BILL ANALYSIS �
SB 773
Page 1
SENATE THIRD READING
SB 773 (Negrete McLeod)
As Amended August 15, 2011
Majority vote
SENATE VOTE :38-0
BUSINESS & PROFESSIONS 7-0
APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|Hayashi, Allen, Butler, |Ayes:|Fuentes, Harkey, |
| |Eng, Hagman, Hill, Ma | |Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Establishes requirements for ethics courses that
certified public accountants (CPAs) must complete to gain
licensure. Specifically, this bill :
1)Requires, after December 31, 2013, the total educational
program required for licensure as a CPA to include a minimum
of 10 units of ethics study as specified by this bill and 20
units of accounting study consistent with regulations to be
adopted by the California Board of Accountancy (CBA) by
January 1, 2012, pursuant to current law.
2)Specifies that CBA's Advisory Committee on Accounting Ethics
Curriculum (Advisory Committee) may determine that a course or
portion of a course satisfies this ethics study requirement,
and that nothing in this bill shall be construed to be
inconsistent with prevailing academic practice regarding the
completion of units.
3)Deletes language that is redundant to 1) above.
4)Requires CPA license applicants to provide documentation of
completion of 10 semester units or 15 quarter units of ethics
study set forth in 1) above, to the satisfaction of CBA and as
prescribed below.
SB 773
Page 2
5)Requires, between January 1, 2014, and December 31, 2016, the
10 semester units or 15 quarter units of ethics study to be
completed from the following course areas:
a) Business, government, and society; business law;
corporate governance; corporate social responsibility;
ethics; fraud; human resources management; business
leadership; legal environment of business; management of
organizations; morals; organizational behavior;
professional responsibilities; or, auditing;
b) A maximum of three semester units or four quarter units
in: philosophy; religion; or, theology; and,
c) A maximum of one semester unit of ethics study for
completion of a course title specific to financial
statement audits.
6)Requires, on and after January 1, 2017, the ethics study to be
completed as follows:
a) A minimum of three semester units of 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;
b) A maximum of seven semester units or 11 quarter units in
courses listed in a) above; and,
c) Courses as described in b) and c) above.
7)Specifies that qualifying courses must contain in their title
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.
8)Changes the sunset provisions for the Advisory Committee, to
remain in effect until January 1, 2014.
9)Removes a requirement that the CBA adopt Advisory Committee
SB 773
Page 3
ethics study recommendations via regulation, and related
language.
EXISTING LAW :
1)Licenses and regulates CPAs under the Accountancy Act by the
CBA within the Department of Consumer Affairs (DCA).
2)Establishes education requirements for CPA licensure,
including specified ethics courses.
3)Establishes the Advisory Committee within CBA to recommend to
the Board ethics study guidelines, as specified, and
authorizes the Advisory Committee to determine that a course
or a portion of a course of accounting education satisfies the
ethics study requirement.
FISCAL EFFECT : According to Assembly Appropriations Committee,
costs associated with this legislation are minor and absorbable
within existing CBA resources.
COMMENTS : Legislation enacted in 2009 revised CPA license
standards to increase the hours of education required for
licensure from 120 hours to 150 hours, beginning January 1,
2014. It also required that the education include at least 10
units of ethics study and 20 units of accounting study. The 10
units of ethics study must meet guidelines established by the
CBA upon the advice of the Advisory Committee, which was also
created by the bill and charged with making recommendations to
the CBA by June 1, 2012. The Advisory Committee has finished
that task and this bill implements its recommendations.
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301
FN: 0001913