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ARIZONA STATE BOARD OF ACCOUNTANCY OPEN SESSION MINUTES

June 13, 2016

Members of the Arizona State Board of Accountancy (“Board”) held a meeting at the Accountancy Board Office in Suite 165, 100 N. 15th Avenue, Phoenix, Arizona 85007. Executive Session was held from 11:00 a.m. to 11:15 a.m.

BOARD MEMBERS: Alan R. Augenstein, CPA ................................................................................... President Douglas N. Kimball ............................................................................................. Secretary Layne Reid Simmons, CPA ................................................................................ Treasurer Gary L. Freed ....................................................................................................... Member LeRoy M. Gaintner, CPA ...................................................................................... Member William C. Heimerdinger, CPA ............................................................................. Member Julie S. Klewer, CPA ............................................................................................ Member Left at 11:29 a.m. STAFF PRESENT: Monica L. Petersen .............................................................................. Executive Director Valli Goss ................................................ Assistant Director, Regulation and Compliance Sophia Varma Van Langen ..................... Assistant Director, Regulation and Compliance Jacki Hancock ......................................... Assistant Director, Registration and Operations John Oyas ........................................................................... Program Project Specialist 2 Christopher Rasmussen ...................................................... Program Project Specialist 2 ASSISTANT ATTORNEYS GENERAL: Michael Raine, Esq ................................................................. Assistant Attorney General Scott Donald, Esq ................................................................... Assistant Attorney General GUESTS PRESENT AND/ORPARTICIPATING: Ronald Riffle ........................................................................................................ Applicant David Freeland ........................ Arizona Association of Accounting and Tax Professionals Alicia Williams Young .......................................................................................... Applicant Adela E. Jiménez, CPA, CGMA ...................................................COO and CFO, ASCPA Lisa B. Lumbard, CPA .................. Accounting and Auditing Advisory Committee Member Stephen T. Harris, CPA ............... Accounting and Auditing Advisory Committee Member Christopher A. Lutes, CPA ........... Accounting and Auditing Advisory Committee Member Participated 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

http://www.azaccountancy.gov/

ARIZONA STATE BOARD OF ACCOUNTANCY MEETING MINUTES June 13, 2016

The meeting was called to order at 8:15 a.m. by Alan R. Augenstein. The following order of business was then considered:

OPEN SESSION CALL TO THE PUBLIC

David Freedland of the Arizona Association of Accounting and Tax Professionals (AAATP) was present, commended Alan Augenstein for his service to the Board, and thanked the Board for allowing him to participate. Ronald Riffle introduced himself and stated that he is willing to provide further information about his application for Certification. Alicia Williams Young introduced herself and thanked the Board for the opportunity to present to the Board about her application for Certification.

SUMMARY OF CURRENT EVENTS Monica L. Petersen introduced John Oyas, new Program Project Specialist 2, and gave a brief statement about his background. Michael Raine, Assistant Attorney General (AAG), introduced AAG Scott Donald as a recent addition to the Office of the Attorney General, who will be the assigned attorney to the Board and Committees. Mr. Donald gave a brief summary of his background. Alan R. Augenstein thanked Sophia Varma Van Langen for her service to the Board and gave her a certificate of appreciation. Monica L. Petersen thanked Alan R. Augenstein for his service to the Board.

DISCUSS, AMEND AND APPROVE MINUTES

After discussion and amendments, a motion was made by Julie S. Klewer, seconded by Gary L. Freed and passed 5 – 0 to accept the May 9, 2016 Open Session minutes, as amended. Layne R. Simmons and Douglas N. Kimball abstained from the vote, as they were absent during the May Board meeting. After discussion, a motion was made by Julie S. Klewer, seconded by Gary L. Freed and passed 5 – 0 to accept the May 9, 2016 Executive Session minutes, as drafted. Layne R. Simmons and Douglas N. Kimball abstained from the vote.

DECLARATION OF CONFLICTS OF INTEREST LeRoy M. Gaintner declared a conflict of interest with agenda item XII.K.1 - George, Brian

R., CPA 4072-S.


Alan R. Augenstein declared a conflict of interest with agenda items X.A.3 -- File No. 2016.142 – Weinstein, Robert and XII.S.1 - Continuing Professional Education Advisory Committee - Craig P. Lewandowski.

CONSENT AGENDA

Julie S. Klewer declared a conflict of interest with the following consent agenda (V) item: A. Recommended for Registration of Firms for the Following Applicants: 15. Scott Coombe CPA; Partner: Scott Coombe 17544-E

A motion was made by LeRoy M. Gaintner, seconded by Gary L. Freed and passed 6 – 0 to approve consent agenda item V.A.15.

Julie S. Klewer declared a conflict of interest and recused herself from the vote.

Gary L. Freed declared a conflict of interest with the following consent agenda item: G. Recommendation of the Certification Committee for Approval of Certification by Reciprocity based on Substantial Equivalency: 8. Zamora, Dominic J.

A motion was made by Layne R. Simmons, seconded by LeRoy M. Gaintner and passed 6 – 0 to approve consent agenda item V.G.8. Gary L. Freed declared a conflict of interest and recused himself from the vote. A motion was made by Douglas N. Kimball, seconded by Gary L. Freed and passed unanimously to approve the following consent agenda items:

A. Recommended for Registration of Firms for the Following Applicants:

1. Adam Remis Partner: Adam Remis 10225-E

2. Ann M. Flaherty, CPA Partner: Ann M. Flaherty 18114-R

3. Bradshaw Mountain Tax Services Partner: Paul Ruwald 16880-E

4. Bruce A. Bergen, CPA Partner: Bruce A. Bergen 18061-R

5. Chris Hardison Business Services Partner: Christopher J. Hardison 18071-R

6. Curtis Lee Thomas, CPA Partner: Curtis Lee Thomas 1585-E

7. Janell L. Dreyfus, CPA Partner: Janell L. Dreyfus 18113-R


8. Jeanie Wynn CPA, LLC Partner: Jeanie Wynn 12089-E

9. Kelli A. Berardi, CPA Partner: Kelli A. Berardi 17938-E

10. Koeller Thompson CPAs, PLLC Partner: Benjamin T. Koeller 11649-E

11. Li, Friezen & Grossetta, CPAs, PC Partner: Thomas P. Friezen 14259-E

12. McFarland-CPA, PC Partner: Billy E. McFarland, Jr. 11364-E

13. Michael J. Fratantoro CPA PLLC Partner: Michael J. Fratantoro 16962-R

14. Rida Abbasi, CPA Partner: Rida Abbassi 18086-E

15. Voted on Separately 16. Solidnger Hu LLP

Partner: Xinyuan Hu 17482-E 17. Thomas E. Scott CPA PLLC

Partner: Thomas E. Scott 3513-E

B. Recommended for Firm Name Change: 1. Issued as: Solid Ground, PC 1220-C

New Name: Solid Ground, PLLC 2. Issued as: Terkelsen, Smith, Tyree & Snell, PLC 2057-L

New Name: Terkelsen, Smith & Tyree, PLC 3. Issued as: Yao & Associates, PLLC 3434-C

New Name: Atlas CPAs & Advisors, PLLC

C. Request for Firm Cancellation – Do Not Wish to Renew: 1. Dase, Larry D., CPA 4441-S 2. Gaffin, Theodore F., CPA 4458-S 3. Liem & Company, P.C. 1072-C 4. Lucht, Mark A. 4707-S 5. Scarborough, Bernard, CPA 5628-S 6. TC Consulting LLC 3261-L 7. Vickers, Virginia P., CPA 5734-S

D. Recommended for Cancellation of Certificate per Registrant’s Request Not to Renew:

1. Bernard Scarborough 813-E 2. Donna Kathryn Rumph 4833-E 3. Emiko Hosoya 11956-E 4. Frank Ejupi 17265-R 5. James Joseph Converse 2194-E 6. Kathy M. Holden 8169-E 7. Leah Meredith 16462-E


8. Lynn Rhoads Hoffman 5985-E 9. Michael B. Miller 16987-R 10. Michael R. Finnern 11823-E 11. Philip L. Hasel 2538-E 12. Robert E. Lowe 17123-R

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

1. Issued as: Aurora Carranza 17803-E ; New Name: Aurora Fitzgerald 2. Issued as: Cassander S. Crandall 15654-E ; New Name: C. Stephen Crandall 3. Issued as: Laura A. Byrne 13795-E ; New Name: Laura A. Watson 4. Issued as: Meghon L. Smith 17217-E ; New Name: Meghon L. Thompson 5. Issued as: Pat Degnan 18066-R ; New Name: Patrick Degnan

F. Recommendation of the Certification Committee for Approval of Certification by

Examination: 1. Bae, Song-Ji 2. Barber, Shawn K. 3. Cardella, Michael 4. Carney, Jessica Raizk 5. Cavan, Danielle 6. Cordero, Nicolas F. 7. Dierlam, Michael A. 8. Heins, Courtney Marie 9. Kawamoto, Kristi Marie 10. Keyonnie, Christine M 11. Kolodziej, Justin Matthew 12. Kothari, Sagar

13. Larsen, Sean 14. Li, Anthony 15. Lynch, Adam 16. Mangieri, Jeff 17. Medina, Daniel J. 18. Moffitt, Benjamin M. 19. Morrison, Christopher Scott 20. Nagori, Deepak 21. Pahwa, Karan 22. Patel, Virendra K. 23. Schwartz, Dana M. 24. Smith, Kasi

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

Reciprocity based on Substantial Equivalency: 1. Brown, Rebecca A. 2. Collyer, Charles T. 3. Ford, Jeremy 4. Litwin, Jeffrey Stewart

5. Pacey, Jennifer L. 6. Smith, Valerie Michelle 7. Squires, Thomas Patrick 8. Voted on Separately

H. Recommendation of the Certification Committee for Approval of Examination Candidates

for the Uniform CPA Examination: 1. Agarwal, Deepanshu 2. Appa, Sarala Devi 3. Bahety, Hemanshu 4. Bajaj, Sukriti 5. Batra, Priyal 6. Beri, Aastha 7. Blain, Michael John 8. Chandi, Sneha

9. Cheong, Soo Kai 10. Dangol, Sabin 11. Degrasse, Nora Eileen 12. Dewan, Akshita 13. Gallagher, Ryan Alastair

Stanley 14. Gates, Kevin Darrell 15. Glick, Lauren Ashley


16. He, Ling 17. Horne, Michael Alexander 18. Huynh, Daniel Minh 19. Jain, Gauri 20. Jim, Della Ann 21. Kagen, Samuel Aaron 22. Koril, Kevin Andrew 23. Leasure, Travis Michael 24. Leu, Michelle Louise 25. Liu, Xiaotong 26. Maddineni,

Lakshminarayana 27. Martinez, Adam 28. Mitchell, Natalia 29. Murarka, Vaishali 30. Nallamilli, Lakshmi 31. Neier, Stephanie Lynn 32. Olibarria, Xavier 33. Patel, Nitu Ashishkumar 34. Penaflorida, Rosavilla Uy 35. Pina Vega, Maria R. 36. Pitman, Amy Lynn 37. Prajapati, Rashmita Santosh 38. Richards, Dustin Ty

39. Saini, Sanaj 40. Schwertfeger, Kyle James 41. Shah, Nilesh Kumar

Prafulkumar 42. Sharma, Pavan 43. Singh, Tarvinder Pal 44. Slusher, Kyle Allen 45. Subramani, Kavitha 46. Sun, Yuyuan 47. Sutaria, Sameer Ilyas 48. Tadeo, David Cordova 49. Teh, Hui Yu 50. Thokchom, Tabitha 51. Tillard, Adam James 52. Tyagavalli Krishnaswamy,

Sunitha 53. Valleau, Shane Allen 54. Venkatesan, Tharani 55. Vora, Charmi Kamlesh 56. Walters, David Mathew 57. Welsh, Michael Jason 58. Xie, Yishi 59. Zhao, Yanni

I. Recommendation of the CPE Advisory Committee for Compliance of the Following

Registrants Regarding Random Audit: 1. Anderson, Melvin William 736-E 2. Curran, John P. 8137-R 3. Ebert, Adam J. 12899-E 4. Hardaway, Shawn Paul 16009-E 5. Maynard, Jolene M. 13735-E 6. McCord, Jennifer R. 12412-E 7. Poole, Chie F. 13055-R 8. Porter, Max 15786-E 9. Randall, Robin Bleich 7022-R 10. Villanueva, Brent A. 9726-E 11. Wallace, Jacqui R. 15679-E 12. White, John Paul 11015-R

J. Recommendation of the CPE Advisory Committee for Reinstatement from Expired Status:

1. Long, Richard Jay 6402-R 2. Miller, Dwight Dale 10353-E


K. Recommendation of the Peer Review Oversight Advisory Committee for Approval of the Following Firms:

1. Carnell, William E., P.C. 64-C 2. Davis, Michael A., CPA. LTD. 802-C 3. Guill, Blankenbaker & Lawson, Certified Public Accountant, A Sole Proprietor

6191-S 4. Hanson & Stewart, P.C. 78-C 5. Johnson Goff & Company, PLLC 2105-L 6. Kroemer Company, PLC, The 3103-L 7. Mayfield, Edward, CPA 4218-S 8. Morton CPAs, P.C. 2288-C 9. Padwe, Stephen A., CPA 4274-S 10. Smith, Kevin D., CPA, PLLC 2598-L 11. Turner, Sandra A., CPA, PC 2577-C 12. Varga, James, CPA, PLLC 370-L 13. Wilson, Rodney C., CPA PLLC 3268-L

L. Recommended Approval of Retired Status for the Following Registrants:

1. Cameron, Joan 6201-E 2. Castaneda, Lora Rose

5595-E 3. Chapko, Stephen John

12374-R 4. Cockerham, James Arthur

3600-R 5. Cramsey, Craig Alan 6228-E 6. Danowski, Michael S. 2870-

E 7. Dase, Larry D. 2309-E 8. Delgado, Leonard J. 1342-

E 9. Diedrich, David Charles

2104-R 10. Flynn, Russell E. 2002-R 11. Gaffin, Theodore Fisher

2581-R 12. Hood, Mary-Ellen 11955-R 13. Horne, Robert Charles

1680-E

14. Jones, Mark Wayne 5705-E 15. Kehret, Nancy Kay 6255-E 16. Koelling, Lowell D. 4615-R 17. Mackenzie, Franklin F.

6355-E 18. Meeks, Peter 13570-E 19. Monroe, James W. 1433-R 20. O'Brien, Sean Kelly 5470-E 21. Raghavan, Usha 8831-E 22. Richards, Beverly S. 9715-

E 23. Santora, Lawrence W.

2743-E 24. Selby, John D. 6910-E 25. Sipek, Meridith Paul 1614-R 26. Tizzard, Roderic Dale 383-E 27. Wagner, Mark Rowland

1916-E 28. Westover, Orlando K. 1511-

E 29. Wolfe, Nancy S. 12399-E

M. Recommended for Reactivation of Certificate from Inactive Status:

1. Gundmundsen, Ralph W. 8297-R 2. Handy, Jennifer D. 9689-E 3. Weinman, Dan F. 7569-E


N. Termination of Decision and Order: 1. File No. 2016.014; Jacobson, Daniel Bruce

ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION

Application for Certification by Exam/Grade Transfer, Recommended Denial by Certification Committee: Riffle, Ronald A Ronald A. Riffle was present. He provided a brief summary and background of his situation

and discussed the handout he provided to the Board. He specified his disagreement with the

staff’s and Committee’s calculations. Alan R. Augenstein questioned if the Committee has

seen the handout. Discussion ensued amongst the Board members regarding the information

presented by Mr. Riffle. Mr. Augenstein stated that he thinks that the application should be

sent back to the Committee.

A motion was made by Layne R. Simmons, seconded by William C. Heimerdinger and

passed 7-0 to remand the matter back to the Committee to review the information and

calculations presented by Ronald A. Riffle.

Young, Alicia Williams

Alicia Williams Young was present. She provided a brief summary of her case and presented

a memorandum to the Board regarding the matter. She proceeded to discuss her academic

history, which included law courses that she believed may be considered for accounting

credit. Alan R. Augenstein stated that Ms. Williams has taken several courses that had

significant tax content and he was willing to consider giving her a 1 hour credit.

A motion was made by LeRoy M. Gaintner to approve the submitted materials and approve

her application for certification. The motion did not carry for lack of a second.

A motion was made by Julie S. Klewer, seconded by Gary L. Freed and passed 7-0 to remand

the matter back to the Certification Committee.

COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES Accounting and Auditing Advisory Committee File No. 2016.127; Scott, Kenneth Lisa B. Lumbard, Committee Liaison for the file, was present. Alan R. Augenstein asked about the draft Decision and Order (By Consent) for the file, the recommendations about the file, and their practicality. Mr. Augenstein noted that he sensed that the Registrant is still starting out early in his career. He stated that he is concerned that the Registrant in question will not be able to learn the skills needed to be competent in the field without being able to practice.

Alan R. Augenstein asked if the Registrant will be able to practice accounting under supervision, in a staff capacity. Lisa B. Lumbard stated that during the investigation, the Committee found out that the Registrant had previous auditing experience and was largely in tax practice. She stated that the Registrant was approached by a client to do a favor in preparing a Department of Labor audit, and bought the guides and studied them, but then fell short in preparing the audit. Ms. Lumbard stated that what makes this case more


concerning is that glaring errors exist even on the basic financial statements themselves. Ms. Lumbard noted that the Registrant made it very clear that he felt that this case has caused him so much trouble that he decided to close his firm. Ms. Lumbard stated that the Accounting and Auditing Committee recommended giving the Registrant three years of suspension should the Registrant consider practicing again in the future. Gary L. Freed asked if the Committee had considered if it would be feasible for the Registrant to practice accounting under supervision of a firm. Mr. Augenstein stated that this Registrant may have made a number of mistakes, but he won’t learn anything about auditing if he does not practice it. Discussion ensued amongst the Board members and Ms. Lumbard regarding the case.

Alan R. Augenstein suggested modifying the draft Decision and Order (By Consent) to expand the practice restriction to include SSARS 21; specifically, preparation engagements; that the probation language be modified to allow the individual to come off probation at the end of 3 years; and that the CPE be separated by 24 hours of SSARS 21 CPE (to be completed if the Registrant chooses to perform preparation engagements) and 24 hours of auditing CPE.

A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 7 – 0 to

remand the file back to the Committee with the aforementioned amendments to the Decision

and Order (By Consent) for the Accounting and Auditing Committee’s consideration.

LEADERSHIP REPORT Executive Director Update: Monica L. Petersen noted that errors made by the General Accounting Office have been adjusted and fixed. She also reported that revenues are current in the Central Service Bureau and have been reconciled through May 23, 2016. Ms. Petersen mentioned that there were only $4,000.00 in foreign deposits that have not been deposited. Discussion ensued between Alan R. Augenstein and Ms. Petersen regarding revenues and the Board’s cash flow report.

Monica L. Petersen presented results for the Arizona Department of Administration’s (ADOA) employee engagement survey, and compared the Board’s engagement ratio of 5.6 with the statewide engagement ratio of 2.3. . Ms. Petersen noted that the Board’s most recent results showed a 250% increase in employee engagement compared to last year’s survey results of 1.6. Ms. Petersen noted that the average organization has an engagement ratio of 1.8 while world class organizations have a ratio of 9.0. Ms. Petersen also thanked Board staff for their efforts in helping to ensure a smooth transition during the various position and organizational changes. Ms. Petersen also provided the Board with the Systems Manager Update regarding the sole practitioner firm registration late fee project, Accountancy Regulatory Management System update, and various security initiatives.

Assistant Director – Regulation and Compliance Update: Valli Goss suggested that the Board’s motions should include the legal basis for actions. She then provided an example of a motion that includes the legal basis for action. Monica L. Petersen further commented on motions and indicated that Board staff would be working with the Board and its advisory committees to enhance the quality of their motions.


COMMITTEE RECOMMENDATIONS – COMPLAINT/INITIAL ANALYSIS FILES Accounting and Auditing Advisory Committee File No. 2016.122 File No. 2016.123 A motion was made by Layne R. Simmons, seconded by Gary L. Freed and passed 7-0 to accept the Committee’s recommendation to close File Nos. 2016.122 and 2016.123 for lack of a violation of professional standards.

Tax Advisory Committee File No. 2016.113 File No. 2016.114 A motion was made by Layne R. Simmons, seconded by Gary L. Freed and passed 7-0 to accept the Committee’s recommendation to close File Nos. 2016.113 and 2016.114 for lack of a violation of professional standards.

Accounting and Auditing Advisory Committee File No. 2016.155 A motion was made by Layne R. Simmons, seconded by Douglas N. Kimball and passed 7-0 to accept the Committee’s recommendation to open an investigation file.

COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES

Accounting and Auditing Advisory Committee File No. 2015.092; Accounts to You, LLC A motion was made by LeRoy M. Gaintner, seconded by Gary L. Freed and passed unanimously to accept the Committee’s recommendation to close File No. 2015.092 for lack of a violation of professional standards.

File No. 2016.026; Watson, CPA, PC Alan R. Augenstein mentioned that the Committee has acknowledged the Registrant’s cooperation with the matter, but that there seems to be an inconsistency between the supporting documents and the Committee’s recommendation. Christopher A. Lutes, Committee Liaison on the file, was contacted telephonically during the Board meeting in an effort to obtain clarification regarding the file. Mr. Lutes informed the Board that he was absent during the investigative interview. The Board recessed from 9:45 a.m. to 9:56 a.m. Discussion amongst the Board members continued regarding the matter. The Board decided to defer further discussion until the Board can obtain clarification on how the Committee arrived at its recommendation.

COMMITTEE RECOMMENDATIONS – PEER REVIEW Peer Review Advisory Committee File No. 2016.151 File No. 2016.152


File No. 2016.153 A motion was made by LeRoy M. Gaintner, seconded by Gary L. Freed and passed 7-0 to follow the Committee’s recommendation to issue an Administrative Letter of Concern on each of the aforementioned three files, as drafted.

NOTICES OF UNLAWFUL USE OF THE CPA DESIGNATION

File No. 2016.115 – Ketelaar, Erik (# 16190) (Relinquished) File No. 2016.116 – Ketelaar Accounting, PLLC (# 3438) (Revoked) Alan R. Augenstein inquired if Board staff had heard back from the individual. Board staff stated that they had not. A motion was made by Gary L. Freed, seconded by Layne R. Simmons and passed 7-0 to direct the Assistant Attorney General to file an injunction in Superior Court against Erik Ketelaar, Erik Ketelaar d/b/a Ketelaar Accounting PLLC, and Ketelaar Accounting PLLC, pursuant to A.R.S. § 32-747.

File No. 2016.142 – Weinstein, Robert (Not Registered) Alan R. Augenstein declared a conflict of interest regarding the file. Douglas N. Kimball stated that he recommends that Board staff explain to the individual why he cannot use the CPA designation in Arizona without certification, and ask the individual if he intends to apply via reciprocity. Discussion ensued amongst the Board members relating to asking the individual to clarify in his marketing materials that he is not a licensed Arizona CPA. Julie S. Klewer noted that the Board would have to start addressing matters relating to using the CPA designation through social media outlets, because this will not be the last time the Board will see these type of cases. Ms. Klewer suggested that the Board give the individual a chance to comply with state law. The Board members discussed that they do not want to close the file. A motion was made by Gary L. Freed, seconded by Julie S. Klewer and passed 6 - 0 to empower the Executive Director or designee to make contact with Mr. Weinstein and request that he cease holding himself out to the public in Arizona as a licensed CPA until he has performed all steps necessary to become a licensed CPA in the State. Alan R. Augenstein declared a conflict of interest regarding the file and recused himself from the vote.

REVIEW COMPLAINT AGING REPORT

Julie S. Klewer asked for clarification on how the report is sorted. Discussion ensued amongst Board members and Board staff regarding how to improve the organization of the report. Monica L. Petersen suggested that perhaps Board staff could sort by the most aged file with a secondary sort by registrant name.


ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION Chartered Global Management Accountant (CGMA) Designation: Alan R. Augenstein gave a brief background of the matter and asked the Board if it should start regulating those who use the CGMA designation and any other related designation in the future. The Board asked Monica L. Petersen if CGMA, or any other related designation, had been confused in the past with being a CPA. Ms. Petersen responded that in her tenure she had never encountered such. Julie S. Klewer questioned if it is worth addressing the issue at this time if there have been no complaints made so far. Discussion ensued amongst the Board members regarding the regulation of the CGMA designation as it relates to A.R.S. § 32-747. Gary L. Freed suggested referring the matter to the Law Review Committee for review. A motion was made by Gary L. Freed, seconded by Alan R. Augenstein to ask the Law Review Committee to review A.R.S. § 32-747 to recommend if the statute should be changed; and, if so, how it should be changed to reflect the proliferation of designations that include “certified” or “accountant”. This consideration would be for a time when other changes to statutes are to be considered by the Board. A final vote was called and the motion failed 2 – 5. Julie S. Klewer, Douglas N. Kimball, LeRoy M. Gaintner, William C. Heimerdinger, and Layne R. Simmons opposed the motion.

Response/Non-Response/Untimely Response to Offered Decision and Order (By Consent): File No. 2016.139; Briggs, Dean A motion was made by Douglas N. Kimball, seconded by Layne R. Simmons and passed 7-0 to direct the Assistant Attorney General to file a Complaint and Notice of Hearing for revocation for failure to respond. Review of Compliance/Non-Compliance with CPE Review from Disciplinary Action: File Nos 2016.028; Shelley, Mark; 2016.027; Shelly International CPA 4367-S; and 2015.080; Shelly, Mark 4242-S Alan R. Augenstein suggested that the Registrant clarify to the CPE Committee which classes he wants to take. Jacki Hancock clarified that it was part of the Registrant’s Decision and Order (By Consent) that the classes must be pre-approved, and stated that the Registrant may just want to know which areas should be emphasized. Discussion amongst the Board members ensued on how the Registrant tried to comply with the Decision and Order (By Consent) and how the Registrant may choose the CPE classes he wants to take. A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 7-0 to communicate with the Registrant to be specific about the 40 hours of CPE courses he plans to take to fulfill all requirements identified in the Decision and Order (By Consent), including at least one course on the Sarbanes-Oxley Act of 2002. These specific selections are to then be presented to the CPE Advisory Committee for review and recommendation.

File No. 2016.017; McCormick, Marlene Discussion ensued amongst the Board members and Board staff regarding the background


of the file. A motion was made by Alan R. Augenstein to consider that the Registrant has fulfilled the CPE aspect of the Decision & Order (By Consent). The motion was withdrawn. A motion was made by Douglas N. Kimball, seconded by Gary L. Freed and passed 7-0 to take no action.

Review of Compliance/Non-Compliance with Certification by Examination: Choudhary, Gagan Alan R. Augenstein clarified with Board staff that one does not have to be a citizen to be a CPA. Jacki Hancock agreed and provided context explaining why the matter was brought to the Board. A motion was made by LeRoy M. Gaintner, seconded by Gary L. Freed and passed 7-0 to approve the application for certification by examination due to the requirements being met. Discussion ensued amongst Board members and Board staff regarding the expansiveness of the response that the Board requests when sending letters to applicants asking for disciplinary history within the profession.

Application for Certification by Exam/Grade Transfer, Recommended Denial by Certification Committee: Durham, Melissa S. Alan R. Augenstein provided a brief background and summary of the matter. A motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and passed unanimously to accept the Committee’s recommendation for denial, but to allow the Executive Director or Assistant Director of Registration and Operations to offer and conduct a settlement conference.

Request for Inactive Status: Furlong, Cynthia M. 12901-E Gavel, Eric Michael 16798-E Gibbs, Amanda K. 12258-E Hogg, Amy L. 10072-E Meltz, David William 2281-E Sahin, Mete 9967-E Schulze, David William 12169-E Wolfe, Nancy S. 12399-E A motion was made by Layne R. Simmons, seconded by Gary L. Freed and passed 7-0 to approve the inactive status for the aforementioned Registrants.

Norton, Jennifer A. 14725-E Alan R. Augenstein noted that the employment description of the Registrant was vague.


A motion was made by Alan R. Augenstein, seconded by Layne R. Simmons and failed 2 – 5 to direct Board staff to request that the Registrant provide a more complete job description. Julie S. Klewer, William C. Heimerdinger, Douglas N. Kimball, Gary L. Freed, and LeRoy M. Gaintner opposed the motion. A motion was made by Gary L. Freed, seconded by Julie S. Klewer and passed 5 – 2 to approve the inactive status. Alan R. Augenstein and Layne R. Simmons opposed the motion. Sanders, Martin P. 16843-R Alan R. Augenstein provided a brief background of the matter and noted some areas of

concern.

A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 7-0 to

direct Board staff to look at the Registrant’s LinkedIn profile and to verify if Sanders, CPA,

PC, as indicated on LinkedIn, is a registered CPA firm, and if not, to pursue the matter further.

Executive Director Salary:

EXECUTIVE SESSION

A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 7-0 to

go into executive session at 11:00 a.m. to discuss confidential information pursuant to A.R.S.

§ 38-431.03(A)(1) relating to the Executive Director’s Salary.

After consideration in executive session, the Board reconvened in open session at 11:15

a.m.

OPEN SESSION

Executive Director Salary: A motion was made by Alan R. Augenstein, seconded by Douglas N. Kimball and passed 7-0 to approve the salary adjustment that was discussed in Executive Session for the Executive Director, and for the appropriate paperwork to be filed with the Arizona Department of Administration.

AAG Michael Raine noted that the Executive Director was present in the Executive Session and is knowledgeable of the matter.

Board Elections: Alan R. Augenstein provided a brief background on the matter and opened comments to the Board. Layne R. Simmons provided a brief summary of his background and experience with Board. Douglas N. Kimball provided a brief summary of his background, experience with the Board,


and his agenda for the Board. Gary L. Freed asked if the election can be done with a secret ballot. AAG Michael Raine stated that the election cannot be done with a secret ballot. Julie S. Klewer noted that both individuals would be great presidents.

Alan R. Augenstein flipped a coin to decide who would first be voted on. Layne R. Simmons won the coin toss. Mr. Augenstein asked for all those in favor of Layne R. Simmons being elected Board President to vote aye and for all those opposed to vote nay. Layne R. Simmons was elected Board President by a vote of 4 – 3.

A motion was made by Layne R. Simmons, seconded by Gary L. Freed and passed 7-0 to confirm Douglas N. Kimball as Secretary of the Board and LeRoy M. Gaintner as Treasurer of the Board.

Signature of Authorization: A motion was made by Julie S. Klewer, seconded by Douglas M. Kimball and passed 7-0 to approve the signature of authorization.

William C. Heimerdinger left the meeting at 11:29 a.m. and did not return.

Request for a CPE Waiver/Extension/Exemption and/or Fee Waiver: CPE Extension(s): Holzhauer, Robert E. 9433-R Jacki Hancock provided a brief summary of the matter to the Board. Board staff requested

that an audit be made of the CPE before any other action is taken. AAG Michael Raine

noted that since an audit is not on the agenda, a vote must be limited to the agendized

extension request.

The Board briefly tabled the matter and proceeded to other matters.

COMMITTEE RECOMMENDATIONS – INVESTIGATION FILES Accounting and Auditing Advisory Committee File No. 2016.026; Watson, CPA, PC At the Board’s request, Stephen T. Harris joined the Board meeting telephonically to discuss the matter. Mr. Harris discussed what happened in the investigation. A motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and failed 3 – 3 to close the file due to no violation of professional standards. Gary L. Freed, Douglas N. Kimball, and Alan R. Augenstein opposed the motion. A motion was made by Layne R. Simmons, seconded by Julie S. Klewer and passed 6 - 0 to send the file back to the Committee for further clarification regarding the Registrant and why the Committee recommends that the case be closed. Stephen T. Harris disconnected telephonically from the meeting.


ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION Request for a CPE Waiver/Extension/Exemption and/or Fee Waiver: CPE Extension(s): Holzhauer, Robert E. 9433-R Discussion ensued regarding the submission of the CPE. AAG Michael Raine stated that given the agenda, he is only comfortable with the Board deciding the extension request today. Monica L. Petersen agreed with Mr. Raine that the Board is able to decide on the extension request today, and stated that the issue of a CPE audit can be placed on a future agenda for the Board’s discussion and possible action. A motion was made by Alan R. Augenstein, seconded by Douglas N. Kimball and passed 5 - 1 to grant the Registrant an extension until June 13, 2016. Gary L. Freed opposed the motion. Kane, Taylor Yuson 13947-E Alan R. Augenstein provided a brief background on the matter and noted that the Registrant may have medical issues and noted his inclination to accept a one-year extension. A motion was made by LeRoy M. Gaintner and seconded by Julie S. Klewer to approve the request for an extension for good cause. Discussion ensued amongst the Board members, wherein Gary L. Freed questioned, if a CPA asks for an extension due to health reasons, can the Board include a practice restriction upon the CPA. Monica L. Petersen noted that there is no way to monitor a practice restriction. A final vote was called for the motion, and the motion passed 5 – 1. Gary L. Freed opposed the motion.

Macarle, Michael 12266-E Alan R. Augenstein provided a brief summary of the matter, and that the Registrant requested a 49-day extension of CPE until July 31. A motion was made by Gary L. Freed, seconded by Julie S. Klewer and passed 6 – 0 to approve the request for a CPE extension for good cause.

Maniuszko, Keith C. 13711-E Alan R. Augenstein provided background on the matter. Julie S. Klewer noted that the Board has been consistently denying applications of the same nature. A discussion ensued amongst Board staff, Board members, and AAG Michael Raine regarding possible actions and agendizing such. A motion was made by Gary L. Freed, seconded by Alan R. Augenstein and passed 6 - 0 to deny the request for a CPE extension for lack of good cause. Monica L. Petersen provided a brief explanation on procedures relating to the decision.


Peterson, Mary A. 7031-R Alan R. Augenstein provided a brief background on the matter. Julie S. Klewer specified that the nature of the case is similar, and wanted to recall the decision that was made in the previous cases. A discussion ensued between Board staff and Board members regarding past cases of a similar nature. A motion was made by Gary L. Freed, seconded by Julie S. Klewer and passed 6 - 0 to approve the request for a CPE extension for good cause.

Vose, Ryan W. 10467-E Alan R. Augenstein provided a brief background of the matter.

A motion was made by LeRoy M. Gaintner, seconded by Layne R. Simmons and passed 6 - 0 to deny the request for a CPE extension for lack of good cause.

Wexler, Laurence Victor 1023-E Jacki Hancock noted that Board staff had received further documentation that morning from the Registrant’s attorney, offering a letter from the physician and additional hours of CPE that have been completed. The Board asked Board staff how many total hours the Registrant had completed. Board staff indicated that there had not been enough time given to review the materials before the Board meeting. A motion was made by Gary L. Freed, seconded by Julie S. Klewer and passed 6 – 0 to approve the request for a CPE extension for 45 days beyond May 30th (or until July 14, 2016) for good cause, but to not allow for an exemption.

Board recessed from 12:13 PM to 12:19 PM.

Review of Compliance/Non-Compliance with CPE Extension: O’Brien, Joseph 1984-E Alan R. Augenstein noted that the Board had recently approved the request for a CPE extension until May 31, 2016 due to health reasons, and asked if Board staff had heard back from the Registrant. Further, Alan R. Augenstein clarified that the current issue is not that the Registrant is asking for an extension; rather, the issue is that he is not compliant. Monica L. Petersen noted that the Board can take action for discipline as it is properly agendized. Discussion between Board members and Board staff ensued regarding the matter, and the course of action that can be pursued. A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 6 - 0 to offer the Registrant a Decision and Order (By Consent), to suspend for non-compliance with CPE requirements and that the suspension will be removed if the CPE is completed within a year, pursuant to A.R.S. § 32-741.02.


Request for Retired Status: Ziskin, Sara R. 3089-E A motion was made by Layne R. Simmons and seconded by Julie S. Klewer to approve the request for retired status. Monica L. Petersen noted a clerical error in the Staff Feedback Sheet. A final vote was called for the motion, and the motion passed 6 – 0.

Review of Compliance/Non-Compliance with Random CPE Audit Requirements: Smith, Kristen 12906-E Alan R. Augenstein noted his familiarity with the audit software relating to this matter, and provided a brief background of the technology as it relates to accounting concepts. Discussion ensued between Board members and Board staff about the topic of emphasis of the courses in question and if there is any way the Board may approve partial credit. A motion was made by Gary L. Freed, seconded by Douglas N. Kimball and passed 6 - 0 to send the matter back to the Committee to provide the Board a better roadmap as to how the Committee arrived at their conclusion and a recommendation on possible actions for the Registrant to be in compliance.

Stinnett, Melinda F. 9629-E Alan R. Augenstein provided a brief summary for the matter. Jacki Hancock provided a copy of the file to present to the Board. Discussion ensued amongst Board staff and the Board regarding the specific details in the file. A motion was made by Gary L. Freed, seconded by Douglas N. Kimball and passed 6 – 0 to find that the Registrant is not in compliance and that Board staff draft a Decision and Order for suspension for 1 year for non-compliance of CPE requirement with possible early termination with completion of CPE requirements, pursuant to A.R.S. § 32-741.02.

Request for Extension to Complete a Peer Review: George, Brian R., CPA 4072-S Alan R. Augenstein and Jacki Hancock provided a brief background of the matter and the Committee’s recommendations for possible actions. A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 5 – 0 to take no action. LeRoy M. Gaintner declared a conflict of interest and recused himself from the vote.

Rescind May 9, 2016 Board Motion that Approved the Following Firm’s Compliance with Peer Review: Herb, Nick, Accounting Service, PC 2383-C Alan R. Augenstein noted that Board staff recommended that the Board rescind its May 9, 2016 motion, in which the Board indicated the firm was in compliance with peer review requirements, in light of the Peer Review Oversight Committee’s request to continue the file for additional information and review.


A motion was made by Alan R. Augenstein, seconded by Gary L. Freed and passed 6 – 0 to rescind the May 9, 2016 Board motion related to this firm and to return the matter to the Peer Review Oversight Committee for further review.

Rescind March 28, 2016 Board Motion that Denied the Following Applicant’s Application for Certification by Reciprocity: Fitzpatrick, Pamela A. Jacki Hancock and Monica L. Petersen provided a brief background of the matter, indicating that the application ought to have been administratively closed for lack of a response from the Applicant, rather than following the denial process. A motion was made by Layne R. Simmons, seconded by Gary L. Freed and passed 6 – 0 to rescind the March 28, 2016 meeting motion that denied the applicant’s application for certification by reciprocity.

Review of Compliance/Non-Compliance with CPE Requirements and Non-

Responsiveness: Henley, John R. 3686-E A motion was made by Gary L. Freed, seconded by LeRoy M. Gaintner and passed 6 – 0 to direct the Assistant Attorney General to file a Complaint and Notice of Hearing for revocation for failure to respond, pursuant A.A.C. R4-1-455.03(F).

Request for Firm Renewal Refund: Berg, Diane R., CPA, PLLC 3422 Alan R. Augenstein provided a brief summary of the matter and noted that there were costs accrued in the process. A motion was made by Gary L. Freed, seconded by Layne R. Simmons and passed 6 – 0 to deny the refund as the Board does not have statutory authority to refund the fee. The only authority given the Board to refund fees is found in A.R.S. § 41-1077; however, this statute does not apply to the matter at hand, so the refund request was denied.

Annual Meeting Topics: Monica L. Petersen asked the Board members whom they would like to have as guest speakers. Gary L. Freed asked if the Board would like the Attorney General’s Office to give a presentation regarding the structure of meetings. Ms. Petersen stated that the Assistant Attorney General does review meeting material, but would not know the complexity of the files to the degree Board staff does. Discussion ensued between Board staff, Board members, and AAG Michael Raine regarding improving the processes of meetings. Monica L. Petersen discussed the possible timeline of the annual meeting topics. Julie S. Klewer expressed that a one-day meeting is preferred. Gary L. Freed agreed and noted that Thursday would be preferred. The Board largely agreed.


Issues from and regarding the National Association of State Boards of Accountancy (NASBA): Alan R. Augenstein provided background regarding the matter, and noted that NASBA has identified issues regarding CPAs seeking reciprocity and has been proposing a way to address such complications. Alan R. Augenstein noted that, traditionally, the Board has not provided comments. Board members did not provide any comments.

Review, Discussion and Possible Action Regarding Committee Membership: Continuing Professional Education Advisory Committee Craig P. Lewandowski A motion was made by Gary L. Freed, seconded by LeRoy M. Gaintner and passed 5 – 0 to approve Craig P. Lewandowski to the CPE Committee.

Alan R. Augenstein declared a conflict and recused himself from the vote. Certification Advisory Committee Anthony R. Gerlach A motion was made by Gary L. Freed, seconded by Layne R. Simmons and passed 6 – 0 to approve Anthony R. Gerlach to the Certification Committee. HB 2613 – Regulatory Boards; Licensing; Revisions: Alan R. Augenstein provided a brief summary of the purpose of the bill. Monica L. Petersen noted the she reached out to the Board lobbyists in regard to the progress of the legislation but had not yet been successful in getting a response. Further, Ms. Petersen discussed some concerns in moving the bill along the process, some prospective administrative changes regarding the oversight of the Executive Director, and challenges that the Board may see in the future. Mr. Augenstein expressed his concern that a lack of input from the Board in the study may lead it to be on the defense. Gary L. Freed asked if the ASCPA has been utilizing their resources and Ms. Petersen noted that they have. Ms. Petersen discussed an idea about relaying information on the Board’s stance to the Legislature. A discussion then ensued between Board staff and Board members regarding differences between various state Boards.

SUMMARY OF CURRENT EVENTS

Monica L. Petersen informed the Board that the Governor’s Office was vetting three different candidates to be a new Board member, and noted that Alan R. Augenstein can still serve on the Board until a replacement has been appointed by the Governor.

IDENTIFICATION OF FUTURE MEETING AGENDA ITEMS

LeRoy M. Gaintner discussed the CPE audit on Robert E. Holzhauer 9433-R.

LeRoy M. Gaintner requested staff research on what other state Boards do in regards to reviewing, monitoring, and approving CPE credits, and how they are calculated. He wants to understand more about the policy in converting quarter hours to semester hours, and why it is that the Certification Advisory Committee rounds down those hours.

LeRoy M. Gaintner requested monitoring of any CGMA designation updates from AICPA/NASBA.


Jacki Hancock reminded the Assistant Attorneys General regarding the disability fee waiver discussion.

ITEMS FOR BOARD REVIEW, DISCUSSION AND POSSIBLE LEGAL ACTION

Annual Meeting Topics: Monica L. Petersen discussed her concern regarding the ability of some Committee members to attend the Annual Board Meeting luncheon, which is usually on a Friday. Julie S. Klewer noted that though it is a two-day reservation, it tends to last one day only. Gary L. Freed noted that he believes the luncheon was held on a Thursday last year.

ADJOURNMENT

A motion was made by Julie S. Klewer, seconded by Gary L. Freed and passed 6 – 0 to adjourn at 1:36 p.m.

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