ALJDEC decisions subject to certification as final

14F-2014.058-ACY · State Board of Accountancy · 2014-02-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 5, 2014 APPEARANCES: The Arizona State Board of Accountancy was represented by Assistant Attorney General Michael Raine. East Valley Professional Accounting, P.C., did not appear. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ 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 30 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. RECOMMENDED ORDER In view of the foregoing, it is recommended that Respondent’s Certified Public Accounting Firm Registration No. 2294-C be revoked on the effective date of the Order entered in this matter.

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 shall be five (5) days from the date of the certification. Done this day, February 24, 2014.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] A.R.S. § 32-741(A)(9) provides as follows: “Violation of any decision, order or rule issued or adopted by the board.” [2] 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. [3] 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 . . . .”

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