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

• Author: Allen, Bruce C.
• Position: Governmentrelations - Ceryified public accountants

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...