ALJDEC decisions subject to certification as final

13F-2013.079-ACY · State Board of Accountancy · 2013-04-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 11, 2013, at 1:00 p.m. APPEARANCES: Elizabeth A. Knight (hereinafter “Ms. Knight”) appeared on her own behalf. The Arizona State Board of Accountancy (hereinafter “Board”) appeared through Assistant Attorney General, Seth Hargraves, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT The Board is the authority for regulating certified public accountants in the State of Arizona. Ms. Knight is the holder of Certificate No. 9991-E issued by the Board that allows Ms. Knight to practice as a certified public accountant in the State of Arizona. Pursuant to A.R.S. § 32-730(A) and (D),[1] all certified public accountant registrants must biennially register with the Board and submit satisfactory proof that they have completed the continuing professional education (“CPE”) requirements promulgated by the Board. Ms. Knight was required to complete 80 hours of CPE during the two-year period immediately preceding her registration renewal. Pursuant to A.A.C. R4-1-453(D)(1), a minimum of 16 hours is required to be completed in a classroom setting or through an interactive webinar. On or about August 30, 2012, Ms. Knight submitted her biennial registration application to the Board. Ms. Knight indicated that she had completed 102 hours of CPE, but that she had only taken 3 of the required 16 hours in a classroom setting or through an interactive webinar. On her application, Ms. Knight requested a waiver/exemption of the remaining 13 live CPE hours. On or about October 15, 2012, the Board reviewed Ms. Knight’s request for waiver/exemption and voted to deny Ms. Knight’s request. The Board then granted Ms. Knight a 3-month extension to complete the CPE requirement. On or about October 15, 2012, Ms. Knight was sent a letter notifying her of the Board’s decision and requesting that she submit the requested CPE documentation that she had taken the additional remaining 13 hours of CPE in a classroom setting or through an interactive webinar to the Board by January 14, 2013. The letter was delivered by registered mail and signed for on October 17, 2012. Ms. Knight failed to submit any additional documentation to the Board and failed to provide proof that she had completed the required 13 CPE hours in a classroom setting or through an interactive webinar or that she had complied with the CPE requirements of A.R.S. § 32-730(D) and A.A.C. R4-1- 453(D)(1). Ms. Knight testified that she had been unemployed for eight months prior to accepting her new position. Ms. Knight stated that she is supporting herself and her adult daughter and grandchildren. Ms. Knight testified that the CPE requirements impose a financial hardship on people in her position. Ms. Knight testified and produced evidence that she had completed more than the required 13 hours of CPE through classroom or interactive webinar before January 14, 2013. Ms. Knight acknowledged that she had failed to inform the Board that she had completed the required CPE hours. Ms. Knight stated that she did not realize that the Board’s October 15, 2012 letter required a reply from her. Ms. Knight testified that she had difficulty utilizing the Board’s website. Ms. Knight stated that she did not know how to report that she had completed the required CPE hours to the Board. Ms. Knight acknowledged that she had not attempted to contact the Board by telephone or in writing for information on how to submit the documentation of the additional CPE hours that she had completed. The Board’s October 15, 2012 letter provided, in pertinent part, as follows: To update your CPE page from your submitted renewal (2012-2014), visit the Board’s website at www.asaccountancy.gov and login, select the “Continuing Professional Education List” button. Secondly, select the “Instructions” button and follow the directions on the FAQ “How do I know what CPE revision to update.” Any CPE used to meet this requirement may not be used on your subsequent registration.

Please be advised that your failure to timely respond and/or submit the requested material may be considered a violation of A.R.S. § 32-741(A)(5), and grounds for disciplinary action against your certificate.

CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. 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). 3. Under A.R.S. § 32-741(A), the Board may revoke, suspend, or take additional disciplinary action as defined by A.R.S. § 32-701(6) against Ms. Knight’s Certified Public Accountant Certificate No. 9991-E. 4. Pursuant to A.A.C. R4-1-102(A),[2] Ms. Knight is deemed to have knowledge of the Board’s rules. 5. Ms. Knight provided credible documentation that she had completed the CPE requirements for registration within the three-month period allowed by the Board in the Board’s October 15, 2012 letter. This Tribunal concludes that Ms. Knight has complied with the CPE requirements set forth in A.R.S. § 32-730(D),[3] A.A.C. R4-1-453(D),[4] and A.A.C. R4-1- 455.03(A).[5] 6. Ms. Knight failed to respond to the CPE extension provided in the Board’s October 15, 2012 letter. Ms. Knight failed to notify the Board that she had completed the CPE requirement prior to the time and date of the administrative hearing. Ms. Knight failed to provide the Board with documentation that she had completed the required CPE until the time and date of the hearing. Ms. Knight failed to take reasonable measures to notify the Board that she had completed the CPE requirements prior to the administrative hearing. This Tribunal concludes that Ms. Knight’s failure to respond and/or furnish documentation in a timely manner to the Board constitutes a violation of the charged provision of A.R.S. § 32- 741(A)(15).[6] 7. Pursuant to A.R.S. § 32-701(6)(a), the Board may impose “[a]n administrative penalty in an amount not to exceed two thousand dollars for each violation of this chapter or rules adopted pursuant to this chapter” in this matter. At the hearing the Board’s counsel requested that Ms. Knight be assessed a $500.00 civil penalty for Ms. Knight’s failure to respond to the Board’s October 15, 2012 letter and that Ms. Knight be assessed the Board’s costs of its investigation and the proceedings in this matter. RECOMMENDed order In view of the foregoing, it is recommended that pursuant to A.R.S. § 32-701(6)(a), Ms. Knight shall be required to pay the Board a civil penalty in the amount of $500.00 within 12 months of the effective date of the Order entered in this matter. It is further recommended that pursuant to A.R.S. § 32-701(6)(f), Ms. Knight shall be required to pay to the Board its costs of investigation and of proceeding to hearing in this matter within 12 months of the effective date of this Order as a condition of keeping her Certified Accountant Certificate No. 9991-E in good standing. In the event of certification of this 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 the certification. Done this day, April 24, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy

----------------------- [1] A.R.S. § 32-730 provides, in pertinent part, as follows: A. Except as provided in subsection C of this section and in section 32-4301, the board shall biennially require every certified public accountant, public accountant and firm to register with the board and pay a registration fee of not less than one hundred nor more than three hundred dollars during the month of the anniversary of the registrant's birth in the case of an individual or, in the case of a registered firm, during the month of the anniversary of the effective date of the firm's formation. In the administration of this section, registrants for less than two years shall be charged on a pro rata basis for the remainder of the registration period. D. 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.

[2] A.A.C. R4-1-102(A) provides as follows:

These rules apply to all actions and proceedings of the Board and are deemed a part of the record in every action or proceeding without formal introduction or reference. All parties are deemed to have knowledge of the rules. The Board shall supply a copy of the rules to any person free of charge.

[3] 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.

[4] A.A.C. R4-1-453(D) provides in relevant part as follows:

Hour Requirement. A registrant shall complete the CPE requirements as specified under subsections (D)(1) through (D)(9) as applicable.

1. 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. . . . .

5. A registrant shall complete a minimum of 16 hours of the required hours in a classroom setting or through an interactive webinar during the two-year period immediately preceding registration renewal. If a registrant has been certified for less than two years, the Board shall reduce the required hours on a prorated basis. . . . .

10. The Board may grant a partial or complete exemption from the CPE requirements to an individual registrant who makes a written request in which good cause is shown. Good cause includes permanent or partial disability, illness or other physical or mental condition, military service, or financial hardship that prevented the individual registrant from completing the CPE requirements.

[5] A.A.C. R4-1-455.03(A) provides as follows:

Discreditable acts: Certified public accountants or public accountants shall not commit any act that reflects adversely on their fitness to engage in the practice of public accounting.

[6] A.R.S. § 32-741(A) provides, in pertinent part, as follows:

A. After 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 any of the following causes: 15. Failing 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.

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