BILL ANALYSIS
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|Hearing Date:June 8, 2009 |Bill No:AB |
| |117 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 117Author:Niello and Ma
As Amended:March 12, 2009Fiscal: Yes
SUBJECT: Accountants.
SUMMARY: Requires the holder of an inactive certified public
accountant license to disclose the inactive license status on all
materials that display the CPA designation.
Existing law:
1)Licenses and regulates some 40,000 certified public accountants (CPAs)
under the Accountancy Act (Act) by the California Board of
Accountancy (Board) within the Department of Consumer Affairs.
2)Requires persons licensed by the Board to complete specified continuing
education requirements to maintain an active license.
3)Allows the Board to make exceptions to the continuing education
requirements for licensees who are not engaged in public practice.
4)Provides that any board under the DCA may establish by regulation an
inactive license category for persons not actively engaged in the
practice of the profession or vocation.
This bill:
1) Requires the holder of an inactive CPA license when using the
CPA designation on correspondence, Internet Websites, business
cards, name plates, or name plaques to place the term "inactive"
immediately after that designation.
2) Makes technical and clarifying changes.
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FISCAL EFFECT: The Assembly Appropriations Committee analysis dated
April 1, 2009, states that there are no significant costs associated
with this legislation.
COMMENTS:
1.Purpose. This bill is sponsored by California Society of Certified
Public Accountants (Sponsor) to require that CPAs with inactive
licenses disclose that they are inactive when using the CPA title by
placing the word "inactive" immediately after "CPA" on business
cards, stationery, r?sum?s, and other business communications.
Currently, the Sponsor states, accountants can represent themselves as
Certified Public Accountants even if they are not current on their
continuing education. The Sponsor states that this consumer
protection bill is necessary to ensure full disclosure.
2.Background. The Act provides that any person who has received from
the Board a certificate of certified public accountant may, be
titled and known as a "certified public accountant" and may also use
the abbreviation "CPA." No other person, except a firm registered
under the Act, may assume or use that title, designation, or
abbreviation or any other title, designation, sign, card, or device
tending to indicate that the person using it is a certified public
accountant.
The Act further provides that a person or firm may not use any title
or designation in connection with the designation "certified public
accountant" that is false or misleading, and authorizes the board to
adopt regulations covering the use of titles or designations.
3.Arguments in Support. The Sponsor writes, "The provisions of AB 117
are consistent with the provisions of the Uniform Accountancy Act
that have already been adopted in 30 other states to require either
disclosure of inactive status or to require continuing education of
every CPA.
"AB 117 will provide significant consumer protection by requiring
disclosure of a license status when the CPA designation is used."
4.Clarifying Amendment. As currently drafted, the bill would require
the label "inactive" to be applied when an inactive certified public
accountant uses the designation "CPA" on specified materials. As
drafted, the bill would not require a licensee to use the term
"inactive" if the full title "certified public accountant" was used,
or if some other title were used indicating that the individual was
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licensed by the Board.
Committee staff recommends the following amendment to clarify that
the designation "inactive" must be used whenever any title or
designation is used which would indicate that the person is licensed
by the Board.
5058.2. The holder of an inactive license issued by the board
pursuant to Section 462, when lawfully using the title
"certified public accountant, the CPA designation or any other
reference which would suggest that the person is licensed by
the board on materials such as correspondence, Internet
Websites, business cards, name plates, or name plaques, shall
place the term "inactive" immediately after that designation.
SUPPORT AND OPPOSITION:
Support: California Society of Certified Public Accountants
(Sponsor)
Opposition: None received as of June 2, 2009.
Consultant:G. V. Ayers