AB-298: California CPA Exam Changes

CPE Guide was created by CPAs and Lawyers designed to equip CPAs with the best tools all year round. A part of that mission is for us to provide to you some of the latest changes or legislatures that we see affecting CPAs. 

We will summarize the Bill for you and then provide to you the exact context for yourself or your legal team to review. The digest below our summary was extracted from the official legislature website of information for California.

This Bill (AB-298) will allow California CPA Exam candidates to sit for the exam prior to graduation. AB-298 was authored to help make the licensure process for new accountants more efficient and secure. Let’s explore some of the key provisions of the bill, and how it may affect your CPA Exam timeline.

The new bill allows candidates in California to sit for the CPA Exam 6 months prior to completing their education requirements if the individual is enrolled in a degree-granting university, college, or other institution of learning. Within  a 8 months timeline of applying for the license, the candidate must provide the board with satisfactory evidence that they have completed the educational requirements. 

[ Approved by Governor  September 24, 2021. Filed with Secretary of State  September 24, 2021. ]

LEGISLATIVE COUNSEL'S DIGEST

AB 298, Irwin. Accountancy: California Board of Accountancy.

Existing law establishes the California Board of Accountancy in the Department of Consumer Affairs for the purpose of licensing and regulating the practice of accountancy and provides that the officers of the board are a president, vice president, and a secretary-treasurer. Existing law requires the president to preside at all meetings of the board, and in the event of the president’s absence or inability to act, requires the vice president to preside.

This bill would require the secretary-treasurer to preside at meetings of the board if both the president and vice president are absent or unable to act. The bill would authorize the president to designate a board member who is not an officer to preside at a meeting of the board if all officers of the board are absent or unable to act at that meeting.

Existing law prohibits a person from engaging in the practice of public accountancy in this state unless the person holds a valid permit issued by the board or a practice privilege, as specified. Existing law requires an applicant to report to the board a valid email address if the applicant has one, at the time of application for, or renewal of, a public accountant license. Existing law provides that these email addresses are not considered public records and prohibits these email addresses from being disclosed pursuant to specified provisions of law, unless required pursuant to a court order.

This bill would recast these provisions to, in the interest of protecting the privacy of applicants and licensees, prohibit from disclosure all email addresses provided by applicants or licensees, and would make conforming changes.

Existing law sets forth the requirements for an applicant to qualify for the certified public accountant license and requires an applicant for admission to the examination to present evidence to the board that the applicant has completed specified education requirements.

This bill would, instead, authorize the board to admit an applicant to the certified public accountant examination before the applicant completes those education requirements if the applicant is enrolled in a degree-granting university, college, or other institution of learning and is within 180 days of completing the educational requirements to qualify for the certified public accountant license, as specified. The bill would require an applicant for licensure to provide documentation of completion of specified coursework, including coursework in ethics, accountants’ professional responsibilities, auditing, or fraud.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 5007 of the Business and Professions Code is amended to read:

5007. The president shall preside at all meetings of the board, and in the event of the president’s absence or inability to act, the vice president shall preside. If both the president and vice president are absent or unable to act, the secretary-treasurer shall preside at meetings of the board. The president may designate a board member who is not an officer to preside at a meeting of the board if all officers of the board are absent or unable to act at that meeting. Other duties of the president, vice president, and the duties of the secretary-treasurer, shall be such as the board may prescribe.

SEC. 2. Section 5009.5 is added to the Business and Professions Code, to read:

5009.5. In the interest of protecting the privacy of applicants and licensees, an email address provided by applicants or licensees to the board pursuant to this chapter shall not be considered a public record and shall not be disclosed pursuant to Section 27 or pursuant to a request under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), unless required pursuant to a court order by a court of competent jurisdiction.

SEC. 3. Section 5070 of the Business and Professions Code is amended to read:

5070. (a) Permits to engage in the practice of public accountancy in this state shall be issued by the board only to holders of the certificate of certified public accountant issued under this chapter and to those partnerships, corporations, and other persons who, upon application approved by the board, are registered with the board under this chapter. Notwithstanding any other law, the board may register an entity organized and authorized to practice public accountancy under the laws of another state for the purpose of allowing that entity to satisfy the registration requirement set forth in Section 5096.12, if (1) the certified public accountants providing services in California qualify for the practice privilege, and (2) the entity satisfies all other requirements to register in this state, other than its form of legal organization.

(b) All applicants for registration shall furnish satisfactory evidence that the applicant is entitled to registration and shall pay the fee as provided in Article 8 (commencing with Section 5130). Every partnership, corporation, and other person to whom a permit is issued shall, in addition to any other fee that may be payable, pay the initial permit fee provided in Article 8 (commencing with Section 5130).

(c) Each applicant who has a valid email address shall report to the board that email address at the time of application or registration.

(d) Each partnership, corporation, and other person issued a permit by the board to practice as a certified public accountant or as a public accountant shall be furnished with a suitable certificate evidencing that registration.

SEC. 4. Section 5070.5 of the Business and Professions Code is amended to read:

5070.5. (a) (1) A permit issued under this chapter to a certified public accountant or a public accountant expires at 12 midnight on the last day of the month of the legal birthday of the licensee during the second year of a two-year term if not renewed.

(2) To renew an unexpired permit, a permitholder shall, before the time at which the permit would otherwise expire, apply for renewal on a form prescribed by the board, pay the renewal fee prescribed by this chapter, and give evidence satisfactory to the board that the permitholder has complied with the continuing education provisions of this chapter.

(3) Each applicant for renewal who has a valid email address shall report that email address to the board on the renewal form described in paragraph (1).

(b) A permit to practice as an accountancy partnership or an accountancy corporation expires at 12 midnight on the last day of the month in which the permit was initially issued during the second year of a two-year term if not renewed. To renew an unexpired permit, the permitholder shall, before the time at which the permit would otherwise expire, apply for renewal on a form prescribed by the board, pay the renewal fee prescribed by this chapter, and provide evidence satisfactory to the board that the accountancy partnership or accountancy corporation is in compliance with this chapter.

(c) On or before July 1, 2020, each permitholder who has a valid email address shall provide that email address to the board.

(d) A permitholder shall notify the board within 30 days of any change to their email address on file with the board. The board may periodically, as it determines necessary, require permitholders to confirm that their email address on file with the board is current.

SEC. 5. Section 5093.5 is added to the Business and Professions Code, to read:

5093.5. (a) Notwithstanding subdivision (b) of Section 5093, the board may admit an applicant to the certified public accountant examination before the applicant completes the education requirements set forth in Section 5093, if the applicant is enrolled in a degree-granting university, college, or other institution of learning, as defined in Section 5094, and is within 180 days of completing the educational requirements set forth in paragraph (1) of subdivision (b) of Section 5093.

(b) Within 240 days of submitting an application pursuant to subdivision (a), the applicant shall provide the board with satisfactory evidence that they have completed the educational requirements set forth in paragraph (1) of subdivision (b) of Section 5093.

(c) Failure to comply with subdivision (b) may result in the loss of any credit received for passage of any part of the certified public accountant examination before the requirement described in subdivision (b) was met.

SEC. 6. Section 5094.3 of the Business and Professions Code is amended to read:

5094.3. (a) An applicant for licensure as a certified public accountant shall, to the satisfaction of the board, provide documentation of the completion of 10 semester units or 15 quarter units of ethics study, as set forth in paragraph (2) of subdivision (b) of Section 5093, in the manner prescribed in this section.

(b) Beginning January 1, 2017, an applicant shall complete 10 semester units or 15 quarter units in courses described in subdivisions (c), (d), (e), and (f).

(c) A minimum of three semester units or four quarter units in courses at an upper division level or higher devoted to accounting ethics, accountants’ professional responsibilities, auditing, or fraud unless the course was completed at a community college, in which case it need not be completed at the upper division level or higher.

(d) A maximum of 7 semester units or 11 quarter units, in the following subjects relating to ethics:

(1) Business, government, and society.

(2) Business law.

(3) Corporate governance.

(4) Corporate social responsibility.

(5) Ethics.

(6) Fraud.

(7) Human resources management.

(8) Business leadership.

(9) Legal environment of business.

(10) Management of organizations.

(11) Morals.

(12) Organizational behavior.

(13) Professional responsibilities.

(14) Auditing.

(e) (1) A maximum of three semester units or four quarter units in courses taken in the following disciplines:

(A) Philosophy.

(B) Religion.

(C) Theology.

(2) To qualify under this subdivision, the course title shall contain 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.

(f) A maximum of one semester unit of ethics study for completion of a course specific to financial statement audits.

(g) An applicant who has successfully passed the examination requirement specified under Section 5082 on or before December 31, 2013, is exempt from this section unless the applicant fails to obtain the qualifying experience as specified in Section 5092 or 5093 on or before December 31, 2015.

SEC. 7. The Legislature finds and declares that Section 2 of this act, which adds Section 5009.5 of the Business and Professions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

This act balances the public’s right to access records of the California Board of Accountancy with the need to protect the privacy of applicants and licensees.