Professional Ethics Committee
seeks new recruits

The exact purpose, responsibilities and goals of the NYSSCPA’s Professional Ethics Committee can be murky for members who haven’t served on the committee or otherwise been involved with it. And of the NYSSCPA’s 67 statewide committees, the PEC is one that most members would hope never to hear from, since a letter from the PEC means a complaint has been filed with the Society asserting a member has violated the Society’s Code of Professional Conduct.

But PEC Chair Debbie A. Cutler explained recently that the PEC is not the equivalent of a police department’s internal affairs unit—although in many ways, the committee is charged with policing Society membership.

One of the PEC’s primary roles is receiving complaints against Society members and conducting investigations to determine if there is prima facie evidence of a violation of the Code of Professional Conduct. If the PEC chair determines that a complaint could reveal a potential code violation, an investigation is assigned to an individual member according to expertise and background,Cutler said. He or she presents the findings to the PEC membership, which then votes on the appropriate course of action. The end result could range from remedial education for the CPA being investigated, to suspension or expulsion from the Society.

PEC investigations are relatively limited, Cutler said, since committee members don’t have subpoena power. Under the Joint Ethics Enforcement Program, investigations of joint NYSSCPA/AICPA members are disclosed between organizations, and an investigation may be referred to the AICPA.

Although the PEC lacks the power to revoke a CPA’s license, the committee is required to report to the New York State Education Department the results of anyinvestigation in which a letter of required
corrective action is accepted, as well as matters that are resolved via a settlement agreement, at which point the state may decide to undertake its own investigation. Society suspensions and expulsions are also listed in The Trusted Professional.

Cutler recognized that most members wouldn’t know what’s involved in the process of a PEC investigation unless they’d faced one—which can be unsettling. But in most cases in which offenders committed a code violation that is not severe, “the idea is, we give you education so in the future you’ll be more informed and won’t get yourself in the same situation,” Cutler said. “The whole concept … is from a remedial standpoint and not punitive.”

The committee has experienced a decline in membership recently, and difficulty recruiting new members. There are currently fewer than 30 members on the PEC; by comparison, some others, like the Not-for Profit Organizations Committee, boast an average of 90 members.

Although the work is demanding, the experience is rewarding, said Cutler, who’s served on the PEC since 2003. The committee meets every other month in NewYork City for four-hour meetings, during which the committee provides ethics education to members and maintains the Society’s code of conduct, with nonmandatory conference calls during “off” months. On top of investigating complaints, the PEC is charged with maintaining the Society’s Code of Professional Conduct—and proposing interpretations of the code for Board approval, as it did last month—promoting and educating members about ethical behavior and standards, and commenting on ethics conduct rules proposed by national or state regulatory bodies. Added to this is the work members are expected to complete outside of meetings, on their own time, investigating complaints. Cutler estimated that members easily spend a total of 60 hours annually working for the committee, but that the number may sometimes creep closer to 80.

But for Cutler, the rewards of serving on the PEC keep her committed.

“It’s a rewarding experience when you feel that you can make a difference,” she said. “But I also feel very connected to our membership, and I think it’s a service to our membership that we provide them guidance in how to practice. It’s really giving the membership tools to practice by having a meaningful code of conduct.”

It’s a sentiment echoed by Jack M. Carr, one of two PEC assistant chairs who is in his eighth year on the committee.

“What you get is a ‘feel good,’ really, that you are putting forth that time, effort and energy, and you are helping the profession overall to live up to the respect that’s put on us,” Carr said. “That’s the main thing, I think, with any committee. And it actually has enhanced my knowledge, too.”

“I think the reward to me is that we’re there to be of service to the public,” Cutler said. “So I really feel that, for the public who has complaints against our members, there’s a forum in which they can air it out, and we resolve their issues.”

But both Carr and Cutler were confident that a better understanding of the PEC’s practices and goals would help smooth the process and diminish the fear.

And what better way to get to know how the PEC operates than serving on the committee, Cutler said.

Cutler would like to hear from potential members with at least a decade of experience, specifically in tax and governmental accounting or auditing, as well as members in industry.

“This is the reason we need a diversity of members on PEC: Obviously, CPAs practice in many different areas,” Cutler said. She added that the committee handles about 100 investigations annually, and since “complaints come in all shapes and sizes,” having a well-rounded committee is critical, she said.

Potential PEC members must have three things, Carr said: “Time, effort and energy. If you don’t have all three to give, then you should not step forward to that committee.” He added that candidates should have a “sound background of integrity,” and be open-minded.

Cutler and Carr both recognize the importance of adding members to the PEC, but they won’t sugarcoat the responsibilities of PEC membership.

“How we derive an outcome could impact that CPA’s ability to make a living,” said Carr.

Even though the majority of cases result in milder consequences, like mandatory education, Cutler said that not everyone is cut out to conduct investigations involving their peers.

“I’ve had a few people interested who, at the end of the day, just didn’t have the personality to judge a peer,” Cutler said. “This is the uniqueness of wanting to do this.”

To learn more about joining the Professional Ethics Committee, contact Nereida Gomez, manager of committees and administrative services, at 212-719-8358 or ngomez@nysscpa.org.

aolson@nysscpa.org



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