ALJDEC decisions subject to certification as final

12F-2012.112-ACY · State Board of Accountancy · 2012-07-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 13, 2012; the record closed on June 27, 2012 APPEARANCES: Joseph Olheiser appeared on his own behalf. Assistant Attorney General Seth Hargraves represented the Arizona State Board of Accountancy. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ FINDINGS OF FACT Background and Procedure A.R.S. § 32-702(A) authorizes the Arizona State Board of Accountancy (“the Board”) to administer and to enforce statutes relating to Certified Public Accountants (“CPAs”). A.R.S. § 32-703(B)(6) authorizes the Board to “[i]ssue to qualified applicants certificates . . . .” On January 13, 2012, the Board received Joseph Olheiser’s application for Certification as a CPA by examination. On March 26, 2012, the Board issued an Order of Denial denying Mr. Olheiser’s application based on the recommendation of the Board’s Certification Advisory Committee (“the Committee”) that Mr. Olheiser “had failed to meet the education requirements, as the college and university transcripts only documented 21 semester hours of upper-level accounting courses.” Mr. Olheiser timely appealed the Board’s denial. Pursuant to A.R.S. §§ 41-1092(7)(a) and 41-1092.01(E), the Board referred Mr. Olheiser’s appeal to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct an evidentiary hearing. On May 2, 2012, the Board issued a Notice of Public Hearing on the issue of the denial of Mr. Olheiser’s application for certification as a CPA. A hearing was held on June 13, 2012. Mr. Olheiser testified on his own behalf and submitted four exhibits. The Board presented the testimony of two witnesses: (1) Deputy Director Jim Dubé; and (2) Nancy Maurer, CPA, a member of the Committee who had recommended that the Board deny Mr. Olheiser’s application. The Board also submitted seven exhibits. Hearing Evidence Mr. Olheiser submitted with his application for certification transcripts from the University of Wyoming, Paradise Valley Community College, Glendale Community College, Rio Salado College, Laramie County Community College, and South Mountain Community College. When the Board received Mr. Olheiser’s application, Board staff determined that it was administratively complete and forwarded it to the Committee for review. Mr. Dubé testified that staff is not qualified to determine whether an applicant meets the Board’s substantive requirements for certification. After reviewing Mr. Olheiser’s application and supporting documentation, the Committee voted to recommend that the Board deny certification to Mr. Olheiser on the basis that he had failed to demonstrate that he had met the educational requirements of A.R.S. 32- 721(B)(2) because his transcripts only documented twenty-one semester hours of upper-level accounting courses. The Committee determined that ACCT 2230 and ACCT 4600 from the University of Wyoming and ACC 212 from Paradise Valley Community College did not qualify as upper-level accounting courses. On March 26, 2012, the Board voted to accept the Committee’s recommendation to deny Mr. Olheiser’s application, finding that he had failed to meet the educational requirements of A.R.S. 32-721(B)(2) because he was short nine semester hours of upper-level accounting courses. The Committee later reconsidered its position regarding ACCT 2230 from the University of Wyoming, and determined that it would qualify as an upper-level accounting course. However, the Committee upheld its previous determination that ACCT 4600 (Professionalism and Ethics) from the University of Wyoming does not qualify as an upper-level accounting course, considering it a “Related Course” under A.R.S. § 32-701(15), and ACC 212 (Managerial Accounting) from Paradise Valley Community College is considered a lower-level accounting course. Therefore, the Committee determined that Mr. Olheiser demonstrated that he has completed twenty-four semester hours of upper-level accounting courses, six semester hours short of the required thirty. At the outset of the hearing, Mr. Olheiser advised the Tribunal that he is not contesting that he does not meet the requirements for certification as a CPA because he does not dispute the Committee’s determination that ACC 212 from Paradise Valley Community College does not constitute an upper-level accounting course. However, Mr. Olheiser stated that he wished to pursue his appeal regarding the Committee’s determination that ACCT 4600 from the University of Wyoming is considered a “Related Course” rather than an upper-level accounting course. Mr. Olheiser obtained a course description for ACCT 4600 from the University of Wyoming. The course number, name, and description are set forth below: ACCT 4600. Ethics and Professionalism. 3 Credits. Examines professional ethics for accountants from both a philosophical and business perspective. Moral development, ethical reasoning, and ethical decision making provides a framework for examining the importance of ethics in the accounting profession. Professional guidance on ethics in accounting will also be examined, including the AICPA Code of Professional Conduct, the Sarbanes-Oxley Act, and the codes for other professional accounting organizations. Prerequisites: ACCT 3070 and 3610 (or equivalents) with grades of C or better in each or concurrent enrollment in ACCT 3830, 4060, and 4050; advanced business standing.

Exhibit 6. (Emphasis in original.)

The University of Wyoming designates courses that are numbered 3000- 4999 as “Primarily for Juniors and Seniors.” See Exhibit 2. Mr. Olheiser submitted a letter from the University of Wyoming’s Associate Dean, College of Business, stating that ACCT 4600 is an upper-division course. See Exhibit 6. Ms. Maurer testified that she reviewed Mr. Olheiser’s file and determined that he was short nine upper-division hours, which was later modified to six hours when the Committee changed its determination as to ACCT 2230. Ms. Maurer testified that the determination regarding ACCT 4600 was not changed because it is a related upper-level course, primarily ethics in its description, rather than accounting. Ms. Maurer explained that the academic members of the Committee reviewed the class content and determined that ACCT 4600 is more of a general ethics class, not an accounting application of ethics, and further, that an ethics class does not teach accounting. Ms. Maurer also testified that the fact that a particular school classifies a course as an upper-level accounting course does not bind the Committee in any way because the Committee does not regulate how educational institutions categorize their classes. Mr. Olheiser testified regarding the course description for ACCT 4600 and opined that it is the University of Wyoming’s intention that it be considered an upper-level accounting course. However, on cross- examination, Mr. Olheiser acknowledged that the course description for ACCT 4600 that sets forth the learning objectives does not state that any of the objectives have anything to do with accounting. Mr. Olheiser reiterated that the purpose of the hearing was not to have the Board’s decision entirely reversed, but rather to have the Board accept ACCT 4600 as an upper-level accounting course. CONCLUSIONS OF LAW This matter lies within the Board’s jurisdiction to resolve.[1] Mr. Olheiser bears the burden of proof and must establish that he meets statutory and regulatory requirements for certification as a CPA 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 “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] A.R.S. § 32-721(B)(2)(a) requires that for CPA certification, a person must complete at least 30 semester hours of upper-level accounting courses. A.R.S. § 32-701(15) sets forth the definition of “Related courses.” A.R.S. § 32-701(15)(k) includes “Ethics” as a related course. An agency’s interpretation of a statute that it is authorized to enforce, and application of a regulation that it has promulgated pursuant to its statutory authority, are normally entitled to great deference.[5] The Board’s conclusion that the University of Wyoming course ACCT 4600 is not an upper-level accounting course, but rather an upper-level related course, was supported by the evidence at hearing. As noted above, Mr. Olheiser bears the burden of proof. On this record, Mr. Olheiser has not established that he meets statutory and regulatory requirements for certification as a CPA. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Board affirm its denial of Mr. Olheiser’s application for certification as a CPA and dismiss this appeal. 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 (5) days from the date of that certification.

Done this day, July 10, 2012.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See A.R.S. § 32-702(A); A.R.S. § 32-703(B)(6). [2] See A.R.S. § 41-1092.07(G)(1); A.A.C. R4-1-344(4); 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 1220 (8th ed. 1999). [5] See Eastern Vanguard Forex, Ltd. v. Arizona Corporation Commission, 206 Ariz. 399, 410, ¶ 35, 79 P.3d 86, 97 (App. 2003) (citing Better Homes Constr., Inc. v. Goldwater, 203 Ariz. 295, 399, ¶ 15, 53 P.3d 1139, 1143 (App. 2002); Berenter v. Gallinger, 173 Ariz. 75, 77, 839 P.2d 1120, 1122 (App. 1992)).

-----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826