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Certified Public Accountants in Texas facing professional misconduct allegations, license suspensions, or unauthorized practice investigations need experienced legal counsel who understands both the substantive requirements of the Public Accountancy Act and the procedural complexities of administrative proceedings before the Texas State Board of Public Accountancy (TSBPA). These proceedings can threaten a CPA's ability to practice their profession and earn a living, making effective legal defense essential to asserting Texas CPA licensees defenses and reputations. Law Offices of Alan Abergel, P.C. ("LOAA") provides comprehensive administrative enforcement defense services to Texas CPAs licensed by the TSBPA and unlicensed individuals and companies facing allegations of unauthorized practice.
The firm represents both licensed CPAs defending against professional misconduct allegations and unlicensed persons or entities investigated for practicing public accountancy without required licensure. This dual focus allows LOAA to provide sophisticated defense across the spectrum of TSBPA enforcement matters while also advising businesses on whether their operations require CPA licensure under Texas law. Whether defending against formal accusations, negotiating agreed consent orders, litigating before administrative law judges, or appealing adverse decisions, LOAA delivers legal representation tailored to the unique challenges of TSBPA proceedings.
The mission of the Texas State Board of Public Accountancy is to protect the public by ensuring that persons issued certificates as certified public accountants possess the necessary education, skills, and capabilities and that they perform competently in the profession of public accountancy. The Board accomplishes this mission through licensure of qualified individuals, establishment of professional standards and ethical requirements, continuing professional education requirements, and enforcement of disciplinary proceedings against CPAs who violate the Public Accountancy Act or Board Rules.
The Public Accountancy Act, Chapter 901 of the Occupations Code, authorizes the Texas State Board of Public Accountancy to investigate and prosecute allegations of professional misconduct against Certified Public Accountants from any source, including the public and other CPAs. TSBPA has the authority to discipline Texas CPAs only for violations of the Act or the Board's Rules, found in Chapters 501-527 of the Texas Administrative Code. Texas CPAs are required to follow the Board's Rules which are cited as Title 22, Part 22 Texas Administrative Code.
The Board's enforcement authority extends to various types of professional misconduct including failure to comply with professional standards in audit, review, compilation, or other attest services, violations of independence requirements when providing services to attest clients, fraud, dishonesty, or other unethical conduct in professional or business activities, conviction of crimes involving moral turpitude or reflecting poorly on fitness to practice, failure to comply with continuing professional education requirements, practice of public accountancy while license is suspended, expired, or revoked, and aiding or abetting unlicensed practice of public accountancy. Understanding what conduct constitutes violations and how to defend against allegations is essential when TSBPA proceedings are initiated.
Complaints against Texas CPAs are reviewed by Enforcement Division staff, which determines whether the conduct described involves professional misconduct as defined in the Texas Public Accountancy Act. Not every dispute or disagreement is within the jurisdiction of TSBPA. Fee disputes, for example, are not within TSBPA's jurisdiction. Therefore, some complaints may be dismissed by TSBPA at this stage of the process if they involve matters outside the its authority or do not allege conduct constituting professional misconduct under the Act or Rules.
When Enforcement Division staff determines that a complaint warrants investigation, an investigative file is opened. The CPA is notified of the investigation and is provided with copies of materials (excluding attorney-client communications and attorney work-product) and documents received as part of the complaint. The CPA has 30 days to respond to the Board in writing. This initial response represents a critical opportunity to present the CPA's position, provide context and explanations for challenged conduct, identify factual disputes or misunderstandings, and demonstrate compliance efforts or good faith. LOAA assists CPAs in preparing comprehensive written responses that address allegations effectively while protecting the CPA's legal interests.
After the CPA has responded to the allegations, the investigation is heard by one of the TSBPA's Enforcement committees. These committees meet regularly to consider complaints. The meetings are not open to the public because investigative information is confidential by statute. The committee reviewing the complaint will make a recommendation on how to proceed with the investigation. Possible outcomes include dismissal of the complaint if no violation is found, issuance of a private letter of concern for minor issues not warranting formal discipline, negotiation of an agreed consent order resolving the matter with agreed discipline, or referral for formal hearing before an administrative law judge if violations are found but agreement cannot be reached.
Sometimes a committee will try to reach an agreement with the CPA regarding appropriate disciplinary or corrective action. Sometimes a committee will invite the complainant and the CPA to meet with the committee at an informal conference. An informal conference allows both parties to present information to the committee and respond to the committee's questions. These conferences provide valuable opportunities to explain circumstances, demonstrate remedial measures taken, present mitigating evidence, and negotiate reasonable resolutions without proceeding to formal hearings.
LOAA represents CPAs in informal conferences before TSBPA Enforcement committees, preparing clients for committee questions, presenting evidence and arguments supporting favorable resolutions, and advocating for dismissal or minimal discipline when appropriate. Effective presentation at informal conferences can often resolve matters without formal proceedings, avoiding the expense, time, and publicity of administrative hearings while achieving reasonable outcomes.
If an agreement between the CPA and the Committee is reached, an agreed consent order (ACO) resolving the investigation will be offered to the Board for its ratification or refusal. Agreed consent orders typically include findings regarding what violations occurred, agreed disciplinary sanctions such as reprimands, probation, education requirements, or practice limitations, and compliance requirements the CPA must satisfy. While agreed consent orders involve admitting violations, they provide certainty about outcomes and often result in less severe discipline than might be imposed after contested hearings.
The decision to accept an agreed consent order or proceed to hearing involves weighing the proposed discipline against the risks and potential outcomes of litigation. Factors to consider include the strength of the Board's evidence supporting alleged violations, availability of defenses or mitigating circumstances, proposed sanctions in the agreed consent order versus potential sanctions after contested hearing, costs and time involved in administrative litigation, and professional and reputational impacts of different resolution options. The firm counsels CPAs on these strategic decisions, providing candid assessments of litigation risks and likely outcomes to inform choices about settlement versus proceeding to hearing.
If an agreement cannot be reached and the committee determines that a violation has occurred, or if the committee is unable to resolve the dispute, the complaint is prosecuted before an administrative law judge (ALJ) at the State Office of Administrative Hearings (SOAH). CPAs can also reject proposed agreed consent orders and request hearings before ALJs. These formal administrative hearings follow procedural rules similar to civil litigation, including discovery, pre-hearing motions, evidentiary hearings with witness testimony and document presentation, and post-hearing briefing.
LOAA provides comprehensive representation in administrative hearings and proceedings before SOAH administrative law judges. This includes responding to formal accusations or statements of issues initiating proceedings, conducting discovery to obtain evidence supporting defenses, filing and arguing pre-hearing motions addressing legal or procedural issues, preparing witnesses including the CPA and expert witnesses for hearing testimony, presenting evidence and examining witnesses at evidentiary hearings, cross-examining Board witnesses and challenging Board evidence, submitting post-hearing proposed findings of fact and conclusions of law, and arguing for dismissal or minimal sanctions based on evidence presented.
Evidence at the hearing may include testimony from the complainant, the CPA, and expert witnesses. Expert testimony is particularly important in cases involving alleged violations of professional standards where technical accounting or auditing issues are disputed. LOAA works with qualified expert witnesses retained by the applicable CPA, who can testify regarding professional standards, industry practices, and whether the CPA's conduct met applicable requirements. Expert testimony often proves decisive in cases where the central dispute involves technical professional judgment rather than clear-cut rule violations.
At the conclusion of the hearing, the ALJ issues a Proposal for Decision (PFD) and recommends a suggested resolution of the matter. The PFD includes findings of fact based on evidence presented, conclusions of law applying the Public Accountancy Act and Board Rules to the facts, and recommended sanctions if violations are found. The PFD and recommendation are presented to and voted on by the full Board. A Board member with an interest in the proceeding will not participate in the discussion or the vote. The Board may adopt the ALJ's proposal for decision, modify it, or reject it and issue its own decision, though Board decisions must be supported by evidence in the administrative record.
The nature of the sanction varies with the seriousness of the misconduct and any mitigating or aggravating factors. Sanctions may include education requirements such as additional continuing professional education in areas related to violations, corrective action such as peer review, practice monitoring, or implementation of quality control procedures, reprimand which is a formal censure becoming part of the CPA's public disciplinary record, probation allowing continued practice under supervision or with conditions for specified periods, suspension of license for definite periods during which the CPA cannot practice, revocation of license which permanently terminates the CPA's ability to practice in Texas, or limitation on scope of practice restricting the CPA to certain practice areas or prohibiting specific services.
Mitigating factors that may reduce sanctions include no prior disciplinary history, good faith efforts to comply with professional standards, implementation of remedial measures before enforcement action, cooperation with the investigation, acceptance of responsibility, and demonstrated rehabilitation. Aggravating factors that may increase sanctions include prior disciplinary history, intentional or reckless misconduct rather than mere negligence, harm to clients or the public, attempts to conceal violations, and lack of remorse or acceptance of responsibility. LOAA presents mitigating evidence and arguments to reduce sanctions and present defenses.
The Texas State Board of Public Accountancy does not generally have jurisdiction over persons who are not licensed CPAs. The exception to this rule is that TSBPA is authorized to act against persons who practice public accountancy without licenses issued by TSBPA. Unauthorized practice allegations arise, among many other causes, when unlicensed individuals or entities provide services that Texas law restricts to licensed CPAs, use titles or designations suggesting CPA licensure, or hold themselves out as qualified to provide public accountancy services.
LOAA provides representation in defense of Texas unlicensed persons and individuals investigated by the TSBPA for Texas Unauthorized Practice of Public Accountancy. These cases require careful analysis of what services were provided, how the individual or entity held themselves out to the public, whether the services constitute "public accountancy" under Texas law, and whether any exemptions apply to the activities in question. Many accounting and bookkeeping services do not constitute practice of public accountancy requiring Texas licensure, and effective defense often involves demonstrating that services fell within permissible unlicensed activity.
The firm also provides review of various business models to provide legal opinions about whether or not a Texas CPA license is required and if the business model engages in Unauthorized Practice of Public Accountancy. This proactive legal analysis helps businesses structure operations to avoid unauthorized practice issues while providing legitimate accounting services to Texas customers.
CPAs may face investigations from multiple regulatory agencies simultaneously, particularly when alleged misconduct involves securities, financial services, or public company auditing. LOAA provides representation in investigations, subpoenas, and administrative hearings and proceedings by TSBPA, Texas State Securities Board, PCAOB (Public Company Accounting Oversight Board), FINRA (Financial Industry Regulatory Authority), and the SEC (Securities and Exchange Commission).
Texas State Securities Board investigations may arise when CPAs provide services to securities issuers or broker-dealers, serve as auditors for companies involved in securities offerings, or face allegations of securities fraud or deceptive practices. PCAOB investigations involve CPAs or accounting firms that audit public companies and are registered with PCAOB, focusing on audit quality, compliance with auditing standards, and independence requirements. SEC investigations may involve CPAs who prepare financial statements for public companies, sign audit reports, or are alleged to have participated in financial reporting fraud. FINRA matters may arise when CPAs serve securities firms or face allegations related to broker-dealer auditing or compliance.
Coordinating responses across multiple agencies requires strategic planning to ensure consistency, protect against statements in one proceeding being used in others, and manage different procedural timelines and requirements. LOAA coordinates multi-agency defense strategies, providing legal representation that defends CPAs across multiple proceedings while avoiding conflicts or inconsistencies in positions taken with different regulators.
CPAs dissatisfied with Board decisions imposing discipline have appeal rights to seek review by administrative law judges and ultimately by Texas courts. LOAA provides representation in appeals of administrative proceedings to The State Office of Administrative Hearings (SOAH) and in Petition for Judicial Review to the Texas District Court.
When TSBPA adopts discipline without a hearing, CPAs can request contested case hearings before SOAH administrative law judges. These de novo hearings provide full opportunity to present evidence, cross-examine witnesses, and argue against TSBPA's determinations. LOAA represents CPAs in these appeals as defense counsel.
After a final TSBPA order following SOAH proceedings, CPAs may seek judicial review by filing a Petition for Judicial Review in Texas District Court. Judicial review involves limited standards of review where courts defer to TSBPA expertise on technical matters but will reverse decisions that violate statutory or constitutional rights, exceed Board authority, or lack substantial evidence support. LOAA prepares petitions for judicial review identifying legal errors, procedural violations, or evidentiary deficiencies as applicable to the specifics of each case. Successful appeals can result in license reinstatement, elimination or reduction of sanctions, or remands for additional proceedings.
The decision to retain or consult legal counsel is entirely the CPA's choice. The Board does not require that CPAs hire attorneys and many CPAs do not. However, the complexity of TSBPA proceedings, potential consequences of adverse decisions, and technical legal and procedural issues involved often make legal representation valuable. CPAs facing serious allegations, potential license suspension or revocation, complex factual or legal issues, or parallel proceedings with other agencies particularly benefit from experienced legal counsel.
Legal representation provides several advantages including understanding of substantive requirements under the Public Accountancy Act and Board Rules, knowledge of TSBPA procedures, practices, and expectations, ability to negotiate agreed consent orders, litigation skills for administrative hearings, and strategic counsel on settlement versus proceeding to hearing. CPAs defending their professional licenses and reputations benefit from counsel who can navigate these complex proceedings effectively.
Whether defending against professional misconduct allegations, negotiating agreed consent orders, litigating before administrative law judges, defending unauthorized practice claims, or appealing adverse decisions, experienced legal representation in TSBPA proceedings is important. Law Offices of Alan Abergel, P.C. provides administrative enforcement defense services to Texas CPAs and unlicensed persons facing TSBPA investigations and proceedings. With understanding of the Public Accountancy Act, Board Rules, and administrative law procedures, combined with experience in securities regulation and financial services law relevant to many CPA practice areas, LOAA delivers sophisticated legal defense tailored to the unique challenges facing accounting professionals in regulatory proceedings. Contact LOAA to discuss legal representation for TSBPA investigations, hearings, or appeals.
Disclaimer: The information on this page is provided for general informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading this content. Every legal matter is unique, and you should consult directly with a qualified attorney regarding your specific circumstances.
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