FILED Department of Business arid Professional Regulation Deputy Agency Clerk STATE OF FLORIDA ck Og ‘vette Lawson-Proctor DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULAT| pete 10/8/2012 File # DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, Petitioner, Vv. Case No. 2011-004842 RODNEY SMILEY, Respondent, / ADMINISTRATIVE COMPLAINT Petitioner, Department of Business and Professional Regulation, files this Administrative Complaint before the Board of Accountancy, against Respondent, Rodney Smiley. 1. Petitioner is the state agency charged with regulating the practice of public accountancy, pursuant to Section 20.165, Florida Statutes, and Chapters 455 and 473, Florida Statutes. MATERIAL FACTS 2. At all times material to this Complaint, Respondent was licensed as a public accountant in the State of Florida, having been issued license number AC 0025365. 3. Respondent’s address of record is 4425 Woodsong Loop East, Jacksonville, Florida 32225. 4, Jaxcare, Inc. (Jaxcare) engaged Respondent, in his capacity as a CPA, to audit Jaxcare’s statutory financial statements for the years ending December 31, 2004, 2005, 2006, 2007, and the fifteen month period ending March 31, 2009. 5. For each period audited, Respondent issued an independent auditor’s report expressing that Jaxcare’s financial statements were fairly presented, and free of material error. 6. Respondent issued the independent auditor’s reports through Smiley & Smiley, P.A., an accountancy firm that did not hold a valid license in the State of Florida. 7. During the period of Respondent’s engagement, Jaxcare’s bookkeeper, Tammy Ramos, embezzled approximately $500,000 from Jaxcare. 8. To accomplish her embezzlement Ms. Ramos would write checks to herself, forge Jaxcare’s CEO’s signature, and deposit the checks in her personal bank account. 9. Respondent failed to detect Ms. Ramos’ embezzlement of approximately $500,000 from Jaxcare. 10. Respondent failed to perform any audit procedures to test the validity of checks that drew upon Jaxcare accounts. 11. Respondent failed to prepare workpapers documenting the performance of audit procedures, in violation of Statement of Auditing Standard 103, which states that “[t]he auditor must prepare audit documentation in connection with each engagement in sufficient detail to provide a clear understanding of the work performed (including the nature, timing, extent, and results of audit procedures performed), the audit evidence obtained and its source, and the conclusions reached.” COUNT ONE 12. Plaintiff realleges and incorporates by reference the allegations set forth in paragraphs one (1) through eleven (11) as though fully set forth herein. 13. Section 473.323(1)(g), Florida Statutes, states that “[c]lommitting an act of fraud or deceit, or of negligence, incompetency, or misconduct, in the practice of public accounting” constitutes grounds for which disciplinary actions may be taken. 14. Based on the facts set forth above, Respondent violated Section 473.323(1)(g), Florida Statutes, in one or more of the following ways: a. By being unable to produce any workpapers in support of the audit. b. By failing to document the performance of any audit procedures. c. By failing to comply with Statement on Auditing Standards 103. COUNT TWO 15. Plaintiff realleges and incorporates by reference the allegations set forth in paragraphs one (1) through eleven (11) as though fully set forth herein. 16. Section 473.323(1) (h), Florida Statutes, states that disciplinary action may be taken for the “[v]iolation of any rule adopted pursuant to this chapter or chapter 455.” 17. Rule 61H1-22.001(2), Florida Administrative Code, states that “[a] certified public accountant shall exercise due professional care in the performance of an engagement.” 18. Based on the facts set forth above, Respondent violated Section 473.323(1)(h), Florida Statutes, through a violation of Rule 61H1-22.001(2), Florida Administrative Code, in one or more of the following ways: a. By being unable to produce any workpapers in support of the audit. b. By failing to document the performance of any audit procedures. c. By failing to comply with Statement on Auditing Standards 103. COUNT THREE 19. Plaintiff realleges and incorporates by reference the allegations set forth in paragraphs one (1) through eleven (11) as though fully set forth herein. 20. Section 455.227(1)(q), Florida Statutes, states that disciplinary action may be taken for “[vJiolating any provision of this chapter, the applicable professional practice act, a rule of the department or the board, or a lawful order of the department or the board, or failing to comply with a lawfully issued subpoena of the department.” 21. Section 473.322(1)(c), Florida Statutes, states that “[Ta] person may not knowingly...[plerform or offer to perform any services described in s. 473.302(8) (a) [performing for the public one or more types of services involving the expression of an opinion on financial statements] unless such person holds an active license under this chapter and is a licensed audit firm, provides such services through a licensed audit firm, or complies with ss. 473.3101 and 473.3141.” 22. Based on the facts set forth above, Respondent violated Section 455.227(1)(q), Florida Statutes, through a violation of Section 473.322, Florida Administrative Code, by issuing audit opinions through an accountancy firm that did not hold a valid license in the State of Florida. WHEREFORE, Petitioner respectfully requests that the Board of Accountancy enter an order imposing one or more of the following penalties: permanent revocation or suspension of Respondent’s license, restriction of practice, imposition of an administrative fine, issuance of a reprimand, placement of Respondent on probation, assessment of costs, corrective action and/or any other relief that the Board deems appropriate. (SIGNATURE PAGE FOLLOWS) Signed this 3rd PC Found: 09/27/12 PC Found By: C. Oscher ERH/cjw Border-Byrd, day of October , 2012. KEN LAWSON, Secretary Department of Business and Professional Regulation Eric R. Hurst Eric R. Hurst Chief Attorney, Professions Florida Bar No. 0879673 Department of Business and Professional Regulation Office of the General Counsel 1940 N. Monroe Street, Ste. 42 Tallahassee, FL 32399-2202 (850) 488-0062 Telephone (850) 414-6749 Facsimile S. Riggs, B. Shinn, T. Borcheck, Ss. NOTICE OF RIGHTS PLEASE BE ADVISED that mediation under Section 120.573, Florida Statutes, is not available for administrative disputes involving this type of agency action. PLEASE BE FURTHER ADVISED that Respondent has the right to request a hearing to be conducted in accordance with Sections 120.569 and 120.57, Florida Statutes, to be represented by counsel or other qualified representative, to present evidence and argument, to call and cross-examine witnesses and to have subpoenas and subpoenas duces tecum issued on his or her behalf if a hearing is requested. Rule 28-106.111, Florida Administrative Code, provides in part that if Respondent fails to request a hearing within 21 days of receipt of an agency pleading, Respondent waives the right to request a hearing on the facts alleged. NOTICE REGARDING ASSESSMENT OF COSTS Respondent is placed on notice that Petitioner has incurred costs related to the investigation and prosecution of this matter. Pursuant to Section 455.227(3) (a), Florida Statutes, the Board, or the Department when there is no Board, may assess costs related to the investigation and prosecution of the case excluding costs associated with an attorney's time, against the Respondent in addition to any other discipline imposed.

Docket for Case No: 13-001224PL