CPA MISCONDUCT OFFICIALLY DEFINED

The Securities and Exchange Commission has clarified its definition of what would constitute improper professional conduct by certified public accountants.

In a proposal issued earlier this month, the SEC put in that category any intentional violations of standards, including recklessness.

The commission also proposed that negligent conduct would be defined as improper if there are repeated violations of professional standards that show the accountant is incompetent.

If the commission determines there has been improper conduct, it can censure, suspend or bar the accountant.

The SEC’s action came in response to a recent appellate court ruling that the agency had not defined improper conduct clearly.