ACCOUNTANT, FIRM FACE DISCIPLINARY ACTION

A Cape Girardeau accountant and his accounting firm have been placed on administrative probation by the Missouri State Board of Accountancy over reported violations of technical standards and professional ethics.

Accountant William R. Schott and Schott's accounting firm, Schott and Van De Ven, entered into a consent agreement June 30 with the State Board of Accountancy in which Schott and the firm accepted the disciplinary action.

As a result, the case was never heard by the state's Administrative Hearing Commission, said Beverley Shackelford, executive director of the accountancy board.

The accountancy board, the state licensing agency charged with regulating the public accounting profession, placed Schott and the firm on probation for three years in regards to their accounting licenses.

Schott and his partner, Melvin Van De Ven, said Monday that they agreed to the disciplinary measure because it was less costly than battling the regulatory agency. "It was a matter of economics for us," said Schott. "I think each one of those items could have been reversed," he added.

"We are active in our society. We are active in our profession," said Van De Ven. "We are not scummy people trying to hide something. We believe in the accounting industry and put a lot of hours in to strengthen the industry."

As part of probation, Schott and the firm must meet certain conditions.

Shackelford said Schott must pass a written examination on professional ethics, and comply with all accountancy laws and regulations.

Each partner of the firm has to complete a minimum of 40 hours of continuing education in areas of ethics, tax, audit and accounting, in addition to regular continuing education requirements, said Shackelford.

Shackelford said each partner and professional employee of the firm must certify to the board in writing each year of the probation period that he or she is not aware of any violations of accountancy laws or regulations.

The firm must also provide 750 hours of free accounting services to charitable, religious or civic organizations during the three years of probation.

As a condition of probation, the partnership has paid $2,500 as partial reimbursement for the cost of the administrative action.

The four-count complaint was filed with the Administrative Hearing Commission. It was filed by St. Louis attorney Dennis Hoffert on behalf of the accountancy board.

According to the complaint, Schott issued accounting reports on two Cape Girardeau businesses the former Thilenius Distributing Co. and Schott Electrical Distributors Inc. but failed to disclose his ties to the companies.

The board said Schott served as a trustee for the employee profit sharing plan of the former Thilenius Distributing Co.

Schott's brother, Robert, has a substantial interest in Schott Electrical Distributors, according to the complaint.

The complaint also alleged that Schott and his firm permitted a certified public accountant not licensed in Missouri to practice in the firm's Cape Girardeau office. The accountant in question, who had worked in Cape Girardeau for several years on a part-time basis, was also listed in the firm's Yellow Pages advertisement, the board said.

Schott said the allegations over the accounting reports for Thilenius Distributing and Schott Electrical Distributors date back to the late 1970s or early 1980s.

Schott said he didn't sign the financial report for Thilenius Distributing. That was done by another accountant, who is no longer with the firm.

As to the report for Schott Electrical Distributors, he said the bank that received the report was well aware of the fact that he and Robert Schott were brothers.

Schott and Van De Ven said the firm passed its peer review in 1990, which was done by an independent CPA firm.

"We think that is a good mark on the integrity of our firm," said Schott.

As to the allegations, Schott said, "No one suffered any injury because of what was done.

Schott said the original complaint was made by a local accountant. "The sources of information received by the state board were not dissatisfied clients, only disgruntled ex-employees and ex-partners," he said.