BILL ANALYSIS
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|Hearing Date:June 29, 2009 |Bill No:AB |
| |797 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS PROFESSIONS
AND
ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 797Author:Ma
As Amended:May 4, 2009 Fiscal: Yes
SUBJECT: Accountants: discipline: Internet posting.
SUMMARY: Requires the California Board of Accountancy to publish
disciplinary decisions on its Website for a period of at least 10
years.
Existing law:
1)Licenses and regulates some 40,000 certified public accountants (CPAs)
under the Accountancy Act by the California Board of Accountancy
(Board) within the Department of Consumer Affairs.
2)Authorizes the Board to receive and investigate complaints against a
licensee and to initiate and take disciplinary action against a
licensee, as specified, through administrative procedures as
specified in the Accountancy Act and in the Administrative Procedure
Act.
3)Specifies that protection of the public shall be the highest priority for
the Board in exercising its licensing, regulatory, and disciplinary
functions. Whenever the protection of the public is inconsistent
with other interests sought to be promoted, the protection of the
public shall be paramount.
This bill:
1) Requires the Board to publish on its Internet Website
disciplinary decisions against a certified public accountant, public
accountant, accountancy partnership, or accountancy corporation for
a period of at least 10 years from the date the decision was issued.
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2) Requires the published disciplinary decisions to be accessible
by the name of the accountant, partnership, or corporation that is
the subject of the decision.
FISCAL EFFECT: The Assembly Appropriations Committee analysis, dated
May 20, 2009 indicates that workload costs associated with this
measure are minor and absorbable within existing Board resources.
COMMENTS:
1.Purpose. The bill is sponsored by the California Society of
Certified Public Accountants (Sponsor). According to the Author,
current policy of the Board is to post a summary of disciplinary
decisions on its website for a period of seven years. This bill
would require the Board to post the full text of its disciplinary
decisions for a period of ten years. According to the Author, this
would increase consumer protection by providing the full text of the
disciplinary decisions so that all proven allegations are readily
available and a full description of the proven allegations can be
accessed easily and for a longer period of time.
2.Background. The documents related to both a pending formal
accusation against a licensee, and the final disciplinary order
against a licensee are considered a public record and obtainable
upon request to any of the more than 40 consumer protection boards,
bureaus, programs and commission in the DCA.
As a matter of administrative policy, the Board currently publishes
the final documents of final disciplinary decisions on its Website
for a minimum of 7 years, but in some cases may publish that
information indefinitely. Specifically, for each final disciplinary
action, the Board posts the licensee's name, the disciplinary action
imposed (revocation, probation, suspension, stipulated decision),
the basis of the disciplinary action (code sections violated) and a
summary of the allegations (the acts the licensee committed that
constituted violations of the law), and a link to a copy of the
formal accusation and the disciplinary order (the Board's adopted
decision) in "PDF" format.
This bill would codify the Board's current practice of publishing the
disciplinary decision on the Website, and would extend the time the
decision is available on the Website to 10 years. The Board would
have discretion to leave the decision posted for an even longer
period of time if it so chooses (such as in cases where there were
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especially egregious violations).
3.Related Legislation. AB 138 (Hayashi) requires California-licensed
accounting firms to undergo a peer review of their accounting and
auditing services. This bill is also before the Committee at
today's hearing.
AB 1005 (Block) requires the California Board of Accountancy to
publish on its Website a notice of formal disciplinary accusations,
documents related to disciplinary decisions, a live audio or video
broadcast of public meetings, and the meeting minutes, as specified.
This bill has also been referred to this Committee.
AB 117 (Neillo) requires the holder of an inactive certified public
accountant license to disclose the inactive license status on all
materials that display the CPA designation. This bill was heard in
this Committee on June 8, and passed 7-0.
SB 961 (Yee) as heard by this Committee would have, effective January
1, 2014, deleted the current 120-hour pathway education requirement,
thereby requiring, after January 1, 2014, an applicant for a CPA
license to meet the criteria of the150-hour pathway requirement for
education. This bill was heard in this Committee on April 27 and
passed 7-0. Since that time the bill has been substantially amended
to instead require, beginning January 1, 2014, applicants for CPA
licensure who have a bachelor's degree and two years of experience
to acknowledge when they sit for the exam that licensure under that
pathway may not be considered substantially equivalent for purposes
of practice privileges in other states that require 150 semester
hours for licensure. This bill is currently in the Assembly
Business and Professions Committee.
4.Arguments in Support. The Sponsor of the bill, California Society
of Certified Public Accountants , writes that the bill is a
straightforward measure with no known opposition, and that posting
the full text of disciplinary orders would provide additional
information to consumers and result in greater public transparency.
SUPPORT AND OPPOSITION:
Support:
California Society of Certified Public Accountants (Sponsor)
Opposition:
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None received as of June 23, 2009
Consultant:G. V. Ayers