Next comes regulation: with the legislative session over, regulators gear up. (Government Relations).

It's a familiar drill. Congress passes a new tax act, which results in new tax codes. But the tax code isn't completely relevant until you know what regulations the IRS will propose to define and interpret the code.

"As a profession, we find ourselves in a similar situation with the Sarbanes-Oxley Act and California's recently passed legislation," says Hal Schultz, a former CalCPA president. "How the regulatory process plays out in California will determine if the public interest is truly being served."

We've Only Just Begun

We are embarking on a lengthy, involved process, explains Bruce Allen, CalCPA's veteran government relations director. He says the process will unfold something like this:

* The California Board of Accountancy meets to discuss new state and federal laws.

* Following its meeting, various CBA committees, task forces and staff will draft proposed regulations.

* Notices will be issued for public hearings and comments on the proposed regulations.

* Hearings will be held, comments will be weighed, the proposed regs will be revised as necessary, and final regs will be issued.

"CalCPA will closely monitor this entire process," says Allen. "We will participate and lend support to regulators as much as possible."

CalCPA Government Relations Committee chair Michael Ueltzen echoes this conviction: "We are working on members'--and the public's--behalf. Members can count on us to provide them with new information as soon as it is available through BUZZ."

In fact, Ueltzen adds that a critical element during the regulatory phase will be member input. "As regulations are proposed, we need to know how they will impact not only our members' practices, but, more importantly, their clients' businesses and the users of the financial information."

"The next year will require vigilance on the part of CalCPA members and staff," says Ueltzen. "It will be imperative that members participate."

Members' Voices Are Heard

"The hallmark of our success over the next several months will rely on CPAs being involved," adds Schultz. "The letters, faxes, e-mails, phone calls and visits our members made to legislators last year created an enormous buzz. I'll never forget the image-and impact--of Assembly Member Wyman holding up a stack of hundreds of letters from CPAs at an Assembly Business and Professions Committee meeting last spring."

According to Schultz and others who were there, the message to legislators was clear: We need legislation that is well-defined and that will not harm California's businesses or, ultimately, the public.

That message became even clearer in May when hundreds of CPAs descended on our state Capitol to meet with legislators and their staff.

"CPA Day was a major turning point in our dealings with the Legislature," says Allen. "After the voices of our members were heard, we were able to work in a more collaborative way with legislators.

"We hope to repeat our collaborative efforts with the Legislature in the coming months with the CBA," says Allen.

Faces Have Changed

"We will be working with a large number of freshman members on the California Board of Accountancy" says Ueltzen. "We know some of the new faces, many of whom have a strong history of working on behalf of consumers. Since protecting the public interest is tantamount for CPAs as well, we trust we can collaborate to create regulations that are clear and reasonable for both consumers and the profession."

Ueltzen admits he has concerns: "One of my biggest concerns is that in an effort to provide transparency in financial reporting--which is crucial for publicly held companies--the balance will be tipped against the owners of privately held businesses."

He explains, for example, that the requirement for CPAs to disclose restatements of financial statements could breach the privacy of their clients. "If a CPA turns over the financial statements of a private company to the California Board of Accountancy, then those private documents suddenly become public.

"The regulator's job really is a tough one, but that is why public comment and hearings are built into the process," adds Ueltzen.

What's Next?

The CBA held the first of several meetings on implementing new regulations in late September.

"Members should expect that we will call on them to help present the facts at hearings and through detailed letters that describe the nature of their relationships with their clients," says Allen.

"Our best way to communicate with members is through BUZZ. If we don't have your e-mail address, give it to us. It only takes a moment to dash off a quick e-mail to [e-mail], but the impact of your participation will make an enormous difference to the next generation of California CPAs."

In fact, says Allen, "Your participation may make the difference for whether or not the CPA profession remains strong and vibrant in California."

"We sincerely hope that the end result of this legislation and our discussions with regulators will be that service to CPA clients will be enhanced and that our profession's ethical standards will be enhanced and enforced," says Ueltzen.

Schultz adds, "By nature of our professional license, we serve the public interest. The public makes choices based on our reports. Recent events have bruised investor confidence.

"Let's continue to do the jobs that the public has entrusted to us. Let's reassure them that companies are providing accurate information, and when they are not--let's take steps to root the bad apples out."

Jeannie Tindel is CalCPA's director of legislation. Tindel can be reached at [e-mail].