Gilroy, Jr., Vincent J. of Utica, NY As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Mr. Gilroy, with the firm of Vincent J. Gilroy, Jr., CPA, P.C. entered into a settlement agreement under the Joint Ethics Enforcement Program, effective May 25, 2021.
Information came to the attention of the ethics charging authority (ECA — AICPA Professional Ethics Executive Committee) alleging a potential disciplinary matter with respect to Mr. Gilroy’s performance of professional services on the audit of the financial statements of an employee benefit plan as of and for the year ended December 31, 2016.
The ECA reviewed the findings of the U.S. Department of Labor’s Employee Benefits Security Administration, Mr. Gilroy’s responses to the ECA’s inquiries, and other relevant documents Mr. Gilroy submitted to support his responses. Based on this information, there appears to be prima facie evidence of violations of the rules of the AICPA Code of Professional Conduct as follows:
Violations
General Standards Rule .01a Professional Competence (1.300.001)
The auditor undertook an engagement that he could not complete in accordance with professional standards.
General Standards Rule .01b Due Professional Care (1.300.001)
The Basis for Disclaimer of Opinion paragraph in the revised auditor’s report cites the incorrect footnote for the trustee certification and identifies the incorrect entity as the custodian.
Compliance with Standards Rule (1.310.001)
The original auditor’s report issued a full-scope audit opinion; however, the audit was intended to be limited- scope. (AU-C 700 and 7
The auditor failed to obtain sufficient and appropriate audit evidence to express an opinion on the original and revised financial statements in substantially all areas. (AU-C 500)
The original auditor’s report failed to include a title that clearly indicates that it is the report of an independent auditor. (AU-C 700)
The revised auditor’s report did not include the Report on Supplementary Information paragraph. (AU-C 725)
The auditor failed to dual date or re-date the auditor’s opinion on the revised financial statements. (AU-C 560)
Accounting Principles Rule (1.320.001)
The original and revised statement of changes in net assets available for benefits failed to separately present interest income from notes receivable from participants. (FASB ASC 962)
The original and revised financial statements improperly presented forfeitures in the statement of changes in net assets available for benefits. (FASB ASC 962)
The original financial statements failed to disclose the accounting policy for notes receivable from participants. (FASB ASC 962)
The original financial statements failed to make all required disclosures for assets measured at fair value on a recurring basis. (FASB ASC 820)
The original financial statements failed to disclose general risks and uncertainties for financial instruments. (FASB ASC 275)
The original and revised financial statements failed to disclose the date through which subsequent events were evaluated. (FASB ASC 855)
The original and revised statements of net assets available for benefits and statements of changes in net assets available for benefits do not agree to Form 5500. (FASB ASC 962-205-50)
The original and revised financial statements failed to disclose that significant costs of plan administration are absorbed by the plan sponsor. (FASB ASC 962)
The revised financial statements failed to disclose the basis of accounting and the accounting policy for and amount of unrealized gain/loss. (FASB ASC 235-10-50)
Governmental Bodies, Commissions, or Other Regulatory Agencies (1.400.050)
As the partner responsible for peer review compliance, Mr. Gilroy failed to ensure his firm complied with the requirements of the New York State Board for Public Accountancy, the AICPA, and the New York State Society of CPAs to undergo a peer review.
The original financial statements failed to include the supplemental schedule of assets (held at end of year). (29 CFR 2520.103-10)
The supplemental schedule of assets (held at end of year) in the revised financial statements did not disclose the interest rates and term of participant loans. (29 CFR 2520.103-10)
Agreement
In consideration of the ECA forgoing further investigation of Mr. Gilroy’s conduct as described above, and in consideration of the ECA forgoing any further proceedings in the matter, Mr. Gilroy agreed as follows:
To waive his rights to further investigation of this matter in accordance with the Joint Ethics Enforcement Program (JEEP) Manual of Procedures.
To waive his rights to a hearing under AICPA bylaws section 7.4.
To neither admit nor deny the above specified charges.
To his expulsion from membership in the AICPA.
That the ECA shall provide a copy of this settlement agreement to the AICPA’s Peer Review Division staff and his firm’s peer review administering entity.
That the ECA shall publish his name, the name of his firm, the charges, and the terms of this settlement agreement.
That the ECA shall monitor his compliance with the terms of this settlement agreement and initiate an investigation where the ECA finds there has been noncompliance.