FINACT17F-2017.057-ACY.pdf

17F-2017.058-ACY · State Board of Accountancy · 2017-11-20

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public OAH Docket No. 17F-2017.057-ACY Accountant Certificate No. 9588-E and 17F-2017.058-ACY Issued to: (Consolidated)

DOUG W. GRIFFORE, ASBA File Nos. 2017.057 2017.058 Respondent,

and DECISION AND ORDER Certified Public Accounting Firm Registration No. 2268-C Issued to:

DOUG W. GRIFFORE, CPA, P.C.,

Respondent Firm.

On November 6, 2017, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Diane Mihalsky’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Neither Doug W. Griffore (“Respondent”) nor Doug W. Griffore, CPA, P.C. (“Respondent Firm”) or an attorney on their behalf appeared. Assistant Attorney General Scott Donald 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. A true and correct copy of the ALJ’s Decision is attached and certain parts of it are incorporated here as set forth above and below. CONCLUSIONS OF LAW The Conclusions of Law as set forth in the ALJ’s Decision are adopted in their entirety and incorporated herein. ORDER Based on the foregoing, the Board ORDERS that Respondent Doug W. Griffore’s

Certified Public Accountant Certificate No. 9588-E and Respondent Firm Doug W. Griffore, CPA, P.C.’s Certified Public Accounting Firm Registration No. 2268-C be REVOKED. IT IS FURTHER ORDERED that Respondent Doug W. Griffore and Respondent Firm Doug W. Griffore, CPA, P.C. shall jointly and severally be required to pay the Board’s costs and attorney’s fees incurred in investigating and prosecuting this matter. NOTICE OF APPEAL RIGHTS Respondent Doug W. Griffore and Respondent Firm Doug W. Griffore, CPA, P.C. are 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 Doug W. Griffore and Respondent Firm Doug W. Griffore, CPA, P.C. Respondent Doug W. Griffore and Respondent Firm Doug W. Griffore, CPA, P.C. 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 17th day of November, 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 17 day of November, 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 17 day of November, 2017 with: Greg Hanchett, Director Arizona Office of Administrative Hearings 1400 W. Washington, Suite 101 Phoenix, Arizona 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. Mail and Certified Mail # [account number redacted] 6787 this 17th day of November, 2017, to: Doug W. Griffore Doug W. Griffore, CPA, P.C. 7933 W. Greer Ave. Peoria, AZ 85345 Copy of the foregoing Decision and Order (and attachment) emailed this 17th day of November, 2017 to: Scott Donald 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 Matters of Nos. 17F-2017.057-ACY and 17F-2017.058-ACY Certified Public Accountant (Consolidated) Certificate No. 9588-E Issued to: DOUG W. GRIFFORE, ADMINISTRATIVE LAW JUDGE Respondent, DECISION and Certified Public Accounting Firm Registration No. 2268-C Issued to: DOUG W. GRIFFORE, CPA, P.C. Respondent Firm.

HEARING: October 13, 2017, at 9:00 a.m. APPEARANCES: The Arizona State Board of Accountancy (“the Board”) was represented by Scott Donald, Esq., Assistant Attorney General; Doug W. Griffore (“Respondent”) and Doug W. Griffore, CPA, P.C. (“Respondent Firm”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona State Board of Accountancy (“the Board”) has issued Certified Public Accountant Certificate No. 9588-E to Respondent and Certified Public Accounting Firm Registration No. 2268-C to Respondent Firm. Respondent is the sole owner and the only certified public accountant who is a member of Respondent Firm. 2. On or about October 12, 2016, the Board received a complaint from two of Respondent’s and Respondent Firm’s clients that they had failed to timely provide tax files after informing Respondents that they were changing tax preparers. 3. The Board assigned the complaint to a contract investigator. According to the

investigator’s report, Respondent acknowledged that he did not timely respond to the clients’ requests for records and, although Respondent eventually provided some

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 records, they did not provide all the records in his possession. In addition, Respondent failed to respond to the investigator’s March 8, 2017 email and March 13, 2017 follow-up email requesting information.1 4. On May 4, 2017, Board Staff sent a letter to Respondent and Respondent Firm at their address of record, inviting Respondent to an investigative interview at the Board’s June 26, 2017 meeting and requesting that Respondent inform the Board within 30 days whether he would attend the investigative interview. The Board also sent a copy of the investigator’s report and required Respondent to provide a written response to the investigator’s report.2 5. On May 9, 2017, Board staff sent another letter to Respondent and Respondent Firm at their address record, informing them that the May 4, 2017 letter included a clerical error that required Respondents to provide a written response to the investigator’s report. The May 9, 2017 letter also informed Respondent that he was still required to respond to the May 4, 2017 letter by indicating whether he planned to attend the investigative interview.3 6. On May 11, 2017, Respondent signed the certified mail receipt for the May 4, 2017 letter.4 7. The Board did not receive any response from Respondent to the May 4, 2017 letter. 8. The Board referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. 9. On September 1, 2017, the Board issued a Notice of Public Hearing and Complaint, charging Respondent with having committed unprofessional conduct as defined by A.R.S. § 32-741(A)(9) by violating A.A.C. R4-1-455.03(F) and A.R.S. § 32- 741(A)(15). 10. The Board’s Notice of Public Hearing and Complaint also notified Respondent that a hearing would be held at OAH on October 13, 2017, at 9:00 a.m. The Board sent

See the Board’s Exhibit 1. See the Board’s Exhibit 2. See the Board’s Exhibit 3. See the Board’s Exhibit 4. the Notice of Public Hearing and Complainant to Respondent and Respondent Firm at their address of record. 11. A hearing was held on October 13, 2017. The Board submitted four exhibits and presented the testimony of Christopher Rasmussen, who is employed by the Board as its Assistant Director of Regulation and Compliance. 12. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed seventeen minutes to allow Respondent additional travel time, he did not appear, personally or through an attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend his Certified Public Accountant Certificate or Respondent Firm’s registration. 13. The Board presented evidence to establish the facts set forth above. Mr. Rasmussen testified that the Board requires licensees to inform the Board whether they will attend a scheduled investigative interview so that the Board can avoid the expense of a court reporter if her services will not be necessary. CONCLUSIONS OF LAW 1. The Notice of Public Hearing and Complaint that the Board mailed to Respondent at his addresses of record was reasonable and he is deemed to have received notice of the hearing.5 2. The Board has personal and subject matter jurisdiction over Respondent and Respondent Firm pursuant to A.R.S. §§ 32-701 et seq. and A.A.C. R4-1-101 et seq. The Board has the authority to discipline Respondent and Respondent Firm pursuant to A.R.S. § 32-741. 3. The Board bears the burden of proof to establish cause to discipline Respondent’s certified public accountant certificate and Respondent Firm’s certified public accounting firm registration by a preponderance of the evidence.6 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”7 A preponderance of the evidence is See A.R.S. § 41-1092.04. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”8 5. Respondent is deemed to have knowledge of the Board’s rules.9 6. The Board established that Respondent failed to respond to at least two of the Board’s inquiries, in violation of A.A.C. R4-1-455.03(F).10 The Board thereby established cause to suspend or revoke Respondent’s certificate and Respondent Firm’s registration pursuant to A.R.S. § 32-741(A)(9).11 7. The Board also established cause to suspend or revoke Respondent’s certificate and Respondent Firm’s registration under A.R.S. § 32-741(A)(15).12 8. Respondent’s failures to respond to clients’ request for documents or to the Board’s inquiries or to appear at the duly noticed public hearing to defend his certified public accountant certificate demonstrate that, at this time, he cannot be regulated. 9. Because Respondent is the sole owner and sole CPA member of Respondent Firm, if Respondent’s certified public accountant certificate is revoked, the Board must revoke Respondent Firm’s registration pursuant to A.R.S. § 32-742(B).13

8 BLACK’S LAW DICTIONARY at page 1064 (6th ed. 1990). See A.A.C. R4-1-102(A). A.A.C. R4-1-455.03(F) provides that “[w]hen 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. § 41-741(A)(9) includes among the grounds for the Board to suspend or revoke a certified public accountant certificate “[v]iolation of any decision, order or rule issued or adopted by the board.” 12 A.R.S. § 32-741(A)(15) includes among the grounds for the Board to suspend or revoke a certified public accountant certificate “[f]ailing 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. 13 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 or may take disciplinary action concerning the registrant for any of the causes enumerated in section 32-741, subsection A or for any of the following additional causes: 1. The revocation or suspension of any certificate issued by the board of any partner, shareholder, member, manager, officer, director, agent or employee of the firm. 2. The cancellation, revocation, suspension or refusal to renew the authority of the firm or any Arizona partner, shareholder, member, manager, officer, director, agent or employee to practice public accounting in any jurisdiction for any cause other than failure to pay a registration fee in the jurisdiction. RECOMMENDED ORDER Based on the foregoing, it is ordered that on the effective date of the final order in this matter, Certified Public Accountant Certificate No. 9588-E previously issued to Respondent Doug W. Griffore shall be revoked. It is further ordered that on the effective date of the final order, Certified Public Accounting Firm Registration No. 2268-C previously issued to Respondent Firm Doug W. Griffore, CPA, P.C. shall be revoked. It is further ordered that on the effective date of the final order, Respondent and Respondent Firm shall jointly and severally be required to pay the Board’s costs and attorney’s fees incurred in investigating and prosecuting this matter pursuant to A.R.S. § 32-701(10)(g).14 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 from the date of that certification. Done this day, October 17, 2017.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

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

3. The failure to comply with section 32-731, subsection E. A.R.S. § 32-701(10)(g) defines “disciplinary action” to include “[r]eimbursement of the board's costs of investigations and proceedings initiated under this chapter, including attorney fees.”