Regulation of Accountants – Arizona

In Arizona, pursuant to A.R.S. § 32-741, after notice and an opportunity for a hearing, the board may revoke or suspend any certificate granted and may take disciplinary action concerning the holder of a certificate for any of the causes such as:

  • Conviction of a felony under the laws of any state or of the United States if civil rights have not been restored pursuant to title 13, chapter 9 or other applicable recognized judicial or gubernatorial order.
  • Conviction of any crime that has a reasonable relationship to the practice of accounting by a certified public accountant or by a public accountant, including crimes involving accounting or tax violations, dishonesty, fraud, misrepresentation, embezzlement, theft, forgery, perjury or breach of fiduciary duty, regardless of whether civil rights have been restored.
  • Fraud or deceit in obtaining a certificate as a certified public accountant or in obtaining a certificate as a public accountant.
  • Dishonesty, fraud or gross or continuing negligence in the practice of accounting.
  • Cancellation, revocation or suspension of any certificate or other authority to practice or refusal to renew the certificate or other authority to practice as a certified public accountant by any other state or foreign country for any cause other than failure to pay license or registration fees.
  • Violation of any of the provisions of the chapter, of title 44, chapter 12, article 13 or of any fraud provisions of the federal securities laws.
  • Final judgment in a civil action if the court makes findings of accounting violations, dishonesty, fraud, misrepresentation or breach of fiduciary duty.
  • Final judgment or order in a civil action or administrative proceeding if the court or agency makes findings of violations of any fraud provisions of the laws of the state or federal securities laws.
  • Knowing violation of any decision, order or rule issued or adopted by the board.
  • Suspension or revocation for cause of the right to practice before the federal securities exchange commission or any other governmental body or agency.
  • Failing to disclose to a client that the registrant has received or expects to receive a commission from a third party for any engagement, services or product sales involving services other than the attest function.
  • Knowingly making any false or misleading statement or verification in support of an application for a certificate, registration or permit filed by another person.
  • Knowingly making a false or misleading statement to the board or its designated agent on a form required by the board or in written correspondence to the board.
  • Failing to respond or furnish information in a timely manner to the board or its designated agent, if the information is legally requested by the board and is in the registrant’s possession or control.

Pursuant to title 41, chapter 6, article 10, the board may summarily suspend the certificate of any certified public accountant or public accountant pending proceedings for revocation or other disciplinary action on the receipt of either of the following:

  • A notice of conviction of any crime that has a reasonable relationship to the practice of accounting, including crimes involving accounting or tax violations, dishonesty, fraud, misrepresentation, embezzlement, theft, forgery, perjury or breach of fiduciary duty or of any felony.
  • A final judgment or order in a civil action or administrative proceeding in which the court or agency made findings of violations of any fraud provisions of the laws of this state or federal securities laws.

The certificate of any certified public accountant or public accountant who fails to timely register and pay the biennial registration fee as required by section 32-730, subsection A shall be automatically suspended without prior notice or a hearing.  If the certified public accountant or public accountant fails to reinstate the certificate within twelve months of the date of suspension, the certificate expires.  The board shall not reinstate a certificate of a certified public accountant or public accountant whose certificate has expired pursuant to this subsection unless the certified public accountant or public accountant complies with section 32-730, subsection H or section 32-748.

Furthermore, the board shall, after notice and a hearing, suspend the certificate of any certified public accountant or public accountant who fails to show proof, in accordance with section 32-730, subsection D, of compliance with the continuing professional education requirements established by the board.  If the board determines that the failure was for reasonable cause or excusable neglect, the board may require compliance as expeditiously as possible.  If the certified public accountant or public accountant fails to reinstate the certificate within twelve months after the date of suspension, the certificate expires.  The board shall not reinstate a certificate that has expired pursuant to this subsection unless the certified public accountant or public accountant complies with section 32-748 and all other requirements for reinstatement.

The board may take disciplinary action against a holder of a certificate, who is practicing accounting even if the person is not representing to the public that the person is a certified public accountant or a public accountant and even if the person is practicing accounting in a firm that is not registered by the board.

A.R.S. § 32-741.01 provides that a certified public accountant or public accountant against whom disciplinary proceedings have been initiated may relinquish his/her certificate to the board during the course of the board’s investigation.  The board shall consider a relinquishment tendered by a certified public accountant or public accountant pursuant to this section and shall determine whether to accept the relinquishment.  A certified public accountant or public accountant who relinquishes a certificate pursuant to this section loses the right to practice accounting as a certified public accountant or public accountant in the state.   A person who relinquishes a certificate pursuant to the section and who desires to apply for a new certificate shall meet all of the requirements for applicants for initial certification pursuant to section 32-721.

If the board accepts the relinquishment of a certificate of a certified public accountant or public accountant, the person shall return the certificate to the board and shall attach to the certificate a document as follows:

I, (Insert name of registrant), acknowledge that disciplinary proceedings
have been initiated against me pursuant to title 32, chapter 6, article 3,
Arizona Revised Statutes, and I relinquish my right to practice accounting as
a (insert either “certified public accountant” or “public accountant”) in the
state of Arizona. I understand that if I choose to apply for a new
certificate, I must meet all requirements for initial certification pursuant
to section 32-721, Arizona Revised Statutes. I further understand that, in
deciding whether to issue a new certificate to me, the board will consider all
disciplinary actions currently pending against me and any other matters it
determines to be appropriate.

Pursuant to A.R.S. § 32-742, after notice and an opportunity for a hearing, the board shall revoke a firm’s registration to practice public accounting if at any time it does not have all the qualifications.  After notice and an opportunity for a hearing, the board may revoke or suspend a firm’s registration to practice public accounting and may additionally take disciplinary action concerning the registrant for any of the causes enumerated in section 32-741, subsection A or for any of the additional causes such as:

  • The revocation or suspension of any certificate issued by the board of any partner, shareholder, member, manager, officer, director, agent or employee of the firm.
  • The cancellation, revocation, suspension or refusal to renew the authority of the firm or any Arizona partner, shareholder, member, manager, officer, director, agent or employee to practice public accounting in any other state for any cause other than failure to pay an annual registration fee in the other state.

The board shall suspend, without notice or hearing, the registration to practice public accounting of any firm that fails to register and pay the biennial registration fee as required by section 32-730.  If the firm fails to reinstate its registration within twelve months after the date of suspension, the registration expires.

A.R.S. § 32-745 provides that nothing shall be construed as preventing a person from being employed by a certified public accountant, a public accountant, a partnership of certified public accountants or a partnership of public accountants if such employed person does not sign reports or assume any responsibility for the conduct of his/her employer’s professional practice.

A.R.S. § 32-746 provides that a person commits fraudulent audit practices if such person knowingly prepares, issues or offers or files with any public agency an audit report or certificate on any financial statement which is materially false or misleading or fraudulent, or which purports to fairly present the financial position, results of operations or changes in financial position of the person or entity reported on but fails to do so.

Pursuant to A.R.S. § 32-747, an individual who has received from the board a certificate to practice as a certified public accountant or as a public accountant issued under the laws of the state or who is a limited reciprocity privilege holder under section 32-725 shall be known as a “certified public accountant” or “public accountant”, in accordance with the certificate or the privilege and may also use the abbreviation.”C.P.A.”, “CPA”, “P.A.” or “PA”, in accordance with the certificate or the privilege.  No individual or firm shall when referring to accounting or accounting practices assume or use the title or designation “chartered accountant”, “certified accountant”, “enrolled accountant”, “registered accountant”, “licensed accountant”, “certified tax accountant”, “certified tax consultant” or any other title or designation likely or intended to be confused with “certified public accountant” or “public accountant” unless the individual or firm has received from the board a certificate to practice as a certified public accountant or as a public accountant issued under the laws of thie state, the individual is a limited reciprocity privilege holder under section 32-725 or the partnership, corporation or other entity is permitted to practice accounting in the state pursuant to section 32-725, subsection G.

If an individual violates the regulations, or represents himself/herself to the public as having received a certificate or registration to practice after a certificate or registration has been revoked or suspended, the individual is guilty of a class 2 misdemeanor unless another classification is specifically prescribed in the chapter.

A.R.S. § 32-748 provides that on application in writing, on completing all of the requirements prescribed by the board and for good cause shown, the board may:

  • Issue a new certificate to a certified public accountant or a public accountant whose certificate has been revoked.
  • Permit the reinstatement of anyone whose certificate has expired, has been canceled or has been suspended.
  • Modify the suspension of any certificate to practice public accounting which has been suspended.
  • Find that the probationary requirements have been fulfilled.

Any person making application for issuance or reinstatement of a revoked certificate shall, in addition to the other requirements of this section, comply with all then existing qualifications and requirements for initial certification for the practice of accounting by a certified public accountant or by a public accountant, except those requirements which are inconsistent with the section.

The board shall not issue or reinstate a certificate to a certified public accountant or public accountant whose certificate has been revoked prior to the expiration of five years from the effective date of revocation, except if the revocation is based only on section 32-741, subsection A, paragraph 1 or 2 and the criminal conviction is ultimately reversed on appeal, the board shall enter an order vacating such revocation.

Pursuant to A.R.S. § 32-749, certified public accountants and public accountants practicing in this state shall not be required to divulge, nor shall they voluntarily divulge, client records or information which they have received by reason of the confidential nature of their employment. Information derived from or as a result of such professional source shall be kept confidential as provided in this section, but this section shall not be construed as modifying, changing or affecting the criminal or bankruptcy laws of this state or the United States, nor shall it be construed to limit the authority of this state or any agency of this state to subpoena and use the information in connection with any investigation, public hearing or other proceeding.

A.R.S. § 32-750 provides that when in the judgment of the board any person has engaged, or is about to engage, in any acts or practices which constitute, or will constitute, a violation of section 32-747, the board may make application to the appropriate court for an order enjoining such acts or practices, and upon a showing by the board that such person has engaged, or is about to engage, in any such acts or practices, an injunction, restraining order, or such other order as may be appropriate shall be granted by such court without bond.


Inside Regulation of Accountants – Arizona