BILL NUMBER: AB 2970	CHAPTERED  08/26/02

	CHAPTER  232
	FILED WITH SECRETARY OF STATE  AUGUST 26, 2002
	APPROVED BY GOVERNOR  AUGUST 23, 2002
	PASSED THE SENATE  AUGUST 8, 2002
	PASSED THE ASSEMBLY  MAY 30, 2002
	AMENDED IN ASSEMBLY  MAY 23, 2002
	AMENDED IN ASSEMBLY  APRIL 29, 2002

INTRODUCED BY   Assembly Member Wayne
   (Coauthor:  Assembly Member Alquist)

                        FEBRUARY 25, 2002

   An act to add Section 5062.2 to the Business and Professions Code,
relating to accounting.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2970, Wayne.  Accounting:  audits.
   Existing law establishes the California Board of Accountancy, in
the Department of Consumer Affairs, for the purpose of licensing and
regulating public accountants.  In addition to other requirements, a
licensee is required to issue a report conforming to professional
standards upon completion of a compilation, review, or audit of
financial statements.
   This bill would prohibit a licensee from accepting employment with
a publicly traded corporation or its affiliate within 12 months of
the date of issuance of a financial statement where the licensee had
a specified level of participation in the audit engagement and the
employment would permit the licensee to exercise significant
authority over accounting or financial reporting.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 5062.2 is added to the Business and Professions
Code, to read:
   5062.2.  A licensee shall not accept employment with a publicly
traded corporation or its affiliate within  12 months of the date of
issuance of a financial statement report if both of the following
criteria are met:
   (a) The licensee has participated in an audit engagement for the
corporation and held responsibility, with respect to the audit
engagement, requiring the licensee to exercise significant judgment
in the audit process.  Responsibilities meeting the requirements of
this subdivision include, but are not limited to, positions, however
titled, where the licensee was the person in charge of the fieldwork,
up through positions where the licensee was a partner on the
engagement.
   (b) The employment would permit the licensee to exercise
significant authority over accounting or financial reporting,
including authority over the controls related to those functions.