FINACT19A-2020.040-ACY.pdf

19A-2020.040-ACY · State Board of Accountancy · 2020-02-13

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public OAH Docket No. 19A-2020.040-ACY Accountant Firm Registration No. 2343-L ASBA File No. 2020.040 Issued to: DOUGLAS M. CLARK, CPA, PLLC, DECISION AND ORDER Respondent Firm. On February 10, 2020, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Jenna Clark’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Neither a representative of Douglas M. Clark, CPA, PLLC

(“Respondent Firm”) nor an attorney on its 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 Certified Public Accountant Firm Registration No. 2343-L be REVOKED. IT IS FURTHER ORDERED that Respondent Firm shall be required to reimburse the Board $87.04 within thirty (30) days of the effective date of this Decision and Order. This amount reflects the costs and attorney’s fees the Board incurred in prosecuting this matter.2 NOTICE OF APPEAL RIGHTS Respondent Firm is hereby notified that it has the right to move for a rehearing or review by filing a motion with the Board’s Executive Director within thirty (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 (5) days after the date of mailing. If a motion for rehearing is not filed, the Board’s Decision and Order becomes effective thirty (35) 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 11th day of February, 2020. ARIZONA STATE BOARD OF ACCOUNTANCY By: ___________________________________ William C. Heimerdinger, CPA, Board President The Board voted to modify the ALJ’s Decision to include a requirement that Respondent Firm pay reimbursement, which is consistent with the Board’s practice. Original of the foregoing Decision and Order (and attachment) th filed this 11 day of February, 2020 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 11 day of February, 2020 with: Greg Hanchett, Director Arizona Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. First Class Mail and Certified Mail #[account number redacted] 1445 this 11th day of February, 2020, to: Douglas M. Clark Managing Partner Douglas M. Clark CPA PLLC 2151 South Hwy 92 #104 Sierra Vista, AZ 85635 Copy of the foregoing Decision and Order (and attachment) emailed this 11th day of February, 2020 to: Scott Donald Assistant Attorney General [email redacted] Seth Hargraves Assistant Attorney General Independent Advisor [email redacted] By: ___________________________________ IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of: No. 19A-2020.040-ACY

ADMINISTRATIVE LAW JUDGE Certified Public Accountant Firm Registration No. 2343-L DECISION Issued to: DOUGLAS M. CLARK, CPA, PLLC, Respondent Firm.

HEARING: January 07, 2020 at 9:00 AM. APPEARANCES: Assistant Attorney General Scott Donald, Esq., appeared on behalf of the Arizona Board of Accountancy (“Board”) with Christopher Rasmussen as a witness. No appearances by or on behalf of Certified Public Accountant Firm Registration No. 2343-L (“Respondent Firm”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following RECOMMENDED ORDER to the Executive Director of the Board. FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. Respondent Firm is the holder of Certified Public Accountant (“CPA”) Firm Registration No. 2343-L, issued by the Board. 2. Pursuant to ARIZ. ADMIN. CODE R4-9-117, Administrative Notice is taken of Respondent Firm’s prior registration record as reflected on the Board’s public website on January 07, 2020. Such prior record reflects that Respondent Firm’s CPA Registration

was issued on January 01, 2001.1 There is no disciplinary action on file for Respondent Firm. 3. Per the COMPLAINT AND NOTICE OF HEARING, the Board referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on January 07, 2020, to determine whether good cause exists to revoke, suspend or take any other disciplinary action against Respondent Firm’s certification. 4. Respondent did not request an informal Settlement Conference in this matter. HEARING EVIDENCE 5. At the hearing, the Board submitted two exhibits and presented the testimony of Mr. Rasmussen, Assistant Director of Regulation and Compliance. Although the start of the duly noticed hearing was briefly delayed allow Respondent Firm additional travel time,

Respondent Firm did not appear, by or through an attorney or owner, and did not contact

OAH to request that the start of the hearing be further delayed. No request to continue was

submitted on Respondent Firm’s behalf, nor was a request to appear telephonically.

Consequently, Respondent Firm did not present any evidence to defend its CPA Registration. 6. ARIZ. REV. STAT. § 32-730(A) and ARIZ. ADMIN. CODE R4-1-345 require every CPA and firm to register once every two years with the Board and pay a registration fee pursuant to ARIZ. REV. STAT. § 32-729 and ARIZ. ADMIN. CODE R4-1-345. 7. Firm is a two-member professional limited liability company, of which Douglas M. Clark (“Mr. Clark”) is the sole CPA owner and responsible for Respondent Firm’s practice.2

See https://www.azaccountancy.gov/CPADirectory/FirmDirectory.aspx?category=pAR8UD%2b90GiwwjVkt7w G0q8mCkWwyZGx0TbkQV9p7%2bo%3d&search=s8MeqzAxRbnPjk0jlGDLjQ%3d%3d. See Board Exhibit 2. 2 8. On or about January 10, 2019, Mr. Clark submitted a renewal registration on behalf of Respondent Firm for the January 31, 2019 through January 31, 2021 term.3 This renewal identified Mr. Clark as being the only CPA owner for Respondent Firm.4 9. On May 01, 2019, Mr. Clark’s CPA Certificate, Certificate No. 9457, was suspended pursuant to ARIZ. REV. STAT. § 32-730(A) and ARIZ. ADMIN. CODE R4-1-345 for failure to comply with registration requirements.5 Mr. Clark failed to vacate the suspension by paying all past due fees and satisfying all of requirements of renewal.6 10. On August 01, 2019, Mr. Clark’s CPA Certificate expired. 11. On August 01, 2019, the Board issued an EXPIRATION ORDER to Mr. Clark.7 12. Ultimately, the Board argued to the tribunal that revocation was appropriate as evidence established Respondent Firm could not be regulated by the Board.

CONCLUSIONS OF LAW 1. This matter was properly brought before the Office of Administrative Hearings pursuant to ARIZ. REV. STAT. §§ 41-1092 et seq. 2. The NOTICE OF HEARING the Board mailed to Respondent Firm’s address of record is sufficient, and Respondent Firm is deemed to have received the NOTICE OF HEARING in this matter.8 Because the Board mailed all correspondence to Respondent Firm in the same manner and failed to receive any mail returned as undeliverable, Respondent Firm is deemed to have received all correspondence regarding this matter

from the Board as well.

3. Pursuant to ARIZ. REV. STAT. §§ 32-701 et seq., the Board is the authority

for regulating the practice of Certified Public Accountants in the State of Arizona. Pursuant

to ARIZ. REV. STAT. §§ 32-701 et seq., and ARIZ. ADMIN. CODE R4-1-101 et seq., the Board

has personal and subject matter jurisdiction over Respondent Firm.

Id. 4 Id. See Board Exhibit 1. 6 Id. Id. 8 See ARIZ. REV. STAT. §§ 41-1092.04, 41-1092.05(D), and 41-1061(A). 3 4. Respondent is deemed to have knowledge of the Board’s rules.9 5. Pursuant to ARIZ. REV. STAT. § 41-1092.07(G)(2), the Board has the burden of proof in this matter. Respondent Firm bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.10 The standard of proof is a preponderance of the evidence.11 6. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”12 A preponderance of the evidence is also, “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.”13 7. ARIZ. ADMIN. CODE R4-1-345(B) provides, in pertinent part, that a registrant shall file for renewal registration in a manner prescribed by the board, and that it is the sole responsibility of the registrant to complete the renewal registration requirements once every two years. 8. Pursuant to ARIZ. REV. STAT. § 32-731(A)(1)(a), in pertinent parts, required qualifications to be a registered CPA firm in Arizona, include having “[a] simple majority of ownership … that belongs to holders in good standing of certificates or licenses as certified public accountants in any jurisdiction.” 9. ARIZ. REV. STAT. § 32-742(A) provides, in pertinent part, that “[a]fter notice and opportunity for a hearing, the board shall revoke a firm’s registration if at any time it does not have all the qualifications prescribed by this chapter and has not been granted an extension of time to comply with firm registration requirements.” 10. ARIZ. REV. STAT. § 32-742(B)(1) provides, in pertinent part, that “[a]fter notice and an opportunity for a hearing, the board may revoke or suspend a firm's registration” if the board revokes or suspends the certificate of any owner that was issued by the board.

9 See ARIZ. ADMIN. CODE R4-1-102(A). See ARIZ. ADMIN. CODE R2-19-119(B)(2). 11 See ARIZ. ADMIN. CODE R2-19-119(A). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1064 (6th ed. 1990). 4 11. Here, the material facts are not in dispute. 12. The Board established by a preponderance of the evidence that after Mr. Clark’s CPA Certificate expired on August 01, 2019, it resulted in Respondent Firm without a certified simple majority ownership who belonged in good standing. 13. Because Respondent violated ARIZ. REV. STAT. §§ 32-730(A), 32- 731(A)(1)(a) and ARIZ. ADMIN. CODE R4-1-345, the Board has authority to revoke Respondent Firm’s CPA Firm Registration under ARIZ. REV. STAT. § 32-742(A). 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 Accountant Firm Registration No. 2343-L issued to Douglas M. Clark. 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, January 09, 2020.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to: Monica L. Petersen, Executive Director Arizona State Board of Accountancy

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