ALJDEC decisions subject to certification as final

18F-2018.120-ACY · State Board of Accountancy · 2018-07-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of

Certified Public Accounting Firm

Registration No. 14-B

Issued to: ANDERSON & SCOW, L.L.P.

Respondent Firm.

No. 18F-2018.120-ACY

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 29, 2018

APPEARANCES: Erik L. Anderson, Manager, appeared on behalf of Respondent Firm Anderson & Scow, L.L.P. The Arizona State Board of Accountancy was represented by Assistant Attorney General Scott Donald.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona State Board of Accountancy (Board) is the state agency authorized to regulate the practice of public accounting by certified public accountants in the State of Arizona.

Anderson & Scow L.L.P. (Respondent Firm) is the holder of firm Registration No. 14-B, issued by the Board.

The Board has the personal and subject matter jurisdiction over Respondent Firm pursuant to A.R.S. § 32-701 et seq. and A.A.C. R4-1-101 et seq.

Pursuant to A.R.S. § 32-730(A) and A.A.C. R4-1-345, every certified public accountant (CPA), public accountant, and firm is required to register once every two years with the Board and to pay a registration fee pursuant to A.R.S. § 32-729 and A.A.C. R4-1-345.

On or about December 30, 2015, Respondent Firm submitted its biennial firm registration renewal form for Firm Registration No. 14-B, listing CPA Richard D. Scow, Certificate No. 411-E, as its Partner In Charge under A.R.S. § 32-731(C), and listing him as Respondent Firm’s only current CPA partner.

Mr. Scow’s individual CPA renewal registration for Certificate No. 12720-E was due at the Board’s office by November 30, 2017. When it was not received by the November 30, 2017 due date, Mr. Scow’s Certificate No. 411-E to practice as a CPA in Arizona was automatically suspended pursuant to A.R.S. § 32-741.01(A) for failure to timely register and pay the biennial registration fee as requested by A.R.S. § 32-729, A.R.S. § 32-730(A), and A.A.C. R4-1-345.

On or about December 1, 2017, a Suspension Order was mailed to Mr. Scow to notify Mr. Scow that his Certificate No. 411-E was suspended for non-registration.

On or about December 11, 2017, a “Notification of Failure to Meet Firm Qualifications” (Notification Letter) was mailed to Respondent Firm’s Partner in Charge, Mr. Scow. The Notification Letter notified Respondent Firm that as of December 1, 2017, CPA Certificate No. 411-E, belonging to Mr. Scow, was suspended due to non-renewal of the certificate. The Notification Letter further notified Respondent Firm that:

Pursuant to A.R.S. § 32-731(A)(1), 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, Anderson & Scow LLP, CPAs [sic] (Firm 14-B) does not presently meet this statutory requirement to be registered and recognized as a CPA firm in Arizona.

Pursuant to A.R.S. § 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 RICHARD D. SCOW does not renew the individual CPA Certificate No. 411-E by 1/10/2018, the Board may take action to REVOKE the firm’s registration.

Mr. Scow did not renew Certificate No. 411-E by the January 10, 2018 deadline.

As Mr. Scow’s Certificate No. 411-E is in suspended status, Respondent Firm does not have at least one partner who is a resident and a full-time practicing CPA in good standing in Arizona.

On or about February 12, 2018, the Board voted to proceed with a complaint against Respondent Firm.

On or about March 20, 2018, the Board issued a Complaint and Notice of Hearing to Respondent Firm via certified mail.

A hearing was held at the Office of Administrative Hearings (OAH) on January 25, 2018. The Board submitted one exhibit and presented the testimony of Christopher Rasmussen to establish the facts set forth above.

Erik L. Anderson, Manager, appeared on behalf of Respondent Firm. Mr. Anderson indicated that he was the personal representative of the estate of a deceased partner’s estate and predicted that in 60 days of the hearing, he would become a partner of the firm upon completion of the estate matter. Mr. Anderson posited that, as he was acting as the personal representative and was a CPA in good standing with the Board, he should be considered to be standing in the place of the deceased partner. However, Mr. Anderson offered no authority for his assertion.

CONCLUSIONS OF LAW

The Board has jurisdiction over Respondent Firm and the subject matter in this case. A.R.S. § 32-701 et seq. and A.A.C. R4-1-101 et seq.

Pursuant to A.R.S. § 41-1092.07(G)(2), the Board has the burden of proof in this matter. The standard of proof on all issues in this matter is that of a preponderance of the evidence. A.A.C. R2-19-119.

A preponderance of the evidence is “[t]he 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 1301 (9th ed. 2009).

The Board has the authority to revoke or suspend Respondent Firm’s firm registration and take additional disciplinary action pursuant to A.R.S. § 32-742(A).

Respondent Firm’s failure to have at least one partner who was a resident and a full-time practicing certified public accountant in good standing in the state of Arizona constituted grounds to impose disciplinary action against Respondent Firm pursuant to A.R.S. § 32-731(A)(1).

The evidence of record supports the revocation of Respondent Firm’s Firm Registration No. 14-B pursuant to A.R.S. §§ 32-731 and 32-742.

RECOMMENDED ORDER

It is recommended that Respondent Firm’s Firm Registration No. 14-B be revoked on the effective date of the Order entered in this matter.

It is further recommended that Respondent shall reimburse the Board’s costs for investigating and proceeding to hearing in this matter, pursuant to A.R.S. § 32-701(10)(g).

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, July 19, 2018

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director

Arizona State Board of Accountancy