FINACT18F-2018.071-ACY.pdf

18F-2018.071-ACY · State Board of Accountancy · 2018-03-27

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of OAH Docket No. 18F-2018.071-ACY Certified Public Accounting Firm Registration No. 3484-L ASBA File No. 2018.071 Issued to: LSJ ACCOUNTING, LLC DECISION AND ORDER Respondent Firm.

On March 26, 2018, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Velva Moses-Thompson’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”).1 Neither LSJ Accounting, LLC (“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. 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’s Certified Public Accounting Firm Registration No. 3484-L be REVOKED. IT IS FURTHER ORDERED that should Respondent Firm seek reinstatement as a CPA firm following revocation, it must meet all of the requirements for reinstatement as set forth in statute and regulation at the time application is made including, but not limited to, demonstrating to the Board’s satisfaction that Respondent Firm has satisfied all orders of restitution entered by courts. This shall be read to include all informal settlements of claims for restitution. NOTICE OF APPEAL RIGHTS Respondent Firm 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. Respondent Firm is further notified that the filing of a motion for rehearing is required to preserve any rights of appeal to the Superior Court. DATED this 27th day of March, 2018. ARIZONA STATE BOARD OF ACCOUNTANCY By:___________________________________ LeRoy M. Gaintner, CPA, Board President Original of the foregoing Decision and Order (and attachment) th filed this 27 day of March, 2018with: 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 27 day of March, 2018with: 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. First Class Mail and Certified Mail # [account number redacted] 8750 this 27th day of March, 2018, to: Laurel Elisa St. John Partner-In-Charge LSJ Accounting, LLC 8710 N. Thornydale Rd., Ste. 150 Tucson, AZ 85742 Copy of the foregoing Decision and Order (and attachment) emailed this 27th day of March, 2018to: 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 Matter of No. 18F-2018.071-ACY

Certified Public Accounting Firm ADMINISTRATIVE LAW JUDGE Registration No. 3484-L DECISION Issued to: LSJ Accounting, LLC

Respondent Firm.

HEARING: February 14, 2018 APPEARANCES: No one appeared on behalf of Respondent LSJ Accounting, LLC. Scott Donald, Esq. appeared on behalf of the Arizona State Board of Accountancy. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. On January 18, 2018, the Arizona Board of Accountancy (“Board”) issued a NOTICE OF HEARING setting the above-captioned matter for hearing at 1:00 p.m. on February 18, 2017, at the Office of Administrative Hearings in Phoenix, Arizona. 2. The NOTICE OF HEARING provides that the issue for hearing is “whether good cause exists to revoke, suspend or take any other disciplinary action against Firm Registration No. 3484-L issued to LSJ Accounting, LLC. 3. No representative for Respondent LSJ Accounting, LLC (“LSJ Accounting”) appeared at the scheduled time and the matter was convened in its absence at about 1:20 p.m.

4. On or about December 28, 2016, LSJ Accounting filed a biennial firm

registration renewal form for Firm Registration No. 3484-L. LSJ Accounting listed

certified public accountant Laurel St. John (“St. John”), Certificate No. 17508-R, as its

Partner In Charge under ARIZ. REV. STAT. section 32-731(C). See Exhibit 1. LSJ

Accounting also listed St. John as its only current certified public accountant partner.

See id.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 5. St. John’s individual CPA renewal registration for Certificate No. 17508-R was due at the Board’s office by September 29, 2017. 6. The Board did not receive St. John’s renewal by the due date and St. John’s certificate was automatically suspended pursuant to ARIZ. REV. STAT. section 32- 741.01(A). 7. On October 1, 2017, the Board notified St. John that Certificate No. 17508-R was suspended pursuant to ARIZ. REV. STAT. section 32-741.01(A) for failure to timely register and pay the biennial registration fee as requested by ARIZ. REV. STAT. sections 32-729, 32-730(A), and A.A.C. R4-1-345. See Exhibit 2. 8. On or about October 4, 2017, the Board issued a “Notification of Failure to Meet Firm Qualifications” to St. John to notify LSJ Accounting of the suspension. The October 4, 2017 notice provides, in relevant part, as follows:1 Pursuant to A.R.S. § 32-73 l(A)(l ), CPA firm qualifications include the requirement that a firm have at least one partner who is a resident and a full-time practicing certified public accountant in good standing in Arizona. According to our records, LSJ ACCOUNTING, LLC (Firm 3484-L) does not presently meet this statutory requirement to be registered and recognized as a CPA firm in Arizona. Pursuant to A.RS. § 32-742(A), "[a]fter notice and an opportunity for a hearing, the board shall revoke a firm's registration to practice public accounting if at any time it does not have all the qualifications prescribed by this chapter." Therefore, if LAUREL ELISA ST JOHN does not renew the individual CPA Certificate No. 17508-R by 11/3/2017, the Board may take action to REVOKE the firm's registration. 9. St. John did not renew Certificate No. 17508-R by November 3, 2017 and Certificate No. 17508-R remained in suspended status. 10. On or about December 4, 2017 the Board voted to direct the Assistant Attorney General to file a complaint and notice of hearing revocation for failure to meet the requisite firm qualifications pursuant to ARIZ. REV. STAT. section 32-742(A). 11. A hearing was held on February 14, 2018. 12. At hearing, the Board presented the testimony of Christopher Rasmussen, Assistant Director of Compliance Issues for the Board, and submitted exhibits 1 through 3.

See Exhibit 3. CONCLUSIONS OF LAW 1. The Board has personal and subject matter jurisdiction over Respondent pursuant to ARIZ. REV. STAT section 32-701 et seq. and A.A.C. R4-1-101 et seq. 2. The Board has the authority to discipline Respondent pursuant to ARIZ. REV. STAT. section 32-742. 3. Pursuant to ARIZ. REV. STAT. section 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. A.A.C. R2-19-119(A). 4. ARIZ. REV. STAT. section 32-742(A) provides: After notice and an opportunity for a hearing, the board shall revoke a firm's registration to practice public accounting if at any time it does not have all the qualifications prescribed by this chapter. 5. ARIZ. REV. STAT. section 32-742(B) provides: 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:

* * * * 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.

* * * * 6. ARIZ. REV. STAT. section 32-731(A) provides:

Except as provided in section 32-725, subsection G, once every two years a partnership engaged in this state in the practice of accounting by certified public accountants or public accountants shall pay the registration fee pursuant to section 32-729 and register with the board as a partnership of certified public accountants and shall meet the following requirements:

1. At least one partner shall be a resident and a full-time practicing certified public accountant in good standing in this state. * * * * 7. The Board established by a preponderance of the evidence that LSJ does not have an Arizona CPA certificate holder in good standing in Arizona, which is a violation of ARIZ. REV. STAT. section 32-731(A). 8. Because LSJ Accounting violated ARIZ. REV. STAT. section 32-731(A), the Board has authority to revoke its registration to practice public accounting under ARIZ. REV. STAT. section 32-742(A). 9. Considering the facts and circumstances of this matter, it is recommended that LSJ Accounting’s certificate No. 3484-L be revoked. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Board’s final order, the Board revoke Certified Public Accounting Firm Registration No. 3484-L issued to LSJ ACCOUNTING, LLC. 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, March 6, 2018

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

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