ALJDEC decisions subject to certification as final

09F-2009.098-ACY · State Board of Accountancy · 2009-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 16, 2009 at 8:00 a.m. APPEARANCES: The Arizona State Board of Accountancy appeared through Montgomery Lee, Esq., Assistant Attorney General; Respondent Sheila Peace did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“the Board”) is the state agency authorized pursuant to A.R.S. §§ 32-701 et seq. to regulate the practice of public accounting by Certified Public Accountants in the State of Arizona. 2. The Board issued to Respondent Sheila Peace Certified Public Accountant Certificate No. 14697-R, which enables Respondent to practice as a certified public accountant in the State of Arizona. 3. The Board has also issued to Respondent Sheila Peace, CPA, PC Certified Public Accounting Firm Registration No. 1252-C. 4. Pursuant to A.R.S. § 32-730(D), all registrants must biennially register with the Board and submit satisfactory proof that they have completed he continuing profession education (“CPE”) requirements promulgated by the Board. 5. Pursuant to A.A.C. R4-1-453(D)(2), Respondent was required to complete 10 hours of CPE for every three months registered before registration renewal. Respondent was therefore required to submit hours of CPE. 6. On or about January 30, 2009, Respondent submitted her biennial registration application to the Board. On the registration application, Respondent failed to document that she had completed the CPE requirements set forth in A.A.C. R4-1-453(D). 7. Respondent also failed to submit legible proof of citizenship as required by Section VI of the registration form. Respondent provided an illegible copy of a passport to the Board. The document was insufficient to determine proof of citizenship. 8. The Board’s staff contacted Respondent about the deficiencies in her biennial registration application. On February 4, 2009, the Board sent Respondent a letter, with which it enclosed a copy of the CPE requirements. 9. The Board’s February 4, 2009 letter also instructed Respondent that she was required to complete the employment section of the application, even if she was unemployed. 10. Respondent failed to submit documentation to register her CPA firm (Sheila Peace CPA, PC) with the Board. 11. On or about March 26, 2009, the Board sent a certified letter requesting CPE information from Respondent to her address of record. The letter requested, pursuant to A.A.C. R4-1-455.03(F), that Respondent respond within thirty days of the date of the letter. 12. On March 27, 2009, one Deborah J. Raney signed to accept delivery of the Board’s March 26, 2006 letter. 13. Respondent failed to timely respond to the Board’s March 26, 2009 certified request for documentation. 14. On or about June 12, 2009, the Board sent a certified letter request to Respondent at her address of record to register her firm, Sheila Peace, CPA, PC. The letter requested, pursuant to A.A.C. R4-1-455.03(F), that Respondent respond within thirty days of the date of this letter. 15. On June 13, 2009, Ms. Raney signed to accept delivery of the Board’s June 12, 2009 certified letter. 16. Respondent failed to timely respond to the Board’s June 12, 2009 certified request for registration of her firm, Sheila Peace, CPA, PC. 17. In mid-July, 2009, Respondent submitted a firm application. But the application was incomplete. 18. On July 15, 2009, the Board’s staff informed Respondent that the Board would review Respondent’s compliance with a previous consent decree and with applicable law at its September 14, 2009 meeting. On September 14, 2009, the Board voted to refer the matter for hearing. 19. On September 25, 2009, the Board issued a Complaint and Notice of Public Hearing, setting the matter for hearing on December 16, 2009 at 8:00 a.m. 20. The Board sent via certified mail a copy of the Complaint and Notice of Public Hearing to Respondent at her address of record. 21. With respect to Respondent’s failure to complete the biennial registration, the Complaint charged Respondent with violations of A.R.S. §§ 32-741(A)(15), A.A.C. R4-1-453(D) and R4-1-455.03(F). 22. With respect to Respondent’s failure to complete her firm registration, the Complaint also charged Respondent with violations of A.R.S. § 32-730(A) and A.A.C. R4-1-455.03(F). 23. The Complaint also informed Respondent that, under A.A.C. R4-1- 102(A), she was deemed to have knowledge of the Board’s rules. Her failure to respond to the Board’s request for documentation constituted a violation of A.R.S. § 32-741(A)(9). 24. The Complaint finally informed Respondent that her failure to provide documentation and information or to comply with the Board’s requests constituted a discreditable act under A.A.C. R4-1- 455.03(A)(3). 25. Finally, the Complaint notified Respondent that the factual allegations were grounds for revocation, suspension, probation and other disciplinary action against her Certificate No. 14697-R and Firm Registration No. 1252-C pursuant to A.R.S. §§ 32-741(A) and (D); 32-730(A) as defined in A.R.S. § 32-701(6). 26. A hearing was held on December 16, 2009, commencing at 8:00 a.m. 27. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, she neither appeared personally or through an attorney, contacted the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed, nor presented any evidence to defend her Certified Public Accountant Certificate and Certified Public Accounting Firm Registration. 28. The Board had admitted into evidence the documents referenced above and presented the testimony of its Deputy Director Jim Dubé. CONCLUSIONS OF LAW The Board has personal and subject matter jurisdiction over Respondent pursuant to A.R.S. §§ 32-701, et seq. and A.A.C. R4-1-101, et seq. The notice of the hearing that the Board mailed to Respondent at her address of record was reasonable Respondent is deemed to have received notice of the hearing.[1] The Board bears the burden of proof and must establish Respondent’s statutory and regulatory violations by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[4] Respondent’s failure to comply with the Board’s requests for documentation as described in the Findings of Fact constitutes a violation of A.R.S. § 32- 741(A)(15).[5] Respondent’s failure to comply with the Board’s requests for CPE documentation as described in the Findings of Fact constitutes a violation of A.A.C. R4-1-453(D)[6] and R4-1-455.03(F).[7] Respondent’s failure to comply with the Board’s requests to register Firm No. 1252-C as described in the Findings of Fact constitutes a violation of A.R.S. § 32-730(A)[8] and R4-1-455.03(F). Pursuant to A.A.C. R4-1-102(A), Respondent is deemed to have knowledge of the Board’s rules. Respondent’s failure to comply with the Board’s requests for documentation, as described in the Findings of Fact, constitutes a violation of A.R.S. § 32-741(A)(9).[9] The conduct and circumstances described in the Findings of Fact and these proven incidents of unprofessional conduct constitute a failure to comply with the professional standards set forth in A.A.C. R4-1-455.03(A)(3).[10] The conduct and circumstances described in the Findings of Fact and these proven incidents of unprofessional conduct are grounds for revocation, suspension, probation, and other disciplinary action against Certificate No. 14697-R and Firm Registration No. 1252-C pursuant to A.R.S. §§ 32- 741(A) and (D);[11] 32-730(A) as defined in A.R.S. § 32-701(6).[12] Respondent’s violations of applicable statute and regulation also provide a basis for the Board to require that she reimburse the Board its costs for the investigation and proceeding to penalize her certified public accountant certificate and public accounting firm registration.[13] Respondent’s failure to respond to the Board’s repeated inquiries indicate that, at this time, she cannot be regulated. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Board suspend Respondent Sheila Peace’s Certified Public Accountant Certificate No. 14697- R and Certified Public Accounting Firm Registration No. 1252-C, previously issued to Sheila Peace, CPA, PC. It is further recommended that, if Respondent fails to reinstate her certificate and firm registration within twelve months after the date of suspension, that the Board deem the certificate and registration to have expired. It is further recommended that the Board assess against Respondent the costs of this proceeding. Done this day, December 22, 2009.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary at page 1064 (6th ed. 1990). [5] This statute includes among the bases for the Board to revoke or suspend a certificate “[f]ailing to respond or furnish information in a timely manner to the board or its designated agent, if the information is legally requested by the board and is in the registrant’s possession or control.”). [6] This regulation requires that “[a] registrant shall complete the CPE requirements as specified under subsections (D)(1) through (D)(9) as applicable.” [7] This regulation provides that, “[w]hen requested, certified public accountants or public accountants shall respond to communications from the Board within 30 days of the mailing of such communications by registered or certified mail.” [8] This statute requires certified public accountant and firms to register biennially with the Board. [9] This statutes includes among the bases for the Board to revoke or suspend a certificate “”[k]nowing violation of any decision, order or rule issued or adopted by the board.” [10] This regulation prohibits certified public accountants from committing discreditable acts, which is defined as “any act that reflects adversely on their fitness to engage in the practice of public accounting,” including “[v]iolation of any of the provision of A.R.S. title 32, Chapter 6, Article 3, or any rule promulgated under these statutes.” [11] A.R.S. § 32-741(A) sets forth the grounds for revocation or suspension of a certificate. A.R.S. § 32-741(D) requires the Board to suspend the certificate of any registrant who fails to show that she has complied with CPE requirements. [12] A.R.S. § 32-730(A) requires biennial registration. A.R.S. § 32-701(6) defines disciplinary action that may be taken as an alternative to suspension or revocation as an administrative penalty, not to exceed $2,000 for each violation, practice restrictions, peer review and additional CPE, a decree of censure, probation, and reimbursement of the Board’s costs. [13] See A.R.S. § 32-701(6)(f).

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