FINACT14F-2014.058-ACY.pdf

14F-2014.058-ACY · State Board of Accountancy · 2014-03-25

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY

In the Matter of Certified Public Accounting Firm Registration No. 2294-C ASBA File No.: 2014.058 Issued to: OAH Docket No. 14F-2014.058-ACY EAST VALLEY PROFESSIONAL ACCOUTNING, PC DECISION AND ORDER

This matter came before Brian Brendan Tully, Administrative Law Judge (ALJ) for the Office of Administrative Hearings on February 5, 2014, for the purpose of determining whether good cause exists for the Arizona State Board of Accountancy (“Board”) to discipline East Valley Professional Accounting, PC (“Respondent”), a certified public accounting firm, pursuant to Arizona Revised Statutes (“A.R.S.”) § 32- 701 et seq. and Arizona Administrative Codes (“A.A.C.”) R4-1-101 et seq. The Respondent did not appear. The Board appeared through its attorney, Michael Raine, Esq., Assistant Attorney General. On March 19, 2014, the Board reviewed the record in this matter including the hearing exhibits and the ALJ’s recommended Decision, dated February 24, 2014. Mr. Raine, the Board’s attorney, was present and requested that the Board adopt the ALJ’s Findings of Fact, the ALJ’s Conclusions of Law and the ALJ’s Recommended Order and possibly consider reimbursement of the Board’s cost for proceeding to a hearing in this matter. Larry Ray, owner of East Valley Professional Accounting, PC was present at the board meeting along with his attorney, Sterling Threet, Esq. Mr. Threet requested that the Board decline to accept the ALJ’s sanction because it appears to be excessive discipline and grant leniency and allow the firm to practicing. Christopher Munns, Esq., Assistant Attorney General with the Solicitor General’s office was present and provided independent legal advice to the Board limiting the parties to the record submitted only at the hearing. 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 (“Board”) is the authority for regulating the practice of public accounting by Certified Public Accountants in the State of Arizona. 2. East Valley Professional Accounting, P.C. (“Respondent”), is the holder of Certified Public Accounting Firm Registration No. 2294-C issued by the Board. This certificate enables Respondent to practice as a certified public accounting firm in Arizona. Larry W. Ray, the holder of Certified Public Accountant Certificate No. 11555-E issued by the Board, is the sole Certified Public Accountant owner of Respondent. 3. By letter dated May 17, 2013, Jim Dubé, the Board’s Deputy Director, notified Mr. Ray that Respondent had been randomly selected to undergo an Educational Enhancement Review (“EER”) by the Board’s Peer Review Oversight Advisory Committee (“Committee”). The letter, which was sent to Respondent’s address of record, requested that Respondent submit required documentation to the Board office within thirty days. The certified mailing was received by Mr. Ray on May 20, 2013. 4. The Board did not receive a response from Respondent until August 20, 2013. 5. By letter dated September 25, 2013 sent via certified mail to Respondent’s address of record with the Board, Mr. Dubé requested that Respondent submit additional documentation to the Board office within thirty days as part of the EER process. 6. Respondent failed to timely respond and/or submit the documentation within days as requested by the September 25, 2013 Board request. 7. As a result of the failure to timely respond to the Board’s May 17, 2013 request, on October 21, 2013, Respondent entered into Decision and Order (By Consent) with the Board in ASBA File No. 2014.032. Respondent was assessed a $500.00 administrative penalty, which Respondent paid to the Board.

8. At its December 3, 2013 meeting, the Board voted the matter to an administrative hearing for Respondent’s failure to timely respond within thirty days of the Board’s September 25, 2013 request for documentation. The matter was then forwarded to the Office of Administrative Hearings, an independent agency, for formal hearing. 9. Respondent failed to appear at the time scheduled for hearing. After the expiration of a fifteen-minute grace period, the Administrative Law Judge convened the hearing in Respondent’s absence. 10. At the hearing, the Board presented its case through the testimony of Mr. Dubé and six exhibits consisting of the following: (i) May 17, 2013 Board letter to Respondent; (ii) August 20, 2013 response by Respondent to Board’s May 17, 2013 letter; (iii) October 21, 2013 Decision and Order (By Consent); (iv) September 25, 2013 Board letter; (v) Open Session Minutes from the December 3, 2013 Board meeting; and (vi) Open Session Minutes from the January 13, 2014 Board meeting. 11. Mr. Dubé testified as to the Committee’s EER process. He stated that Respondent had been randomly selected by the Committee for an EER. Respondent’s failure to timely respond to the Board’s requests for information resulted in the Decision and Order (By Consent) and later the Board’s vote to refer the matter for hearing. 12. Mr. Dubé stated that Respondent did not comply with the Board’s September 25, 2013, request for documentation to the Board until January 14, 2014, which was well beyond the 30-day deadline. 13. Mr. Dubé also testified that Mr. Ray’s Certified Public Accountant license is suspended for his failure to renew the license. CONCLUSIONS OF LAW 1. The Board has jurisdiction over Respondent and the subject matter in this case pursuant to A.R.S. §§ 32-701 to 32-751 and A.A.C. R4-1-101 to A.A.C. R4-1-456. 2. Pursuant to A.R.S. § 41-1092.07(G)(2), the Board has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119(A).

3. Respondent’s failure to timely respond to or submit the documentation requested by the Board in this matter constitutes a violation of A.R.S. § 32-741(A)(9), 1 specifically, A.A.C. R4-1-455.03(F). 2 4. Respondent’s failure to timely respond to or submit the documentation requested by the Board in this matter also constitutes a violation of A.R.S. § 32- 741(A)(15). 3 5. Pursuant to A.R.S. § 32-742(B), 4 after notice and opportunity for hearing, the Board may revoke or suspend a firm’s registration to practice public accounting and may additionally take disciplinary action concerning the registrant for any violations of A.R.S. § 32-741(A). The evidence of record supports the revocation of Respondent’s Certified Public Accounting Firm Registration No. 2294-C in this matter. ORDER Based on the foregoing, it is ordered that the Respondent’s Certified Public Accounting Firm Registration No. 2294-C be revoked on the effective date of the Order entered in this matter. NOTICE OF APPEAL RIGHTS Respondents are hereby notified that they have 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.

Respondents are further notified that the filing of a motion for rehearing is required to preserve any rights of appeal to the Superior Court. A.R.S. § 32-741(A)(9) provides as follows: “Violation of any decision, order or rule issued or adopted by the board.” A.A.C. R4-1-455.03(F) provides as follows: “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. A.R.S. § 32-741(A)(15) provides as follows: “Failing to respond in writing 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.” 4 A.R.S. § 32-742(B) provides as follows: “After notice and an opportunity for a hearing, the board may revoke or suspend a firm's registration to practice public accounting and may additionally take disciplinary action concerning the registrant for any of the causes enumerated in section 32-741, subsection A . . . .” DATED this 24th day of March, 2014. ARIZONA STATE BOARD OF ACCOUNTANCY

By:___________________________________ Karen K. McCloskey, CPA, Board President Original of the foregoing filed this 24th day of March, 2014, with: Monica L. Petersen Executive Director Arizona State Board of Accountancy 100 N. 15th Avenue, Suite 165 Phoenix, AZ 85007 Copy of the foregoing filed this 24th day of March, 2014, with: Office of Administrative Hearings 1400 W. Washington, Suite 101 Phoenix, Arizona 85007 Via: https://portal.azoah.com/aljdec/documents/acy/

Copy of the foregoing mailed via regular USPS and certified mail return receipt no. [account number redacted] 8128 this 24th day of March, 2014, to: Larry Ray, CPA 1855 E. Southern Ave., Ste. 109 Mesa, AZ 85204

Copy of the foregoing mailed this 24th day of March, 2014, to:

Michael Raine Assistant Attorney General 1275 W. Washington, CIV-LES Phoenix, Arizona 85007

By:____________________________________