Top issues: rule 99, mobility and CPA Day at the Capitol.

The California Board of Accountancy recently elected the following CalCPA members as officers for the coming year: David Swartz, CPA, president; Don Driftmier, CPA, vice president; and Robert Petersen, CPA, treasurer. CalCPA member Leslie LaManna, a San Diego CPA and partner with Withers, Mann & LaManna LLP, was appointed to the CBA by Gov. Schwarzenegger in January.

Rule 99 Cause for Denial or Discipline

The CBA voted to eliminate a proposed amendment to its Regulation 99 that specifies the grounds for discipline and denial of licenses for CPAs in California.

CalCPA objected to the proposed amendment that would have allowed discipline or denial for: (d) Any act or crime which evidences a present or potential risk to the safety or welfare of any client, potential client, co-worker or any other person who may be encountered by the licensee in his or her professional capacity.

Current rule 99 allows discipline for acts or crimes that are related to the practice of public accountancy, which include, among other things, dishonesty, fraud, breach of fiduciary responsibility and gross negligence in the practice of public accountancy.

CalCPA does not support criminal activity of any kind, but the regulation as proposed was too broad and CalCPA questioned whether the CBA was the appropriate agency to be investigating and determining license denial or revocation for individuals who are accused, but not convicted of, actions unrelated to the practice of public accountancy, such as assault, murder, extortion and arson, among others.

Additionally, there was the potential for abuse if the regulation were adopted as proposed. For example, a client involved in a fee dispute with a CPA could have claimed unproven allegations of assault to force a settlement by the CPA.

Additionally, employees and coworkers could bring similar allegations to the CBA rather than pursuing more appropriate civil and criminal remedies.

Mobility Issues

The ability of CPAs to practice across state lines without obtaining a license from each state where incidental services may be provided continues to be a major issue for the profession.

California's experience has highlighted the difficulties with the current system requiring notification. While other states have adopted laws similar to California's within the past five years, California's law, because of its impact on taxpayers and CPAs across the nation, was the first one to be publicized.

The National Association of State Boards of Accountancy and the AICPA have agreed to forward a revision of the Model Accountancy Act that would allow for practice across state lines without notice to the state boards. The revision would essentially replace the old "incidental and temporary" standard that had served taxpayers and the profession for decades.

While the Model Accountancy Act has no statutory authority, the proposal illustrates significant movement in the professional and regulatory environment that could assist us in further refining state laws.

The CBA is defining incidental and temporary practice. This is part of the commitment that CBA representatives made to former Sen. Liz Figueroa last year when AB 1868 was passed by the Senate Business and Professions Committee.

Current law allows out-of-state CPAs to provide temporary and incidental services to California clients without obtaining a practice privilege from the CBA.

CPA Day at the Capitol: Presenting a United Voice

Team up with CalCPA members to help legislators understand the issues facing California CPAs by participating in CPA Day at the Capitol Tuesday, May 29.

The profession needs your help communicating with legislators in Sacramento.

By attending CPA Day at the Capitol, you will make connections that will prove crucial in educating legislators--including 35 freshmen--on CPA issues before they vote, not to mention establishing meaningful relationships that ultimately will create a more favorable business environment for CPAs throughout California.

"Meeting with the legislators is one of the best ways to support the CPA Profession in California," says CalCPA Chair Marc G. Parkinson, CPA.

CPA Day at the Capitol begins with an issues briefing at 10 a.m. Then, armed with briefing materials and discussion points, you will be assigned to teams to meet with legislators. After a full day at the Capitol meeting with legislators, CPAs reconvene for a debriefing, finishing by 4 p.m.

More than 100 California CPAs participated in CPA Day at the Capitol last year, meeting with more than 100 legislators.

In addition to meeting with legislators, members sat in on hearings and caught up with their peers from around the state.

This event is invaluable in increasing the visibility of the CPA profession in California. Because of term limits many lawmakers have no experience with the CPA profession. Some of them will meeting with a CPA for the very first time.

Download a registration form and sign up today at www.calcpa.org/ebulletinimages/legday.pdf, or you can RSVP by calling [phone] or e-mailing [e-mail].

Bruce C. Allen is CalCPA's director of government relations.