Home > California CPA Magazine > May 2009 Index > Capitol Beat: It's a Busy Year

Capitol Beat: It's a Busy Year

A review of the various legislative and regulatory happenings of 2009 thus far, including the 150-hour requirement, license status disclosure issues and the taxpayer privilege sunset extension.

Bruce C. Allen & Jeannie Tindel

The California Board of Accountancy recently held a regulatory hearing on proposed amendments to the Continuing Education Regulations. Under the proposal, California CPAs are still required to complete 80 hours of continuing education every two years, but the regulations will require completion of a minimum number of hours annually.

CPAs renewing an active license after Dec. 31, 2011, must complete a minimum of 20 hours annually with at least 12 of the 20 hours in technical subject areas. The CBA will require that licensees complete two hours of ethics focused on regulatory and statutory review every six years. Additionally, four hours of ethics will be required every renewal period.
 
150 Hours

CalCPA is sponsoring SB 691 (Yee, Niello, Ma) requiring all candidates entering the profession after Jan. 1, 2014, meet the Uniform Accountancy Act’s 150-hour educational requirement (i.e., the candidate must have a bachelor’s degree, and at least 24 semester hours or units in business and 24 hours in accounting). The success of this legislation is essential to allow current and future California CPAs to represent the needs of taxpayers and clients with interests in other states. Check CalCPA's website for updates on this important issue.

SB 691’s first hearing was scheduled for April 27 (after California CPA’s press time) in the Senate Business and Professions Committee. Thanks to visits from CPA members and staff, the senators understand the importance of enacting this legislation quickly as time is running out for California CPAs that do not meet the
150-hour requirement.

As states change their mobility laws, they are removing exemptions for temporary and incidental practice, and the only CPAs who may provide services in their states
after 2012 are those who are from substantially equivalent states or individually substantially equivalent. Such requirements would seriously interfere with your ability as a California CPA to participate in national and international commerce.

License Status Disclosure
AB 117 (Niello, Ma) will require CPAs with inactive licenses to disclose that fact when using the CPA designation.

The CBA allows CPAs employed by private business or government to use the title CPA on their business cards, résumés and in other business communications even if their license is “inactive.” CPAs in industry and government are often employed in the finance and accounting department of the business or government agency and involved in the preparation of financial statements for audit or in obtaining financing from banks or investors.

In today’s economy it is essential that employers, investors and consumers are provided with increased transparency in making investment and employment decisions.

AB 117 is a CalCPA-sponsored measure that is consistent with the requirements of the UAA and the statutes of 30 other states. It would simply require that CPAs with inactive licensees disclose that fact when using the CPA title by placing the word “(inactive)” immediately after CPA on business cards, stationary, résumés or other business communications. AB 117 passed the Assembly Business and Professions Committee.

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 already mandatory in most states, most recently in New York. 

CalCPA has long supported a mandatory peer review requirement for California firms performing attest services and supports AB 138. However, the CBA is evaluating various provisions of the bill, including requiring an investigation of a firm if two consecutive peer reviews are deficient, a policy that is consistent with the mandatory peer review policies adopted by other states.

Taxpayer Privilege Sunset Extension
AB 129 (Ma) introduces 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 that California enacted in 2000. The privilege can be asserted in non-criminal tax issues that do not involve abusive tax shelters and conforms to Internal Revenue Code provisions.

Fiduciaries Bureau Exemption
CalCPA also is working with enrolled agents to support AB 276 (Hayashi) to clarify the exemption from licensing by the Professional Fiduciaries Bureau for enrolled agents and CPAs who provide ancillary fiduciary services to clients.

The bureau recently was created to require registration from individuals who assume control of the financial and medical affairs of unrelated individuals. CPAs and enrolled agents are exempted from registration as long as they are acting within the scope of their practice. However, the bureau recently adopted the position that enrolled agents are required to register with it because fiduciary services are not within their scope of practice.

CalCPA will be working 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.
Bruce C. Allen is CalCPA’s director of government relations. Jeannie Tindel is CalCPA’s director of legislation.