ALJDEC decisions subject to certification as final

21A-2021.183-ACY · State Board of Accountancy · 2021-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Appeal of Denial of Application for Certification:

Cody Carl Turley,

Appellant.

No. 21A-2021.183-ACY

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: June 23, 2021

APPEARANCES: Susan L. Turley, Esq. for Appellant; Scott Donald, Esq. for the 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. The Board’s role is to protect the public, which requires ensuring that each applicant meets the standards for certification as a CPA.

On May 5, 2021, the Board issued a Notice of Hearing setting this matter for hearing on June 23, 2021 at the Office of Administrative Hearings.

The issue for hearing is Appellant Cody Carl Turley’s appeal of the Board’s March 26, 2021 Order of Denial of his application for Certified Public Accountant certification by grade transfer.

Mr. Turley appeared through counsel; he testified on his own behalf and presented the testimony of Robert Clarke, Ph.D.

The Board presented the testimony of Andrea Byrd, its assistant director of certification, and Vicki Rios, CPA, who has been a member of the Board’s Certification Committee for fourteen years and is currently the chairperson.

Ms. Rios has practiced as an accountant and taught classes at Arizona State University, Northern Arizona University, and Glendale Community College.

The Board denied Mr. Turley’s application because it determined that he did not meet the educational requirements of Ariz. Rev. Stat. section 32-721(B)(2).

Among other things, subsection 32-721(B)(2) requires that an applicant must show that he has completed at least 150 semester hours, of which thirty semester hours are upper level accounting classes and thirty semester hours are accounting related classes.

In Mr. Turley’s case, the Board found that he had only thirty-five hours of non-duplicative accounting classes and only twenty-seven hours of upper level account classes.

In Mr. Turley’s case, the Board determined that the ACCTG 333A and 333B Advanced Spreadsheet Application classes Mr. Turley took at Brigham Young University Idaho in the Fall of 2017 were accounting related courses, rather than upper level accounting classes. ACCTG 333A and 333B are each 1.5 semester hour classes.

When the Board receives an application for certification, its staff reviews the application to determine whether the applicant appears to meet the statutory requirements.

The application is then forwarded to the Board’s Certification Advisory Committee, where two Committee members conduct independent reviews of the application and related material. The Committee then meets and votes on the applications, after which it makes a recommendation to the Board regarding each application. The Board makes the determination of whether the applicant qualifies for certification.

In Mr. Turley’s case, through a letter dated February 5, 2021, Board staff informed him that his application was not complete and provided him with the opportunity to provide certain documentation.

The February 5th letter also informed Mr. Turley that “after a preliminary staff review of his submitted transcripts [he] was tentatively* credited with” forty hours of upper level classes and fifty-one hours of accounting related classes. The letter’s footnote shows that the staff review did not include any attempt to identify upper level classes or classes that may be duplicative, and to the effect that the Certification Committee might determine that he had not taken the requisite number of semester hours, despite the staff’s preliminary assessment.

Mr. Turley provided the Board with the additional information its staff requested, and through a letter dated February 19, 2021, staff informed Mr. Turley that the Committee would review his application at a meeting to be held on March 11, 2021. The letter also shows that if the Committee recommended approval of his application, final approval would come within one week of the meeting, but if the Committee recommended denial, the matter would be placed on the next available Board meeting agenda, which was “currently anticipated as being” May 3, 2021.

Prior to the Committee meeting, two members reviewed Mr. Turley’s application, with one member, Sharon Walker CPA, recommending that it be approved and the second member, Teresa Finley CPA, recommending denial.

Ms. Finley recommended denial of the application because she determined that ACCTG 333A and 333B were accounting related courses, and not upper level accounting courses.

The Committee considered Mr. Turley’s application at its meeting held on March 11, 2021. The agenda for that meeting was posted on-line and shows that the meeting would be held by Google Meet and that public could attend using that platform.

Mr. Turley did not attend the March 11, 2021 Committee meeting. At that meeting the Committee members determined that ACCTG 333A AND 333B were accounting related classes and not upper level accounting courses and it recommended that Mr. Turley’s application be denied.

The Board does not provide each applicant with information as to the Committee’s decision regarding their applications, but provides that information in its meeting minutes.

The minutes for the Committee’s March 11, 2021 meeting were posted on-line on March 15, 2021.

Mr. Turley’s application and the Committee’s recommendation were forwarded to the Board, which considered his application at the meeting held on March 22, 2021, and not May 3, 2021, as shown in the Board’s letter of February 19, 2021.

The Board did not provide Mr. Turley with individual notice that his application would be considered at the March 22, 2021 meeting or that the meeting date had been advanced from the tentative date of May 3, 2021.

The agenda for the Board’s March 22, 2021 meeting was posted on-line and shows that the meeting would be held by Google Meet and that public could attend using that platform.

Mr. Turley did not attend the Board’s March 22, 2021 meeting.

At its March 22, 2021 meeting, the Board determined that Mr. Turley’s application did not meet the statutory requirements and issued its Order of Denial.

Dr. Clarke began teaching at BYU Idaho in 2001 and he designed the ACCTG 333A and 333B classes, which originally had been one three-hour class. Prior to taking that position, Dr. Clarke worked for Price Waterhouse, where his job functions included training.

Dr. Clarke testified to the effect that these classes are more than spreadsheet classes, the syllabuses do not reflect the actual content of the classes, and they are unable get the names of the classes changed.

These classes are considered upper level classes for juniors and seniors. The classes are designed to meet Idaho’s requirements and some firms will not interview students who have not yet taken them. The objective of the classes is to have the students practice analyzing problems including the time-value of money or three period problems. Although Excel is used in the classes, it is only a tool or medium to teach concepts.

Dr. Clarke taught ACCTG 333B the semester that Mr. Turley took that class. In 333B, the first half of the semester consists of smaller problems of increasing complexity and during the second half the students work on a capstone project during which the students develop an accounting system with journal entries, financial statements and trial balances, all in one integrated solution. To do so requires knowledge of GAAP and the accounting cycle.

Ms. Rios was present at the Committee meeting at which Mr. Turley’s application was considered.

Ms. Rios testified that related classes teach concepts that are important for accountants to know, but do not teach accounting principles, analysis or theories.

Accounting related classes are defined in Ariz. Rev. Stat. section 32-701(25) and include computer science, information systems or data processing. In Ms. Rios’s opinion, based on the syllabuses provided, ACCTG 333A and 333B fit this definition.

The syllabuses do not include the word “accounting” and although those syllabuses list analysis and problem solving, these are skills that apply to many professions, not only accounting. Ms. Rios’s experience shows that there are similar courses offered at other universities in programs other than the accounting program.

Ms. Rios heard Dr. Clarke’s testimony, but that did not change her opinion.

Mr. Turley testified to the effect that in ACCTG 333A and 333B he learned to take financial information and break it down into a useable format, and that he gained a deeper understanding of the accounting cycle and accounting information systems. In his capstone project he designed an accounting information system, starting with the basic transactions and processing through to the financial statements. This required applying and understanding the accounting principles including journal entries, trial balances, and amortization and depreciation tables. Concepts that he learned included accounting cycles, the flow of information, reconciling, and ledgers and journal entries.

Mr. Turley did not learn that his application had been denied until he received the Board’s Notice of Denial. He was of the belief that had he learned of the Committee’s recommendation, he would not have had enough time to prepare a presentation for the Board to consider at its March 22, 2021 meeting.

The Committee has a “matrix” listing common classes, which is a tool the help its members track classes that may be duplicative. For example, BYU Idaho’s ACC 200 is duplicative of Arizona State’s ACC 111. The matrix is helpful because applicants have gained their educational experience at numerous different universities.

The Board does not publicize the existence of the matrix because it does not believe that applicants should rely on that matrix in determining which classes to take. The Board does however provide the matrix in response to public records requests.

Minutes from the Committee’s January 19, 2017 meeting show that as of that date the Board considered ACCTG 333A and 333B to be accounting related classes and not upper level accounting classes.

CONCLUSIONS OF LAW

Mr. Turley bears the burden of persuasion. Ariz. Rev. Stat. § 41-1092.07(G)(1); § 32-721.

The standard of proof on all issues 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).

Mr. Turley has a baccalaureate degree but was required to:

Present satisfactory evidence that [he had] completed at least one hundred fifty semester hours of education of which:

(a) At least thirty-six semester hours are nonduplicative accounting courses of which at least thirty semester hours are upper-level courses.

(b) At least thirty semester hours are related courses.

Ariz. Rev. Stat. § 32-721(B)(2).

Through Dr. Clarke’s and his own testimony, Mr. Turley provided what is best considered anecdotal or qualitative information showing that ACCTG 333A and 333B cover material that is not fully described in the syllabuses.

But Mr. Turley did not provide sufficient information about the content of the courses to prove that these should be considered upper level accounting classes, rather than accounting related classes. In particular, although he and Dr. Clarke made reference to the type of classwork that he performed in ACCTG 333B, Mr. Turley did not provide details of the specific assignments to show how much of that the work involved accounting principles, analysis or theory.

Consequently Mr. Turley has not shown by a preponderance of the evidence that he meets the statutory requirement for certification by grade transfer.

Mr. Turley’s appeal should be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that Cody Carl Turley’s appeal is dismissed and that the Board’s Order of Denial is affirmed.

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.

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-137160-45720000Done this day, July 13, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director

Arizona State Board of Accountancy

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