CONTINUING PROFESSIONAL EDUCATION ADVISORY COMMITTEE MEETING MINUTES. October 18, 2016

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1 ARIZONA STATE BOARD OF ACCOUNTANCY 100 North 15 th Avenue, Suite 165 Phoenix, Arizona Phone (602) Fax (602) CONTINUING PROFESSIONAL EDUCATION ADVISORY COMMITTEE MEETING MINUTES October 18, 2016 Members of the met in the Board s conference room at 100 North 15 th Avenue, Suite 165, Phoenix, Arizona. Attendance at the Committee meeting is listed below: Committee Members Sean Kindell, CPA... Chairperson Freddy Bedoya, CPA... Member Anne Cornelius, CPA... Member John Cotton, CPA... Member Todd Jason, CPA... Member Craig P. Lewandowski, CPA... Member A. Carter Smitherman, CPA... Member Arrived at 1:34 p.m. Arrived at 1:38 p.m. Absent Staff Members Jacki Hancock... Assistant Director of Registration and Operations Assistant Attorney General Scott Donald... Assistant Attorney General CALL TO ORDER The meeting was called to order at 1:31 p.m. by Sean Kindell. CALL TO THE PUBLIC Pursuant to A.R.S (H), the Committee made an open call to the public, to allow individuals to address the public body on any issue within the jurisdiction of the public body. The following individuals were present and spoke to the Committee: Cheryl Becker, Registrant, spoke to agenda item 11.a., related to her CPE Disciplinary Review. Mrs. Becker summarized that she had a request for CPE pre-approval in her file. She also spoke to two different 8-hour CPE certificates that she received for a course that she attended in August on taxation, which was pre-approved pursuant to a requirement in her Decision & Order (By Consent), or D&O. The first certificate credited all eight hours in Taxation; the latter, four hours in Taxation and four hours in Ethics. October 18, 2016 Page 1

2 Mrs. Becker wanted to be able to use the four hours credited as Ethics to her upcoming renewal. John Cotton asked for clarification as to whether she was asking the Committee to credit her with 12 CPE hours for an 8-hour CPE course, which Mrs. Becker affirmed as being accurate. Mr. Cotton, and the Committee members generally, shared that they would not agree to allow for credit of 12 hours of CPE when only eight hours were taken. However, Sean Kindell stated that he felt that the full eight hours, regardless of the breakout for Ethics, should be counted towards meeting the D&O requirement regarding Tax Practice Management. Jacob Findley, Registrant, spoke to agenda item 10.d, related to his CPE audit. Mr. Findley explained that he taught a course, but did not claim four hours of preparation time for that course, since he had already reported 80 hours. He also noted that one of his certificates for a different course was either not signed, or else that it does not spell out the hours on the certificate itself, which gave him cause for concern that it might be disregarded by the Committee. Thus, he was hoping that the Committee would accept his previously-unreported preparation time for the one course to help cover any other deficits. Jacki Hancock reminded the Committee of Arizona Administrative Code (A.C.C.) R (C)(5), which states, A registrant shall report total CPE hours completed for the registration period and which helps to negate situations like this, of which the Committee affirmed its understanding. Sean Kindell stated that the Committee does not allow for substitution of CPE. Mr. Findley asked what the normal course of action was to remedy the situation. Sean Kindell stated that the Committee makes a recommendation to the Board for the registrant having either met CPE requirements, or not; then, it is up to the Board to determine whether to suspend, or to take other action. The concept of proactively taking CPE in advance of the upcoming November 7th Board meeting was also broached by the Committee; however, Ms. Hancock stated that she did not want Mr. Findley to have false hopes that the Board would accept any CPE submitted post-audit as meeting requirements prior to the audit. Ms. Hancock reaffirmed that Committees and the Board need to maintain consistency with the nature of the law for similarly-situated individuals. She also summarized the process of suspension and the hearing process, should the Board elect to impose discipline in that way. Mr. Findley asked if he could simply cancel his certificate but was advised that, once in the path of possible discipline for not meeting requirements, a registrant is not allowed to cancel the CPA certificate. DISCUSS, AMEND AND APPROVE MINUTES A motion was made by Freddy Bedoya and seconded by Anne Cornelius to approve the minutes, as drafted, from the September 13, 2016 Committee meeting. The motion passed A. Carter Smitherman was not present for the vote; and, John Cotton abstained, since he was not present during the September Committee meeting. October 18, 2016 Page 2

3 DISCUSSION AND POSSIBLE ACTION REGARDING CPE MEETINGS NOTED IN 2017 MASTER MEETING SCHEDULE Following discussion regarding a schedule conflict, due to Tax Day being on April 18, 2017, it was initially-recommended that the Committee date be moved. Ultimately, the Committee felt that the Committee date in April should be retained as is. UPDATE ON COMMITTEE RECOMMENDATIONS Board staff apprised Committee members regarding files that had been reviewed by the Board and how they motioned for the following registrants: Lopez, Bryon David 6983-E Hughes, Timothy F E DISCUSSION AND POSSIBLE ACTION REGARDING SEPTEMBER 15, 2016 CERTIFICATION ADVISORY COMMITTEE MOTION TO DENY THE FOLLOWING APPLICANT S REQUEST FOR CERTIFICATION BY RECIPROCITY The Committee took no action on this item, as it was not intended to be reviewed by the CPE Committee. ITEMS FOR COMMITTEE REVIEW, DISCUSSION, AND POSSIBLE ACTION ON REQUESTS FOR REINSTATEMENT A motion was made by Craig P. Lewandowski and seconded by Todd Jason that the CPE Advisory Committee recommends that the following individuals who applied for Reinstatement be recommended to the Board as being compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Burns, L. Leann 9303-E Oxer, Stuart Scott 9169-E A motion was made by Craig P. Lewandowski and seconded by Todd Jason that the CPE Advisory Committee recommends that the following individual who applied for Reinstatement be recommended to the Board as being non-compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Daie, Teresa Paul 7977-E Required CPE Reported CPE Approved CPE Noted Deficiency A motion was made by Craig P. Lewandowski and seconded by Todd Jason that the CPE Advisory Committee recommends that the following individuals who applied for Reinstatement be continued for evaluation at a subsequent Committee meeting. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Beauchamp, Bart Ausby E Buness, Randal L R Kelley, Steven Ross 5577-R October 18, 2016 Page 3

4 ITEMS FOR COMMITTEE REVIEW, DISCUSSION, AND POSSIBLE ACTION ON CPE AUDITS A motion was made by John Cotton and seconded by Anne Cornelius that the CPE Advisory recommended to the Board as being compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Abeles, Kristina Leigh E Bednarik, Walter Anthony 4017-R Dobrusin, David J R Holmes, D. Diane 5183-E Jankes, Ann K E McClanahan, Marjorie T E O'Farrell, Laura Lynn E Pope, Kerry A E Priniski, Michael J E Stoecker, Claudia 8707-E Vetter, Scott F E Whitman, Donald W R A motion was made by John Cotton and seconded by Anne Cornelius that the CPE Advisory recommended to the Board as being non-compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Holzhauer, Robert E R Required CPE Reported CPE Approved CPE Noted Deficiency AICPA Tax Power (1 CPE) did not include a certificate of completion. Duplicate reporting (5 CPE) was attributed to: Total Payroll Management, Recording Transactions, and Spreadsheet Practices Roadmap to Reduced Risk. The Committee also noted that additional certificates of completion (4 CPE, completed on 6/8/14) were added after-the-fact by the registrant, in that he forgot to report the CPE as part of his renewal; however, since the course was not included in the submittal (i.e., the reported CPE), these hours were not considered by the Committee. Olson, D. Sam 6150-E Required CPE Reported CPE Approved CPE Noted Deficiency The Committee noted that Annual Tax Update, dated 12/19/13, for a total of 8.0 reported CPE, did not have a certificate of completion. The registrant also noted this omission as part of his initial response to the audit. A motion was made by John Cotton and seconded by Anne Cornelius that the CPE Advisory continued for evaluation at a subsequent Committee meeting. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Findlay, Jacob E Hughes, Timothy F E Tadesse, Belaynesh 8286-E October 18, 2016 Page 4

5 ITEMS FOR COMMITTEE REVIEW, DISCUSSION, AND POSSIBLE ACTION ON PRE-APPROVAL OF CPE AND/OR CPE COMPLIANCE AS REQUIRED BY DECISIONS & ORDERS A motion was made by John Cotton and seconded by Freddy Bedoya that the CPE Advisory recommended to the Board as being compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Becker, Cheryl A E The Committee recommended pre-approval of the following courses related to the requirement for S-Corporations, Intermediate level: - Calculating Tax Basis for Subchapter S Corporation (2 CPE) - S-Corporation Taxation (4 CPE) - Tax Forms Boot Camp S-Corporations (8 CPE) The Committee also recommended approval of the following CPE certificates: - Ethics and Quality Control in Tax Practice (8 CPE) McCormick, Marlene Denise 9405-E The Committee completed a full audit of the registrants CPE and verified all as meeting requirements. A motion was made by John Cotton and seconded by Freddy Bedoya that the CPE Advisory Committee recommends that the following individual who was subject to a CPE Audit be recommended to the Board as being partially-compliant with CPE requirements. The motion passed 6-0. A. Carter Smitherman was not present for the vote. Stern, Jeffrey Louis 3548-E The Committee recommended pre-approval of 16 CPE of 24 CPE submitted, related to the requirement Computers/Information Technology: - Cybersecurity Webcast Series with Ridge Global, Parts 1, 2, and 3 (6 CPE) Technology Update (2 CPE) - Technology for Accounting Conference (8 CPE) The Committee noted that the course, Fraud Detection in Financial Statements (8 CPE) does not meet the category requirement for Computers/Information Technology. The course, AZ Accounting Ethics with Emphasis on Tax Practice Issues (4 CPE) also does not meet the Incremental Ethics (i.e., Behavioral Ethics) category requirement. The Committee further recommended that, if the classroom setting is not available for the Behavioral Ethics course, to see for an example. October 18, 2016 Page 5

6 A motion was made by John Cotton and seconded by Freddy Bedoya that the CPE Advisory Committee recommends that the following individual who was subject to a CPE Audit be deferred to the Board to determine compliance/non-compliance with CPE requirements: Renberg, Mark E R The submitted certificates for 21 CPE hours represented completed courses that were not pre-approved by the Committee, as required by the D&O. The certificates include: CPE Hours Course Date Course Title Subject 8.0 6/9/16 The Complete Trust Workshop Taxation 7.5 6/22/16 The Top 50 Business Tax Mistakes Practitioners Make and How to Fix Them Taxation 5.5 6/23/16 Surgent s 2016 Annual Tax-Planning Guide for S- Taxation Corporation, Partnerships, and LLCs Had the courses been pre-approved, the Committee would have approved the resulting certificates. However, as the courses were not pre-approved, the Committee motioned to defer to the Board to decide whether or not to accept the CPE certificates of completion. The motion passed 6-0. A. Carter Smitherman was not present for the vote. DISCUSSION AND POSSIBLE ACTION REGARDING PROPOSED CHANGES TO A.C.C. R AND/OR DISCUSSION OF SUBSTANTIVE POLICY TO INCORPORATE SPECIFICS OF HOW TO INTERPRET EXISTING RULES, INCLUDING WHAT TO INCLUDE IN THE OTHER SUBJECT AREA FOR CPE REPORTING, AND CPE NANO- OR MICRO-CREDITS Todd Jason stated that, in relation to the Other subject area, he felt that the Committee should consider whether or not to allow for self-improvement coursework to be credited towards CPE requirements. Sean Kindell added that the Committee may wish to narrow the focus. In addition, Mr. Kendall suggested that the Committee make a recommendation relating to nano-credits. Ms. Hancock highlighted key aspects of the AICPA s guidelines regarding nano-credits, then suggested that the Law Review Committee anticipates receiving some recommendations from the CPE Committee. Additional discussion ensued about finding ways to manage the Committee s workload, so that more time might be devoted to discussing the matter at a future Committee meeting. Ultimately, a decision was made to continue this matter to the December 6, 2016 Committee meeting; and, if the Committee is short on time, it might elect to continue some CPE audits to the January 2017 meeting. In addition, it was decided that all Committee members would arrive by 1:00 p.m. in to review files, prior to the actual 1:30 p.m. start for the Committee meeting. October 18, 2016 Page 6

7 BOARD STAFF REPORT Jacki Hancock informed the Committee of the recent resignation of Board staff member, Jessica Buckner, and expressed gratitude for the significant contributions she made to process improvements and ongoing Board work. SUMMARY OF CURRENT EVENTS No current events were discussed at this time. FUTURE AGENDA ITEMS As previously stated, the Committee requested that the following items be placed on the October 18, 2016 Committee agenda: Discussion and possible action regarding proposed changes to A.C.C. R and/or discussion of substantive policy to incorporate specifics of how to interpret existing rules, including what to include in the other subject area for CPE reporting, and CPE nano- or micro-credits ADJOURNMENT The Committee motioned to adjourn at 4:35 p.m. October 18, 2016 Page 7