Findings Of Fact The Petitioner is not a graduate of at least a four-year accredited college or university course, and has not qualified for a degree with a major in accounting. The Petitioner has not completed such courses as would constitute a major in accounting. The Petitioner has not satisfied all of the legal requirements to take the Florida examination or to receive a Reciprocal Certificate from the Respondent. The Petitioner has practiced accountancy for more than fifty years, and he holds Certified Public Accountant Certificates from the state of New York and the Commonwealth of Massachusetts. The Petitioner has also been admitted to practice before the United States Treasury Department and the United States Tax Court. The Petitioner has performed meritorious work as a Certified Public Accountant, and as also performed many important civic services.
Recommendation That the application of Philip M. Percus for a Reciprocal Certificate allowing him to practice as a Certified Public Accountant in Florida be denied. Recommended this 6th day of May, 1977, in Tallahassee, Florida. G. STEVEN PFEIFFER Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Laurence J. Marchbanks, Esquire 301 W. Camino Gardens Boulevard Boca Raton, Florida 33432 Attorney for Petitioner James S. Quincey, Esquire P.O. Box 1090 Gainesville, Florida 32602 Attorney for Respondent Douglas N. Thompson, Jr. Executive Director Florida State Board of Accountancy Post Office Box 13475 Gainesville, Florida 32604
Findings Of Fact Pabrey holds certificate number R-0211 as a Certified Public Accountant practicing in the State of Florida and held such certificate in good standing on January 1, 1974. At that time, Pabrey was subject to professional certification require- ments set forth in Chapter 473, Florida Statutes. The records of the Board reflect that Pabrey provided no evidence of the completion of any courses or studies that would give him credit towards the reestablishment of his professional competency in the period between January 1, 1974, and April 2, 1977. On October 15, 1976, Pabrey sat for an examination which was approved by the Board and given to practicing Certified Public Accountants pursuant to applicable law requiring reestablishment of professional competency. Pabrey received a score of 57 out of a possible score of 100. The established passing grade for the examination is 75. On December 31, 1976, Pabrey tendered his check to the Board in the amount of forty dollars ($40.00) as the required license fee. On May 13, 1977, the Board suspended Pabrey's certificate R-0211 as a Certified Public Accountant for failing to comply with requirements for the reestablishment of his professional knowledge and competency to practice public accounting. The check was returned to Pabrey by the Board on May 18, 1977, along with a copy of the Administrative Complaint and Order of Suspension. The questions to be answered in the uniform written professional examination administered to Pabrey on October 15, 1976, were based upon "Current Authoritative Literature' which included Accounting principles Board's Opinions, Accounting Research Bulletins, Statements and Interpretations of the Financial Accounting Standards Board, Statements on Auditing standards, and the Laws and Rules of the Florida State Board of Accountancy. Pabrey challenges thirty-six of these one hundred questions on the grounds that the approved answers are incorrect and that the answer selected by Pabrey is the proper choice. The questions attacked by Pabrey are numbers 5, 7, 11, 15, 18, 19, 22, 28, 29, 30, 31, 35, 36, 37, 42, 45, 53, 54, 55, 57, 59, 62, 63, 65, 66, 70, 72, 74, 76, 78, 86, 87, 88, 91, 92, and 98. The title of the uniform written professional examination is "Examination of Current Authoritative Accounting and Auditing Literature and Rules of the Florida State Board of Accountancy. The approved answer to each of the questions on the examination is that which is mandated by the "Current Authoritative Literature." The examination does not purport to seek answers outside of the requirements of the Current Authoritative Literature. Each of the approved answers in the thirty-six questions listed above are consistent with the demands of the Current Authoritative Literature. None are vague, misleading, unfair or improper. Each of Pabrey's answers is contrary to the provisions of the Current Authoritative Literature. Accordingly, the answers selected by Pabrey are not the best answers and were properly graded incorrect on his examination answer sheet.
Findings Of Fact Tooze holds certificate number R-0434 as a Certified Public Accountant practicing in the State of Florida and held such certificate in good standing on January 1, 1974. At that time, Tooze was subject to professional certification requirements set forth in Chapter 473, Florida Statutes. The records of the Board reflect that Tooze provided no evidence of the completion of any courses or studies that would give him credits toward the reestablishment of his professional competency in the period between January 1, 1974, and April 2, 1977. On October 15, 1976, Tooze sat for an examination which was approved by the Board and given to practicing Certified Public Accountants pursuant to applicable law requiring re- establishment of professional competency. Tooze received a score of 64 out of a possible score of 100. The established passing grade for the examination is 75. Tooze received nine credit hours for the examination he took. On May 13, 1977, the Board suspended Tooze's certificate R-0434 as a Certified Public Accountant for failing to comply with requirements for the reestablishment of his professional knowledge and competency to practice public accounting. The questions to be answered in the uniform written professional examination administered to Tooze on October 15, 1976, were based upon "Current Authoritative Literature" which included Accounting Principles Board's Opinions, Accounting Research Bulletins, Statements and Interpretations of the Financial Accounting standards Board, Statements on Auditing standards, and the Laws and Rules of the Florida State Board of Accountancy. Tooze challenges sixteen of these one hundred questions on the grounds that the approved answers are incorrect and that the answer selected by Tooze is the proper choice. The questions attacked by Tooze are numbers 13, IS, 18, 51, 56, 61, 63, 67, 72, 74, 78, 80, 82, 95, 96 and 99. The title of the uniform written professional examination is "Examination of Current Authoritative Accounting and Auditing Literature and Rules of the Florida State Board of Accountancy. The approved answer to each of the questions on the examination is that which is mandated by the "Current Authoritative Literature." The examination does not purport to seek answers outside of the requirements of the Current Authoritative Literature. Each of the approved answers in the sixteen questions listed above are consistent with the demands of the Current Authoritative Literature. Each of Tooze's answers is contrary to the provisions of the Current Authoritative Literature. Accordingly, the answers selected by Tooze are not the best answers and were properly graded incorrect on his examination answer sheet.
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.
Recommendation 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
The Issue Count I of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges Respondent Certified Public Accountant (CPA) practiced public accounting in an unlicensed firm by appending the CPA designation after her name in the telephone book and on business cards in violation of Sections 473.323(1)(a), (g), and (h) F.S. and Rule 21A-20.012 F.A.C. Count II of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges that Respondent CPA violated Sections 473.323(1), (g), and (h) and Rule 21A-24.001(1)(g) F.A.C. by appending the certified financial planner (CFP) designation along with the CPA designation after her name in the telephone book and on business cards, in that the CFP designation allegedly is an unapproved specialty of accountancy. Count III of the Amended Administrative Complaint as modified by the August 22, 1991 Order on Reconsideration alleges that Respondent CPA practiced public accounting by holding herself out as a CPA by appending the CPA designation after her name in the telephone book and on her business cards, implying that she abides by the provisions of Chapter 473 F.S., and is thereby in violation of Sections 473.323(1)(f), (g), and (h) F.S. and Rule 21A-24.001 F.A.C. [no specific subsections cited].
Findings Of Fact Respondent Silvia S. Ibanez is a practicing attorney, a member of the Florida Bar, and holds active Florida CPA License No. 10842, currently in good standing. She is also a Registered Investment Advisor with the Florida Division of Securities and a certified financial planner (CFP). At all times material, she has been actively certified as a CFP in good standing with the International Board of Standards and Practice for Certified Financial Planners (IBCFP). The IBCFP is a corporation. "CFP" and "certified financial planner" are registered trademarks. The IBCFP has no governmental affiliations within the state of Florida. The Florida Board of Accountancy has no involvement in the CFP accrediting process and no proprietary interest over the CFP mark. As a licensee with the federal Securities and Exchange Commission, Ibanez is required to, and does, disclose the fact that she is a CPA. Ibanez' CPA certificate (like all Florida CPA certificates) authorizes her to display her CPA credentials. The CPA certificate represents that the recipient, . . . has passed all examinations and has met all other requirements prescribed by law and by rule of this board for certification as an expert public accountant, and *is therefore entitled to append the letters CPA after this registrant's name to evidence registration by this board as a Certified Public Accountant.* [Emphasis supplied between *] The Board of Accountancy's only classifications of CPA licenses/licensees are "active" or "inactive." "Active" and "inactive" refer to the status of the CPA license and do not refer to or imply that the licensee is actively practicing public accounting. One can be an actively licensed CPA and not be practicing public accounting. The Board of Accountancy issued a letter opinion to Ibanez that a CPA who offers financial planning services for a fee but who does not hold out as a CPA or become associated with financial statements would not be practicing public accounting. Ibanez is listed in the yellow pages under the heading, "Attorneys," as, "Ibanez, Silvia, S., CPA, CFP." Respondent also is listed in the white pages as "Ibanez, Silvia S., CPA CFP atty." On their face, there is nothing false or fraudulent about these listings. As an attorney, Petitioner also places "CPA" after her name on her business cards and on her letterhead. The Respondent's business card states "Silvia Safille Ibanez, JD, CPA, CFP." DPR contends that because Petitioner "holds out" to the public as a CPA, uses accounting skills, and provides one or more types of management, advisory or consulting services, she is currently "practicing public accounting." Ibanez is not listed in the yellow pages under "accountants," "accountants, certified," or "CPAs." Neither the CFP nor CPA credential is part of the firm name, "Silvia S. Ibanez, P.A. - Law Offices," which also appears on Ibanez' business card. Ibanez' telephone directory listings and card at issue show the CPA and CFP credentials strictly appended to Respondent's individual name. Louis Dooner, accepted as an expert certified public accountant, testified that the Respondent is involved in the practice of public accounting because by merely appending the CPA designation after her name on her business cards, she is telling the public that she is offering to perform services that CPAs perform. Respondent Ibanez currently operates as a sole practitioner of law employed by the law firm of "Silvia S. Ibanez, P.A." As such, she provides specialized legal services for her clients not provided by CPAs. As part of her current, normal professional activities as an attorney, she provides all types of tax services to her clients, including tax opinion work, representation before the Internal Revenue Service, and evaluation of the tax consequences of certain transactions. She also performs financial counselling and planning for her clients. In doing so, she utilizes both her legal education, training, and experience and her education, training, and experience as a CPA. Prior to admission to the Florida Bar, Ibanez was employed by two CPA firms where she did substantially similar work, plus audits. It is conceded by the parties that it is possible to practice law and public accounting in the same business activity and that many activities conducted by professionals and nonprofessionals other than by CPAs and other than by attorneys are identical to activities performed by CPAs engaged in public accounting. For instance, anyone can legally prepare a tax return. Bookkeepers and free-lance tax assistors of all sorts are unregulated in any way. Truthful use, communication, or disclosure of the CPA credential by an actively licensed CPA does not per se constitute false, misleading, or deceptive advertising. The evidence does not support a finding that withholding truthful disclosure that one has earned the CPA credential benefits the public welfare or effects the purposes of the enabling legislation, or indeed, how such nondisclosure could promote them, particularly since it has been shown that persons of considerably lesser competency and achievement levels in the discipline of accounting may legally offer to the public almost all the services provided by CPAs. The use of the term "CPA" implies a specific competency to the public. The fact that Ibanez is a CPA is valuable to her legal clients. CPA status is a valuable property right to each CPA, and the ability of a practicing attorney to publicize the fact that s/he holds an active CPA license is a valuable asset to that individual. The only activity among public accounting activities that is a unique activity of CPAs is the "attest" function. See, Section 473.322(1)(c) F.S. There is no evidence that Respondent Ibanez attests as a CPA in the course of her law practice or that she personally performs audits. Ibanez testified credibly that her intent in appending the CPA and CFP credentials solely to her own name is to indicate that she is, in her own right, individually licensed as a CPA and CFP. Respondent Ibanez has clearly marked her office premises with all the indicia of a law office, including two signs posted outside the building itself. One sign specifies that the building constitutes "law offices," that "Silvia S. Ibanez, P.A." is located there, and that Ibanez is an "attorney at law," with no reference to her CPA or CFP credentials. Another sign specifies, "law offices," without any reference to her CPA or CFP credentials. A potential client must pass these two signs just to enter the building that houses Ibanez' law office. Once in the building, a potential client also must be admitted by a secretary to Ibanez' inner office. Ibanez has consistently required her secretary to screen all telephone calls and potential clients who enter the office to be certain that persons seeking out Ibanez will be fully informed that Ibanez is not offering strictly accounting services and that she is practicing law. Ibanez also personally makes that information clear to individuals at each initial office consultation and consistently follows up office consultations at which her legal employment has been negotiated with letters and/or employment contracts which set forth the parameters of the legal services she has agreed to perform for clients. Elise Rice is an employee of Petitioner Department of Professional Regulation who has earned a vocational school accounting diploma. She is not a CPA, nor is she an attorney. Ms. Rice testified that she, personally, drew the conclusion from looking at Respondent's business card that the Respondent was a CPA, but that she did not know what CFP or JD signified and therefore she would not assume from the card that Ibanez was a lawyer or a certified financial planner. Clearly, the designation "CFP" did not suggest to Ms. Rice that Ibanez was advertising either a specialty or particular competence in public accounting. Ms. Rice further stated that, despite Ibanez' business card's clear use of the term "law offices," she would continue to believe that Ibanez was doing both CPA work and legal work out of "law offices." Ms. Rice further stated that even if she telephoned ahead and spoke to a secretary who clearly indicated that Ibanez was a CPA but was working as a lawyer, she would persist in believing that Ibanez was doing both CPA work and legal work out of "law offices." Ms. Rice also testified that if she arrived at Ibanez' office building and was confronted by the sign posted there which clearly indicates Ibanez is an attorney at law and the two signs that clearly state that the building houses only "law offices," she would then believe that she had come to the wrong place to find Ibanez the CPA. However, Ms. Rice conceded that, under the latter circumstances, the premises were, indeed, law offices. Ms. Rice's personal view that Ibanez must be acting as a CPA in the face of significant information to the contrary is not persuasive that the average layman would be misled by Ibanez' business card and telephone listings in the face of all her other disclosures. One who has initially consulted the yellow pages of the telephone directory under the heading "attorneys" would most logically infer from Ibanez' yellow pages listing that Ibanez is a practicing attorney who is dually licensed as a CPA and who possesses a CPA's education, training, experience, and skills and that Ibanez is offering to act as a lawyer capable of applying her additional education, training, experience, and skills as a CPA and CFP. The inferences that the average viewer might draw from Ibanez' white pages telephone listing and her business card are more blurred, but Ibanez demonstrated, and it is conceded by both parties, that an individual may have the opportunity to disabuse members of the public that s/he is engaged in the activity of the practice of public accounting or that s/he is offering all the services normally associated with a CPA, as opposed to law or some other profession, at least where there is direct contact by letter or telephone. It may be reasonable that at least until making direct contact with Ibanez or her office staff, the average viewer of either the telephone listings or the card would assume that, as a CPA, Ibanez is subject to disciplinary oversight by the licensing authority for accounting functions only and that she abides by all Board of Accountancy regulations while doing accounting. However, prior to any meaningful employment, Ibanez exercises reasonable care to disabuse the average viewer of that belief. Since 1982, the Board has consistently issued letter opinions on an individual basis to the effect that the designation "certified financial planner" is an accountancy specialization which has not been approved by the Board and further holding that "CFP" could not be displayed by CPA licensees on stationery or in yellow pages listings in conjunction with the CPA designation. The Executive Director of the Florida Board of Accountancy did not know how "certified financial planner" came to be viewed as a specialty designation of certified public accounting, and the letter opinions do not set forth the Board's rationale for considering it as a specialty. The Board has adopted no rule to that effect. Further, in this proceeding, the agency has not proven any rationale for the policy set forth in the Board opinions. The agency presented no evidence by way of anecdotal experience, professional studies, or accumulated data to show that licensed CPAs or certified CFPs have ever mislead members of the public purely by displaying their credentials in the manner Ibanez has done here. DPR knows of no complaint and has never received any complaint from a member of the public regarding Ibanez' professional activities or advertising. Nor is there any evidence that any member of the public has ever been confused about whether or not Ibanez was practicing accounting or law or financial planning or that any member of the public was mislead into hiring Ibanez under the impression that she would be acting as a CPA solely and not as an attorney, or that she would be performing audits or performing the attesting function of a CPA. Upon the scenario established in the case sub judice, Ibanez is not guilty of any fraudulent advertising so as to mislead the public to the effect that she abides by all regulations of the Board of Accountancy.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Accountancy enter a Final Order that: Finds Respondent Ibanez is not "holding herself out as a certified public accountant" and Finds her not guilty of all charges alleged under Counts I through III and dismisses them. DONE and ENTERED this 15th day of January, 1992, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 15th day of January, 1992.
The Issue Whether Petitioner is entitled to credit for her answers to questions 55 p.m. and 56 p.m. on the Fundamentals of Engineering portion of the engineering licensure examination given on April 15, 2000.
Findings Of Fact Upon consideration of the oral and documentary evidence received at the hearing, the following relevant findings of fact are made: The examination for licensure of an engineer in the State of Florida is administered by the Florida Engineers Management Corporation, a not-for-profit corporation, created under Section 471.038, Florida Statutes. A written examination is authorized by Rule 61G15-21.001, Florida Administrative Code. Respondent contracts with the National Council of Examiners for Engineering and Surveying to provide engineering licensure examinations. This practice is approved by Section 455.217, Florida Statutes, and Rule 61G1 5-21.005, Florida Administrative Code. The National Council of Examiners for Engineering and Surveying develops standardized tests given for licensure throughout the United States and ensures that the questions are not ambiguous through a number of methodologies. A candidate for licensure as an engineer intern must attain a "scaled" score of 70 to pass the examination. On the examination taken by Petitioner, the minimum "raw" score required to attain a "scaled" score of 70 was 107; Petitioner's "raw" score was 105. Petitioner had initially challenged five questions; at the hearing, Petitioner withdrew her challenge to three questions; the two remaining challenged questions (55 p.m. and 56 p.m.) were "ethical" questions, i.e., they dealt with questions of engineering ethics. The challenged questions were multiple-choice questions. The test gives the following directions: "Each of the questions or incomplete sentences below is followed by four suggested answers or completions. Select the one that is the best in each case and then fill in the corresponding space on the answer sheet." (Emphasis added.) The challenged question 55 p.m. deals with an engineer hired to prepare a report on the design, manufacture, and assembly of a structure. The report contains references to "shoddy workmanship." Petitioner states that while she agreed that answer A [the graded "correct" answer] is correct, she believed that the inclusion of the word "also" in answer B included answer A in answer B by reference and therefore she chose B as her answer. Petitioner acknowledges that the word "also" in answer B could be referring to language in the question rather than in answer A. Answer A specifically refers to "engineering issues" which the engineer is "qualified to assess"; answer B indicates that the references to "shoddy workmanship" are "personal opinions" and "not professional opinions". An engineer is obligated by his license not to give an opinion for which he does not have expertise. An engineer should not render a personal opinion in a report in which the engineer gives a professional opinion. The challenged question 56 p.m. deals with an engineer who lacks expertise dealing with space frames but designed structures which included same. Regarding challenged question 56 p.m., the Petitioner acknowledged that answer A (the graded "correct" answer) could have been the correct answer as well as the answer she chose, answer D. Answer D indicates that the engineer was unethical because he did not refer that matter to the Registration Board. An engineer should not contact the Registration Board and report to the Board that someone has asked him to do something unethical; it is incumbent upon an engineer to practice engineering ethically without the input of the Board. In both instances in answering the challenged questions the Petitioner failed to provide the "best" answer and at hearing acknowledged that the graded "correct" answer by the National Council of Examiners for Engineering and Surveyors was a "correct" answer even though she chose a different answer.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Engineers Management Corporation enter a final order denying Petitioner's challenge to questions 55 p.m. and 56 p.m. DONE AND ENTERED this 27th day of December, 2000, in Tallahassee, Leon County, Florida. JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of December, 2000. COPIES FURNISHED: Yvette Bowman 3401 North Lakeview Drive Apartment 216 Tampa, Florida 33618 Douglas D. Sunshine, Esquire Florida Engineers Management Corporation 1208 Hays Street Tallahassee, Florida 32301 Barbara D. Auger, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Dennis Barton, Executive Director Board of Professional Engineers Department of Business and Professional Regulation 1208 Hays Street Tallahassee, Florida 32301 Natalie A. Lowe, Esquire Vice President for Legal Affairs Florida Engineers Management Corporation 1208 Hays Street Tallahassee, Florida 32301
The Issue The central issue in this case is whether the Respondent is guilty of the violation alleged in the administrative complaint dated August 7, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency authorized to regulate and discipline licensees pursuant to Chapters 455 and 473, Florida Statutes. The Respondent is a licensed certified public accountant, license number AC 3214 (election of rights submitted by Respondent). In connection with an investigation of another licensee (not at issue herein), the Respondent submitted to the Department a financial report that Respondent had performed for the entity identified as Moreil Interiors, Inc. (Moreil). That document (Department's exhibit 1) consisted of four pages and represented financial information related to Moreil for a 6 month period ending December 31, 1984. Certified public accounts are required to utilize specific guidelines in the performance of accounting services. Those guidelines are codified in the Statements on standards for Accounting and Review Services (SSARS). The failure to abide by the SSARS guidelines constitutes performance below acceptable accounting standards. The financial report identified in paragraph 3 failed to comply with the SSARS in at least four material ways. The level of service indicated by the Respondent's report is not accepted practice for certified public accountants and has been rejected by the American Institute of Certified Public Accountants. The type and number of the deficiencies in that report constitute negligence on Respondent's part and establish a failure to exercise professional competence and due professional care in the performance of accounting services.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Board of Accountancy enter a final order requiring the Respondent to complete 24 hours of continuing education regarding compliance with the SSARS guidelines, and placing the Respondent on probation with his work to be reviewed, at his expense, by a consultant or certified public accountant approved by the Board, for a period of one year following completion of the continuing education. DONE and ORDERED this 19th day of July, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1990. COPIES FURNISHED: Tobi Pam Senior Attorney Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 Frank Berman P.O. Box 14156 North Palm Beach, Florida 33408 Martha Willis Executive Director Board of Accountancy Suite 16 4001 Northwest 43rd Street Gainesville, Florida 32606 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact Petitioner is A graduate of the University of the East in Manila, Philippines. Petitioner is the holder of the state of Illinois C.P.A. Certificate No. 18012. On July 11, 1979, Petitioner filed an application to obtain a reciprocal certified public accountant certificate in Florida (licensure by endorsement) based upon his certificate issued by the State of Illinois. On December 14, 1979, the Board denied Petitioner's application for a reciprocal certificate for the reason that Petitioner had not graduated from an accredited four-year college or university and, accordingly, failed to satisfy the requirements set forth in Section 7(3)(b), Chapter 79-202, Laws of Florida, now codified as Section 473.308(3)(b), Florida Statutes (1979) The University of the East in Manila, Philippines, is not recognized by the Board as an accredited university in Florida and was not so recognized at the time that Petitioner received his certificate as a certified public accountant in the State of Illinois. The University of the East is not listed among the institutions of post secondary education by the Council on Postsecondary Accreditation, the official listing of accredited colleges and universities adopted by the Board to ensure the minimum competence of public accounting practitioners. Additionally, the University of the East in Manila, Philippines, has not been accredited by any of the regional accrediting agencies recognized by the Board. Douglas H. Thompson, Jr., the Respondent's Executive Director since 1968, is the Board's chief executive officer and, as such, carries out the Board's functions respecting applications for licensure. Mr. Thompson examined Petitioner's application pursuant to Petitioner's Illinois certificate to ascertain whether Petitioner's certificate was issued under criteria substantially equivalent to Florida's licensing criteria and determined that the criteria were not substantially equivalent. Petitioner's application was considered by the Board on two occasions and was rejected.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED THAT: Petitioner's application for a reciprocal certified public accountant certificate be denied. RECOMMENDED this 10th day of June, 1980, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings Collins Building Room 101 Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1980. COPIES FURNISHED: Samuel Hankin, Esquire Commerce Building 226 South Main Street Gainesville, Florida 32602 Mr. Marianito Manalo Ilagan 9020 S.W. 56th Street Cooper City, Florida 33328 Ms. Nancy Kelley Wittenberg Secretary Department of Professional Regulation The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301
