By Yi Zhou
AB 3251 (Berman) (Chapter 586, Statutes of 2024), as amended June 25, 2024, extends the California Board of Accountancy’s (CBA) regulatory authority to January 1, 2029, allowing CBA to continue its oversight of the Certified Public Accountant (CPA) licensing processes.
AB 3251 clarified that CPA applicants must obtain their degrees from institutions accredited by agencies recognized in a list published by the U.S. Secretary of Education. This provision aligns California’s educational requirements for CPA licensure with federal standards, replacing the language in prior law that referred only to regional or national accrediting agencies. Additionally, the bill allows for streamlined documentation by permitting the institutions to submit official transcripts electronically, accompanied by a signed letter when required, instead of physical mailing.
In addition, AB 3251 modernizes processes to enhance CBA’s oversight of the accountancy profession. Previously, the law required CBA to mail copies of the proposed conduct rules at least 30 days before public hearings. The new provision allows CBA to send these notifications electronically, which is expected to yield annual savings of $70,000. Additionally, the bill mandates that peer review programs use a secure web-based platform accessible to CBA to monitor peer review progress, participation, and outcomes. All California firms are required to participate in this system, which provides comprehensive oversight of CPA firms’ audit practices and enhances transparency.
Furthermore, the bill clarifies requirements for licensees seeking retired status. First, a permanent restricted practice order will not be considered an outstanding order if the licensee completed probation as part of any previous discipline order. Second, if a licensee is subject to a permanent restricted practice order when CBA grants retired status, the permanent restricted practice order will be reinstated if the licensee status changes from retired to active.
Additionally, for CBA enforcement purposes, a firm that provides attestation services where none of the licensee owners of the firm have authority to sign reports on attest engagements would result in the licensee owner being held responsible as the licensee or licensees who performed the engagement. Further, A firm must make all working papers available for a licensee that no longer works for the firm who signed a report on an attest engagement upon CBA request for purposes of investigations.
Governor Newsom signed AB 3251 on September 25, 2024. CBA’s next meeting will be held on November 21–22, 2024, at CBA’s Sacramento headquarters with an opportunity for public comment.