McBride

*521 Opinion

The trial court sustained the decision of the California Board of Accountancy to discipline appellant members of the accounting profession for their failure to meet professional standards in performing audits for the County of Orange. We affirm.

FACTS

Robert Citron, the elected treasurer-tax collector for Orange County, was authorized to invest Orange County funds and the funds of the “Orange County Investment Pool” (OOP), which consisted of Orange County funds as well as funds on deposit from other governmental entities. In addition to funds deposited by school districts, which were required to invest their funds in OOP, and other voluntary OOP participants, Citron raised additional funds for OOP by borrowing from brokers and lenders. Citron would transfer securities owned by OOP as collateral for the cash, and promised to repay cash plus interest upon the return of the securities. This arrangement is called a reverse purchase agreement. Citron invested the cash obtained through these reverse purchase agreements in other securities.

As long as interest rates were stable or declining, the reverse purchase agreements enabled Citron to invest the borrowed funds at…