STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF ACCOUNTANCY,)
)
Petitioner, )
)
vs. ) CASE NO. 92-3420
) GERALD E. SHAW and GERALD E. ) SHAW, P.A., )
)
Respondents. )
)
RECOMMENDED ORDER
A hearing was held in this case in Port St. Lucie, Florida on August 14, 1992, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.
APPEARANCES
For the Petitioner: Charles Tunnicliff, Esquire
Department of Professional Regulation
1940 North Monroe Street Tallahassee, Florida 32399-0792
For the Respondent: Gerald E. Shaw, pro se
10780 S. U.S. 1
Port St. Lucie, Florida 34952 STATEMENT OF THE ISSUES
The issue for consideration in this matter is whether Respondent's license as a certified public accountant should be disciplined because of the matters alleged in the Administrative Complaint.
PRELIMINARY MATTERS
By Administrative Complaint dated May 3, 1992, the Department of Professional Regulation, on behalf of the Board of Accountancy, charged Respondent with failing to comply with generally accepted auditing standards and accounting principles and with failing to exercise professional competence and due professional care in the performance of an accounting engagement involving the financial statements for the High Point of Fort Pierce Condominium Association Section One, Inc. for the year ended December 30, 1990, in violation of Sections 473.323 (1), Florida Statutes, and Rules 21A-22.001 - 21A-22.003, F.A.C.
By Election of Rights form, signed on May 19, 1992, Respondent requested a formal hearing on the allegations, and by undated letter, received on June 4,
1992, the file was forwarded to the Division of Administrative Hearings for appointment of a Hearing Officer. By Notice of Hearing, dated June 22, 1992, issued after receipt of the response to Initial Order by each party, the undersigned set the matter for hearing in Port St. Lucie on August 14, 1992, at which time it was heard as scheduled.
At the hearing, Petitioner presented the testimony of Thomas F. Reilly and Marlyn D. Felsing, both certified public accountants and experts in public accounting, and introduced Petitioner's Composite Exhibit 1. Respondent testified in his own behalf and introduced Respondent's Exhibit A.
A transcript was furnished, and subsequent to the hearing, only counsel for Petitioner submitted proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.
FINDINGS OF FACT
At all times pertinent to the issues herein, the Petitioner, Board of Accountancy was the state agency responsible for the certification and licensing of public accountants and the regulation of the public accounting profession in Florida. Respondent, Gerald E. Shaw, was licensed as a certified public accountant, (CPA), in Florida and operated a public accounting practice in Florida as Gerald E. Shaw, P.A.
During the period between December 31, 1990 and April 20, 1991, Respondent was retained to audit the financial books and records of High Point of Fort Pierce Condominium Association Section I, Inc. His audit report and allied papers were submitted to the membership of the association by letter dated April 20, 1991. In his letter he indicated he had conducted his audit in accordance with generally accepted auditing standards, (GAAS), and he opined therein that the financial statements he prepared, "present fairly, in all material respects, the financial position of the [Association] as of December 31, 1990 and the results of its operations for the year then ended in conformity with generally accepted accounting principles."
At some point thereafter, the Department/Board of Accountancy received the financial statements prepared by the Respondent which contained apparent deficiencies on the face, particularly the lack of adequate note disclosure. Thomas F. Reilly, C.P.A., an expert in public accounting and an individual who had, on previous occasions, conducted similar investigations for the Board of Accountancy, was retained to conduct an investigation to ascertain the facts related to the instant financial statements prepared by the Respondent. By letter dated October 4, 1991, the Department notified Respondent that the investigation would take place and the subject matter thereof.
Mr. Reilly thereafter met with the Respondent and discussed the financial statements and work papers in issue with him. Though Respondent was initially reluctant to participate in the investigative process unless he was provided, ahead of time, with a list of the reported deficiencies, he later agreed to a review of his work product.
When he had completed his investigation, Mr. Reilly prepared a report in which he stated his opinions regarding the sufficiency of the financial statement prepared by Respondent which he determined to be inadequate. His opinion was based on his findings that there were a significant number of departures from the accounting standards called for in Statement of Accounting
Standards, (SAS), 58 developed and promulgated by the American Institute of Certified Public Accountants, (AICPA).
Mr. Reilly also found there were no references in the Financial Statement prepared by Respondent to footnotes as required by Accounting Principles Board, (APB), Statement 4. There also was no summary of significant accounting policies as required by APB Statement 22. All of this was determined from the hierarchy of accepted auditing principles as found in SAS 5. APB Statement 22 is at the top of the hierarchy and indicates that a failure to follow generally accepted accounting principles is a significant deviation.
Among the deviations Mr. Reilly found were included:
Cash in reserve funds was incorrectly referred to as a current asset. Reserve
funds should not be considered current assets. (See APB Statement 43).
Leases should be disclosed and here these were significant. (See FASB 13, Section L-10).
Related party disclosures are not mentioned in the notes as they should be. Here there were 3 separate condominium associations and this financial statement related to only one of them. Since the 3 associations were related, however, the statement should have referred to the others within the complex shared by them all. Because of their interrelationship, disclosure was important.
There was no allocation of expenses among the three different associations. There were some invoices paid which may have been allocated among the 3 associations and this was not discussed. It could be significant.
Rule 7D-23, F.A.C., requires disclosure of common property and the costs of repair
thereof. This requires reserves be maintained for future repair, and the method of allocation, or the waiver thereof, should be explained. This can be very significant, and it was not done by Respondent here.
Among the work papers submitted some things which should have been shown were not in evidence. These included:
A written audit program should have outlined as required by SAS 22 and SAS 41. This is very significant.
A client representation letter should have been obtained as called for in SAS 19. Without it, a limitation on the audit is imposed. This is very significant.
A review of related party transactions was not shown to have been done as required by SAS 45. Because of the related organi- zations, this was a material deviation.
There appeared to be no review of the internal control structure, (policies, pro-
ceedings, etc. relating to the accounting practices of the organization). The auditor should look at this and understand it so he can plan his audit, as required by SAS 55. Here, the audit report did not show it was done and this is significant.
A preliminary judgement of materiality levels, as required by SAS 47 was not done.
There was no showing that planning had been done as required by SAS 22 and 47, or analytical procedures used in planning the nature, timing and extent of other audit procedures, as required by SAS 56. Each of these alone might not be significant, but taken together, they all are significant.
There appeared to be no consideration given to applicable assertions in develop- ing audit objectives as required by SAS 31.
An attorney's letter was not in the file as required since the books showed an attorney had been used during the year. This is called for by SAS 12 and is used to check on the status of the legal work and any potential liability of the client.
No check was made to see if any test- ing had been done to insure the association was in compliance with Rule 7D-23, FAC.
No inquiry was made to see if the client was in compliance with the laws and regulations of the state in general, as called for by SAS 63.
The work papers contained a lot of unnecessary bills and statements not norm- ally included. These should not have been there in that form without a showing they were used in the audit. (See SAS 41)
There was no showing that any tests were done to insure a correct expense all- ocation among the 3 entities.
There was no reporting disclosure checklist. While not required, such a list is common practice to insure all required disclosures pertinent to condo associations were made. The failure to do this is, in Reilly's opinion, practice below commonly accepted standards. The checklists are available from many sources readily access- ible to accountants. There is nothing secret or exclusive about them.
Accounting competency standards are found in Rule 21A-22.001 - 21A- 22.003, F.A.C. In Mr. Reilly's opinion, based on, among other discrepancies, the matters outlined above, Respondent deviated from these standards to a point below the standard for a reasonably prudent certified public accountant. He defines "generally accepted accounting practices", (GAAP), as a source of knowledge that exists as defined within the parameters of SAS 5.
Certified public accountants keep current in literature pertinent to their professional practice by attendance at continuing education courses, conferences, by performing quality and peer reviews, by doing investigations for the Board of Accountancy, and by networking with other CPA's. These are, of course, not the sole methods of maintaining currency but the ones used mostly by active practitioners, to the best of Mr. Reilly's knowledge.
In his report of investigation, Mr. Reilly notes that Respondent is not a member of either the Florida Institute of Certified Public Accountants or the American Institute of Certified Public Accountants and does not participate in the peer review or quality review programs of either organization. His continuing professional education, as reported by him, consisted mainly of self study programs published by Accounting Publications, Inc., and though his practice is related, to a substantial degree to condominium associations, he has not attended any recognized continuing professional education course in that area.
Mr. Felsing, also a CPA, heard Mr. Reilly's testimony at the hearing and reviewed his report of investigation. He agrees with Mr. Reilly concerning Respondent's report and he also considers Respondent's departure from generally accepted accounting standards to be significant. He notes that the Respondent here expressed a "clean" opinion regarding the status of the association which he should not have done because of the deficiencies in his work.
Mr. Felsing did not review Respondent's work papers, but based on his understanding of Reilly's testimony, he identified what he considers to be significant departures from standard. These include:
There should have been a work program developed as required by SAS 22. This is very significant.
There should have been a client representation letter as required by SAS 19. This is significant because the failure to have it requires a qualification of the report.
SAS 45 requires a review of all related parties and this was not done here even though related parties existed.
Respondent's failure to document his thought processes on understanding on internal control standards is indicative of Respondent's attitude toward those standards.
Felsing generally concurs with the opinions given by Mr. Reilly right down the line. He concludes that the Respondent's demonstrated lack of planning raises a question as to the effectiveness of the audit since one cannot determine if all required tasks were done. Generally accepted accounting standards require the use of analytical procedures as a valuable tool. Failure to use them would be a significant departure from accepted standards since they all relate to the planning of the engagement and without documentation, a reviewer of the audit report cannot tell if the required tasks were performed. The mere inclusion of client documents in the work papers is not acceptable proof that the work was done. The significance of the disclosure checklist lies in the fact that it is the only way to insure that all required items are included in the financial statement. After a review of all the evidence available to him, Mr. Felsing concluded that Respondent failed to use due
diligence as a CPA in this audit. In the aggregate, the information available shows Respondent was either not aware of or chose to disregard the applicable professional standards pertinent here.
In his defense against the charge of failing to conform to generally accepting accounting standards, Respondent refers to SAS 5 and AU 411.02 and
411.05. These authorities basically outline the standards against which accounting practice is measured. He notes that the term, "generally accepted accounting practices" includes not only pronouncements but also concept statements of the Financial Accounting Standards Board and "broad conventions and rules" which are not pronouncements.
Respondent urges that a practitioner has to follow generally accepted accounting practices when performing an audit. There are two subgroups of these practices which pertain to (1) profit and nonprofit organizations, and (2) governmental entities. According to the AICPA interpretation of Conduct Rule #3, there are reasons to depart from GAAP when appropriate. One is the evolution of a new form of business transaction and another is new legislation requiring a departure. In either case, a certified public accountant might legitimately deviate from GAAP. Since, he claims, GAAP is somewhat fluid in application, the auditor has the responsibility and the right not to act as a robot but to see that the audit properly serves the purpose of the entity being audited so as to promote decision making and to identify net income and net worth.
Respondent asserts that GAAP are not an end in themselves but a tool in making business decisions. The usefulness of the financial information should be the primary quality to be sought. Usefulness deals with relevance and reliability. In the instant case, Respondent claims that the concept of condominium ownership of realty is so new and so different, and governed by such new legislation that GAAP which have been in use over the past 10 or 15 years and developed to deal with the condominium association are not pertinent. Here, he claims, he had to modify. His position, however, is not well taken.
The audit report in issue was to be read by the condominium owners who are interested in the stewardship of the condominium board and the net worth of the association. Respondent contends they are not interested in profit or tradable net worth. A condominium association has a clear and stated purpose which is the management and maintenance of the condominium property. Therefore, an accountant who goes into an audit of a condominium association without having these concepts in his mind is, in his opinion, not doing a good job.
Turning to the specifics of the allegations made by Petitioner's witnesses and in the report of investigation, while he accepts some of the comments as valid so far as they allege a particular action, he also claims, in those cases, that the alleged inadequacy has no significant effect on the financial statements. For example, on page C-1 of Mr. Reilly's report, under the heading, Financial Statements, he refers to audits (plural) when only one year is reported on. On the other hand, Respondent disagrees with Reilly's comments regarding an "unorthodox" practice of presenting separate operating statements for the general and reserve funds. Respondent claims there is no definition of "unorthodoxy" for a condominium association and, as evidenced by the 1990 budget of the association, there were more than one reserve account indicated on the financial statement. In his opinion, the accountant should honor that segregation of funds.
Respondent agrees that his financial statements do not contain a general reference to the accompanying notes, but he cannot see where any damage was done to a reader of those statements because the footnotes were there without a separate reference.
He disagrees that it is generally accepted to record changes in financial position as a basic part of the financial statement when dealing with condominium associations. They are "new animals" and as the accountant, he has the right, he claims, to decide if that information is necessary to the reader of the financial statement. Here, he concluded it was not and, in fact, could be a source of confusion.
Respondent also disagrees the Reilly's comment regarding the information regarding reserve funds. He believes that if the financial reporter feels there is a need for segregation of funds, he has to present that segregation in detail. In this case, Respondent believes there is no orthodoxy for condominium reporting and it would be useful to the reader of the statement to see total assessments from all sources so as to determine the justification for his monthly assessment.
He also disagrees with Reilly's conclusion that the financial statements do not contain a summary of significant accounting policies. There are, he claims, no alternatives to the way he presented them.
Respondent has difficulty responding to Reilly's seventh assertion which is to the effect that cash in reserve funds was inappropriately reflected as a current asset since the reserves are long term. Mr. Shaw believes that if the cash is there, it is available to the board whether it is used or not. This appears to be a matter of semantics and not an issue particularly related to the accounting for condominium associations. While it is true the reserve asset is current and available, it is a dedicated asset and the better accepted accounting practice, as indicated by both experts, is to treat it more as a long term asset. It is so found.
Respondent also disagrees with Reilly's conclusion that his terminology in Sections 2 and 3 of the balance sheet is unorthodox. He asserts that those sections do not have to be defined anywhere in the financial statements and are not related to Section 1. He contends that any reader of the audit report would know what is what and be able to understand it.
With regard to the "missing" note disclosures, he disagrees with all allegations. He claims that disclosures under FASB #13 and #96 clearly do not apply to condominium associations but relate to investor owned leaseholds. Review of the pertinent bulletin does not necessarily support Respondent's position. He also claims that since there are no related parties none need be disclosed as regards the property management company or the other Sections. The same, he contends, relates to disclosure of potential allocation of expense between the three associations in the same complex. He also does not accept the need to disclose the allocation of interest income between funds utilized by the association. As to disclosures related to reserves and the funding for major repairs and replacements, he contends there is no GAAP that requires this disclosure. Only the state requires it. If a practice is called for in either a statute or rule governing a business activity, whether the profession agrees or not, that requirement must be met and one who fails to do so omits at his peril. In general, those things omitted from his audit, such as a cash flow statement, were not requested by the client, he claims. Had he been asked for them, he would have provided them.
Respondent also seeks to rebut some of Mr. Reilly's comments regarding his work papers. He has no complaint with the first two which are not critical of his audit, and he admits he may be in violation of GAAP with regard to Reilly's finding that certain required documentation was not included therewith. However, if, as he alleged, the financial statement conforms to GAAP, there is no harm done when the supporting work papers are not exactly as they should be. He contends, as well, that several, such as SAS #22 which refers to assistants, do not apply. Admitting to a violation of SAS #19 which calls for a client representation letter, he claims to have cured that defect by subsequently getting one and thereafter saw no reason to change the financial statement. Again, as with his response to the complaints regarding the financial statement, he claims any alleged failure regarding related parties is invalid since, he asserts, there are none.
With regard to the remaining alleged defects in the supporting documentation to the work papers, he claims there was a search for unrecorded liabilities but because there was no mention made of it, Reilly could not tell this from the documents. Admitting there was no documentation regarding understanding of the internal control structure, as required by SAS #55, Respondent claims he understood it. He alleges he did accomplish an assessment of control risk as required by SAS #55 but admits there is no record of it in the work papers. The preliminary judgement of materiality levels, planning, and analytical procedures in planning the nature, timing and extent of other audit procedures, as required by SAS #'s 22,47 and 56 were all accomplished, he claims, but admits they were not included in the work papers. He also admits he did not get an attorney's letter and that this is a violation. However, he claims he did test to determine if the association was in compliance with pertinent statutes and rules, but it was not written down in the work papers, and he claims that confirmation of accounts receivable was not necessary because there were none except from Sections 2 and 3, which he did verify. In this latter assertion, it appears he was correct.
Mr. Shaw refers to allegations 4 - 6 regarding work papers as mere statements of fact with which he takes no issue. A closer look at the report, however, reveals that numerous omissions were noted here as well. He admits that a financial statement reporting checklist was not in evidence but relates he deemed it not necessary. Mr. Reilly disagreed and his opinion is more supportable. There is little to disagree with in Mr. Reilly's item 8 under work papers when he asserts that the omission of an overall index of the work papers made them difficult to review and void of audit methodology.
Taken together, the evidence demonstrates that Respondent's audit did not sufficiently conform to GAAP and was less than required under the circumstances.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings. Section 120.57(1), Florida Statutes.
In its Administrative Complaint the Board seeks to discipline Respondent's certificate as a certified public accountant on the basis that, as alleged, he is guilty of failing to comply with generally accepted auditing and accounting principles and of failing to exercise professional competence and due professional care in his preparation of financial statements for the High Point
of Fort Pierce Condominium Association Section One for the year ended December 30, 1990, and thereby violated provision of Section 473.323(1), Florida Statutes, and Rules 21A-001, .002, and .003, F.A.C.
To successfully impose that discipline, Petitioner must establish Respondent's guilt of the misconduct alleged by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).
Section 473.323(1), Florida Statutes, outlines the grounds for which disciplinary action may be taken and, as pertinent here, include:
(a) Violation of any provision of s. 473.317, s. 455.277(1), or any other provision of [the] act.
...proof that the licensee is guilty of fraud or deceit, or of negligence, incompetence, or misconduct, in the practice of accounting.
Violation of any rule adopted pursuant to [the] act or chapter 455.
Rules 21A-22.001 - .003, F.A.C. generally require a certified public accountant to exercise professional competence and due professional care in the performance of any accounting engagement.
The evidence of record clearly established that Respondent was, as a certified public accountant, engaged to audit the financial books and records of High Point Condominium Association Section One, Inc., and pursuant to that engagement prepared financial statements for the association and an audit report which, when submitted to the association, were accompanied by a letter from the Respondent in which he indicated he had conducted his audit in accordance with generally accepted auditing standards. This was shown not to be the case in total.
Investigations into the adequacy of Respondent's audit procedures and report, conducted independently of each other, by two qualified experts in the area of public accountancy and auditing, demonstrated that Respondent's work was replete with departures from accounting standards as identified in recognized accounting source authorities. These deviations were outlined and discussed in the Findings of Fact portion of this Recommended Order and were, for the most part, found to have been established by clear and convincing evidence.
To be sure, there were instance where Respondent was able, through his own testimony, to justify some reasonable basis for his actions. For the most part, however, the expert testimony of Petitioner's witnesses, both of whom have been active in public accountancy for several years and whose background and qualifications to judge Respondent's performance was not successfully debated, was not reasonable offset by Respondent's attempts at self justification which formed the entire substance of his presentation. Respondent simply could not and did not successfully demonstrate that either Mr. Reilly or Mr. Felsing's criticism of his performance in this instance was incorrect, unjustified, or unsupported by the evidence of records. To the contrary, they clearly and concisely laid out those specific instances where, in their professional opinion, his performance was unsatisfactory and his protestations of personal disagreement, unsupported by any authority either written or spoken, were not persuasive except in those few specific instances identified.
In addition, Respondent's presentation demonstrated a somewhat cavalier approach to the rules and practices governing the appropriate conduct of public accounting. His attempts at continuing education appeared to the undersigned to be less than satisfactory and his willingness to disregard state requirements regarding disclosures related to reserves since it is, in his opinion, not mentioned in the GAAP, is remarkable and somewhat explains his unorthodox approach here. Taken together, Petitioner's evidence, as a whole clearly establishes the insufficiency of the Respondent's performance in this audit and supports the determination that he has violated the provisions of both the pertinent rules and statutes.
Petitioner suggests in its Proposed Recommended Order, that Respondent's license be suspended for two years and upon reinstatement, it be placed on probation for an additional three years under numerous conditions and guidelines to be imposed by the Board. There can be no reasonable quarrel with the requirement for a tight reign to be placed on Respondent's practice of accountancy so long as his attitude and approach to the profession are as demonstrated. However, as Respondent points out, this audit was not one relating to the investment of funds by the unsuspecting public and no loss was sustained as a result of his actions. For this reason, it is concluded that a suspension is not appropriate under the circumstances of this case.
Based on the foregoing Findings of Facts and Conclusions of Law, it is recommended that a Final Order be entered in this case placing Respondent, Gerald E. Shaw's, license as a certified public accountant in Florida on probation for a period of three years under such terms and conditions relating to practice and continuing education as are deemed appropriate by the Board of Accountancy.
RECOMMENDED this 12th day of October, 1992, in Tallahassee, Florida.
ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 1992.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-3420
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case.
FOR THE PETITIONER:
Accepted and incorporated herein except as they relate to the treatment of reserve accounts as long term assets.
FOR THE RESPONDENT:
None submitted.
COPIES FURNISHED:
Charles F. Tunnicliff, Esquire Department of Professional
Regulation
1940 North Monroe Street Tallahassee, Florida 32399-0792
Gerald E. Shaw 10780 South US 1
Port St. Lucie, Florida 34952
Jack McRay General Counsel
Department of Professional Regulation
1940 North Monroe Street Tallahassee, Florida 32399-0792
Martha Willis Executive Director
Department of Professional Regulation/Board of Accountancy
Suite 16
4001 Northwest 43rd Street Gainesville, Florida 32606
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION
BOARD OF ACCOUNTANCY
DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF ACCOUNTANCY, )
)
Petitioner, )
)
vs. ) CASE NO. 92-3420
)
GERALD E. SHAW and GERALD E. )
SHAW, P.A., )
)
Respondents. )
)
FINAL ORDER
THIS CAUSE came on to be heard before the Board of Accountancy at a regularly scheduled meeting held in Orlando, Florida on December 4, 1992, pursuant to a Recommended Order entered by Hearing Officer, Arnold H. Pollock, on October 12, 1992. The Board having reviewed the Recommended Order and the entire record in this cause, including the transcript and all exhibits, hereby rules that the exceptions filed by Respondent on November 5, 1992, are not well taken, in that they question the Findings of Fact of the Hearing Officer and those findings are supported by competent substantial evidence. Further, to the extent that Respondent argues that, to the extent that he can render an opinion on financial statements, which purports to be conformity with General Accepted Accounting Principles (GAAP) as defined by Rule 21A-20.007, and implemented by Rule 21A-22.003, when in fact, the Respondent is implementing what he believes his is "GAAP", as opposed to that defined by the rule he is in error. While it may be true that a CPA may deviate from "GAAP" in reporting on financial statements, he may not report as though he is using GAAP unless he "describe(s) the departure, the approximate effects thereof, if practicable, and the reasons why compliance with the principle would result in a misleading statement."
(Rule 21A-22.003, F.A.C.) No CPA is entitled to report that his opinion is presented in conformance with "GAAP" when, in fact, the CPA is using some other method of reporting.
In light of the foregoing, the Board hereby accepts the Proposed Findings of Facts, Conclusions of Law and Recommendation of the Hearing Officer with the modification of the penalty from three (3) years of probation to one (1) year of probation based upon the Board's usual procedure in disciplining licensees for first time offenders of the Board's technical standards. It is the Board's usual procedure to place such an individuals on probation for a period of one
(1) year with such terms and conditions as the Board deems appropriate, and that a report shall be made to the Board prior to the end of probation. If the report shows that technical violations have been corrected, then the probation will terminate, if not, the Board reserves the authority to extend the probation
or, in egregious instances, to refer the matter to the Department of Professional Regulation for additional disciplinary action.
WHEREFORE, based upon the foregoing, it is hereby ORDERED and ADJUDGED that Respondent's license shall be placed on probation for a period of one (1) year, during which time a CPA chosen by the Respondent and approved by the Board in accordance with its guidelines shall conduct pre-issuance reviews of all audits, reviews and compilations prepared by Respondent with quarterly reports to be submitted to the Board prior to the end of the probation. The cost of the reviews shall be paid for by Respondent. Should there be deficiencies in the reports submitted to the Board prior to the end of the probation, the Board at its discretion may extend the probationary period and impose such terms and conditions and it deems necessary or refer the matter to the Department of Professional Regulation for additional discipline.
As a further condition of probation, Respondent shall attend eight (8) additional hours of continuing education courses in the area of condominium accounting and auditing, and (8) hours of continuing education in the area of work paper preparation, which are approved pursuant to Rule 21A-33, Florida Administrative Code. Said hours must be reported to the Department or the Board with sufficient documentation of same necessary to the Department or Board prior to the end of the probationary period. None of the continuing education hours shall be counted toward Respondent's present renewal period. Respondent shall complete said continuing education courses within one (1) year, and Respondent shall bear the burden of insuring the complete and accurate reports of attendance of such continuing education course are received in a timely manner by the Director of the Division of Accountancy.
Finally, throughout the period of probation, Respondent shall not violate any laws and rules governing the practice of accountancy in the State of Florida.
DONE and ORDERED this 5th day of January 1993 by the Florida Board of Accountancy.
WHIPPLE VAN NESS JONES, JR. CHAIRMAN
COPIES FURNISHED:
Gerald E. Shaw and Gerald E. Shaw, P.A. Arnold H. Pollock, Hearing Officer
John J. Rimes, Jr., Esquire Martha Willis, Executive Director
| Issue Date | Proceedings |
|---|---|
| Feb. 01, 1993 | Final Order filed. |
| Oct. 12, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 8/14/92 |
| Sep. 21, 1992 | Petitioner`s Proposed Recommended Order filed. |
| Sep. 08, 1992 | Transcript of Proceedings filed. |
| Aug. 27, 1992 | Letter to AHP from Gerald E. Shaw (re: Respondent`s elaboration on the response gave to a question on cross examination) filed. |
| Jun. 23, 1992 | Ltr. to AHP from Gerald E. Shaw re: Reply to Initial Order filed. |
| Jun. 22, 1992 | Notice of Hearing sent out. (hearing set for 8-14-92; 9:30am; Port St. Lucie) |
| Jun. 19, 1992 | (Petitioner) Response to Initial Order filed. |
| Jun. 10, 1992 | Initial Order issued. |
| Jun. 04, 1992 | Agency referral letter; Administrative Complaint; Election of Rights filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 05, 1993 | Agency Final Order | |
| Oct. 12, 1992 | Recommended Order | Certified Public Accountant's Performance in Audit of Condo Association books fell below accepted standard and thus was violation of rule and statute justifying discipline. |
