BILL NUMBER: SB 773 AMENDED
BILL TEXT
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 5017.5 and 5094 of
5094 and 5094.5 of, to amend and repeal Section 5094.6 of, and
to add Section 5094.3 to, the Business and Professions Code,
relating to accountants.
LEGISLATIVE COUNSEL'S DIGEST
SB 773, as amended, 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 a 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 make conforming
changes to related provisions and delete the requirement that the
board adopt these provisions by regulation.
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 the board to provide a
live audio or video broadcast on its Internet Web site of each of its
board meetings that are open and public.
This bill would instead require the board to provide live video
broadcasts of those meetings.
Existing law creates the Advisory Committee on Accounting Ethics
Curriculum and authorizes that committee to determine that a course
or a portion of a course of accounting education satisfies the ethics
study requirement of 20 units.
This bill would make a conforming change to that provision.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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 must 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.) and, after January 1, 2014, shall also, at
minimum, include 10 units of ethics study consistent with the
regulations promulgated pursuant to subdivision (b) of
requirements set forth in Section
5094.6 5094.3 and 20 units of accounting study
consistent with the regulations promulgated under subdivision (c) of
Section 5094.6. The Accounting Education Advisory Committee
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 deemed inconsistent with prevailing academic practice
regarding the completion of units.
(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. 2. Section 5094.3 is added to the
Business and Professions Code , to read:
5094.3. (a) In addition to completing the minimum of 24 semester
units in accounting subjects and 24 semester units in
business-related subjects, as set forth in subdivisions (b) and (c)
of Section 9.2 of Article 2 of Division 1 of Title 16 of the
California Code of Regulations, an applicant applying for licensure
as a certified public accountant shall, to the satisfaction of the
board, provide documentation of the completion of an additional 20
semester units of accounting study and 10 semester units or 15
quarter units of ethics study, as set forth in Section 5094.
(b) Satisfactory evidence as to educational qualifications shall
take the form of certified transcripts of the applicant's college
record, mailed directly to the board from the educational
institution; however, in unusual circumstances the board may accept
such other evidence as it deems appropriate and reasonably
conclusive. For foreign education, in addition to certified
transcripts of the applicant's college record, satisfactory evidence
shall usually take the form of an evaluation of educational
credentials by a credentials evaluation service approved by the
board.
(c) For purposes of this section, one quarter unit is equivalent
to two-thirds of one semester unit.
(d) On and after January 1, 2014, and until January 1, 2017, the
10 semester units or 15 quarter units of ethics study required
pursuant to subdivision (a) shall be completed from the list of
course areas set forth in paragraph (2) of subdivision (e).
(e) On and after January 1, 2017, three of the 10 semester units
or four of the 15 quarter units of ethics study required pursuant to
subdivision (a) shall be met in a course or courses at an upper
division level or higher course study devoted to accounting ethics or
accountants professional responsibilities. The remaining seven
semester units or 11 quarter units shall be completed from the list
of disciplines and courses in paragraphs (1) and (2), with no more
than three semester units or four quarter units from paragraph (1).
(1) (A) No more than three semester units or four quarter units
shall be from the following disciplines:
(i) Philosophy.
(ii) Religion.
(iii) Theology.
(iv) Sociology.
(v) Psychology.
(vi) Cultural, ethnic, or diversity studies.
(vii) Economics.
(viii) Political science.
(B) Courses in these disciplines shall have as its course title
the name of the discipline or shall, at a minimum, include the
following words or terms in the course title in addition to the name
of the discipline: "Introduction," "Introductory," "General,"
"Fundamentals of," "Principles," "Foundation of," or "Survey of."
(2) Between seven and 10 semester units or between 11 and 14
quarter units shall be from the following course areas:
(A) Business law.
(B) Legal environment of business.
(C) Accounting ethics or accountant's professional
responsibilities.
(D) Corporate governance.
(E) Ethics, morals, or fraud.
(F) Organizational behavior.
(G) Human resources management.
(H) Management of organizations.
(I) Business, government, and society.
(J) Business leadership.
(K) Nonaccounting courses specific to professional
responsibilities.
(f) Notwithstanding subdivision (e), applicants may obtain credit
for a maximum of one semester unit of ethics study for completion of
a course specific to financial statement audits.
SEC. 3. 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) (1) This section shall
become inoperative on the later of the following:
(A)
(1) January 1, 2014.
(B)
(2) The day following the date on which the
committee issues the final report required under subdivision (b) of
Section 5094.6.
(2) This section shall be repealed on the later of the following:
(A) January 1, 2014.
(B) January 1 following the date described in subparagraph (B) of
paragraph (1).
(f) 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. 4. 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) No later than January 31, 2013, the board shall adopt
, by regulation, the ethics study recommendations made by
the committee pursuant to subdivision (a) without substantive
changes. The committee shall issue a report during the
public comment period and, no later than 30 days after the
regulations are final, shall offer an opinion as to whether the
regulations will implement its recommendations.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
SECTION 1. Section 5017.5 of the Business and
Professions Code is amended to read:
5017.5. (a) The board shall provide a live video broadcast, on
its Internet Web site, of each of its board meetings that are open
and public.
(b) (1) If technical failure prevents the board from providing a
live broadcast as specified in subdivision (a), that failure shall
not constitute a violation of this section if the board exercised
reasonable diligence in providing a live broadcast.
(2) Failure to provide a live broadcast of its board meetings due
to technical failure shall not prohibit the board from meeting and
taking actions.
(c) The recording of the live video broadcast shall remain on the
Internet Web site for at least three years. Providing a link on the
Internet Web site to the recording of the live video broadcast shall
satisfy this requirement.
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 must 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.) and, after January 1, 2014, shall also, at
minimum, include 10 units of ethics study consistent with the
regulations promulgated pursuant to subdivision (b) of Section 5094.6
and 20 units of accounting study consistent with the regulations
promulgated under subdivision (c) of Section 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 deemed
inconsistent with prevailing academic practice regarding the
completion of units.
(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.