ALJDEC decisions subject to certification as final

11F-2011.029-ACY · State Board of Accountancy · 2010-12-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 9, 2010 at 1:00 p.m. APPEARANCES: The Arizona State Board of Accountancy appeared through Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Laura Calder did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“the Board”) issued to Respondent Laura Calder Certified Public Accountant (“CPA”) Certificate No. 15801-R. 2. On August 17, 2010, the Board received Ms. Calder’s biennial Registration Renewal Form for the period 7/31/2010 – 7/31/2012 (“the Registration Renewal Form”). 3. On the Registration Renewal Form, Ms. Calder provided her residence address as 40345 West Lococo St., Maricopa, AZ 85138. Ms. Calder also provided her secondary occupation as performing one hour of accounting per month as a member of AZ Accounting Solutions, L.L.C. at her residence address. 4. The Board’s staff determined that AZ Accounting Solutions, L.L.C. was not a firm that the Board recognized under A.R.S. § 32- 701(8).[1] 5. On August 24, 2010, Deputy Director Jim Dubé on behalf of the Board sent via certified mail a letter to Ms. Calder at her residence, informing her in relevant part as follows: Pursuant to A.A.C. R4-1-455.03(D)(1), “certified public accountants or public accountants may practice public accounting, whether as owners or employees” only in a firm as defined by statute . . . . In addition, please note that A.R.S. § 32-731(A)(2) provides that at least 51% ownership of the firm belong to holders of certificates which are in good standing. Staff’s review of the Arizona Corporation Commission (A.C.C.) website indicates you registered this company with the A.C.C. in April, 2009, and it appears that you listed your name as Laura Stillwell. Please be aware that in any venue where you represent yourself as an accountant, or any public accounting work you perform, you must represent yourself by the exact name under which you are licensed with the Board.

Enclosed, please find an application to register a firm. The Board will consider your request once you have completed the enclosed application for your professional corporation. Please note that you are prohibited from operating under your firm’s proposed name until the Board approves your registration application.

The Board is aware that the approval of your firm registration is of vital importance to you. Be assured that the Board will do everything it can to timely act on your firm’s registration application. Upon receipt of all the required information, the Board will make every effort to consider your firm’s registration application at its next regularly scheduled meeting and will notify you shortly thereafter of its action.

Please be advised that if the firm continues to represent itself or hold itself out to the public as a CPA firm without being registered with the Board, it may be subject to legal action. Pursuant to A.A.C. R4-1-455.03(F), you are hereby requested to respond to this request by submitting the requested documentation, within thirty days of the date of this letter. Failure to timely respond and/or submit the requested material may be considered a violation of A.R.S. § 32-741(A)(9) and (15) and A.A.C. R4-1-455.03(F), which could be grounds for disciplinary action against your certificate.

[Emphasis in original.] 6. The Board attached records from the Arizona Corporation Commission (“A.C.C.”) to its August 24, 2010 letter. According to the A.C.C. records, Laura Stillwell and one Colby L. Hess were listed as members in AZ Accounting Solutions, L.L.C. AZ Accounting Solutions, L.L.C.’s and both members’ addresses were listed as 40345 W. Lococo St., Maricopa, AZ 85138, the same address as Ms. Calder’s address of record with the Board. 7. On August 25, 2010, Colby L. Hess signed the United States Postal Service’s receipt of the Board’s August 24, 2010 certified letter. 8. Ms. Calder did not respond to the Board’s August 24, 2010 certified letter and did not provide a completed application to register her firm, AZ Accounting Solutions, L.L.C. 9. At the Board’s October 4, 2010 meeting, it voted to file a Complaint and Notice of Hearing for revocation of Ms. Calder’s CPA certificate, based on her failure to respond to the Board’s August 24, 2010 certified letter. 10. The Board referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. 11. On October 6, 2010, the Board issued a Complaint and Notice of Public Hearing, setting a hearing on December 9, 2010 at 1:00 p.m. at the OAH. The Board mailed copies of the Complaint and Notice of Public Hearing to Ms. Calder at her address of record by regular and certified mail. 12. The Complaint and Notice of Public Hearing charged Ms. Calder with violations of A.R.S. §§ 32-741(A)(15)[2] and 32-741(A)(9),[3] specifically, of A.A.C. R4-1-455.03(F).[4] The Complaint and Notice of Public Hearing also charged Ms. Calder with having committed a discreditable act as defined by A.A.C. R4-1- 455.03(A)(1) and (3).[5] 13. A hearing was held on December 9, 2010, commencing at 1:15 p.m. 14. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Ms. Calder additional travel time, she did not appear personally or through an attorney, and did not contact the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed. Ms. Calder did not present any evidence to defend her CPA certificate. 15. The Board presented the testimony of Mr. Dubé and submitted three exhibits to establish the facts set forth above. CONCLUSIONS OF LAW The Board has personal and subject matter jurisdiction over Ms. Calder pursuant to A.R.S. §§ 32-701 et seq. and A.A.C. R4-1-101 et seq. The Board has the authority to discipline Ms. Calder’s CPA certificate pursuant to A.R.S. § 32-741. The notice of the hearing that the Board mailed to Ms. Calder at the address she provided on her Registration Renewal Form, her address of record, was reasonable and she is deemed to have received the Board’s Complaint and Notice of Public Hearing.[6] The Board bears the burden of proof and must establish cause to penalize Ms. Calder’s CPA certificate by a preponderance of the evidence.[7] Ms. Calder is deemed to have knowledge of the Board’s rules.[8] The Board established cause to penalize Ms. Calder’s CPA certificate under A.R.S. § 32-741(9) and (15), A.A.C. R4-1-455.03(F), and A.A.C. R4-1- 455.03(A)(1) and (3). Ms. Calder’s proven failure to respond to the Board’s inquiries, as required by regulation, constitutes a discreditable act and provides cause for the Board to penalize her CPA certificate.[9] Her failures to provide the requested information and to appear at the duly noticed public hearing to defend her CPA certificate demonstrate that, at this time, she cannot be regulated. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Board revoke Certified Public Accountant Certificate No. 15801-R previously issued to Laura Calder. 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, December 20, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] This statute defines “firm” as follows:

“Firm” means a business organization that is engaged in the practice of accounting and that is established under the laws of any state or foreign country, including a sole practitioner, partnership, professional corporation, professional limited liability company, limited liability company, limited liability partnership or any other entity recognized by the board that has met the applicable requirements contained in §§ 32-731 and 32- 732.

A.R.S. §§ 32-731 and 732 set forth the requirements for, respectively, certified public accountant partnerships and public accountant partnerships. [2] This statute includes among the grounds for the Board to revoke or suspend any CPA 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 and control.” [3] This statute includes among the grounds for the Board to revoke or suspend any CPA certificate, “[k]nowing violation of any . . . rule issued or adopted by the board.” [4] This administrative rule provides as follows: “Communications: When 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.” [5] This administrative rule provides in relevant part as follows:

Discreditable acts: 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:

1. Violation of any of the provisions of R4-1-455 through R4- 1-455.04; [or] . . . .

3. Violation of any of the provisions of A.R.S. § Title 32, Chapter 6, Article 3, or any rule promulgated under these statutes. [6] See A.R.S. § 41-1092.04. [7] 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). [8] A.A.C. R4-1-102(A). [9] See A.R.S. § 32-741(A)(9) and (15).

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