ALJDEC decisions subject to certification as final

11F-2011.025-ACY · State Board of Accountancy · 2011-03-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 9, 2011, at 1:00 p.m. APPEARANCES: The Arizona State Board of Accountancy appeared through Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Lielis Ali did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“the Board”) issued Certified Public Accountant Certificate No. 12120-E to Lielis Ali (“Respondent”). This certificate enables Respondent to practice as a certified public accountant (“CPA” or “registrant”) in the State of Arizona. 2. A.R.S. § 32-730(D) requires all registrants to register biennially with the Board and to submit satisfactory proof that they have completed the continuing professional education (“CPE”) that the Board requires. 3. On or about May 24, 2010, Respondent submitted to the Board her biennial registration renewal application (“the 2009 registration renewal”) for the period from November 30, 2009, through November 30, 2011. Respondent did not indicate on the 2009 registration renewal that she had completed any CPE. 4. Respondent attached to her 2009 registration renewal a change of address form that indicated that she had moved from Mesa, Arizona to an address in Jakarta Barat in Indonesia. 5. On May 24, 2010, the Board sent a letter to Respondent at her address in Indonesia, notifying her that she had not met the requirements for CPE set forth in A.A.C. R4-1-453(D)(5) and that she was required to submit to the Board a completed CPE form showing that she had taken at least 80 hours of CPE by July 9, 2010. The Board’s May 24, 2010 letter requested that Respondent respond in writing to the letter within thirty days pursuant to A.A.C. R4-1-455.03(F). 6. Between May 25 and July 2, 2010, Board staff communicated with Respondent via e-mail, informing her that if she did not submit a completed CPE form showing that she had completed the requisite CPE or request in writing, the Board would place her CPA certificate on inactive status, and the matter would be referred to the Board for possible discipline against her CPA certificate. 7. Respondent failed to respond in writing to the Board’s May 24, 2010 letter, failed to provide a completed CPE form that showed that she had taken the requisite CPE, and failed to request that the Board place her CPA certificate on inactive status. 8. At the Board’s September 13, 2010 meeting, it voted to offer Respondent a Decision and Order (by Consent), to include a $500.00 civil penalty for failing to timely respond to the Board’s May 24, 2010 letter. 9. On September 21, 2010, the Board sent to Respondent at her address in Indonesia a letter notifying her of the Board’s offer to resolve the matter by a Decision and Order (by Consent). The Board’s September 21, 2010 letter requested that Respondent respond in writing to the letter within thirty days pursuant to A.A.C. R4-1- 455.03(F). 10. The Board also sent a copy of its September 21, 2010 letter to Respondent at her e-mail address. 11. Respondent did not respond to the Board’s September 21, 2010 letter or e-mail. 12. At the Board’s December 6, 2010 meeting, it voted to direct its attorney to file a Complaint and Notice of Hearing for revocation. 13. The Board referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On December 9, 2010, the Board issued a Complaint and Notice of Public Hearing, setting a hearing on February 9, 2011, at 1:00 p.m. 14. The Board mailed a copy of the Complaint and Notice of Public Hearing to Respondent at her address in Indonesia. 15. A hearing was held at the OAH on February 9, 2011. The Board’s attorney presented the testimony of Deputy Director Jim Dubé and submitted six exhibits to establish the facts set forth above. 16. Although the beginning of the hearing was delayed fifteen minutes to allow Respondent additional travel time, she did not appear, personally or through an attorney, did not request to appear telephonically, and did not contact the OAH to request a continuance or that the start of the hearing be further delayed. Respondent did not present any evidence to defend her CPA certificate. 17. At the conclusion of the Board’s case, its attorney asked the Administrative Law Judge to suspend Respondent’s CPA certificate as a result of the statutory and regulatory violations established in this case and to allow her up to another year to provide proof that is satisfactory to the Board that she has taken the requisite CLE for the 2009 registration renewal period. CONCLUSIONS OF LAW The Board has been created and authorized to regulate and control the profession of Certified Public Accountancy in Arizona.[1] This matter lies within its jurisdiction. The Complaint and Notice of Public Hearing that the Board mailed to Respondent at the address that she provided was reasonable and she is deemed to have received notice of the hearing.[2] The Board bears the burden of proof and must establish Respondent’s statutory and regulatory violations by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] Respondent was required to submit to the Board as part of her 2009 registration renewal “satisfactory proof, in a manner prescribed by the [B]oard, that [she] has completed the [CPE] requirements established by the [B]oard.”[5] Although the Board may grant an exemption from this requirement, Respondent never claimed, and the record does not establish, that she had any right to an exemption. Pursuant to its statutory authority, the Board has promulgated an administrative rule that sets forth CPE requirements.[6] The Board’s rules also provide that registrants are deemed to have knowledge of the rules.[7]

Respondent’s failure to complete the Board’s CPE requirements for registration renewal violates A.R.S. § 32-741(A)(6) and (9),[8] specifically, A.A.C. R4-1-453(D),[9] and A.R.S. § 32-730(D).[10] Respondent’s failure to comply with the Board’s request that she provide CPE documentation violates A.R.S. § 32-741(A)(15).[11] Respondent’s failures to respond to the Board’s May 24, 2010 and September 21, 2010 letters violate A.R.S. §§ 32-741(A)(15) and 32-741(A)(9), specifically A.A.C. R4-1-455.03(F).[12] Respondent’s failures to complete the Board’s CPE requirements for registration renewal or to comply with the Board’s request that she provide CPE documentation constitute discreditable acts, as defined by A.A.C. R4-1- 455.03(A)(3).[13] Respondent’s violations of the applicable statutes and regulations that are set forth above provide grounds for the Board to take disciplinary action against her CPA certificate under A.R.S. § 32-741(A) and (D).[14] Although the Board established that Respondent generally was non- responsive to the Board’s attempts to regulate her, two mitigating factors support a lesser sanction than unconditional revocation of her CPA certificate. First, Respondent engaged in substantial communication with Board staff through e-mail. Second, during all relevant time periods, Respondent was residing on another continent, making both communication with the Board and compliance with the Board’s CLE requirements substantially more difficult. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Board’s final order, the Board suspend Respondent Lielis Ali’s Certified Public Accountant Certificate No. 12120-E for a period of twelve months or until Respondent submits proof that is satisfactory to the Board that she has completed the CPE that the Board requires for her 2009 registration renewal, whichever occurs earlier. It is further recommended that if Respondent fails to submit proof that is satisfactory to the Board that she has completed the CPE that the Board requires for her 2009 registration renewal within twelve months, the Board deem her certificate to be expired pursuant to A.R.S. § 32-741(D). It is further recommended that pursuant to A.R.S. § 32-701(6)(f), the Board require Respondent to reimburse its costs of investigation and of proceeding to hearing in this matter as a condition of keeping her CPA certificate in good standing. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, March 1, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See A.R.S. § 32-701 et seq. [2] See A.R.S. § 41-1092.04; A.R.S. § 41-1061(A). [3] 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). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] A.R.S. § 32-730(D). [6] See generally A.A.C. R4-1-453. [7] A.A.C. R4-1-102(A). [8] A.R.S. § 32-741(A) provides that after notice and an opportunity for hearing, the board may revoke any certificate previously issued for any of the following causes:

6. Violation of any of the provisions of this chapter . . . .

. . . .

9. Knowing violation of any . . . rule . . . adopted by the board.

[9] A.A.C. R4-1-453(D) requires registrants to complete 80 hours of CPE during the two-year period immediately preceding registration renewal. [10] A.R.S. § 32-730(D) provides that “[a]t the time of registration, every certified public accountant and public accountant shall as a prerequisite to biennial registration submit to the board satisfactory proof, in a manner prescribed by the board, that the registrant has completed the continuing education requirements established by the board.” [11] A.R.S. § 32-741(A)(15) provides that after notice and an opportunity for hearing, the board may revoke any certificate previously issued for “[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.” [12] A.A.C. R4-1-455.03(F) 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.” [13] A.A.C. R4-1-455.03(A) defines a “discreditable act” as follows:

Certified public accountants, public accountants, or firms shall not commit any act that reflects adversely on their fitness to engage in the practice of public accounting, including: . . . .

2) Violation of any of the provisions of A.R.S. Title 32, Chapter 6, Article 3, or any rule promulgated under these statutes.

[14] A.R.S. § 32-741(D) provides that “[t]he board shall, after notice and a hearing, suspend the certificate of any certified public accountant or public accountant who fails to show proof, in accordance with section 32- 730, subsection D, of compliance with the continuing professional education requirements established by the board.”

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