Licensing update CBA considers attest hour requirement.

• Author: Allen, Bruce C.
• Position: Capitol Beat

In a surprise move, the California Board of Accountancy's Committee on Professional Conduct recommended that the CBA consider requiring all California CPA candidates to complete a minimum number of attest hours prior to licensing. The CBA has approved this recommendation and will consider the proposed requirement at a future meeting.

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Before 2001, all CPA candidates were required to gain attest experience prior to licensing. The requirement had proven unworkable for numerous reasons, including that performing 500 or even 1,000 hours of supervised attest experience did little to ensure a candidate's quality or ability to perform audits unsupervised.

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Most states have abandoned the attest experience requirement and instead have moved to peer review as a method of ensuring auditor experience and compliance with standards. It's surprising that the CBA is proposing this move when it's finally embracing peer review as an important consumer protection.

Background

Under California law, CPA candidates have several options for completing their experience requirements.

California allows candidates to qualify for licensure after meeting educational and examination requirements by completing one or two years of general experience working in industry, government or public practice under the supervision of a CPA with an active license. Candidates who want the ability to sign audits and reviews also must complete a qualifying attest experience requirement. CPAs who have not fulfilled this requirement may not sign an audit or review.

Additionally, any CPA signing an audit or review is required to complete 24 hours of focused accounting and auditing continuing education and eight hours of fraud detection CPE every two years.

When California law was changed in 2001, it was acknowledged that the attest-only option discouraged candidates from entering the profession due to the difficulty of obtaining audit experience because of a decreasing number of audits being performed: a lack of interest in auditing as a career; and the length of time it took to obtain attest hours. Some legislative critics complained that the attest-only option constituted an unreasonable barrier to entry to the CPA profession without providing real public protection.

A majority of states have adopted the general experience requirement described in the Uniform Accountancy Act rather than retain an attest experience requirement. CPA firms and...