BEFORE THE ARKANSAS STATE BOARD OF PUBLIC ACCOUNTANCY IN THE MATTER OF BKD, LLP CERTIFICATE NO. 28LP ‘NO. C18-068 CONSENT ORDER ‘The Arkansas State Board of Public Accountancy (hereafter "the Board") and BKD, LLP (hereafter "Respondent") acknowledge the existence of a controversy regarding Respondent's compliance with the Arkansas Public Accountancy Act of 1975, the Board's Rules, and the Code of Professional Conduct adopted by the Board (hereafter "Conduct Rules") Arkansas Code Annotated § 25-15-208(b) specifies that administrative proceedings may be resolved informally “by stipulation, settlement, consent order, or default.” Now the Respondent is willing to enter into a Consent Order to resolve the pending controversy. It is expressly understood and agreed that this Consent Order is a compromise of disputed claims and is entered into for the sole purpose of resolving the issues between the parties and avoiding costly litigation. Respondent admits the jurisdiction of the Board and the Conduct Rules, waives its right to a formal hearing and appeal, waives any further procedural steps including the right to challenge or contest the validity of this Consent Order, and without admitting or denying the findings of facts or conclusions of law made herein, consents to the entry of this Consent Order, and agrecs to abide by its terms in settlement of any violations committed by Respondent concerning the matters detailed in this Consent Order. Further, Respondent hereby represents and agrees: 1. Respondent, having read the proposed Consent Order, acknowledges its right to consult with counsel, and enters into this Consent Order on Respondent's own volition and without any reliance upon any representations by the Board or any officer, employee, agent or other representative thereof, other than expressly set forth herein. 2, Respondent agrees that the Board will review and determine whether to approve this,Consent Order. Furthermore, Respondent agrees that should this Consent Order not be approved by the Board, the presentation and consideration of this Consent Order by the Board shall not unfairly or illegally prejudice the Board or any of its members from further participation, consideration, or resolution of the matters involved herein at any subsequent hearing, 3. Respondent understands and agrees that approval and entry of this Consent Order shall not preclude additional proceedings by the Board against Respondent for acts or ‘omissions not specifically addeessed herein. 4. Respondent understands and acknowledges that this Consent Oxder ‘(and the Boss's records conceming this matter are public records tad svailable to the public purraant " to the Freedom of Information Act, Arkansas Code Annotated (hereafter A.C.A.) §25-19-101, es. 5. This agreement shall not become a valid and enforceable order of this Board unless and until accepted and approved by the Board at an official meeting and executed by the President of the Board or his or her designee. FINDINGS OF FACT 7. Respondent was hited by Client A to perform an audit of Client A's December 31, 2011 financial statements. Respondent issued the engagement audit report on September 28, 2012, 8 Respondent was also hired by Client A to prepare Client A's IRS Form 990 (Return of Organization Exempt From Income Tax) for fiscal year 2011 (hereafter "2011 ‘Tax Return"). After completion, the 2011 Tax Return was filed with the Internal Revenue Service. 9,IN BKD, I: MATTER OF 10. Client A publicly acknowledged that the changes did not require amendment of the 2011 Tax Return, did not change bottom line numbets, and did not result in the payment of any taxes. Client A also publicly stated they chose to amend the 2011 Tax Return as a commitment to disclosure and thoroughness, 11, As requested by Client A, Respondent made the recommended changes to the 2011 Tax Return and filed an amended return with the Internal Revenue Service. CONCLUSIONS OF LAW 12. Board Conduct Rules 201(B) and 202 provide, respectively, that a “licensee shall exercise due professional care in the performance of professional services,” and that a “licensee who performs auditing, review, compilation, management consulting, tax, or other professional services shall comply with professional standards as defined in Board Rule 8.2." 13. Violations of Board Conduct Rule 201 (B) and Board Conduct Rule 202 constitute grounds for the imposition of disciplinary action pursuant to A.C.A. § 17-12-601(@)(4) and A.C.A. § 17-12-602. 15. Respondent contends that due professional care was exercised and all applicable professional standards followed in the initial preparation and filing of the 2011 Tax Return for Client ‘A, and that the subsequent amendments are not indicative of a violation of Board Conduct Rule 201(B) and 202, and accordingly of A.C.A. § 17-12-601(@)(4).INTHE MATTER OF BED, LP, ORDER In settlement of this matter, but without admitting or denying the findings of fact or conclusions of law made above, Respondent and the Board agree that Respondent BKD, LLP shall pay the to the Board: Givil Penaley $ 1,000.00 Expert Witness Charges $7,442.26 “The Board shall receive payment of the above total of $8,442.26 within thirty (30) days ofthe date on which the President of the Board or his or her designee signs this Consent Order. IT IS FURTHER ORDERED the Board shall retain jurisdiction of this matter for purposes of implementing and enforcing this Consent Order; and, Respondent's failure to comply with any term or condition of this Consent Onder shall constitute grounds to impose additional disciplinary action pursuant to A.C.A. § 17-12-601(a)9)s and, the Board may, after notice and opportunity for a heating, suspend or revoke Respondent's certificate as a firm licensee or take other appropriate action pursuant to ACA, § 17-12-602 against Respondent. IV IS SO ORDERED. AGREED this 4 day of Pypes \__, 2021 Approved: ARKANSAS BOARD OF PUBLIC ACCOUNTANCY Dut f UL : A David Vaden, CPA Jypfiny Corley, ExCcutive Director President Mille 4-9-2091 Aiichael G. Wolfe, Cp Date Chief Risk Officer BKD, LLP