ALJDEC decisions subject to certification as final

16F-2016.02-ACY · State Board of Accountancy · 2017-08-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of

Certified Public Accountant

Firm Registration No. 3019-L

Issued to:

G & S CERTIFIED PUBLIC ACCOUNTING, LLC,

Respondent.

No. 16F-2016.02-ACY

ADMINISTRATIVE LAW JUDGE DECISION

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

The Arizona State Board of Accountancy (“Board”) is the authority for regulating Certified Public Accountants in the State of Arizona.

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.

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”).

No one appeared for Respondent at the scheduled hearing time and the matter was convened in its absence at about 9:20 a.m.

Robert G. Dowdy holds Arizona CPA certificate number 15444-R issued by the Board and is Respondent’s sole CPA owner and CPA employee.

On July 1, 2013, Mr. Dowdy submitted to the Board a firm renewal application on behalf of Respondent.

Respondent performs restricted financial services or full disclosure compilation services and was therefore required to complete a peer review.

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.

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.

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).

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).

As of the hearing date, Respondent had not submitted the final acceptance letter.

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.

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

The Board bears the burden of persuasion. Ariz. Rev. Stat. § 41-1092.07(G)(2) and (G)(3).

The standard of proof on all issues in this matter is that of the preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

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).

Respondent violated the Decision and Order, which is a violation of Ariz. Rev. Stat. section 32-741(A)(9).

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.

Because Respondent violated Ariz. Rev. Stat. section 32-741(A)(9), it is subject to discipline under Ariz. Rev. Stat. section 32-701(10).

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.

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.

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