BILL NUMBER: SB 773 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 1, 2011
PASSED THE ASSEMBLY AUGUST 25, 2011
AMENDED IN ASSEMBLY AUGUST 15, 2011
AMENDED IN ASSEMBLY JUNE 28, 2011
AMENDED IN ASSEMBLY JUNE 20, 2011
AMENDED IN SENATE APRIL 14, 2011
AMENDED IN SENATE MARCH 24, 2011
INTRODUCED BY Senator Negrete McLeod
FEBRUARY 18, 2011
An act to amend Sections 5093, 5094, 5094.5, and 5094.6 of, and to
add Section 5094.3 to, the Business and Professions Code, relating
to accountants.
LEGISLATIVE COUNSEL'S DIGEST
SB 773, Negrete McLeod. Accountants.
Existing law provides for the licensure and regulation of
accountants by the California Board of Accountancy in the Department
of Consumer Affairs. Existing law requires an applicant for an
accountancy license to complete a minimum of 24 semester units in
accounting subjects and a minimum of 24 semester units in
business-related subjects, or as calculated in quarter units.
Existing law, on and after January 1, 2014, requires an applicant for
an accountancy license to complete an additional 10 units in ethics
study and 20 units in accounting study, and establishes an advisory
committee to recommend to the board ethics study guidelines, to be
adopted by the board by regulation.
This bill would set forth the ethics study requirements that, on
and after January 1, 2014, would apply to an applicant for an
accountancy license, as specified. The bill would authorize the
advisory committee described above to determine that a course or
portion of a course satisfies the ethics study requirements. The bill
would make conforming changes to related provisions and delete the
requirement that the board adopt these provisions by regulation.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5093 of the Business and Professions Code is
amended to read:
5093. (a) To qualify for the certified public accountant license,
an applicant who is applying under this section shall meet the
education, examination, and experience requirements specified in
subdivisions (b), (c), and (d), or otherwise prescribed pursuant to
this article. The board may adopt regulations as necessary to
implement this section.
(b) (1) An applicant for admission to the certified public
accountant examination under the provisions of this section shall
present satisfactory evidence that the applicant has completed a
baccalaureate or higher degree conferred by a degree-granting
university, college, or other institution of learning accredited by a
regional or national accrediting agency included in a list of these
agencies published by the United States Secretary of Education under
the requirements of the Higher Education Act of 1965 as amended (20
U.S.C. Sec. 1001 et seq.), or meeting, at a minimum, the standards
described in subdivision (c) of Section 5094. The total educational
program shall include a minimum of 24 semester units in accounting
subjects and 24 semester units in business-related subjects. This
evidence shall be provided at the time of application for admission
to the examination, except that an applicant who applied, qualified,
and sat for at least two subjects of the examination for the
certified public accountant license before May 15, 2002, may provide
this evidence at the time of application for licensure.
(2) An applicant for issuance of the certified public accountant
license under the provisions of this section shall present
satisfactory evidence that the applicant has completed at least 150
semester units of college education including a baccalaureate or
higher degree conferred by a college or university, meeting, at a
minimum, the standards described in Section 5094, the total
educational program to include a minimum of 24 semester units in
accounting subjects, 24 semester units in business-related subjects,
and, after December 31, 2013, shall also include a minimum of 10
units of ethics study consistent with the requirements set forth in
Section 5094.3 and 20 units of accounting study consistent with the
regulations promulgated under subdivision (c) of Section 5094.6. This
evidence shall be presented at the time of application for the
certified public accountant license. Nothing herein shall be deemed
inconsistent with Section 5094 or 5094.6. The Advisory Committee on
Accounting Ethics Curriculum established under Section 5094.5 may
determine that a course or a portion of a course satisfies the ethics
study requirement. Nothing herein shall be construed to be
inconsistent with prevailing academic practice regarding the
completion of units.
(c) An applicant for the certified public accountant license shall
pass an examination prescribed by the board.
(d) The applicant shall show, to the satisfaction of the board,
that the applicant has had one year of qualifying experience. This
experience may include providing any type of service or advice
involving the use of accounting, attest, compilation, management
advisory, financial advisory, tax or consulting skills. To be
qualifying under this section, experience shall have been performed
in accordance with applicable professional standards. Experience in
public accounting shall be completed under the supervision or in the
employ of a person licensed or otherwise having comparable authority
under the laws of any state or country to engage in the practice of
public accountancy. Experience in private or governmental accounting
or auditing shall be completed under the supervision of an individual
licensed by a state to engage in the practice of public accountancy.
(e) Applicants completing education at a college or university
located outside of this state, meeting, at a minimum, the standards
described in Section 5094, shall be deemed to meet the educational
requirements of this section if the board determines that the
education is substantially equivalent to the standards of education
specified under this chapter.
SEC. 2. Section 5094 of the Business and Professions Code is
amended to read:
5094. (a) In order for education to be qualifying, it shall meet
the standards described in subdivision (b) or (c) of this section.
(b) At a minimum, education shall be from a degree-granting
university, college, or other institution of learning accredited by a
regional or national accrediting agency included in a list of these
agencies published by the United States Secretary of Education under
the requirements of the Higher Education Act of 1965 as amended (20
U.S.C. Sec. 1001 et seq.).
(c) Education from a college, university, or other institution of
learning located outside the United States may be qualifying provided
it is deemed by the board to be equivalent to education obtained
under subdivision (b). The board may require an applicant to submit
documentation of his or her education to a credential evaluation
service approved by the board for evaluation and to cause the results
of this evaluation to be reported to the board in order to assess
educational equivalency.
(d) The board shall adopt regulations specifying the criteria and
procedures for approval of credential evaluation services. These
regulations shall, at a minimum, require that the credential
evaluation service (1) furnish evaluations directly to the board, (2)
furnish evaluations written in English, (3) be a member of the
American Association of Collegiate Registrars and Admission Officers,
the National Association of Foreign Student Affairs, or the National
Association of Credential Evaluation Services, (4) be used by
accredited colleges and universities, (5) be reevaluated by the board
every five years, (6) maintain a complete set of reference materials
as specified by the board, (7) base evaluations only upon authentic,
original transcripts and degrees and have a written procedure for
identifying fraudulent transcripts, (8) include in the evaluation
report, for each degree held by the applicant, the equivalent degree
offered in the United States, the date the degree was granted, the
institution granting the degree, an English translation of the course
titles, and the semester unit equivalence for each of the courses,
(9) have an appeal procedure for applicants, and (10) furnish the
board with information concerning the credential evaluation service
that includes biographical information on evaluators and translators,
three letters of references from public or private agencies,
statistical information on the number of applications processed
annually for the past five years, and any additional information the
board may require in order to ascertain that the credential
evaluation service meets the standards set forth in this subdivision
and in any regulations adopted by the board.
SEC. 3. Section 5094.3 is added to the Business and Professions
Code, to read:
5094.3. (a) An applicant for licensure as a certified public
accountant shall, to the satisfaction of the board, provide
documentation of the completion of 10 semester units or 15 quarter
units of ethics study, as set forth in paragraph (2) of subdivision
(b) of Section 5093, in the manner prescribed in this section.
(b) (1) Between January 1, 2014, and December 31, 2016, inclusive,
an applicant shall complete 10 semester units or 15 quarter units in
courses described in subdivisions (d), (e), and (f).
(2) Beginning January 1, 2017, an applicant shall complete 10
semester units or 15 quarter units in courses described in
subdivisions (c), (d), (e), and (f).
(c) A minimum of three semester units or four quarter units in
courses at an upper division level or higher devoted to accounting
ethics or accountants' professional responsibilities, unless the
course was completed at a community college, in which case it need
not be completed at the upper division level or higher.
(d) Between January 1, 2014, and December 31, 2016, inclusive, a
maximum of 10 semester units or 15 quarter units, and on and after
January 1, 2017, a maximum of 7 semester units or 11 quarter units,
in courses containing the following terms in the course title:
(1) Business, government, and society.
(2) Business law.
(3) Corporate governance.
(4) Corporate social responsibility.
(5) Ethics.
(6) Fraud.
(7) Human resources management.
(8) Business leadership.
(9) Legal environment of business.
(10) Management of organizations.
(11) Morals.
(12) Organizational behavior.
(13) Professional responsibilities.
(14) Auditing.
(e) (1) A maximum of three semester units or four quarter units in
courses taken in the following disciplines:
(A) Philosophy.
(B) Religion.
(C) Theology.
(2) To qualify under this subdivision, the course title shall
contain one or more of the terms "introduction," "introductory,"
"general," "fundamentals of," "principles," "foundation of," or
"survey of," or have the name of the discipline as the sole name of
the course title.
(f) A maximum of one semester unit of ethics study for completion
of a course specific to financial statement audits.
SEC. 4. Section 5094.5 of the Business and Professions Code is
amended to read:
5094.5. (a) There is hereby created within the jurisdiction of
the board the Advisory Committee on Accounting Ethics Curriculum. For
purposes of this section, "committee" means the advisory committee
established under this section.
(b) The committee shall consist of the following 11 members:
(1) One member appointed by the California Public Employees
Retirement System.
(2) Two members appointed by the Regents of the University of
California. These members shall be professors of business ethics or
accounting who have published works on the desirability and potential
contents of accounting ethics education.
(3) Two members appointed by the California State University Board
of Trustees. These members shall be professors of business ethics or
accounting who have published works on the desirability and
potential contents of accounting ethics education.
(4) Two members representing the California Community Colleges
appointed by the Board of Governors of the California Community
Colleges. These members shall be instructors of business ethics or
accounting.
(5) The Senate Committee on Rules, the Speaker of the Assembly,
and the board shall each appoint one member. The members appointed by
the Senate Committee on Rules and the Speaker of the Assembly shall
be from organized labor or consumer advocacy organizations.
(6) The Governor shall appoint one California certified public
accountant in public practice from a list provided by the California
Society of Certified Public Accountants.
(c) The term of a member of the committee shall be at the pleasure
of the appointing authority.
(d) The committee shall be subject to the Bagley-Keene Open
Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1
of Part 1 of Division 3 of Title 2 of the Government Code).
(e) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 5. Section 5094.6 of the Business and Professions Code is
amended to read:
5094.6. (a) No later than June 1, 2012, the committee shall
recommend to the board ethics study guidelines consisting of no less
than 10 semester units to be included as a part of the education
required under Section 5093. Ethics study may consist of academic
courses, portions of courses, or independent study offered by
degree-granting universities, colleges, or other institutions of
learning accredited by a regional or national accrediting agency.
Nothing herein shall be deemed inconsistent with prevailing academic
practice regarding completion of units.
(b) The board shall, no later than January 1, 2012, by regulation,
adopt guidelines for accounting study to be included as part of the
education required under Section 5093. In promulgating these
regulations, the board shall consider the views of the Accounting
Education Advisory Committee established under Section 5094.7.
(c) No later than six months following the issuance of the report
by the California Research Bureau regarding the Uniform Accountancy
Act's 150-hour rule, the board shall hold a hearing on the report. At
the hearing, the board shall make recommendations, based on that
report, to the National Association of State Boards of Accountancy
and the American Institute of Certified Public Accountants for
ensuring the relevancy of accountancy education to the modern
practice of accounting and shall approve a plan for the board to seek
the adoption of those recommendations and any others the board may
recommend related to enforcement and Internet disclosure.
(d) For purposes of this section, the following definitions shall
apply:
(1) Except as provided in subdivision (c), "committee" means the
Advisory Committee on Accounting Ethics Curriculum established under
Section 5094.5.
(2) "Ethics study guidelines" means the guidelines for the study
of ethics adopted for California by the committee and the board
consisting of a program of learning that provides students with a
framework of ethical reasoning, professional values, and attitudes
for exercising professional skepticism and other behavior that is in
the best interest of the investing and consuming public and the
profession. At minimum, it includes academic work or independent
study and shall include a foundation for ethical reasoning and the
core values of integrity, objectivity, and independence consistent
with the International Education Standards-4 of the International
Accountants Education Standards Board, the International Federation
of Accountants Code of Ethics, and the American Institute of
Certified Public Accountants Code of Professional Conduct.
(3) "Accounting study" means independent study or other academic
work in accounting, business, ethics, business law, or other academic
work relevant to accounting and business, so as to enhance the
competency of students as practitioners.