BILL ANALYSIS
AB 1005
Page 1
Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 1005 (Block) - As Amended: April 20, 2009
SUBJECT : California Board of Accountancy.
SUMMARY : Requires the California Board of Accountancy (CBA) to
publish on its website documents related to pending disciplinary
accusations, a live webcast of public meetings, and the meeting
minutes, as specified.
EXISTING LAW provides for the licensing and regulation of
accountants and accounting firms by CBA, and prohibits a person
from engaging in the practice of public accountancy in this
state unless he or she holds either a license issued by CBA.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
purpose of the bill is to provide transparency and public access
to California Board of Accountancy meetings and formal
accusations filed against a licensee. Given the importance of
the accounting profession to the operations and disclosure
requirements of public and private entities required under both
state and federal law, increasing transparency and public access
will lead to more informed choices by consumers."
Background . The documents related to a pending accusation
against a licensee are considered a public record and obtainable
upon request to any of the 43 consumer protection entities in
the Department of Consumer Affairs (DCA). Six of these DCA
entities provide documents related to a pending investigation on
their websites, 2 publish supporting documents on final
decisions, and 21 entities provide a summary of the final
decision and order, and 14 do not publish any information on
their websites. In addition to a summary of the final decisions
and order, the CBA also publishes supporting documents related
to a final decision on its website. However, CBA does not
publish supporting investigatory documents related to pending
accusations on its website because the accusations may change or
be withdrawn during the course of their investigation and it may
AB 1005
Page 2
not be in the public interest to publish information of such a
preliminary nature.
The committee may wish to consider whether the bill should
clarify the publication of documents on CBA's website to include
preliminary disciplinary documents as part of an ongoing
investigation or such publication should be restricted to final
disciplinary decisions.
Related Legislation . AB 797 (Ma) of 2009 requires CBA to post
on its web site the text of disciplinary decisions for a period
of 10 years from the date the decision was issued.
Support . The California Alliance for Retired Persons writes:
"Over the past number of years, there have been too many
examples of failures of the accounting profession to be
independent auditors of the financial statements of companies.
AB 1005 tries to address these critical issues in two modest
ways. First, it requires that the California Board of
Accountancy broadcast each of its board meeting live from its
Internet Website. Second, it requires the California Board of
Accountancy to post on its Website any formal accusation filed
by the Board against a licensee."
Opposition . The California Society of Certified Public
Accountants writes; "We are concerned that posting the
accusations will have irreparable impact on the ability of the
CPA to make a living even if the allegations contained in the
accusation are dismissed. This is not an unprecedented
occurrence as in the last decade at least 9 accusations did not
result in discipline and in uncounted instances the allegations
were modified in some way. To tarnish the reputations of CPAs
who have not been afforded due process is unconscionable and
serves no valid consumer protection purpose."
REGISTERED SUPPORT / OPPOSITION :
Support
California Alliance for Retired Americans
Opposition
Civil Justice Association of California
AB 1005
Page 3
California Society of Certified Public Accountants
Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301