Bill Text: CA SB773 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Accountants.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2011-09-26 - Chaptered by Secretary of State. Chapter 344, Statutes of 2011. [SB773 Detail]

Download: California-2011-SB773-Amended.html

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BILL NUMBER: SB 773	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 24, 2011

INTRODUCED BY   Senator Negrete McLeod

                        FEBRUARY 18, 2011

   An act to amend Section  5063   5094  of
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 also creates the Advisory Committee
on Accounting Ethics Curriculum and empowers 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.  
   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 a licensee to report to
the board in writing the occurrence of certain events within 30 days
of the time the licensee has knowledge of those events, including any
restatement of a financial statement and related disclosures by a
client audited by the licensee.  
   This bill would exempt from the reporting requirement a
restatement or related disclosure if included in any report filed and
furnished to the Securities and Exchange Commission, or if the
restatement or disclosure was made solely due to a change in law,
rules and regulations, or standards. 
   Vote: majority. Appropriation: no. Fiscal committee:  yes
  no  . 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 Section 5094.6
and 20 units of accounting study consistent with the regulations
promulgated under subdivision (c) of Section 5094.6. The 
Accounting Education  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. 
  SECTION 1.    Section 5063 of the Business and
Professions Code is amended to read:
   5063.  (a) A licensee shall report to the board in writing of the
occurrence of any of the following events occurring on or after
January 1, 1997, within 30 days of the date the licensee has
knowledge of these events:
   (1) The conviction of the licensee of any of the following:
   (A) A felony.
   (B) Any crime related to the qualifications, functions, or duties
of a public accountant or certified public accountant, or to acts or
activities in the course and scope of the practice of public
accountancy.
   (C) Any crime involving theft, embezzlement, misappropriation of
funds or property, breach of a fiduciary responsibility, or the
preparation, publication, or dissemination of false, fraudulent, or
materially misleading financial statements, reports, or information.
   As used in this section, a conviction includes the initial plea,
verdict, or finding of guilt, pleas of no contest, or a pronouncement
of sentence by a trial court even though that conviction may not be
final or sentence is not actually imposed until all appeals are
exhausted.
   (2) The cancellation, revocation, or suspension of a certificate
or other authority to practice, or refusal to renew a certificate or
other authority to practice as a certified public accountant or a
public accountant, by any other state or foreign country.
   (3) The cancellation, revocation, or suspension of the right to
practice as a certified public accountant or a public accountant
before any governmental body or agency.
   (b) A licensee shall report to the board in writing the occurrence
of any of the following events occurring on or after January 1,
2003, within 30 days of the date the licensee has knowledge of the
events:
   (1) Any restatement of a financial statement and related
disclosures by a client audited by the licensee that is not included
in any report filed and furnished to the Securities and Exchange
Commission, or that is not solely due to a change in law, rules and
regulations, or standards.
   (2) Any civil action settlement or arbitration award against the
licensee relating to the practice of public accountancy where the
amount or value of the settlement or arbitration award is thirty
thousand dollars ($30,000) or greater and where the licensee is not
insured for the full amount of the award.
   (3) Any notice of the opening or initiation of a formal
investigation of the licensee by the Securities and Exchange
Commission or its designee.
   (4) Any notice from the Securities and Exchange Commission to a
licensee requesting a Wells Submission.
   (5) Any notice of the opening or initiation of an investigation by
the Public Company Accounting Oversight Board or its designee, as
defined pursuant to subdivision (g).
   (c) A licensee shall report to the board in writing, within 30
days of the entry of the judgment, any judgment entered on or after
January 1, 2003, against the licensee in any civil action alleging
any of the following:
   (1) Dishonesty, fraud, gross negligence, or negligence.
   (2) Breach of fiduciary responsibility.
   (3) Preparation, publication, or dissemination of false,
fraudulent, or materially misleading financial statements, reports,
or information.
   (4) Embezzlement, theft, misappropriation of funds or property, or
obtaining money, property, or other valuable consideration by
fraudulent means or false pretenses, or other errors or omissions.
   (5) Any actionable conduct by the licensee in the practice of
public accountancy, the performance of bookkeeping operations, or
other professional practice.
   (d) The report required by subdivisions (a), (b), and (c) shall be
signed by the licensee and set forth the facts that constitute the
reportable event. If the reportable event involves the action of an
administrative agency or court, then the report shall set forth the
title of the matter, court or agency name, docket number, and dates
of occurrence of the reportable event.
   (e) A licensee shall promptly respond to oral or written inquiries
from the board concerning the reportable events, including inquiries
made by the board in conjunction with license renewal.
   (f) Nothing in this section shall impose a duty upon any licensee
to report to the board the occurrence of any of the events set forth
in subdivision (a), (b), or (c) either by or against any other
licensee.
   (g) The board may adopt regulations to further define the
reporting requirements of this section.