CBA's full plate: board seeking legislation on everything from licensing to fines.As the California Board of Accountancy delivered its sunset review report, the Joint Legislative Sunset Review Committee urged legislation on a number of issues, including changes to discipline options, peer review and licensing. These issues will be amended into SB 1543, which extends the CBA See Capital Builder Account. sunset. Enforcement The Legislature has requested that the CBA develop recommendations related to its ability to discipline large firms. Ian Thomas Ian Thomas may refer to:
"These barriers are compounded by a cumbersome state contracting process and the consumption of significant internal staff time," he said. "Confirming and proving 'audit failure' by a large firm is a rigorous undertaking and investigations of complex audit engagements can consume several years and cost millions of dollars." To enhance its enforcement ability the CBA is recommending budgeting flexibility so it can access $2 million of its contingency funds during a budget year, if necessary to pursue complex enforcement cases. Additionally, the CBA is seeking authority to encumber To burden property by way of a charge that must be removed before ownership is free and clear. Property subject to an encumbrance may have a lien or mortgage imposed upon it. funds for specific investigative contracts for at least two years and be able to have nine months' operating budget Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. . Currently, the CBA's reserves are limited to a sum that is no more than six months of their operating budget. The CBA also seeks to fill positions eliminated due to vacancies or the state's hiring freeze Noun 1. hiring freeze - a freeze on hiring freeze - fixing (of prices or wages etc) at a particular level; "a freeze on hiring" so its enforcement program can be more effective. Increased Fining Authority Thomas urged the Legislature to expand the CBA's fining authority to provide additional levels of discipline for violations of the Accountancy Act. The CBA's current disciplinary options include probation, suspension and revocation The recall of some power or authority that has been granted. Revocation by the act of a party is intentional and voluntary, such as when a person cancels a Power of Attorney that he has given or a will that he has written. . The CBA is proposing adding a two-tiered fining structure: up to $5,000 for the initial violation; $10,000 for subsequent violations. These fines could be imposed on both individuals and firms for violating any part of the Accountancy Act. More egregious e·gre·gious adj. Conspicuously bad or offensive. See Synonyms at flagrant. [From Latin violations--criminal convictions, embezzlement embezzlement, wrongful use, for one's own selfish ends, of the property of another when that property has been legally entrusted to one. Such an act was not larceny at common law because larceny was committed only when property was acquired by a "felonious taking," i. , gross negligence An indifference to, and a blatant violation of, a legal duty with respect to the rights of others. Gross negligence is a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property, or , fiscal dishonesty dis·hon·es·ty n. pl. dis·hon·es·ties 1. Lack of honesty or integrity; improbity. 2. A dishonest act or statement. Noun 1. and fraud--could subject an individual practitioner to a fine of up to $50,000 for an initial violation and $100,000 for repeated violations. Firms could be fined up to $1 million for the first violation and up to $5 million for subsequent violations. The extent of consumer harm, severity of the violation and the ability to pay must be considered in assessing fines. Licensing Changes Statutory changes that became effective Jan. 1, 2002, altered the education, examination and experience requirements for licensure as a California CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. . Candidates now have three options for licensure--Pathway 0, 1 or 2. Pathway 2 is considered substantially equivalent to licensing laws in most other states. It requires 150 hours of education and one year of general work experience in government, private industry or public practice under the supervision of a CPA with an active license. CPAs who wish to sign audits and reviews are required to complete the audit experience requirement. Pathway 0, which required less education and completion of the audit experience requirement, has been closed to new applicants since the new options became available. Pathway 0 was to be eliminated Dec. 31, 2005 and candidates who had not been licensed by then would have been required to re-take and pass the Uniform CPA Exam. The CBA is proposing that Pathway 0 candidates be given four more years to qualify for licensure and that all interested Pathway 0 candidates be allowed to transition to Pathway 1 or 2 if they meet the new educational requirements. Peer Review The CBA is proposing postponing the effective date for mandatory peer review from Jan. 1, 2006 to July 1, 2008. This would apply to all firms with four or more partners that provide attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as services (audits, reviews or examinations of prospective financial statements). Incidental Practice in California California law California Law consists of 29 codes, covering various subject areas, the State Constitution and Statutes. See also
Incidental is not defined and has been interpreted liberally by individual CPAs. The CBA believes anyone providing audit services in California should be licensed by California, but has not enforced this policy. The board is proposing legislation to require out-of state CPAs to notify the CBA before providing services in California. After paying a fee and agreeing to be subject to the CBA's authority for disciplinary purposes, the CPA could temporarily practice in California under a "practice privilege." This is consistent with Uniform Accountancy Act provisions being implemented in other states. The recommendations, if enacted, will become effective Jan. 1, 2005. Special Districts Bill Dies SB 1272 (Ortiz) has been held by the Senate Appropriations Committee In the United States government, the Appropriations Committee can refer to either:
The issue may be revived next session, but appears to be dead this year. Special districts, CalCPA and others opposed the measure for numerous reasons. Bruce C. Allen is CalCPA's director of government relations. |
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