Moore, Andrew J. of Dallas, TX

As a result of a decision of a hearing panel of the Joint Trial Board, Mr. Moore’s AICPA membership was admonished effective December 30, 2023. Mr. Moore was found guilty of violating the following rules of the AICPA Code of Professional Conduct in his performance of professional services on the audit of the financial statements of a not-for-profit as of and for the fiscal year ended June 30, 2019 and 2018:

General Standards Rule .01b. Due Professional Care (1.300.001)

1. The auditor failed to exercise due professional care as the original and revised June 30, 2019 financial statements do not disclose that ASU 2016-14 was adopted but use the new terms “net assets without donor restrictions” and “net assets with donor restrictions”; although the Contributions paragraph in Note 2 still uses the terms unrestricted, temporarily restricted, and permanently restricted.
2. The auditor failed to exercise due professional care as the board-designated endowment fund footnotes do not agree. Consequently, the dual-dated auditor’s report should have also referenced additional footnotes.
3. The auditor failed to exercise due professional care as evidenced by the following:
   1. The Basis of Accounting paragraph in all financial statement versions states, “These financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than generally accepted accounting principles generally accepted in the United States of America.” The first phrase “generally accepted” should be omitted.
   2. The original and revised June 30, 2019 financial statements are on the modified cash basis but the Cash and Cash Equivalents paragraph of Note 2 contains the phrase “for purposes of the statement of cash flows”.
   3. The management representation letter is dated July 26, 2019, which is the same as the auditor’s report; however, the management signature is dated July 24, 2019.
   4. The auditor’s report in all financial statement versions refers to the statement of revenues, expenses and other changes in net assets. “Other” is not included in the table of contents or on the face of the statement.
   5. In the revised 2019 financial statements provided by the respondent, there is no subtotal for net assets without donor restrictions.
   6. The engagement letter notes the financial statements will be presented on the modified-cash basis of accounting; however, it also notes the auditor will express an opinion on whether the financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles.

Compliance with Standards Rule (1.310.001)

1. The auditor failed to prepare audit documentation that would enable an experienced auditor, having no previous connection to the audit, to understand the procedures performed for related parties. (AU-C §230)
2. The auditor failed to obtain sufficient and appropriate audit evidence to express an opinion on the financial statements regarding contingencies. (AU-C §500)
3. The paragraph for Report on Summarized Comparative Information in the auditor’s report does not include a statement regarding if an opinion was issued on this information or not. (AU-C §725)
4. The auditor failed to prepare audit documentation that would enable an experienced auditor, having no previous connection to the audit, to understand the procedures performed for investments, revenues, and net assets. (AU-C §230)
5. The auditor failed to document the understanding of internal controls, including walkthroughs, for significant audit areas. (AU-C §315, AU-C §230)
6. The auditor failed to prepare a written audit program that set forth procedures necessary to accomplish the objectives of the audit in the area of investments. (AU-C §300)
7. The original and revised June 30, 2019 financial statements failed to achieve fair presentation in accordance with AU-C §800 as evidenced by the following:
   1. The adoption of ASU 2016-14 and its impact on the financial statements was not adequately disclosed. (FASB ASC 250-10-50)
   2. No disclosure of quantitative information, and additional qualitative information in the notes as necessary, about the availability of the entity’s financial assets at year-end to meet cash needs for general expenditures within one year. (FASB ASC 958-210-45)
   3. No disclosure of qualitative information that is useful in assessing the entity’s liquidity and that communicates how the entity manages its liquid resources available to meet cash needs for general expenditures within one year of the financial statement date. (FASB ASC 958-210-50)
   4. No disclosure for use of estimates and the general risk and uncertainties for cash and investment holdings. (FASB ASC 275)
   5. Failure to present and disclose an error correction for misclassifying board designated net assets as permanently restricted net assets. (FASB ASC 250-10-50)
   6. Failure to allocate investment earnings to donor-restricted endowment funds. (FASB ASC 958-205-45)

   The hearing panel of the Joint Trial Board also imposed remedial sanctions and Mr. Moore was directed as follows:

   1. To comply immediately with professional standards applicable to the professional services he performs.
   2. To complete the following 35 hours of continuing professional education (CPE) courses within 12 months of the effective date of the Joint Trial Board decision and provide evidence of such completion (e.g., attendance sheets, course completion certificates). 
      
                  Not-for-Profit Accounting and Financial Reporting              19
      
                  Risk Assessment During the Recovery                              4
      
                  Workpaper documentation – course to be selected by
      
                  Mr. Moore and pre-approved by the ECA                          4
      
                  Professional Ethics: The AICPA Comprehensive
      
                  Course (self-study) with a score of 90 or above                8
          
      
   3.  To hire an outside party, acceptable to the Ethics Charging Authority (ECA – AICPA Professional Ethics Executive Committee and Texas Society of CPAs Professional Ethics Committee), to perform a pre-issuance review of the reports, financial statements, and working papers on 5 audits performed by him for one year from the date the reviewer has been approved by the ECA. The reviewer may be a partner from another office in his firm with relevant expertise. He must submit the names of the chosen reviewers to the ECA for approval no later than 30 days after the effective date of the Joint Trial Board decision. Also, no later than 30 days after the effective date of the Joint Trial Board decision, he must submit a list to the ECA of the audits on which he expects to participate, and reports will be issued in the upcoming 12 months from which the engagements subject to pre-issuance review will be selected.
      
      He was directed to permit the outside party to report quarterly to the ECA on his progress in complying with this agreement as stated herein to comply with professional
      standards. The report should include the reviewer’s comments in detail for each engagement (a report that omits such detail will be unacceptable); a description of the nature of the entity reviewed; the entity’s year-end; and the date of the review.
      
      The first report is due 120 days after the reviewer has been approved by the ECA, with subsequent reports due every 90 days thereafter. If none of the engagements selected for pre-issuance review were performed during a reporting period, he was directed to inform the ECA of such. He was directed to have this pre-issuance review performed at his expense. The ECA has the right to extend the period of time and number of engagements subject to pre-issuance review if there are deficiencies.
      
      He was directed to inform the ECA of any changes in the composition of his practice, changes in his role, or if he has not performed any audits during the period he is subject to the pre-issuance reviews. If his practice changes and he is no longer involved with audits, no longer acts in a supervisory capacity on such engagements, or has not performed such engagements during the above specified period, he must inform the ECA of this change and the ECA may require that he attest every six months for three years as to the nature of his practice. If, during the three-year attestation period he returns to performing such engagements, he must inform the ECA of this change and undergo the required pre-issuance reviews.
      
      
   4. To submit six months after completion of the pre-issuance reviews, a list of the highest level (audits, reviews, and compilations with note disclosures) of engagements that he performed in the six-month period following the date he completed the pre-issuance reviews.
      
      The ECA will select one of these engagements for review. He will be informed of this selection and will be asked to submit information to include a copy of the auditor’s report, the financial statements, and working papers related to that engagement for review by the ECA. The ECA may extend the period to select an engagement to ensure a suitable selection is available. A peer review undergone by his firm would not exempt him from this requirement.
      
      He was directed to inform the ECA of any changes in the composition of his practice, changes in his role, or if he has not performed any audits, reviews, or compilations with note disclosures until a suitable work product is selected for review. If his practice changes and he is no longer involved with audits, reviews, or compilations with note disclosures, no longer acts in a supervisory capacity on such engagements, or he has not performed such engagements during the above specified period, he must inform the ECA of this change, and the ECA may require that he attest every six months for three years as to the nature of his practice. If, during the three-year attestation period he returns to performing such engagements, he must inform the ECA of this change, and the ECA will select a suitable work product for review.
      
      After an initial review of such report, financial statements, and working papers, the ECA may decide he has substantially complied with professional standards and close this matter. Or, the ECA may decide that an ethics investigation of the engagement he submitted is warranted. If, at the conclusion of the investigation, the ECA finds that professional standards have in fact been violated, the ECA may refer the matter to the AICPA joint trial board for a hearing or take such other action as it deems appropriate.
      
      
   5. To be prohibited from performing peer reviews in any capacity until he has completed all directives. This prohibition will be communicated to his firm’s peer review administering entity.
      
      
   6. To be prohibited from serving as a member of any ethics or peer review committee of the AICPA or the Texas Society of CPAs until he has completed all directives. This prohibition will be communicated to those responsible for appointments to such committees. In addition, if he applies to join any other committee of the AICPA or the Texas Society of CPAs, he must inform those responsible for such appointments of the results of this ethics investigation.
      
      
   7. To be prohibited from teaching continuing professional education courses approved by the AICPA or the state CPA societies in the areas of accounting and auditing until he has completed all directives. This prohibition will be communicated to those responsible for engaging CPE instructors at the AICPA and the Texas Society of CPAs.
      
      
   8. To submit written evidence from the partner at his firm responsible for coordinating his firm’s peer review and the firm’s managing partner that he has provided the results of the Joint Trial Board decision to them within 30 days of the effective of the Joint Trial Board decision.
      
      
   9. That the ECA shall provide a copy of this Joint Trial Board decision to the AICPA’s Peer Review Division staff, his firm’s peer review administering entity, and his firm’s peer reviewer.
      
      
   10. That the ECA shall monitor his compliance with the terms of the Joint Trial Board decision and initiate an investigation where the ECA finds there has been noncompliance.