As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Mr. Tomisato, with the firm of Tomisato, P.C. entered into a settlement agreement under the Joint Ethics Enforcement Program, effective March 15, 2022.
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. Tomisato’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, 2017.
The ECA has reviewed Mr. Tomisato’s responses to the ECA’s inquiries, and other relevant documents Mr. Tomisato submitted to support his response, including certain work papers, financial statements, and relevant correspondence.
Based on this information, there appears to be prima facie evidence that Mr. Tomisato has violated the following rules of the AICPA Code of Professional Conduct.
Violations
General Standards Rule .01b. Due Professional Care (1.300.001)
The auditor failed to exercise due professional care as:
the amount and classification of investments between the fair value note and the statements of net assets available for benefits is not consistent for all years presented.
the auditor’s report does not refer to the correct footnote for the limited-scope certification.
The auditor failed to exercise due professional care as Note 10 discloses no difference in net assets available for benefits per the financial statements and Form 5500; however, there are differences which should have been disclosed.
Compliance with Standards Rule (1.310.001)
The auditor’s report refers to more than one period of the statement of changes in net assets available for benefits when only one period is presented in the financial statements. (AU-C §700)
The footnote disclosure for the limited-scope certification does not include the prior year presented and did not include investment income and therefore the degree of responsibility the auditor is taking is not clear. (AU-C §700)
The auditor failed to either obtain sufficient appropriate evidence or sufficiently document work performed in substantially all areas of the audit. (AU-C §230, §315, and §500)
Accounting Principles Rule (1.320.001)
The financial statements failed to:
include all fair value disclosures. (FASB ASC 820)
appropriately identify and disclose the type of investments held. (FASB ASC 962- 325-50)
include a complete investment valuation and income recognition policy. (FASB ASC 962-325-50 and 235-10-50)
Agreement
In consideration of the ECA forgoing further investigation of Mr. Tomisato’s conduct as described above, and in consideration of the ECA forgoing any further proceedings in the matter, Mr. Tomisato 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 from the effective date of this agreement. His expulsion from the AICPA includes the loss of his AICPA credentials and certificates.
That the ECA shall provide a copy of this settlement agreement to the AICPA’s Peer Review Division staff, his firm’s peer review administering entity, and his firm’s peer reviewer.
That the ECA shall publish his name, the name of his firm, the charges, and the terms of this settlement agreement.