AB1175 - Accountants.

Assembly Bill No. 1175 CHAPTER 293 An act to amend Sections 5081, 5082.3, 5082.4, 5082.5, 5087, 5088, 5090, 5094, 5095, 5096, 5096.1, 5096.4, 5096.12, 5096.20, 5096.21, and 5096.22 of, to amend and repeal Sections 5093, 5093.5, 5094.3, and 5094.6 of, to add Sections 5035.4, 5093.2, and 5093.3 to, and to repeal Sections 5086 and 5092 of, the Business and Professions Code, relating to professions and vocations. [ Approved by Governor October 03, 2025. Filed with Secretary of State October 03, 2025. ] LEGISLATIVE COUNSEL'S DIGEST AB 1175, Irwin. Accountants. Existing law establishes the California Board of Accountancy in the Department of Consumer Affairs to license and regulate certified public accountants and the practice of public accountancy. Existing law makes it a crime for a person to engage in the practice of public accountancy without a valid permit issued by the board or pursuant to a practice privilege. Existing law establishes education, experiential, examination, and other qualifications for licensure as a certified public accountant and requires an applicant to provide documentation that the applicant completed specified units in prescribed courses. Existing law requires the board to admit an applicant to the certified public accountant examination before the applicant completes the 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 prescribed education requirements. Existing law requires the board to adopt guidelines for accounting study to be included as part of the educational requirements for licensure. This bill would, operative on January 1, 2027, enact an alternative set of qualifications and requirements for a license, including a requirement to have completed an accounting concentration of courses from a board-recognized United States institution of higher education, instead of evidence of completion of specified units in prescribed courses for the education qualifications, as described above. The bill would make those revised qualifications and requirements an alternative to the above-described existing law provisions until January 1, 2029, at which time the bill would repeal those existing law provisions. Existing law authorizes the board to issue a certified public accountant license to an applicant who is the holder of a certified public accountant license issued under the laws of any state if the board determines the standards are substantially equivalent to the standards established in this state. This bill would instead authorize the board to issue a certified public accountant license to an applicant who holds a license from another state with comparable licensure requirements, as defined. Existing law authorizes an individual whose principal place of business is not in this state and who has a license to practice public accountancy from another state to practice in this state under a practice privilege without obtaining a license from the board if the individual, among other things, satisfies one of specified requirements, including that the individual has continually practiced public accountancy as a certified public accountant under a licensed issued by another state for at least 4 of the last 10 years. This bill would delete the provision requiring the individual to satisfy one of those specified requirements to practice under a practice privilege. Existing law requires individuals licensed in another state as a certified public accountant to file a specified notification form with the board and pay a fee as a condition of exercising a practice privilege if the board determines that allowing the individual to practice would violate the board’s duty to protect the public, and specifies factors the board is required to consider in making that determination. This bill would require the board, in making that determination, to also consider whether the other state has comparable licensure requirements. The bill would require an individual who has their principal place of business in a state that the board determines does not have comparable licensure requirements, to indicate on the notification form whether they have met one of 2 alternative sets of requirements. The first would be having continually practiced public accountancy as a certified public accountant under a license issued by any state for at last 4 of the last 10 years. The other set of requirements would be having passed the Uniform CPA Examination and completed education that included a baccalaureate degree or higher with an accounting concentration and at least one year of general accounting experience. Existing law authorizes a licensee to sign reports on attest engagements if, among other requirements, the licensee completes 500 hours of experience satisfactory to the board in attest services. This bill, among other changes to those requirements, would authorize the board, by regulation, to require the completion of specified job tasks associated with performing attest services. The bill would make other conforming, technical, and nonsubstantive changes. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 5035.4 is added to the Business and Professions Code, to read: 5035.4. “Comparable licensure requirements” means another state requires passage of the examination described in Section 5082 and has education and experience requirements, when considered collectively, that meet or exceed the standards established by the board pursuant to Article 5 (commencing with Section 5080). SEC. 2. Section 5081 of the Business and Professions Code is amended to read: 5081. An applicant for an authorization to be admitted to the examination for a certified public accountant license shall: (a) Not have committed acts or crimes constituting grounds for denial of a license under Section 480. (b) File the application prescribed by the board. This application shall not be considered filed unless all required supporting documents, fees, and the fully completed board-approved application form are received in the board office or submitted via a board-provided electronic application or filed by mail. (c) Meet one of the educational requirements specified in this article. SEC. 3. Section 5082.3 of the Business and Professions Code is amended to read: 5082.3. An applicant for a license as a certified public accountant may be deemed by the board to have met the examination requirements of Section 5082 if the applicant satisfies all of the following requirements: (a) The applicant is licensed or has comparable authority under the laws of any country to engage in the practice of public accountancy. (b) The International Qualifications Appraisal Board jointly established by the National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants has determined that the standards under which the applicant was licensed or under which the applicant secured comparable authority meet its standards for admission to the International Uniform Certified Public Accountant Qualification Examination. (c) The applicant has successfully passed the International Uniform Certified Public Accountant Qualification Examination referenced in subdivision (b). SEC. 4. Section 5082.4 of the Business and Professions Code is amended to read: 5082.4. A Canadian Chartered Accountant in good standing may be deemed by the board to have met the examination requirements of Section 5082 if they have successfully passed the Canadian Chartered Accountant Uniform Certified Public Accountant Qualification Examination of the American Institute of Certified Public Accountants or the International Uniform Certified Public Accountant Qualification Examination referenced in subdivision (b) Section 5082.3. SEC. 5. Section 5082.5 of the Business and Professions Code is amended to read: 5082.5. The board may give credit to a candidate who has passed all or part of the examination in another state if the members of the board determine that the standards under which the examination was held are as high as the standards established for the examination in this chapter. SEC. 6. Section 5086 of the Business and Professions Code is repealed. SEC. 7. Section 5087 of the Business and Professions Code is amended to read: 5087. (a) The board may issue a certified public accountant license to any applicant who is a holder of a current, active, and unrestricted certified public accountant license issued under the laws of any state with comparable licensure requirements and who has not committed acts or crimes constituting grounds for denial under Section 480. To be authorized to sign reports on attest engagements, the applicant shall meet the requirements of Section 5095. (b) The board may in particular cases waive any of the requirements regarding the circumstances in which the various parts of the examination were to be passed for an applicant from another state. SEC. 8. Section 5088 of the Business and Professions Code is amended to read: 5088. Any individual who is the holder of a current, active, and unrestricted license as a certified public accountant issued under the laws of any state and who applies to the board for a license as a certified public accountant under the provisions of Section 5087 may, until the time the application for a license is granted or denied, practice public accountancy in this state only under a practice privilege pursuant to the provisions of Article 5.1 (commencing with Section 5096), except that, for purposes of this section, the individual is not disqualified from a practice privilege during the period the application is pending by virtue of maintaining an office or principal place of business, or both, in this state. The board may by regulation provide for exemption, credit, or proration of fees to avoid duplication of fees. SEC. 9. Section 5090 of the Business and Professions Code is amended to read: 5090. An applicant for the certified public accountant license shall comply with the education, examination, and experience requirements in this article. SEC. 10. Section 5092 of the Business and Professions Code is repealed. SEC. 11. Section 5093 of the Business and Professions Code is amended to read: 5093. (a) To qualify for the certified public accountant license, an applicant who is applying under this section shall meet the education, examination, and experience requirements specified in subdivisions (b), (c), and (d), or otherwise prescribed pursuant to this article. The board may adopt regulations as necessary to implement this section. (b) (1) An applicant for admission to the certified public accountant examination under this section shall present satisfactory evidence that the applicant has completed a baccalaureate or higher degree conferred by a degree-granting university, college, or other institution of learning accredited by an accrediting agency included in a list of these agencies published by the United States Secretary of Education under the requirements of the federal Higher Education Act of 1965 as amended (20 U.S.C. Sec. 1001 et seq.), or meeting, at a minimum, the standards described in Section 5094. The total educational program shall include a minimum of 24 semester units in accounting subjects and 24 semester units in business-related subjects. This evidence shall be provided at the time of application for admission to the examination, except that an applicant who applied, qualified, and sat for at least two subjects of the examination for the certified public accountant license before May 15, 2002, may provide this evidence at the time of application for licensure. (A) An applicant enrolled in a program at an institution as described in this paragraph that grants conferral of a baccalaureate degree upon completion of the 150 semester units required by paragraph (2) of this subdivision may satisfy the requirements of this paragraph if the applicant’s institution sends electronically or delivers the applicant’s official transcript or its equivalent together or separately with a letter signed by the institution’s registrar, or its equivalent, directly to the board pursuant to subdivision (c) of Section 5094. The letter shall include all of the following: (i) A statement that the applicant is enrolled and in good standing in a program that will result in the conferral of a baccalaureate degree upon completion of either a master’s degree or the 150 semester units required by paragraph (2) of this subdivision. (ii) A statement that the applicant has completed all requirements, including general education and elective requirements, for a baccalaureate degree and the only reason the college or university has yet to confer the degree is because the applicant is enrolled in a program that confers a baccalaureate degree upon completion of either a master’s degree or the 150 semester units required by paragraph (2) of this subdivision. (iii) The date on which the applicant met all of the college’s or university’s requirements for conferral of a baccalaureate degree. (B) The total educational program for an applicant described in subparagraph (A) shall include a minimum of 24 semester units in accounting subjects and 24 semester units in business-related subjects. This evidence shall be provided at the time of application for admission to the examination, except that an applicant who applied, qualified, and sat for at least two subjects of the examination for the certified public accountant license before May 15, 2002, may provide this evidence at the time of application for licensure. (2) An applicant for issuance of the certified public accountant license under this section shall present satisfactory evidence that the applicant has completed at least 150 semester units of college education, including a baccalaureate or higher degree conferred by a college or university, meeting, at a minimum, the standards described in Section 5094, the total educational program to include a minimum of 24 semester units in accounting subjects, 24 semester units in business-related subjects, and, after December 31, 2013, shall also include a minimum of 10 units of ethics study consistent with the requirements set forth in Section 5094.3 and 20 units of accounting study consistent with the regulations promulgated under subdivision (c) of Section 5094.6. This evidence shall be presented at the time of application for the certified public accountant license. Nothing in this paragraph shall be deemed inconsistent with Section 5094 or 5094.6. Nothing in this paragraph shall be construed to be inconsistent with prevailing academic practice regarding the completion of units. (c) An applicant for the certified public accountant license shall pass an examination prescribed by the board. (d) (1) The applicant [Text truncated for display. Full text available on Congress.gov.]