October 01, 2017

CalCPA Takes Stock of Changes, Looks Ahead

By Jason Fox
CalCPA is taking stock of the major policy changes passed this year, now that the legislative session has come to an end. With the goal of continuing to build our relationships with legislators, CalCPA will use the interim break to shift focus to our grassroots program and to CPA Day at the Capitol Jan. 17.

OTA Cleanup
After the passage of landmark legislation earlier this year, much of the Board of Equalization’s duties were distributed to two new state agencies: the California Department of Tax and Fee Administration and the Office of Tax Appeals (OTA). 

As with most legislation that makes a major policy change in a short time, a cleanup bill is often needed to address unintended consequences, clarify intent and other technical changes. In the case of the OTA, this type of measure was needed.

The original legislation raised concerns about whether CPAs would be able to continue to represent taxpayers in front of the newly formed OTA in the same fashion they did before the BOE. Specifically, CalCPA raised concerns related to the ability of CPAs to represent audit clients in tax matters without impairing a CPA’s independence, which is guided by strict professional standards. In response, the Legislature agreed that further amendments to the statute was needed to clarify that it was not the intent of the Legislature to create a forum that would preclude a CPA from representing taxpayers in the same fashion that they had before. 

CalCPA, the governor’s office and legislative leaders worked on crafting a cleanup bill that addressed this issue, as well as other technical changes. Specifically, the language strengthened key characteristics of the OTA to make clear that an appeal before the OTA is an administrative proceeding and would not in itself threaten to impair a CPA’s independence. These changes further align the structure and operation of the OTA with the Legislature’s overarching intent for a taxpayer to be represented by a broad spectrum of individuals, including CPAs, at every stage of an appeal before the OTA.

The language was incorporated and passed by the Legislature as a part of several other budget cleanup bills in September. 
Most significantly, this is an example of how CPAs being vigilant and responsive to legislative proposals can help shape public policy for the better.

2018 CPA Day at the Capitol
The annual CPA Day at the Capitol gives members the opportunity to meet with legislators in Sacramento. By participating, CalCPA members will have the chance to meet with members of the Legislature to discuss issues facing the CPA profession in California. Attendees also will get the opportunity to meet their elected representatives, reiterating the local connection CalCPA has in their district.

CPA Day will be taking place Wednesday, Jan. 17. Details will be coming soon, but registration is open

Student Outreach
The California Board of Accountancy’s September meeting took place at the campus of California State University, Fullerton, and the CBA used the opportunity to reach out to students and CPA candidates about the CBA’s role in licensing and overseeing the profession. 

CalCPA coordinated with the CBA to provide opportunities for students to network with CBA members and staff, ask licensing questions and discuss the career opportunities of a CPA in today’s world. CalCPA Chair Kathy Johnson and CalCPA Orange County/Long Beach Chapter Vice President Summer Taylor participated in the event and spoke to the CBA about the resources and networking opportunities CalCPA facilitates for students and candidates as they go through the licensing process and begin their careers as a CPA.

New CPE Regs Take Effect
Regulations implementing the CPE changes related to preparation engagements under SSARS 21 were adopted by the Office of Administrative Law and took effect Oct. 1. 

The CBA held a regulatory hearing at its July 2016 meeting and adopted new regulations that establishes and defines the A&A CPE requirements for licensees who, as the highest level of service, provided preparation engagements at eight hours of the 80 hours required every two years. 

In addition, the regulations require such licensees to complete the requirement of four hours of fraud prevention, detection and reporting of fraud affecting financial statements.

New CBA Member Appointed
Tustin’s Dan Jacobson has been appointed to the CBA by the Speaker of the Assembly to fill a public member position. 
Jacobson has practiced civil litigation law in California since 1988, and served on the Board of Governors of the California Insurance Guarantee Association and as a Temporary Judge for the Orange County Superior Court.  

CalCPA congratulates Jacobson on his appointment and looks forward to working with him.  
Jason Fox is CalCPA’s director of legislation.

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