FREE ESSAY ON VIOLATION OF STATE ACCOUNTANCY ACT

VIOLATION OF STATE ACCOUNTANCY ACT

RIVERSIDE CPA PAYS $25,000 PENALTY
FOR VIOLATING STATE ACCOUNTANCY ACT
Hartford - Secretary of the State Susan Bysiewicz's office announced today that the
Connecticut State
Board of Accountancy has accepted a settlement agreement with Michael Smeriglio, a
certified public
accountant (CPA) from Riverside, Connecticut, practicing in Greenwich, which requires
Smeriglio to pay a
$25,000 civil penalty for allegedly violating the State Accountancy Act. Smeriglio is
reported to have
received commissions from the sale of financial products. The penalty represents the net
income he
received from the illegal profits of that activity. 
Connecticut law bars CPA's from accepting commissions or referral fees, even when done
through a
business separate from their CPA firm, according to Michael Kozik, attorney for the
Connecticut State
Board of Accountancy.
The Board's case against Smeriglio was initiated when another Connecticut CPA sent the
Board a copy of
newsletter apparently published by Trusted Securities Advisors, Corp. Smeriglio was
quoted in the
newsletter as saying, In addition to generating commission revenues that used to go to
brokers, I also
make my clients feel much more comfortable with me as their personal financial advisor.
It's a win win
scenario for all of us.
According to Kozik, Smeriglio fully cooperated with the Board's investigation. None of
Mr. Smeriglio's
clients complained to the Board, and he may have even thought that he was acting lawfully
by setting up
a separate business through which to receive the commissions. He was wrong. He made
illegal profits for
about two and a half years. This settlement deprives him of all of those profits, Kozik
added.
The settlement also provides that Smeriglio will immediately stop accepting commissions
for referring the
products or services of others and will waive his right to receive future commissions on
products already
sold. The settlement specifically provides that by agreeing to settle the case, Smeriglio
is not admitting he
did anything wrong. He retains his Connecticut CPA license.
Kozik also noted that, although there is a great deal of discussion in the profession and
the business
community about changing the law prohibiting CPA's from receiving commissions, in late
October the
Board voted down a proposal to seek such a change from the legislature. The traditional
view in the
accounting profession is that accepting commissions would imperil a CPA's objectivity and
independence.
The State Board of Accountancy, which was established in 1907 to regulate the practice of
public
accountancy in Connecticut, has been part of the Office of the Secretary of the State
since 1986.
Bibliography
RIVERSIDE CPA PAYS $25,000 PENALTY
FOR VIOLATING STATE ACCOUNTANCY ACT
Hartford - Secretary of the State Susan Bysiewicz's office announced today that the
Connecticut State
Board of Accountancy has accepted a settlement agreement with Michael Smeriglio, a
certified public
accountant (CPA) from Riverside, Connecticut, practicing in Greenwich, which requires
Smeriglio to pay a
$25,000 civil penalty for allegedly violating the State Accountancy Act. Smeriglio is
reported to have
received commissions from the sale of financial products. The penalty represents the net
income he
received from the illegal profits of that activity. 
Connecticut law bars CPA's from accepting commissions or referral fees, even when done
through a
business separate from their CPA firm, according to Michael Kozik, attorney for the
Connecticut State
Board of Accountancy.
The Board's case against Smeriglio was initiated when another Connecticut CPA sent the
Board a copy of
newsletter apparently published by Trusted Securities Advisors, Corp. Smeriglio was
quoted in the
newsletter as saying, In addition to generating commission revenues that used to go to
brokers, I also
make my clients feel much more comfortable with me as their personal financial advisor.
It's a win win
scenario for all of us.
According to Kozik, Smeriglio fully cooperated with the Board's investigation. None of
Mr. Smeriglio's
clients complained to the Board, and he may have even thought that he was acting lawfully
by setting up
a separate business through which to receive the commissions. He was wrong. He made
illegal profits for
about two and a half years. This settlement deprives him of all of those profits, Kozik
added.
The settlement also provides that Smeriglio will immediately stop accepting commissions
for referring the
products or services of others and will waive his right to receive future commissions on
products already
sold. The settlement specifically provides that by agreeing to settle the case, Smeriglio
is not admitting he
did anything wrong. He retains his Connecticut CPA license.
Kozik also noted that, although there is a great deal of discussion in the profession and
the business
community about changing the law prohibiting CPA's from receiving commissions, in late
October the
Board voted down a proposal to seek such a change from the legislature. The traditional
view in the
accounting profession is that accepting commissions would imperil a CPA's objectivity and
independence.
The State Board of Accountancy, which was established in 1907 to regulate the practice of
public
accountancy in Connecticut, has been part of the Office of the Secretary of the State
since 1986.