Capitol Beat: 150 Hours Tops Legislation List
Peer review and license status disclosure also high on the list.
By Bruce C. Allen and Jeannie Tindel
From 150 hours to license status disclosure to peer review, CalCPA’s legislative agenda is full. The following is an update on a few of the professional issues we’re monitoring—and often advocating—on your behalf.
150 Hours: CalCPA is sponsoring legislation to require that all candidates entering the profession after Jan. 1, 2014, meet the Uniform Accountancy Act’s 150-hour
educational requirement (a bachelor’s degree plus 30 units, including 24 hours in business and 24 hours in accounting).
The success of this legislation, which will align California with national licensing standards, is essential to allow current and future California CPAs to represent the needs of their clients with interests in other states. More information on this important topic is available at www.calcpa.org/150.
License Status Disclosure: CalCPA is sponsoring AB 117 (Niello), which will require CPAs with inactive licenses to disclose that fact when using the CPA designation.
The California Board of Accountancy allows CPAs employed by private business or government to use the title CPA on their business cards, résumés and other business communications even if their license is “inactive.” An inactive licensee pays biennial licensing fees to the CBA, but does not meet the continuing professional education requirements that active licensees must fulfill.
In today’s economy, it is essential that employers, investors and consumers are provided with increased transparency in making investment and employment decisions. In this spirit, CalCPA supports increased transparency from inactive CPAs who often find themselves involved in the preparation of financial statements for audit or in obtaining financing from banks or investors.
AB 117 would require CPAs with inactive licensees to disclose that fact when using the CPA title by placing “(inactive)” immediately after CPA on business cards, stationary, résumés or other business communications.
Peer Review: The CBA is sponsoring AB 138 (Hayashi) to enact a mandatory peer review requirement for California firms providing any audit, review or compilation services. The mandate would be phased in beginning in 2010. Peer review is mandatory in most states.
CalCPA supports AB 138 as introduced and has long supported implementation of a mandatory peer review requirement for California firms performing attest services. Even though the bill has been introduced, the CBA continues to evaluate its various provisions.
As it stands, the bill would provide for an investigation of a firm if two consecutive peer reviews are deficient, which is similar to the peer review requirements mandated by other states.
The CBA also is considering development of a financial offset for firms where peer review might be considered cost prohibitive. Options include an exemption from some part of the continuing education requirements during the renewal period in which a peer review is performed, providing a lower renewal fee or establishing a grant program for affected firms.
A decision on the issue will be made at the CBA’s March meeting.
Taxpayer Privilege Sunset Extension: AB 129 (Ma) introduced urgency legislation to re-enact the taxpayer confidentiality provisions for enrolled agents and CPAs that expired Dec. 31, 2008.
CalCPA is working with the enrolled agents to reinstate this provision of the law, which was enacted in California 2000. The privilege can be asserted in non-criminal tax issues that do not involve abusive tax shelters and conforms to IRC provisions.
Professional Fiduciaries Bureau CPA Exemption: CalCPA also is working with enrolled agents to support AB 276 (Hayashi) to clarify the exemption from Professional Fiduciaries Bureau licensing for enrolled agents and CPAs providing ancillary fiduciary services to clients.
The bureau recently was created to register individuals who assume control of the financial and medical affairs of unrelated individuals. CPAs and enrolled agents are
exempted as long as they are acting within the scope of their practice. Attorneys and bank employees also are exempt.
Recently, the bureau adopted the position that enrolled agents are required to register with it because fiduciary services are not within their scope of practice.
CalCPA will work with the enrolled agents to clarify the situation since the intent of the legislation was to provide an exemption for CPAs and enrolled agents as long as they were not holding out as professional fiduciaries.
CPA Day: More than 200 CPAs and a handful of accounting students met with legislators in Sacramento Jan. 21 to explain the importance of bringing California’s
educational standards for CPA candidates and students up to the standards of 46 other states.
Additionally, members introduced legislators to CalCPA’s financial literacy initiative.
CPA assembly members, Roger Niello (R-Sacramento) and Fiona Ma (D-San Francisco), spoke to participants about the importance of their involvement in the political process, and many Republican assembly members and senators also mingled with participants at the Sacramento Convention Center and provided their personal insights and appreciation for the profession.
Bruce C. Allen is CalCPA’s director of government relations. Jeannie Tindel is CalCPA’s director of legislation.
