ALJDEC decisions subject to certification as final

12F-2012.020-ACY · State Board of Accountancy · 2011-11-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 10, 2011, at 1:00 p.m. APPEARANCES: The Arizona State Board of Accountancy appeared through Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Richard M. Streetman 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. 3654-E to Richard M. Streetman (“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 March 30, 2011, Respondent submitted his biennial registration renewal application (“the 2011 registration renewal”) to the Board. The address on the 2011 registration renewal was Respondent’s address of record with the Board. On the 2011 registration renewal, Respondent indicated that he had not completed any CPE. 4. Pursuant to A.A.C. R4-1-453(D)(1), Respondent was required to complete 80 hours of CPE during the two-year period immediately preceding Respondent’s 2011 registration renewal. 5. In addition to the 2011 registration renewal application, Respondent also submitted a request to the Board for an extension of time until December 31, 2011, to complete the Board’s CPE requirement. 6. On or about May 9, 2011, the Board voted to deny Respondent’s request for an extension of time until December 31, 2011, to complete the Board’s CPE requirement, but voted to grant Respondent a 90-day extension of time to complete and report the required CPE. 7. On May 9, 2011, Board staff sent a letter to Respondent informing him of the Board’s decision, and advising him that he should complete and report to the Board the required CPE hours by August 9, 2011. 8. Despite the extension, Respondent failed to submit any documentation to the Board and failed to provide proof that he had completed the required CPE. 9. On or about August 22, 2011, Board staff sent Respondent a letter at his address of record informing him that the Board would review his failure to comply with the CPE requirement, despite the extension of time to do so, at its September 12, 2011 meeting. 10. On or about September 12, 2011, the Board voted to file a Complaint and Notice of Hearing for Suspension of Respondent’s CPA certificate. 11. The Board referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. 12. On September 22, 2011, the Board issued a Complaint and Notice of Public Hearing, setting a hearing on November 10, 2011, at 1:00 p.m. The Board mailed a copy of the Complaint and Notice of Public Hearing to Respondent at his address of record. 13. A hearing was held at the OAH on November 10, 2011. The Board submitted five exhibits and presented the testimony Deputy Director Jim Dubé to establish the facts set forth above. 14. Respondent did not request to appear telephonically at the duly noticed hearing and did not request that the hearing be continued. Although the start of the hearing was delayed fifteen minutes to allow Respondent additional travel time, he did not appear, personally or through an attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend his CPA certificate. CONCLUSIONS OF LAW The Complaint and Notice of Public Hearing that the Board mailed to Respondent at his address of record was reasonable and Respondent is deemed to have received notice of the hearing.[1] The Board has personal and subject-matter jurisdiction over Respondent and this complaint pursuant to A.R.S. §§ 32-701 et seq. and A.A.C. R4-1-101 et seq. Under A.R.S. § 32-741(A),[2] after notice and opportunity for hearing, the Board may revoke or suspend, or may take additional disciplinary action, as defined by A.R.S. § 32-701(6),[3] against Respondent’s CPA certificate. The Board bears the burden of proof to establish cause to discipline Respondent’s CPA certificate by a preponderance of the evidence.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] Respondent’s failure to complete the CPE requirements for the 2011 registration renewal violated A.R.S. § 32-730(D)[6] and provides cause for the Board to discipline his CPA certificate under A.R.S. § 32-741(A)(6).[7]

Pursuant to A.A.C. R4-1-102(A), Respondent is deemed to have knowledge of the Board’s rules. Respondent’s failure to complete the CPE requirements for the 2011 registration renewal also violated A.A.C. R4-1-453(D)[8] and provides cause for the Board to discipline his CPA certificate under A.R.S. § 32-741(A)(9).[9] Respondent’s failure to respond to the Board’s extension of time to complete and report the required CPE hours provides additional cause for the Board to discipline his CPA certificate under A.R.S. § 32- 741(A)(15).[10] Respondent’s failures to complete the CPE requirement for the 2011 registration renewal or to respond to the Board’s extension of time to complete and report the required CPE hours constitute discreditable acts as defined by A.A.C. R4-1-455.03(A).[11] Respondent’s failure to complete the CPE requirements for the 2011 registration renewal requires the Board to suspend Respondent’s CPA certificate under A.R.S. § 32-741(D).[12] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Board’s final order, the Board suspend Respondent Richard M. Streetman’s Certified Public Accountant Certificate No. 3654-E for a period of twelve months or until Respondent submits proof that is satisfactory to the Board that he has completed the CPE that the Board requires for the 2011 registration renewal, whichever occurs earlier. It is further recommended that if Respondent fails to submit proof that is satisfactory to the Board that he has completed the CPE that the Board requires for the 2011 registration renewal within twelve months, the Board deem his 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 within twelve months as a condition of keeping his 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, November 23, 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. § 41-1092.04; A.R.S. § 41-1061(A). [2] A.R.S. § 32-741(A) provides that “[a]fter notice and an opportunity for a hearing, the board may revoke or suspend any certificate granted under this chapter and may take disciplinary action concerning the holder of any certificate” for certain enumerated causes. [3] A.R.S. § 32-701(6) defines “disciplinary action” as follows: "Disciplinary action" means any other regulatory sanctions imposed by the board in combination with, or as an alternative to, revocation or suspension of a certificate or registration, including the imposition of: (a) An administrative penalty in an amount not to exceed two thousand dollars for each violation of this chapter or rules adopted pursuant to this chapter. (b) Restrictions on the scope of registrants' accounting practice, including, without limitation, restriction of audit or attest function practice, restriction of tax practice or restriction of management advisory practice. (c) Peer review and professional education requirements. (d) A decree of censure. (e) Probation requirements best adapted to protect the public welfare that may include a requirement for restitution payments to accounting services clients or to other persons suffering economic loss resulting from violations of this chapter or rules adopted pursuant to this chapter. (f) Reimbursement of the board's costs of investigations and proceedings initiated under this chapter. [4] 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). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] A.R.S. § 32-730(D) provides as follows: At 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. The board may grant an exemption from continuing professional education requirements for registrants on a demonstration of good cause as determined by the board. [7] A.R.S. § 32-741(A)(6) allows the Board to revoke or suspend a registrant’s CPA certificate for “[v]iolation of any of the provisions of this chapter.” [8] A.A.C.R4-1-453 generally provides the Board’s requirements for CPE. A.A.C. R4-1-453(D)(1) provides that “[a] registrant whose last renewal period was for two years shall complete 80 hours of CPE during the two-year period immediately preceding registration renewal.” [9] A.R.S. § 32-741(A)(9) allows the Board to revoke or suspend a registrant’s CPA certificate for “[k]nowing violation of any . . . rule issued or adopted by the board.” [10] A.R.S. § 32-741(A)(15) allows the Board to revoke or suspend a registrant’s CPA certificate 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.” [11] A.A.C. R4-1-455.03(A) provides 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. [12] A.R.S. § 32-741(D) provides as follows: The 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. If the board determines that the failure was for reasonable cause or excusable neglect, the board may require compliance as expeditiously as possible. If the certified public accountant or public accountant fails to reinstate the certificate within twelve months after the date of suspension, the certificate expires. The board shall not reinstate a certificate that has expired pursuant to this subsection unless the certified public accountant or public accountant complies with section 32-748 and all other requirements for reinstatement.

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