FINACT16F-2016.02-ACY.pdf

16F-2016.02-ACY · State Board of Accountancy · 2017-09-14

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public OAH Docket No. 16F-2016.02-ACY Accountant Firm Registration No. 3019-L Issued to: ASBA File No. 2016.020

G & S CERTIFIED PUBLIC ACCOUNTANT, LLC, DECISION AND ORDER Respondent Firm. On September 11, 2017, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Thomas Shedden’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Neither G & S Certified Public Accountant, LLC (“Respondent

Firm”) nor an attorney on its behalf appeared. Assistant Attorney General Michael Raine appeared on behalf of the State. The Board received independent legal advice from Assistant Attorney General Seth Hargraves. The Board, having considered the ALJ’s Decision and the entire record in this matter, hereby issues the following Findings of Fact, Conclusions of Law and Order (“Decision and Order”). FINDINGS OF FACT The Findings of Fact as set forth in the ALJ’s Decision are adopted in their entirety and incorporated herein. CONCLUSIONS OF LAW The Conclusions of Law as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. A true and correct copy of the ALJ’s Decision is attached and certain parts of it are incorporated here as set forth above. ORDER Based on the foregoing, the Board ORDERS that Respondent Firm G & S Certified Public Accountant, LLC’s Certified Public Accounting Firm Registration No. 3019-L be REVOKED. IT IS FURTHER ORDERED that Respondent Firm G & S Certified Public

Accountant, LLC shall be required to pay an administrative penalty in the amount of $500. The administrative penalty shall be paid within 15 days of the effective date of the Decision and Order. NOTICE OF APPEAL RIGHTS Respondent Firm G & S Certified Public Accountant, LLC, is hereby notified that they have the right to move for a rehearing or review by filing a motion with the Board’s Executive Director within 30 days after service of this Decision and Order. A.R.S. § 41- 1092.09. The motion must set forth legally sufficient reasons for granting a rehearing. A.A.C. R4-1-114(C). Service of this Decision and Order is effective on the date of personal service or five days after the date of mailing. If a motion for rehearing is not filed, the Board’s Decision and Order becomes effective 30 days after it is mailed to Respondent Firm G & S Certified Public Accountant, LLC. Respondent Firm G & S Certified Public Accountant, LLC, are further notified that the filing of a motion for rehearing is required to preserve any rights of appeal to the Superior Court. DATED this 13th day of September, 2017. ARIZONA STATE BOARD OF ACCOUNTANCY By:___________________________________ LeRoy M. Gaintner, CPA, Board President Original of the foregoing Decision and Order (and attachment) th filed this 13 day of September, 2017 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 th Decision and Order (and attachment) e-filed this 13 day of September, 2017 with: Greg Hanchett, Director Arizona Office of Administrative Hearings 1400 W. Washington, Suite 101 Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. First Class Mail and Certified Mail #7013 1090 001 2055 5490 this 13th day of September, 2017, to: G & S Certified Public Accountant, LLC Attn: Robert G. Dowdy 91-B London Bridge Rd., Ste. 104 Lake Havasu City, AZ 86403 Copy of the foregoing Decision and Order (and attachment) emailed this 13th day of September, 2017 to: Michael Raine Assistant Attorney General 1275 W. Washington SGD/LES Phoenix, AZ 85007 Seth Hargraves Assistant Attorney General Independent Attorney Advisor 1275 W. Washington SGD/LES Phoenix, AZ 85007 By: ___________________________________ IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of No. 16F-2016.02-ACY

Certified Public Accountant Firm Registration No. 3019-L ADMINISTRATIVE LAW JUDGE Issued to: DECISION

G & S CERTIFIED PUBLIC ACCOUNTING, LLC, Respondent.

HEARING: August 9, 2017 APPEARANCES: No one appeared for Respondent; Michael Raine, Esq. for the Arizona State Board of Accountancy ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“Board”) is the authority for regulating Certified Public Accountants in the State of Arizona. 2. On June 23, 2017, the Board issued a Notice of Hearing setting this matter for hearing at 9:00 a.m. August 9, 2017 at the Office of Administrative Hearings. 3. The issue for hearing is whether good cause exists for the Board to revoke, suspend, or take other disciplinary action against Firm Registration No. 3019-L issued to G & S Certified Public Accounting LLC (“Respondent”). 4. No one appeared for Respondent at the scheduled hearing time and the matter was convened in its absence at about 9:20 a.m. 5. Robert G. Dowdy holds Arizona CPA certificate number 15444-R issued by the Board and is Respondent’s sole CPA owner and CPA employee. 6. On July 1, 2013, Mr. Dowdy submitted to the Board a firm renewal application on behalf of Respondent.

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 7. Respondent performs restricted financial services or full disclosure compilation services and was therefore required to complete a peer review. 8. Respondent was informed that its peer review was to be completed by December 31, 2013. Mr. Dowdy requested and received two extensions, putting the new deadline at January 31, 2015. Respondent did not submit the peer review by that date. 9. On December 9, 2015, Respondent entered a “Decision and Order (By Consent)” with the Board. The Decision and Order was admitted into evidence as Exhibit 1 and is incorporated by reference as part of this Administrative Law Judge Decision. 10. Among other conditions, Respondent was required to complete the peer review and submit to the Board a final acceptance letter no later than December 9, 2016 (twelve months after the effective date of the Decision and Order). 11. In the Decision and Order, Respondent agree that its failure to submit the required acceptance letter would be a violation of that Order subjecting it to disciplinary action as defined in ARIZ. REV. STAT. section 32-701(10). 12. As of the hearing date, Respondent had not submitted the final acceptance letter. 13. The Decision and Order shows that in July 2015, Respondent submitted to the Board a firm renewal application that did not have the required peer review. 14. At the hearing, the Board requested that Respondent’s license be revoked and that Respondent be assessed a $2000 civil penalty for its failure to comply with the Decision and Order, and that it be assessed a $2000 civil penalty for its failure to submit a peer review with its July 2015 renewal application. CONCLUSIONS OF LAW 1. The Board bears the burden of persuasion. ARIZ. REV. STAT. § 41-1092.07(G)(2) and (G)(3). 2. The standard of proof on all issues in this matter is that of the preponderance of the evidence. ARIZ. ADMIN. CODE § R2-19-119. 3. A preponderance of the evidence is:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other. BLACK’S LAW DICTIONARY 1373 (10th ed. 2014). 4. Respondent violated the Decision and Order, which is a violation of ARIZ. REV. STAT. section 32-741(A)(9). 5. The Board alleges that Respondent also violated ARIZ. REV. STAT. section 32- 741(A)(15), but the evidence does not show that Respondent has (or had) the required documentation in its possession and that allegation is not proven. 6. Because Respondent violated ARIZ. REV. STAT. section 32-741(A)(9), it is subject to discipline under ARIZ. REV. STAT. section 32-701(10). 7. Although the Board requested that a civil penalty be imposed for Respondent’s failure to submit a peer review with its July 2015 application, that failure is encompassed within the Decision and Order. Consequently, it is not appropriate to issue a civil penalty for that failure. 8. The Board requested the maximum civil penalty of $2000 for Respondent’s failure to comply with the Decision and Order, but did show that the maximum penalty is appropriate. 9. Considering the facts and circumstances of this matter, Firm Registration No. 3019-L issued to G & S Certified Public Accounting LLC should be revoked and G & S should be assessed a civil penalty of $500.

RECOMMENDED ORDER IT IS ORDERED that Firm Registration No. 3019-L issued to G & S Certified Public Accounting LLC is revoked; IT IS FURTHER ORDERED that within fifteen days of the final Order in this matter, G & S Certified Public Accounting LLC must pay to the Board a civil penalty of $500.

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 after the date of that certification.

Done this day, August 28, 2017 /s/ Thomas Shedden Thomas Shedden Administrative Law Judge Transmitted electronically to: Monica L. Petersen, Executive Director Arizona State Board of Accountancy