ALJDEC decisions subject to certification as final

13F-2012.111-ACY · State Board of Accountancy · 2013-03-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 7, 2013 APPEARANCES: The Arizona Board of Accountancy was represented by Assistant Attorney General Seth Hargraves. Respondent Ryan Rodney did not appear. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT Respondent Ryan Rodney is the holder of Certificate No. 13687-E, issued by Arizona Board of Accountancy (Board). This certificate enables Respondent to practice as a certified public accountant (CPA) in the State of Arizona. On August 1, 2011, Respondent’s CPA certificate was suspended by the Board after Respondent failed to timely submit a biennial registration application and pay the biennial registration fee as required by A.R.S. § 32-730. On January 29, 2012, Respondent posted an ad on Craigslist.com for the Portland, Oregon area. The listing was titled “CPA Tax Preparation Services” and read as follows: Tax preparation services available by a CPA with 9+ years of experience in tax preparation and accounting experience. Received Best of Honolulu Award for 2011 and recently expanded business to the Portland area. . . . . Ryan Rodney, CPA

Exhibit 1. On January 30, 2012, the Board received Respondent’s 2011-2013 biennial registration application. On the registration, Respondent did not list any employment and indicated he was unemployed. Respondent signed the application certifying that the statements and information provided were true and accurate and correct in all respects and dated the application January 26, 2012. On February 14, 2012, the Board vacated the suspension of Respondent’s CPA certificate. On or about April 10, 2012, the Board received a complaint against Respondent alleging errors in the preparation of the client’s tax return and failure to respond to the client. The Board assigned the matter File Number 2012.111 and referred the matter to the Board’s Tax Practice Committee (Tax Committee) for investigation. During the Tax Committee’s investigation, it was discovered that Respondent was not licensed as a CPA in either Oregon or Hawaii at any time relevant to the events at issue. On November 6, 2012, the Board sent Respondent an offer to resolve the matter. The letter was sent by certified mail to Respondent’s address of record. Respondent was asked to respond within 30 days. Respondent did not reply to the Board’s November 6, 2012 letter. On January 14, 2013, the Board issued a Complaint and Notice of Public Hearing. The Complaint and Notice of Public Hearing set a hearing on March 7, 2013, at 1:00 p.m. before the Office of Administrative Hearings (“the OAH”), an independent agency. The Board mailed a copy of the Complaint and Notice of Public Hearing to Respondent at his address of record. On March 7, 2013, a hearing was held in the OAH. The Board presented the testimony of Ryan Edmonson, its Compliance Manager, and submitted 13 exhibits. 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 25 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 and at his residential address was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04; 41-1092.05(D). The Board is authorized to regulate the practice of public accounting by Certified Public Accountants (CPA) in the State of Arizona. A.R.S. § 32- 701 et seq. 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 Board bears the burden of proof to establish cause to discipline Respondent’s CPA certificate by a preponderance of the evidence. A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). Respondent is deemed to have knowledge of the Board’s rules. A.A.C. R4-1- 102(A). The Board argued that Respondent’s continued use of the CPA designation after being suspended for non-renewal provided grounds under A.R.S. § 32- 741(A)(9)[1] and A.R.S. § 32-741(A)(6),[2] specifically A.R.S. § 32-747,[3] for the Board to discipline his CPA certificate. A.R.S. § 32-747 specifically references the use of the CPA designation “in this state.” The Craigslist.com advertisement stated that Respondent was offering to perform services as a CPA in the Portland, Oregon area. The Board did not present any evidence to establish Respondent had used the CPA designation in the State of Arizona while his certificate was suspended for non-renewal. The Board argued that Respondent’s indication on his certification application that he was unemployed while his Craigslist.com ad indicated he was, at a minimum, self-employed provided grounds under A.R.S. § 32- 741(A)(3)[4] and A.R.S. § 32-741(A)(14)[5] for the Board to discipline his CPA certificate. The biennial registration application was dated by Respondent on January 26, 2012. The Craigslist.com ad the Board relied on as evidence Respondent was self-employed was dated January 29, 2012. The Board did not present any evidence to establish Respondent was self-employed at the time he signed the biennial registration application, despite the appearance that he was self-employed at the time the Board received the biennial registration application. The Board established Respondent failed to respond to the Board’s November 6, 2012 letter. Respondent’s failure to file a timely written response to the Board’s November 6, 2012 letter provides grounds under A.R.S. § 32-741(A)(15)[6] and A.R.S. § 32-741(A)(9), specifically A.A.C. R4-1-455.03(F),[7] for the Board to discipline his CPA certificate. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Board’s final order, the Board suspend Respondent Ryan Rodney’s Certified Public Accountant Certificate No. 13687-E for a period of 12 months. 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 12 months of the effective date of the final order as a condition of keeping his CPA certificate in good standing. It is further recommended that pursuant to A.R.S. § 32-701(6)(a), the Board require Respondent to pay a civil penalty in the amount of $500.00 within 12 months of the effective date of the final order as a condition of keeping his CPA certificate in good standing. It is further recommended that if Respondent fails to reimburse the Board’s costs or fails to pay the civil penalty within 12 months of the effective date of the final order, the Board suspend Respondent’s CPA Certificate No. 13687-E until Respondent has reimbursed to the Board its costs under A.R.S. § 32-701(6)(f) and paid the $500.00 civil penalty under A.R.S. § 32-701(a). 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 27, 2013.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] 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.” [2] 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.” [3] A.R.S. § 32-747 provides: An individual who has received from the board a certificate to practice as a certified public accountant or as a public accountant issued under the laws of the state . . . shall be known as a "certified public accountant" or "public accountant", in accordance with the certificate or the privilege and may also use the abbreviation "C.P.A.", "CPA", "P.A." or "PA", in accordance with the certificate or the privilege. No other individual or firm shall assume or use any title, designation or abbreviation or any other title, designation, sign, card or device in this state tending to indicate that the individual or firm using it is authorized to practice public accounting or is a certified public accountant or a public accountant. [4] A.R.S. § 32-741(A)(3) allows the Board to revoke or suspend a registrant’s CPA certificate for “[f]raud or deceit in obtaining a certificate as a certified public accountant or in obtaining a certificate as a public accountant under this chapter.” [5] A.R.S. § 32-741(A)(14) allows the Board to revoke or suspend a registrant’s CPA certificate for “[k]nowingly making a false or misleading statement: (a) To the board or its designated agent, (b) On a form required by the board, (c) In written correspondence to the board.” [6] 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.” [7] A.A.C. R4-1-455.03(F) provides “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.”

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