FINACT13F-2013.077-ACY.pdf

13F-2013.077-ACY · State Board of Accountancy · 2013-06-13

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public Accountant Certificate No. 5031-E ASBA File No. 2013.077 Issued to: OAH Docket No. 13F-2013.077-ACY CRAIG E. CLIFFORD

DECISION AND ORDER

This matter came before Tammy L. Eigenheer, Administrative Law Judge (ALJ) for the Office of Administrative Hearings on April 12, 2013, for the purpose of determining whether good cause exists for the Arizona State Board of Accountancy ("Board") to discipline Craig E. Clifford's ("Respondent") individual certified public accountant (CPA) certificate pursuant to Arizona Revised Statutes ("ARS.") § 32-701 et seq. and Arizona Administrative Codes ("AAC.") R4-1-101 et seq. The Respondent did not appear and the Board appeared through its attorney, Seth T. Hargraves, Esq., Assistant Attorney General. On June 3, 2013, the Board reviewed the record in this matter including the hearing exhibits and the ALJ's recommended Decision, dated April 24, 2013. The Respondent was not present at the Board's meeting. Mr. Hargraves, the Board's attorney, was present and requested that the Board adopt the ALJ's Findings of Fact and the ALJ's Conclusions of Law. However, Mr. Hargraves requested that the Board consider modifying the ALJ's Recommended Order to be more clear and provide that the suspension be in accordance with ARS. 32-741(0) regarding continuing professional education ("CPE") and that either Mr. Clifford provides proof, satisfactory to the Board, that he has completed the required CPE for his 2011 registration renewal or if he fails to provide proof within the 12-month suspension that also in accordance with ARS. 32-741(0), that Mr. Clifford's certificate be deem expired. Mr. Hargraves also requested the Board to consider making it clear that the administrative penalty in the amount of $500.00 and reimbursement of Board costs be within the 12-month timeframe. The Board voted to adopt the ALJ's Findings of Fact, the ALJ's Conclusions of Law and the ALJ's Recommended Order. Based on the ALJ's Recommended Decision, the administrative record in this matter and the Board meeting, the Board issues the following Order: FINDINGS OF FACT 1. The Arizona State Board of Accountancy (the Board) issued Certified Public Accountant Certificate No. 5031-E to Craig E. Clifford (Respondent). This certificate enabled Respondent to practice as a certified public accountant (CPA or registrant) in the State of Arizona. 2. On or about August 8, 2011, Respondent submitted to the Board his biennial registration renewal application (the 2011 registration renewal) for the period from August 31, 2011, through August 31, 2013. 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 completed 141 hours of continuing professional education (CPE). Respondent signed the application, certifying that the CPE information that he reported was true, that he understood that the CPE was subject to the Board's approval and review, and that he would retain all documentation of the claimed CPE for three years following the registration renewal. 3. On October 25,2012, the Board sent a letter via certified mail to Respondent, notifying him that he had been randomly selected for a CPE audit, and requesting that he submit to the Board the documentation for the CPE that he claimed on his 2011 registration renewal. The Board's October 25,2012 letter requested that Respondent respond in writing to the letter within thirty days pursuant to AAC. R4-1-455.03(F). 4. The Board's October 25,2012 letter informed Respondent that A.AC. R4- 1-453(F) required him to submit two documents to support the courses that comprised his claimed CPE hours, as follows: (1) A certificate of completion or letter of verification issued by the sponsor that verified his attendance at and completion of the course; and (2) A course outline, syllabus, or agenda issued by the sponsor of the course that identified the topics covered in the course. 5. On or about October 29, 2012, Respondent signed the certified mail receipt to indicate that the Board's October 25, 2012 certified letter had been received at Respondent's address of record. 6. Respondent did not respond to the Board's October 25, 2012 letter within thirty days. 7. On January 22,2013, the CPE Advisory Committee (the Committee) reviewed Respondent's CPE report and determined that he had not provided documentation to establish either his completion or the content of the courses claimed on the 2011 registration renewal. 8. At the Board's February 11, 2013 meeting, it accepted the Committee's report and voted to proceed to hearing. 9. On February 15, 2013, the Board issued a Complaint and Notice of Public Hearing, setting a hearing for 8:00 a.m. on April 12, 2013. The Board mailed a copy of the Complaint and Notice of Public Hearing to Respondent at his address of record. 10. A hearing was held at the Office of Administrative Hearings (OAH) on April 12,2013. The Board submitted five exhibits and presented the testimony Deputy Director Jim Dubs to establish the facts set forth above. 11. 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 more than twenty 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 1. 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. See ARS. § 41-1092.04. 2. The Board has been created and authorized to regulate and control the profession of Certified Public Accountancy in Arizona. See ARS. § 32-701 ef seq. This matter lies within its jurisdiction. 3. The Board bears the burden of proof to establish Respondent's statutory and regulatory violations by a preponderance of the evidence. See ARS. § 41- 1092.07(G)(2); AAC. 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). 4. Under A.R.S. § 32-741 (A), after notice and opportunity for hearing, the Board may revoke or suspend, or may take additional disciplinary action, as defined by AR.S. § 32-701(6),1 against Respondent's CPA certificate. 5. Under A.R.S. § 32-741(0), "[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 0, of compliance with the continuing professional education requirements established by the board."2 6. Under AAC. R4-1-453(F), the issue at the hearing was not whether Respondent took the courses that he reported on the CPE form that accompanied his 2011 registration renewal, but whether he had complied with the Board's requirements for maintaining and submitting the documentation that the Board requires to support the content and his completion of the claimed CPE.

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. A.R.S. § 32-741 (D) also provides that "[ilf 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." 7. The Board established that Respondent failed to maintain and/or submit the required documentation supporting the content and completion of the claimed CPE in violation of AR.S. § 32-741 (A)(9),3 specifically, his failure to comply with AAC. R4-1- 453(F).4 8. The Board established that Respondent failed to provide documentation of the CPE that he reported on his 2011 registration renewal to the Board within thirty days after request, in violation of AR.S. § 32-741 (A)(6)5 and AR.S. § 32-741 (A)(15).6 9. Respondent's failure to timely respond to the Board's October 25,2012 letter violated AR.S. § 32-741 (A)(15) and AR.S. § 32-741 (A)(9), specifically AA.C. R4-1- 455.03(F).7 10. Respondent's failure to show proof of his compliance with the CPE requirements established by the Board as set forth above provide grounds for the Board to suspend his CPA certificate under AR.S. § 32-741 (D). 11. Respondent's violations of the applicable statutes and regulations that are set forth above provide grounds for the Board to take disciplinary action against his CPA certificate under AR.S. § 32-741 (A). ORDER Based on the foregoing, the Board orders that Respondent's Certified Public Accountant Certificate No. 5031-E be suspended for a period of 12 months or until Respondent submits proof that is satisfactory to the Board that he has either provided the requested CPE documentation or has completed the required CPE for the 2011 registration renewal, whichever occurs earlier.

ARS. § 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." AAC. R4-1-453(F) provides "CPE Record Retention: A registrant shall maintain for three years and provide the Board upon request the following documents: course outlines, proof of attendance or ~articipation, and written proof of completion." ARS. § 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." 6 A RS. § 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." AAC. 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." It is further ordered that pursuant to A.RS. § 32-741(0), if Respondent fails to submit proof that is satisfactory to the Board that he has either produced his CPE documentation supporting his claimed CPE hours in his 2011 registration renewal or has subsequently completed CPE with proper documentation for the 2011 registration renewal within 12 months from the effective date of this Order, then Respondent's Certified Public Accountant Certificate No. 5031-E shall be deemed to have expired. It is further ordered that pursuant to A.RS. § 32-701(6)(a), Respondent shall be required to pay to the Board a total civil penalty in the amount of $500.00 within 12 months of the effective date of this Order as a condition of keeping his Certified Accountant Certificate No. 7761-E in good standing. It is further ordered that pursuant to A.RS. § 32-701 (6)(f), Respondent shall be required to pay to the Board its costs of investigation and of proceeding to hearing in this matter in the amount of one thousand, eight hundred fifty-one dollars and 24/100 (1,851.24) within 12 months of the effective date of this Order as a condition of keeping his Certified Accountant Certificate No. 5031-E in good standing. NOTICE OF APPEAL RIGHTS Respondent is hereby notified that he has the right to petition for a rehearing or review by filing a petition with the Board's Executive Director within thirty (30) days after service of this Order. A.R.S. §41-1092.09. The petition must set forth legally sufficient reasons for granting a rehearing. A.A.C. R4-1-114(C). Service of this Order is effective on the date of personal delivery or five days after the date of mailing. If a motion for rehearing is not filed, the Board's Order becomes effective thirty (30) days after it is mailed to Respondent.

Respondent is further notified that the filing of a motion for rehearing is required to preserve any rights of appeal to the Superior Court.

DATED this 7th day of June, 2013.

ARIZONA STATE BOARD OF ACCOUNTANCY

Original of the foregoing filed this 7th day of June, 2013, with: Monica L. Petersen Executive Director Arizona State Board of Accountancy th 100 N. 15 Avenue, Suite 165 Phoenix, AZ 85007 Copy of the foregoing filed this 7th day of June, 2013, with: Office of Administrative Hearings 1400 W. Washington, Suite 101 Phoenix, Arizona 85007 Copy of the foregoing mailed via regular USPS and certified mail return receipt no. [account number redacted] 7893 this 7th day of June, 2013, to:

Craig E. Clifford, CPA 1943 E. Woodman Drive Tempe, AZ 85283 Copy of the foregoing mailed this 7th day of June, 2013, to: Seth T. Hargraves Assistant Attorney General 1275 W. Washington, CIV-LES Phoenix, Arizona 85007