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OPEN SESSION MINUTES

February 9, 2015

Members of the Arizona State Board of Accountancy held a meeting at 8:15 a.m. on Monday, February 9, 2015, at the Accountancy Board Office in Suite 165, 100 N. 15th Avenue, Phoenix, Arizona 85007. Executive sessions were held from 10:31 a.m. to 10:52 a.m. and from 11:06 a.m. to 11:13 a.m.

BOARD MEMBERS: John C. Sizer, Jr., CPA ............................................................................ President Douglas N. Kimball .................................................................................. Secretary Alan R. Augenstein, CPA ........................................................................ Treasurer Gary L. Freed ............................................................................................. Member LeRoy M. Gaintner, CPA ........................................................................... Member Julie S. Klewer, CPA .................................................................................. Member Layne R. Simmons, CPA ........................................................................... Member Absent STAFF PRESENT: Monica L. Petersen .................................................................... Executive Director Michael D. Raine, Esq. ................................................ Assistant Attorney General Ryan P. Edmonson ............................................................... Compliance Manager Kathy Stone .............................................................................Registrant Manager Richard Sietz ............................................................................. Systems Manager

GUESTS PRESENT AND/ORPARTICIPATING: Adela Jiménez, CPA, CGMA ................ Chief Operating Officer & CFO of ASCPA Dave Freeland ............. Arizona Association of Accounting and Tax Professionals Barry Dill ............................................................... Strategic Advisor, FirstStrategic Marcus Dell’Artino ................................................. Strategic Advisor, FirstStrategic Christopher A. Lutes ............ Accounting & Auditing Standards Committee Liaison Steven Edward Clark .............................................................................. Registrant Appeared telephonically

ARIZONA STATE BOARD

OF ACCOUNTANCY

100 North 15th Avenue, Suite 165

Phoenix, Arizona 85007

Phone (602) 364-0804

Fax (602) 364-0903

www.azaccountancy.gov

Open Session Minutes February 9, 2015

The meeting was called to order at 8:15 a.m. by John C. Sizer, Jr. The following Order of business was then considered: OPEN SESSION CALL TO THE PUBLIC

Dave Freeland was present and thanked the Board for the opportunity to attend the Board meeting.

MINUTES January 12, 2015 Board Meeting Open Session Minutes After making amendments, a motion was made by LeRoy M. Gaintner, seconded by Alan R. Augenstein and passed to approve the Open Session Minutes from the January 12, 2015, Board meeting, as amended. January 12, 2015 Board Meeting Executive Session Minutes A motion was made by Alan R. Augenstein, seconded by Julie S. Klewer and passed to approve the Executive Session Minutes from the January 12, 2015, Board meeting, as written.

DECLARATION OF CONFLICTS OF INTEREST No new conflicts were declared. CONSENT AGENDA

Prior to any Board review, discussion or action, Board staff requested that the following consent agenda items be pulled off the consent agenda for action at a future meeting:

A. Recommended for Registration of PC’s & LLC/PLLC/LLP’s for the following

Applicants (Meet the requirements of A.R.S. §§ 32-731, 32-734 & 32-735): 4. Halverson and Company, A Professional Corporation

Partner: Scott Thomas Wrigley 13891-R

B. Recommended for Firm Name Change: 4. Partridge & Associates CPA’s PLC

Partridge & Associate CPA’s PLC 3002-L Partner: Joy Partridge 8697-E

Due to conflicts, Julie S. Klewer requested the following firms from the following consent agenda item be pulled from the consent agenda and voted on separately.

M. Recommendation of the Peer Review Oversight Advisory Committee for approval of the following firms in compliance with A.A.C. R4-1-454: 3. Addington & Associates, PLLC 2336-L 12. Metzger, Klawon & Fox, PLC 1004-L


A motion was made by Alan R. Augenstein, seconded by Douglas N. Kimball and passed to approve the following consent agenda items:

M. Recommendation of the Peer Review Oversight Advisory Committee for approval

of the following firms in compliance with A.A.C. R4-1-454: 3. Addington & Associates, PLLC 2336-L 12. Metzger, Klawon & Fox, PLC 1004-L

Julie S. Klewer declared conflicts and did not vote. Due to conflicts, LeRoy M. Gaintner and Alan R. Augenstein requested the following items from the following consent agenda item be pulled from the consent agenda and voted on separately.

O. Termination of Decision and Order

1. File No. 2010.124; Mayer Hoffman McCann, PC 2. File No. 2012.017; Hothem, Terry

A motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed to approve the following consent agenda items:

O. Termination of Decision and Order 1. File No. 2010.124; Mayer Hoffman McCann, PC 2. File No. 2012.017; Hothem, Terry

LeRoy M. Gaintner and Alan R. Augenstein declared conflicts and did not vote. Due to conflicts, Alan R. Augenstein requested the following individuals from the following consent agenda items be pulled from the consent agenda and voted on separately.

F. Recommended for Reissuance of Certificate because of Name Change:

1. Issued as: Kristin Derington-Ruiz 13852-E New name: Kristin Derington G. Recommendation of the Certification Committee for approval of Certification by

Examination – A.R.S. § 32-721(B): 3. Anna-Paula Lopez

I. Recommendation of the Certification Committee for approval of Certification by Reciprocity based on Substantial Equivalency – A.R.S. § 32-721(C)(1): 3. Douglas Logan – WI

A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed to approve the following consent agenda items:


F. Recommended for Reissuance of Certificate because of Name Change:

1. Issued as: Kristin Derington-Ruiz 13852-E New name: Kristin Derington G. Recommendation of the Certification Committee for approval of Certification by

Examination – A.R.S. § 32-721(B): 3. Anna-Paula Lopez

I. Recommendation of the Certification Committee for approval of Certification by Reciprocity based on Substantial Equivalency – A.R.S. § 32-721(C)(1): 3. Douglas Logan – WI

Alan R. Augenstein declared conflicts and did not vote. Due to a conflict, John C. Sizer, Jr. requested the following items from the following consent agenda items be pulled from the consent agenda and voted on separately.

G. Recommendation of the Certification Committee for approval of Certification by Examination – A.R.S. § 32-721(B): 33. Ryan J. Tully

I. Recommendation of the Certification Committee for approval of Certification by Reciprocity based on Substantial Equivalency – A.R.S. § 32-721(C)(1): 1. A. Guillermo Villatoro Valdez – IL

M. Recommendation of the Peer Review Oversight Advisory Committee for approval of the following firms in compliance with A.A.C. R4-1-454: 6. Deloitte & Touche, LLP 2111-B

A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed to approve the following consent agenda items:

G. Recommendation of the Certification Committee for approval of Certification by

Examination – A.R.S. § 32-721(B): 33. Ryan J. Tully

I. Recommendation of the Certification Committee for approval of Certification by Reciprocity based on Substantial Equivalency – A.R.S. § 32-721(C)(1): 1. A. Guillermo Villatoro Valdez – IL

M. Recommendation of the Peer Review Oversight Advisory Committee for approval of the following firms in compliance with A.A.C. R4-1-454: 6. Deloitte & Touche, LLP 2111-B

John C. Sizer, Jr. declared conflicts and did not vote. A motion was made by Alan R. Augenstein, seconded by Layne R. Simmons and passed to accept the following consent agenda:


A. Recommended for Registration of PC’s & LLC/PLLC/LLP’s for the following Applicants (Meet the requirements of A.R.S. §§ 32-731, 32-734 & 32-735): 1. Stehly, Tantoco & Wray, P.C.

Partner: Chace K. Wray 13584-R 2. Dave Saunders, LLC

Partner: David J. Saunders 16261-R 3. SDH Accounting & Bookkeeping, PLLC

Partner: Stephanie D. Hernandez 16810-E 4. Board staff removed item 5. Marshall Accounting GRC, LLC

Partner: William Ray Marshall 11651-E 6. Moore CPA Tucson, PLLC

Partner: Stephen A. Moore 5469-E 7. San Tan CPA, PLLC

Partner: Julie L. Bellack 8291-R

B. Recommended for Firm Name Change: 1. Davis, Morgan & Cardwell, PLC

Davis, Morgan & Cardwell, CPAs, PLC 986-P Partner: Susan M. Cardwell 6731-E

2. Bradley & Smith, C.P.A., P.C. Tom A. Bradley, C.P.A., P.C. 925-C Partner: Tom A. Bradley 7814-E

3. O’Malley & Berberich, CPAs, PC O’Malley CPAs, PC 2368-C Partner: Michael P. O’Malley 6874-R

4. Board staff removed item

C. Request for Firm Cancellation – Do not wish to renew: 1. Cam Valuation, PLLC 1235-C 2. Jessica S. You, P.C. 2203-C 3. Hedden, George & Booth, PLLC 3144-L 4. Cleveland Estes Avellone, PLLC 2797-L 5. Klein & Jorg PC 1283-C 6. John Park, CPA, PC 2280-C 7. Patterson CPA, PLLC 3163-L 8. Volcanic Partners CPA LLP 1319-B

D. Recommended for Cancellation of Certificate per registrant’s request not to renew: 1. James E. Chapman 8160-E 2. Richard Joseph Gill 15509-R 3. Jeffrey J. Lliteras 16425-R 4. Thomas Robert Morden 6663-E 5. Lydia Marie Montoya 5884-E 6. Mark James Oehrlein 5549-E


E. Recommended for Cancellation of Certificate per registrant’s request not to renew

due to Mobility: 1. Gena S. Jones 8022-E 2. Yeh-Yun Wu 12586-E

F. Recommended for Reissuance of Certificate because of Name Change: 1. Conflicted Item - Removed 2. Issued as: Mark K. Gilbaugh 15189-E New name: Mary K. Thompson 3. Issued as: Jennifer J. Nolan 17177-R New name: Jennifer J. Mansfield 4. Issued as: Zach Snickles 14492-E New name: Zachary Scott Snickles

G. Recommendation of the Certification Committee for approval of Certification by Examination – A.R.S. § 32-721(B): 1. Abby Kruja 2. Amber M. Pilliod 3. Conflicted Item - Removed 4. Chandra Bertoch 5. Cheska Camille Stenehjem 6. Christopher R. Murphy 7. Christopher J. Moriarty 8. Courtney A. Beck 9. Cristen M. Beauregard 10. Danielle Eddy 11. Denise K. Foshe 12. Dennis McDaniels 13. Gustavo Nava 14. James Wakefield 15. Jesse S. Howell 16. Jim Westling 17. Jonathan Udall Smith 18. Julia M. Coulombe 19. Karletta Jones 20. Katarzyna Zbikowska 21. Kathryn M. Starling

22. Kiattisak Ounpitakpaiboon 23. Kristen Eleanor Lannes 24. Kyle W. Andersen 25. Mark E. Barriere 26. Matthew D. Anson 27. Maunil Patel 28. Megan Grady 29. Michael D. Hennessey 30. Michelle Murphy 31. Richard Rhoton 32. Rochelle Sue Manley 33. Conflicted Item - Removed 34. Sakshi Parker 35. Sarah A. Guthrie 36. Scott D. Mills 37. Sonja Schuette 38. Susanna A. Wussow 39. Tamara Yachnin 40. Tiffany Bisconer 41. Tulsi R. Chokshi 42. Yu-Wen Wang

H. Recommendation of the Certification Committee for approval of Certification by Examination by Grade Transfer – A.R.S. § 32-721(B): 1. Alissa Jatsenti - CT 2. Davis Hyde - SC

I. Recommendation of the Certification Committee for approval of Certification by Reciprocity based on Substantial Equivalency – A.R.S. § 32-721(C)(1): 1. Conflicted Item - Removed 2. Daniel J. Korthals - MN 3. Conflicted Item - Removed 4. Frances Juichih Kuo – VA

5. Henry B. Zimmer – Canada 6. Jessica R. Gadeken – SD 7. Joseph Dee Itri – VA 8. Kathryn J. Nordstrom –KS


9. Kelley Wilson – Illinois 10. Kenneth D. Brown – GA 11. Kyle A. Miller – KS 12. Linda R. Simmons – MD 13. Lucy Marie Littlejohn – IL 14. Matthew R. Katz – MO 15. Michael C. Bresin – NY 16. Michael W. Fleury – OH 17. Michele L. Hay – TX 18. Mukesh S. Pursnani – CO 19. Nathan Johnston – CA

20. Paul N. Michas – IL 21. Ronald David Paul – CO 22. Sandra V. Baldwin – IL 23. Sara Jean Schumacher – MS 24. Shao-Han Weng – CO 25. Spencer B. Lott- ID 26. Thomas S. Chambers – MA 27. Tim Henry – WA 28. Timothy Bruce Whiting –VA 29. Tyler Klepinger - VA

J. Recommendation of the Certification Committee for approval of Certification by

Reciprocity – A.R.S. § 32-721(C)(2): 1. Geoffrey Lee Reynolds - CA 2. Sarah Elizabeth Wyant - CO 3. Vlado Vucicevic - CA

K. Recommendation of the Certification Committee for approval of Examination Candidates for the Uniform CPA Exam – A.R.S. § 32-723: 1. Albert Armenovich

Baghdasaryan 2. Alec Michael Peterson 3. Alex Leigh Hartig 4. Austin Scott Davis 5. Bonnie Elena Gonzales 6. Brandon Michael Iddings 7. Cassandra Faye Clow 8. Chad Richard Sheppard 9. Chang Zhong 10. Charles Michael Burns 11. Charles Lee Johnson 12. Cody James Moxley 13. Daniel Blake Guy 14. Daniel Timothy LaCroix 15. Daniel James Aboud 16. David Spencer Hakes 17. Debora Jo Oliva 18. Derek Douglas Cone 19. Dorothey V. Haro 20. Edward Jonathon Scibilia 21. Evan Hale Roberts 22. Fransisca Chenny Bintoro 23. Gabriel Chung Hing Yu 24. Gaizka Altor Urreiztieta 25. Heather Christy Rice

26. Hina Sultan 27. Jack Steven Bridgewater 28. Jack Jared Lavey 29. Jade Biyi Shao 30. Jared Harold Morrison 31. Jedidiah Joel Richmond 32. Jeffrey Michael Yates 33. Jennifer Logan Grant 34. Jessica Ann Cyiza 35. Jonathan Mark Barratt 36. Jonathan Allan Pulito 37. Kelley Kristine Burch 38. Kelsey Verline Hall 39. Kimberley Jade Sayers 40. Kory Lee Drent 41. Laurie Ma'amu Fruean 42. Lijie Han 43. Linda G. Baldazo 44. Lyle Jon Claw 45. Matthew Joseph Wiseley 46. Matthew James Asztalos 47. Md Baboo 48. Michael Merlin Koncaba 49. Mitchell Eugene Ewing 50. Mohsin Usman Khattak 51. Neal Farrell Smith


52. Nicholas Anthony Schmitzer 53. Noah Taro Smith 54. Rahim Nooruddinbhai Mardhani 55. Raymond Tan 56. Roland Anong Tebong 57. Sarah Elizabeth Mackey 58. Scott Allan Ransom, Jr. 59. Shaun Maurice Ralph Light

60. Sydney Lamparter Gray 61. Taji Berrard Allen 62. Tamanna Mahesh Jethwani 63. William Jay Lichtsinn 64. Xiangyue Wang 65. Yang Wang 66. Yinan Yang

L. Recommendation of the CPE Advisory Committee for Compliance of the following

registrants regarding random audit (A.A.C. R4-1-453): 1. Lizabeth Wynn Bruni 10097-E 2. Amy Chavez 15470-E 3. Lynn Cook 4424-E 4. Larry Alan Fleischer 8460-E 5. Joey I. Jones 13512-E 6. John F. Kinnane 12873-R 7. Michael R. Lolli 11201-E 8. Staci E. Mehlhouse 16582-E 9. Nancy Murray 8649-E 10. Tracy J. Pence 12038-E 11. Lawrence D. Focazio 10388-E

M. Recommendation of the Peer Review Oversight Advisory Committee for approval of the following firms in compliance with A.A.C. R4-1-454: 1. Accountify, LLC 3256-L 2. Adams, Richard L., CPA 5582-S 3. Conflicted Item - Removed 4. Butler, Hansen, PC 2017-C 5. Culbert, Nowicki & Associates, PC 94-C 6. Conflicted Item - Removed 7. Evers Robinson, LTD 843-C 8. Glebke, James D., CPA, PC 499-C 9. Heying, Kevin, CPA 4533-S 10. HIG Consulting, PC 1229-C 11. Jones, Rondal M., CPA 4486-S 12. Conflicted Item - Removed 13. Osinski, Edward M., Jr., CPA, PC 2027-C 14. Packard & Appleby, PC 2341-C 15. Peto & Company, CPAs, PLLC 2796-L 16. RDK CPA, LLC 3249-L 17. REDW, LLC 2633-L 18. Urke & Stoller, LLP 763-C 19. Walker & Armstrong, LLP 375-B


N. Recommended Approval of Retired Status for the following Registrants –

A.R.S. § 32-730.04: 1. Karen Kay Dugger 4613-R 2. Carole Crown Duskin 2561-E 3. Jeff Geisler 7554-E 4. Lavern Glassley 6309-E 5. Carolyn R. Kirkpatrick 2967-E 6. Alice Ann Lenzini 9755-R 7. Hilton Roy Maddox Jr. 10951-R 8. Mary Ellen McGonigle 4312-E 9. David S. Mork 9115-R

10. Mark S. Nexsen 9440-R 11. Kenneth R. Ramsey 2459-E 12. Gail D. Reese 15220-R 13. Cynthia C. Riley 2702-E 14. Roy Romero 14429-R 15. Kenneth Rhodes Unger 1335-E 16. Gary John Volkenant 3300-R 17. James Steven Whisler 5826-E 18. Jon R. Young 1480-E

O. Termination of Decision and Order

1. Conflicted Item - Removed 2. Conflicted Item - Removed 3. File No. 2013.050; Johnston, Lisa 4. File No. 2014.049; Rudd, Gevan 5. File No. 2014.071; Conrad, Phyllis A., CPA, LLC

LEGISLATIVE UPDATE

Barry Dill and Marcus Dell’Artino were present to provide an update to the Board regarding Arizona State Legislature House Bills 2218 and 2219 and other proposed legislation that may impact the Board, the state of the State’s budget and answered questions from the Board.

EXECUTIVE DIRECTOR’S REPORT

The Board reviewed the budget and agency operation issues related to the handling of inactive status requests, suspension for nonregistration, staff resignation, and the hiring freeze process, and the status of hiring for the compliance area administrative assistant position. The Board also discussed the office reorganization and Monica L. Petersen expressed a need for a programmer and a part-time administrative services officer which would require reclassification of existing positions. Alan R. Augenstein spoke in favor of a programmer to help streamline the Board’s operations and Julie Klewer inquired about the options for contracting out programmer services if necessary during the hiring freeze. Monica L. Petersen shared that there was a statewide contract for IT services that could be used but the spirit of the hiring freeze is to save money. The Board also discussed Executive Order 2015-01 regarding the rulemaking moratorium with Monica L. Petersen.

INFORMATION TECHNOLOGY REPORT

IT Security Policies for Agencies Richard Sietz was present and provided an update and answered questions from the Board regarding information technology security policies mandated by the State.

ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION

Response/Non-response to Offered Decision and Order (By consent) File Nos. 2013.106; S.E. Clark & Co. and 2015.054; Clark, Steven


Steven Edward Clark was present to discuss the Board’s offer and the reasons he is dissenting to the Board’s offer. Mr. Clark stated that he believes both parties can reach an agreement. Mr. Clark summarized what he believes are factual inaccuracies in the Decision and Order (By Consent) (“Order”). Mr. Clark also requested that the Board consider reducing the amount of Board costs to be reimbursed. A motion was made by John C. Sizer, Jr. to direct staff to forward Mr. Clark’s dissention to the committee liaison to review and consider the reasons for the dissention and report back to the Board. The motion failed for lack of a second and a vote. Prior to further Board discussion, the Board requested staff to contact Chris Lutes, the committee liaison, to participate in the discussion. Mr. Lutes was present, telephonically, answered questions from the Board and summarized the Accounting and Auditing Committee’s recommendation. The Board made some amendments to the facts of the Order, the requirement for pre-approval of CPE and pre-issuance peer reviews and reduced the reimbursement of Board costs to $7,500.00. A motion was made by Alan R. Augenstein, seconded by Layne R. Simmons and passed to direct the Assistant Attorney General to make the amendments that the Board made during its meeting, and once made, to offer the Order to Mr. Clark for his acceptance and if not accepted within 10 days from the date of the offer to file a Complaint and Notice of Hearing.

The Board took a break from 10:06 a.m. to 10:12 a.m. STRATEGIC INITIATIVES UPDATE

Retention and Business Continuity Monica L. Petersen provided an update regarding the Board’s Retention and Business Continuity strategic initiative. Monica L. Petersen indicated that the in-grade adjustments could not be submitted to the Arizona Department of Administration Human Resources until after staff performance evaluations were complete because a current MAP score was required. She shared that in-grade and equity based adjustments were submitted on February 5, 2015 and provided some background about the requisite justification that is required by human resources.

ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION Consider Forming a Sub-Committee of the Board Alan R. Augenstein shared with the Board that he had met with Monica L. Petersen on February 3, 2015 to discuss succession planning, retention and staff moral. Alan indicated that with respect to succession planning it would be ideal to have a natural progression in the hierarchy of positions but the position qualifications and compensation restrictions make it harder for the Board than in organizations that have more band width. Alan


expressed a concern about the challenges associated with discussing operational issues in an open meeting format but did not feel that it was necessary to form a sub-committee. Julie Klewer expressed agreement with Alan remarks and shared with the Board that she had an hour long telephone conversation with Monica L. Petersen about similar issues and also does not see a need for a subcommittee. Julie felt that it was important for the Board to follow through on their charge to evaluate the Executive Director on an annual basis which up until last year had not been done on a formal basis and the Board agreed to address as a future agenda item. Julie shared that there has been a lot of change in the agency and a lot of movement around trying to get more technology and efficiencies in the organization and by default it brings discomfort. Alan R. Augenstein shared that the Board’s operations have undergone a lot of change during Monica L. Petersen’s tenure and indicated that the Board needs people on staff that can change with the times. Alan also shared that Board staff should feel like they are important to the organization and work in an environment where people are happy, feel they can contribute, feel respected and have their voice heard. Alan stated that to the extent that the Board has staff that can’t deal with the change then the Board has to make changes. A motion was made John C. Sizer, Jr., seconded by Douglas N. Kimball and passed to forgo creating and forming a sub-committee of the Board to discuss office staffing matters.

COMMITTEE RECOMMENDATIONS – COMPLAINT/INITIAL ANALYSIS FILES

Board to review, discuss and take possible action on the advisory committee’s recommendation to close the following file due to no violation(s) of professional standards: Tax Practice Committee File No. 2015.046 A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed to accept the Tax Practice Committee’s recommendation and close the file due to no violations.

Board to review, discuss and take possible action on the advisory committee’s recommendation to an open investigation file on the following file:

Accounting and Auditing Standards Committee File No. 2015.043

A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed to accept the Accounting and Auditing Standards Committee’s recommendation and open an investigation file.

Board to review, discuss and take possible action on the advisory committee’s recommendation to open an investigation file and direct the Assistant Attorney General to file a Complaint and Notice of Hearing on the following file:

Tax Practice Committee File No. 2015.052 A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed to accept the Tax Practice Committee’s recommendation and open an investigation file and


direct the Assistant Attorney General to file a Complaint and Notice of Hearing for the revocation of the registrant’s CPA certificate and firm registration.

COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES

Board to review, and take possible action on the advisory committee’s recommendation to issue a Summary Suspension of the registrant’s CPA certificate and firm registration and to direct the Assistant Attorney General to file a Complaint and Notice of Hearing on the file files: Tax Practice Committee File Nos. 2015.009, 2015.025, 2015.029, 2015.031 & 2015.032

The Board discussed going into executive session to discuss confidential information and seek legal advice.

EXECUTIVE SESSION A motion was made by John C. Sizer, Jr., seconded by Douglas N. Kimball and passed to go into executive session at 10:31 a.m. to discuss confidential information and seek legal advice pursuant to A.R.S. § 38-431.03(A)(2) & (3) regarding file nos. 2015.009, 2015.025, 2015.029, 2015.031 & 2015.032. After consideration in executive session, the Board reconvened in open session at 10:52 a.m.

OPEN SESSION COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES

Board to review, and take possible action on the advisory committee’s recommendation to issue a Summary Suspension of the registrant’s CPA certificate and firm registration and to direct the Assistant Attorney General to file a Complaint and Notice of Hearing on the file files: Tax Practice Committee File Nos. 2015.009, 2015.025, 2015.029, 2015.031 & 2015.032

After discussion, a motion was made by Layne R. Simmons, seconded by LeRoy M. Gaintner and passed to grant the Assistant Attorney General limited authority to settle the matters by drafting a Decision and Order (By Consent) (“Order”), with the opposing counsel, for the relinquishment of the registrant’s CPA certificate and firm registration. The motion included designating Mr. Simmons as a representative of the Board to approve the final Order before offering it to the registrant for his signature. The Order must include that if the registrant seeks reinstatement, in the future, that he meet all requirements of A.R.S. § 32-741.04, including the retaking and passing of the CPA exam and proof that the registrant cured all matters alleged by the complainants, including those complaints that currently do not have assigned file numbers. The registrant must accept the Board’s offer within 10 days from the date of the offer, and if not, then the Board will issue a summary suspension of the registrant’s CPA certificate and firm registration and direct the Assistant Attorney General to file a Complaint and Notice of Hearing for the revocation of the registrant’s CPA certificate and firm registration.


Board to review, discuss and take possible action on the advisory committee’s recommendation to issue an administrative letter of concern on the following file: Tax Practice Committee File No. 2015.008 The Board requested an update regarding potential violations. Michael D. Raine provided a summary of the Tax Practice Committee’s deliberation regarding the file. The Board discussed going into executive session to discuss confidential information and seek legal advice. EXECUTIVE SESSION

A motion was made by LeRoy M. Gainter, seconded by Julie S. Klewer and passed to go into executive session at 11:06 a.m. to discuss confidential information and seek legal advice pursuant to A.R.S. § 38-431.03(A)(2) & (3) regarding file no. 2015.008. After consideration in executive session, the Board reconvened in open session at 11:13 a.m.

OPEN SESSION COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES Board to review, discuss and take possible action on the advisory committee’s recommendation to issue an administrative letter of concern on the following file: Tax Practice Committee File No. 2015.008

A motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed to accept the Tax Practice Committee’s recommendation and issue an Administrative Letter of Concern (LOC), as amended in executive session, and close the file. Prior to issuing the LOC to the registrant, the Board requested that John C. Sizer, Jr. approve the final version.

NOTICES OF UNLAWFUL USE OF THE CPA DESIGNATION

Board to review, discuss and take possible action on the following file: File No. 2015.055; Nationwide CPAs After discussion, a motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed to direct the Assistant Attorney General to file an injunction in Superior Court for the respondent to cease and desist using the CPA designation in Arizona for any and all unregistered CPA firms formed by the respondent. Board to review, discuss and consider whether or not to proceed with an injunction in Maricopa Superior Court on the following file: File No. 2015.017; Smith, David N. After discussion regarding the respondent shutting down his website, where he used the CPA designation unlawfully, a motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and passed not to take any action and close the file.

PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD (PCAOB)


Board to review information received from the PCAOB regarding two CPA firm inspection reports to determine whether or not to open an initial analysis or investigation file and/or take disciplinary action. A motion was made by Alan R. Augenstein, seconded by John C. Sizer, Jr. and passed not to take any action. Board to review information received from the PCAOB regarding a Notice of Disapproval of Registration Application to determine whether or not to open an initial analysis or investigation file and/or take disciplinary action. After the Board reviewed the PCAOB findings, a motion was made by LeRoy M. Gaintner, seconded by John C. Sizer, Jr. and passed not to take any action.

REVIEW COMPLAINT AGING REPORT

The Board reviewed the complaint aging report.

ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION Return of Certificate Request from Carl Brooksby to retain Arizona CPA certificate LeRoy M. Gaintner provided a brief summary of Mr. Brooksby’s CPA career. Monica L. Petersen provided a brief summary of Mr. Brooksby’s request to keep his certificate. The Board discussed the statutory and rule requirements regarding whether or not to allow Mr. Brooksby to keep his Arizona CPA certificate.

Discussion of statutory and rule changes, if any Monica L. Petersen provided an update regarding the Board’s statutory and rule authority requiring CPAs to return their certificates when they are no longer an active CPA or certified as a retired CPA. After discussion, a motion was made by John C. Sizer, Jr., seconded by LeRoy M. Gaintner and passed that the Board and its office staff cease the practice of requesting Arizona CPA certificates be returned to the Board, except as currently written in the Board’s rules regarding suspensions and in cases where an individual either relinquishes their CPA certificate or it is revoked by the Board, and therefore, written in the Decision and Order. The motion also included directing Ms. Petersen to pursue technical changes in the Board’s current house bill before the Arizona State Legislature. Request from Carl Brooksby to retain Arizona CPA certificate Based on the aforementioned discussion, a motion was made by John C. Sizer, Jr., seconded by Layne R. Simmons and passed to grant Carl Brooksby’s request to retain his CPA certificate. Reinstatement Applications After Monica L. Petersen provided a summary regarding the process that reinstatement applications go through, a motion was made by John C. Sizer, Jr., seconded by Douglas N. Kimball and passed to approve staff’s recommendation of placing reinstatement applications under the consent agenda item on future meeting agendas. The reinstatement


applications that would be placed on future Consent Agendas would not include requests for reinstatement from a discipline status.

Firm Application and Registration Monica L. Petersen provided a summary of the firm registration process and the Board provided guidance that the staff operations and procedures should follow what the Board statutes and rules allow. Disciplinary Guidance Monica L. Petersen provided an update and summarized the charts in the Board’s packets and what they represent. Board staff agreed with the Board that the Board should always have discretion in their motions. The Board discussed creating standardized penalties for violations of failing to timely respond, CPE violations and unlawful uses of the CPA designation while always maintaining the discretion to alter the final decision. After conducting a straw poll, a motion was made by John C. Sizer, Jr., seconded by Douglas N. Kimball and passed 5 – 1 that when the Board is considering imposing administrative penalties for failure to timely respond that the minimum penalty will be $100 for one day late and up to seven days late and the penalty will increase by $100 per week up to the maximum of $2,000 while still maintaining the discretion to modify the penalty based on mitigating and/or aggravating circumstances. Layne R. Simmons voted against the motion. After conducting a straw poll, a motion was made by John C. Sizer, Jr., seconded by LeRoy M. Gaintner and passed that when the Board is considering imposing maximum timelines for a registrant to cure their CPE deficiencies that the days to complete the deficiencies shall be no more than 60 days from the date of notification regardless of how many CPE hours the registrant is deficient while still maintaining the discretion to modify the timeline based on mitigating and/or aggravating circumstances.

After discussion, a motion was made by Douglas N. Kimball, seconded by Layne R. Simmons and passed 5 – 1 that when the Board is considering a respondent’s unlawful use of the CPA designation that the matter be open for Board discussion when deciding whether or not to direct the Assistant Attorney General to file an injunction in Superior Court for the respondent to cease and desist using the CPA designation in Arizona. Julie S. Klewer voted against the motion. Settlement Offer File No. 2013.064; McGehee, Lara C., CPA After Michael D. Raine provided an update and the Board discussed the file, a motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and passed to accept the registrant’s settlement offer for revocation of the firm’s CPA firm registration.


Application for Certification by Exam/Grade Transfer, Recommended Denial/Deferral by the Certification Committee – A.R.S. § 32-721 Danny M. Heatherson, Jr. After discussion, a motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and passed to approve the applicant’s application for certification by exam/grade transfer. Deborah J. Martarella Scott Heywood Sheryl Dinsmore A motion was made by Layne R. Simmons, seconded by LeRoy M. Gaintner and passed to deny the applicants’ applications for certification by examination/grade transfer and to appoint Monica L. Petersen or Kathy Stone, as a designated representative of the Board to conduct an informal settlement conference, if requested, with limited authority to settle. Application for the Uniform CPA Examination, Denial by Certification Committee - A.R.S. § 32-723 Jack Michael Jess, Jr. A motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed to deny the applicant’s application for the Uniform CPA Examination. Request for Inactive Status – A.R.S. § 32-730.01 Larissa A. Charais 12853-E James D. Coates 11633-E Sandra L. Duncan 16524-R Joyce Galise 10768-E Gayle Harvey Greenlee 4253-E Lori L. Hoby 13170-R Terri L. Moran 14302-R Michael K. Morgan 15748-R Darcy L. Nicora 8188-R Margaret E. Peat 12829-E Connie L. Valentour 9423-E A motion was made by LeRoy M. Gaintner, seconded by Julie S. Klewer and passed to grant the registrants’ requests for inactive status. Stacey Conces Dickey 11313-E After the Board discussed the registrant’s job description, a motion was made by Alan R. Augenstein, seconded by Julie S. Klewer and passed to grant the registrant’s request for inactive status. Joseph Michael Parker 10414-E Alan R. Augenstein provided a summary of the registrant’s bio and credentials found on his law firm’s website in which he is currently using the CPA designation while also already on inactive status. The Board discussed deferring action until its March 30, 2015 Board


meeting to receive an update regarding the registrant’s job description and a response to the apparent unlawful use of the CPA designation.

A motion was made by Alan R. Augenstein, seconded by Julie S. Klewer and passed to defer action until the Board’s March 30, 2015 Board meeting and direct staff to request that the registrant provide a detailed update of the his job description and respond to the current use of the CPA designation while already on Board approved inactive status from the previous two renewal cycles. Request for a CPE Waiver/Extension/Exemption and/or Fee Waiver – A.R.S. 730(B) & (C) CPE Extension(s): John R. Radonovich – 7096-E A motion was made by Layne R. Simmons, seconded by LeRoy M. Gaintner and passed to grant the registrant’s request for a CPE extension. Request for NTS Extension DeBruge, Suzanne Azam A motion was made by Layne R. Simmons, seconded by LeRoy M. Gaintner and passed 5 – 1 to grant the respondent’s request for an NTS extension for one testing window. John C. Sizer, Jr. voted against the motion. Request for Reinstatement Jesus A. Fernandez – 12256-E Mark J. Schreiner – 8792-R A motion was made by Layne R. Simmons, seconded by Alan R. Augenstein and passed to grant the applicants’ requests for reinstatement.

Review of Compliance/Non-Compliance with Peer Review Requirements – A.A.C. R4-1-454 Groll, Robert H, CPA 4114-S After Board staff provided an update and the Board discussed the firm’s request, a motion was made by John C. Sizer, Jr. and seconded by Layne R. Simmons to defer action pending the cancellation of the firm’s CPA firm registration. During the discussion of the motion and prior to the vote, John C. Sizer, Jr. withdrew his motion and Layne R. Simmons withdrew his second to the motion. After discussion, a motion was made by John C. Sizer, Jr., seconded by Julie S. Klewer and passed 5 – 1 to grant the firm an exemption from completing a firm peer review based on the firm’s cancellation submission and other mitigating circumstances. Alan R. Augenstein voted against the motion.


Review of Compliance/Non-Compliance with CPE Requirements and Non-responsiveness – A.A.C. R4-1-453 Geri A. Zinn 16611-R A motion was made by John C. Sizer, Jr., seconded by Douglas N. Kimball and passed to accept the Continuing Professional Education Committee’s recommendation and open an investigation file and direct the Assistant Attorney General to file a Complaint and Notice of Hearing for the suspension of the registrant’s CPA certificate. Tax Practice Advisory Committee Recommendations David S. Cantor, CPA James R. Nardine, CPA A motion was made by John C. Sizer, Jr., seconded by Layne R. Simmons and passed to accept the Tax Practice Committee’s recommendations to approve the appointments of the respondents to serve on the Tax Practice Committee for a five-year term each. Issues from and regarding the National Association of State Boards of Accountancy (NASBA) Consideration for the approval of the Executive Director’s and Board Member’s attendance at the NASBA’s Biennial Peer Review Oversight Committee Conference on July 10, 2015 in Nashville, TN A motion was made by John C. Sizer, Jr., seconded by LeRoy M. Gaintner and passed to approve the Executive Director’s and one Board member’s attendance at the NASBA’s biennial peer review oversight committee conference on July 10, 2015 in Nashville, TN and if a Board member is unable to attend, to grant the attendance of the Board’s Peer Review Oversight Advisory Committee’s chairperson.

SUMMARY OF CURRENT EVENTS

The Board discussed Gary J. Wood’s passing and recognized his many contributions to the CPA profession and to the Board as a member of its Peer Review Oversight Advisory Committee, since its inception, and as a Board investigative reviewer. Adela Jiménez provided an update regarding Mr. Wood’s outstanding firm peer review obligations and Board staff reminded the Board of the information already emailed regarding Mr. Wood’s memorial service.

DISCUSSION OF ITEMS TO BE PLACED ON FUTURE MEETING AGENDAS

The Board requested that the staff add the following on agenda items on its next Board meeting agenda:

Executive Director evaluation procedures

Reorganization update as a standing agenda item within Executive Director’s ED report

ADJOURNMENT

A motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed to adjourn at 12:48 p.m.

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