will be fully restored.E NFORCE ME NTDE FINITIONSAccusationA formal document that charges violation(s) of theCalifornia Accountancy Act and/or CBA Regulations bya licensee. The charges in the accusation are allegations.Allegations are not a final determination of wrongdoingand are subject to adjudication and final review by CBApursuant to the Administrative Procedure Act.Cost RecoveryThe licensee is ordered to pay CBA certain costs ofinvestigation and prosecution including, but not limitedto, attorney's fees.Default DecisionThe licensee failed to file a Notice of Defense orhas otherwise failed to request a hearing, object,or otherwise contest the accusation. CBA takesaction without a hearing based on the accusation anddocumentary evidence on file.Effective DateThe date the disciplinary decision becomes operative.ProbationThe licensee may continue to engage in activities forwhich licensure is required, under specific terms andconditions.ReinstatementA revoked license that is restored, not sooner thanone year from the date of revocation, to a clear orinactive status after petition to and approval by CBA.Reinstatement may include probation and/or termsand conditions.RevocationThe individual, partnership, or corporation no longer islicensed as a result of a disciplinary action.StayedThe action does not immediately take place and may nottake place if the licensee complies with other conditions(such as a probation term).StipulationThe matter is negotiated and settled without goingto hearing.SurrenderedThe licensee has surrendered the license. The individual,partnership, or corporation no longer is licensed. CBA,however, may impose discipline against a surrenderedlicense in certain circumstances. Surrender also mayrequire certain conditions be met should the formerlicensee ever choose to reapply for licensure.SuspensionThe licensee is prohibited for a specific period oftime from engaging in activities for which licensureis required.9

CALIFORNIABOARD OFACCOUNTANCYNewsletterENFORCEMENT ACTIONSC PA R EVO CAT I O N S T H R O U G H S E PT. 4, 2 0 1 8AY LWA R D, W I L L I A M K E V I NC h e rr y Va l l ey, C a l i f.(CPA 4 7 0 2 5 )DISCIPLINARY ACTIONS/LICENSE RESTRICTIONS:Revocation of C PA l icense, via defa u l t decisio n .Effective J u n e 2 5 , 2018CAUSES FOR DISCIPLINE:Accusation No. AC-201 8-63 conta i n s the fol l ow i n ga l l egations: (1) u n p rofess i o n a l con d u ct-co nviction o fsu bsta ntia l l y related cri me; ( 2 ) u n p rofess i o n a l co n d u ct fiscal d is ho n esty; a n d (3) u n p rofess i o n a l co n d u ct em bezzlement/m i s a p p ropriation of funds.M r. Aylwa rd is s u bject to d i sci p l i na ry action i n that o n o ra bout D e c . 1 9, 2017, h e w a s convicted o n h i s g u i lty plea o fv i o l a t i n g Pen a l C o d e sections 504/51 4 (em bezz lem ent o fp u b l i c funds), a fe l ony, a n d Penal C o d e section 424(a) (1)(m isappropriation of p u b l ic funds), a fe lo ny.M r. Aylwa rd is s u bject to d i sci p l i na ry action in that heengaged in fiscal d i s h o n esty by d ive rt i n g a n d co n cea l i n gp u b l i c f un d s .FOR VIOLATIONS OF:B u s i n ess a n d Professions Code, Divis i o n 3, C h a pter 1 ,§ 510 0(a), (i), a n d (k).CASTRO, CA R LOS A .B u rb a n k, C a l i f.(C PA 9 0 7 1 4)DISCIPLINARY ACTIONS/LICENSE RESTRICTIONS:Revocation of C PA l icense, via defa u l t decisio n .Effective J u ly 5 , 2018CAUSES FOR DISCIPLINE:Accusation No. AC-201 8-32 conta i n s the fo l l owinga l l egations: (1) practicing w ith ou t a perm it; (2) d is h o n esty;(3) w il lfully violat i n g the Accou nta n cy Act; (4) know i n gprepa rati on , p u b l ication, o r dissemi nation of fa lse,fra u d u lent, o r materi a l l y m i s l ead i n g fi n a n c i a l documents;(5) obta i n i n g m on ey by fra u d u lent means o r fa lsep retenses; (6) i m p roperly using C PA designation; and (7)a dve rtis i n g/soliciting i n a false, m islea d i n g m a n n e r.M r. Castro is s u bject to d isci p l i na ry action i n that heengaged i n the p ractice of accou nta n cy without a va l i dpermit.M r. Castro is s u bject to d isci p l i na ry action i n that heco m m itted acts of d is h o n esty when h e o bta ined a feefrom a client after prepa r in g a n d fi l i n g a c l i e nt 's tax returnsw h i l e h is l icense was d e l i n q uent a n d d i d not have otherautho rity to do so, a n d advertised a n d solicited busi ness tope rfo rm a cco u n t i n g services u s i n g the CPA designatio n .M r. Castro is s u bject t o d isci p l i na ry action i n that h ew i l lf u l l y violated a su bdivision o f t h e Accou nta n cy Act a sdescribed here i n .M r. Castro is s u bject t o d isci p l i na ry action i n t h a t h eknowi n g l y p repa red, p u b l ished, o r d isse m i nated fa lse,fra u d u lent, o r materi a l l y m i s l ead i n g fi n a n c i a l state m ents,repo rts, o r i nfo rmation when h e i m p roperly used theCPA designation i n advertis i n g a n d soliciting b u s i n ess tope rfo rm a cco u n t i n g services.M r. Castro is s u bject to d isci p l i na ry action i n that heobta i n ed m on ey o r oth er va l u a b l e consideration byfra u d u lent means o r fa lse p retenses when h e o bta i ned afee from a client after prepa r in g a n d fi l i n g a c l i e nt 's taxreturns w h i l e his l icense was d e l i n q uent and did not haveoth e r autho rity to do so, a n d advertised a n d solicitedbusi ness to pe rfo rm a cco u n t i n g services u s i n g the CPAdesignati o n .CONTINUED O N PAGE 1 1IO

UPDATE SPRING/SUMMER 2018C PA REVOCATIONS THROUGH SEPT. 4, 2 0 1 8M r. Castro is s u bject t o d isci p l i na ry action i n t h a t hei m p roperly a n d u n lawfu l l y d e s i g n ated h i mself as a certifiedp u b l i c a ccou nta nt and used the a b b reviation "C PA" w h e nh i s l i cense w a s i n "de l i n q u e n t " status.M r. Castro is s u bject to d isci p l i na ry action i n that hea dve rtised a n d s o l i cited busi ness i n a fa lse, fra u d u l ent, andm is l ea d i n g m a n n e r as described a bove.FOR VIOLATIONS OF:B u s i n ess a n d Professions Code, Division 3, C h a pter 1 ,§§ 5050, 5055, 5 1 0 0 (c), (g), (j), a n d (k). C a l ifo r n i a Code ofReg u lations, Title 1 6 , Division 1, § 63.C H E N , TO N I TO N GH a c i e n d a H e i g h t s , C a l i f.(CPA 7 3 6 6 3 )DISCIPLINARY ACTIONS/LICENSE RESTRICTIONS:Revocati on of C PA l icense, via defa u l t d e c i s i o n .Effective Sept. 4, 201 8CAUSE FOR DISCIPLINE:Accusation No. AC-201 8-1 7 conta i n s the fo l l owi n ga l l egations: ( 1 ) co nvi ction o f a su bsta ntially related cri me;(2) d i s ho n esty and fra u d ; (3) fiscal d is h o nesty o r b reachof fi d u c i a ry respo n s i b i l ity; (4) e m bezz l e m ent, th eft, o rm is a p p ropriations o f f u n d s ; ( 5 ) i m position o f d i sci p l i n e bythe U n ited States Secu rities a n d Exc h a n g e Com m ission(SEC); (6) d isci p l i n a ry action by a ny a g e ncy of the federalgove r n m ent; (7) suspension of r i g h t to p ractice beforegove r n m e n t a l body o r a g e n cy; and (8) fa i l u re to reportevents.M s . Chen is s u bject to d isci p l i na ry action i n thats h e d is h o n estly and fra u d u l ently m is a p p ro p riateda p p roxi m ately 372,585 from victi m i nvesto rs.Ms. Chen is s u bject to d isci p l i na ry action i n that sheknowi n g l y co m m itted fiscal d is h o nesty o r breached h e rfi d u c i a ry respo n s i b i l ity b y m isa p p ro p r i a t i n g a p p roxi m ately 372,585 from vict i m i nvestors.Ms. Chen is s u bject to d isci p l i na ry action i n that sheknowi n g l y e m bezzled and m is a p p ropriated a p p roxi mately 372,585 from vict i m i nvestors.Ms. Chen is s u bject to d isci p l i na ry action i n that s h e wasd isci p l i ned by t h e S EC on J u ly 8, 201 6 , i n the p roceed i n gtitled I n the M atter o f To n i To ng C h e n , C PA. Ad m i n i strativeProceed i n g F i l e N o . 3-1 7329.Ms. Chen is s u bject to d isci p l i na ry action i n that s h e wasd isci p l i ned by t h e S EC, a n a g e ncy esta b l ished by thefederal gove r n m ent.M s . Chen i s s u bject to d i sci p l i na ry action i n that h e r rightto p ractice before a g ove r n m e n t body o r a g e ncy wassuspended o r revo ked .M s . C h e n is s u bject t o d isci p l i n a ry action i n that s h e fa iledto report i n writing to CBA with i n 30 days of her g u i lty pleaa n d the cancellation, revocation, or suspension of the rightto practice as a certified public accou ntant before the S E C .FOR VIOLATIONS OF:B u s i n ess a n d Professions Code, Division 1, Cha pter 1 ,§ 141; D i v i s i o n 1 . 5, Cha pter 3 § 490; Division 3, Cha pter 1 ,§§ 5063(a)(l ) a n d (a) (3), 5 1 0 0 (a), (c), (h), ( i ), ( k) a n d ( I ).C a l ifo r n i a Code of Reg u lations, Title 1 6, D i v i s i o n 1 , § 99.Ms. Chen i s s u bject to d isci p l i na ry action i n that s h ew a s convicted of a c r i m e su bsta ntia l l y related t o theq u a l ificatio n , functions, a n d duties of a certified p u b l i ca ccou ntant. S pecifical ly, M s . C h e n w a s convi cted o f o n ec o u n t o f w i re fra u d .CONTINUED ON PAGE 12II

CALIFORNIABOARD OFACCOUNTANCYNewsletterC PA REVOCATIONS THROUGH SEPT. 4, 2 0 1 8HART, T H O MASP a s a d e n a , C a l i f.(C PA 5 6 0 5 2 )DISCIPLINARY ACTIONS/LICENSE RESTRICTIONS:Revocation of C PA l i cense, via defa u l t decision.Effective April 30, 201 8CAUSE FOR DISCIPLINE:The fo l l ow i ng g ro u n d s fo r d isci p l i ne a re a l leged in thePetition to Revoke Probation.PROBATION VIOLATION:(1) fa i l u re to s u b m i t written repo rts; (2) fa i l u re to co m p l eteethics conti n u i ng e d u cation (C E); (3) fa i l u re to co m p l etereg u l atory review cou rse; (4) fa i l u re to co m p l ete a n dp rovide p r o p e r docum entation of C E cou rses; a n d (5)fa i l u re to co m p l y with probation by fa i l i ng to s u b m itq u a rterly re ports.LEVI N E, PAU LWood l a n d H i l l s , C a l i f.(CPA 1 5 9 8 6)DISCIPLINARY ACTIONS/LICENSE RESTRICTIONS:Revocation of C PA l i cense, via sti p u lated settlement.Effective J u n e 25, 2018CAUSES FOR DISCIPLINE:Accusation No. AC-201 7-27 conta i n s the fo l lowi n ga l l egations: (1) w i l l f u l v i o l a t i o n of Accou nta ncy A c t a n dCBA reg u lations; ( 2 ) d ish o n esty, fra u d ; (3) know in gprepa ration, p

s of that change. Although the U.S. Postal Service is the primary method used by CBA to communicate with applicants and licensees, we request that you provide an email address as well. For your convenience, CBA has provided an address change form in the back of this publication and made it available online. To access it, visit . www.cba.ca.gov