Antitrust – CPA Board – Competitors – Administrative – Contract

In re Johnson (Lawyers Weekly No. 020-046-17, 19 pp.) (Gregory McGuire, J.) 2017 NCBC 39

Holding: Even though there are active CPAs on the North Carolina Board of Certified Public Accountant Examiners (the Board), (1) petitioners have not raised federal antitrust claims against the Board and state-action immunity is not at issue in this case and (2) the Board’s disciplinary action against petitioners is subject to active supervision by the state through the very judicial review process invoked by petitioners in this case. Most significantly, petitioners have admitted that there is no evidence in the record that would support a conclusion that the Board’s disciplinary order or procedure has affected competition among CPAs in North Carolina; therefore, the court rejects petitioners’ contentions that the Board order violated federal and state antitrust protections.

The Board order is affirmed.

The Board’s expert witness testified as to petitioners’ specific deficiencies in the audit that was reviewed. Evidence of petitioners’ failure to comply with generally accepted auditing standards and government accounting standards supports the Board’s finding and conclusion that petitioners violated 21 NCAC 08N.0409, .0403, and .0212.

The dispute between petitioner Johnson and the CPA who performed her peer review did not discharge petitioners’ obligation to pay the amount due under the peer review contract. While Johnson contends that the peer reviewer charged her more than agreed, she admits that there was an agreement and that she has not paid the reviewer anything. The Board did not err in concluding that Johnson had violated 21 NCAC 08N.2003.

Finally, on at least one occasion, Johnson failed to provide documents and information requested by the Board. The Board did not err in concluding that Johnson violated 21 NCAC 08N.0206.

Affirmed.