Contents

Course Overview.. 8

Recent New Rules. 8

Trend in Recent California Board of Accountancy Enforcement Actions. 8

CBA Regulations, Article 1- General 10

Definition of Attest Services. 10

Notification of Change of Address. 10

Example of CBA Disciplinary Action. 10

Observance of Rules. 12

California Accountancy Act, Article 3 – Application of Chapter. 12

Valid permit to practice required. 12

Practice of public accountancy. 13

Use of the certified public accountant title. 14

Inactive License Status. 14

Retired License Status. 15

Military Wavier Status. 15

Military Inactive Status. 16

California Accountancy Act, Article 4 – Applications, Registrations, Permits Generally. 17

Public Accountancy Permits and Certificates. 17

Expiration of Permits; Renewal; Continuing Education Requirements. 17

Failure to Renew Within Five Years; Reinstatement. 18

Offices Not Under Personal Management of Certified Public Accountant or Public Accountant; Supervision. 19

Nonlicensee Ownership of Firms. 19

Example of CBA Disciplinary Action. 21

California Accountancy Act, Article 3.5 - Standards of Professional Conduct. 21

Name of Firm.. 22

Example of CBA Disciplinary Action. 22

California Board of Accountancy Frequently Asked Questions. 23

Commissions. 24

Example of CBA Disciplinary Action. 25

Report Conforming to Professional Standards. 25

Example of CBA Disciplinary Action. 26

Restrictions on Accepting Employment with an Audit Client. 27

Reportable Events. 28

Example of CBA Disciplinary Action. 29

Disclosure of Confidential Client Information Prohibited. 31

CBA Regulations, Article 9- Rules of Professional Conduct. 32

Client Notification. 32

Attest Client Notification Regarding Composition of Firm Ownership. 32

Firms with Nonlicensee Owners. 33

Notification of Non-Licensee Ownership. 33

Response to Board Inquiry. 33

Example of CBA Disciplinary Action. 34

Discrimination Prohibited. 35

Confidential Information Defined, Exception. 36

Disclosure of Confidential Information Prohibited. 36

Commissions -Basic Disclosure Requirement. 37

Example of CBA Disciplinary Action. 37

Incompatible Occupations/Conflict of Interest. 39

Compliance with Standards. 39

Example of CBA Disciplinary Action. 39

Reporting of Restatements. 41

Contingent Fees. 42

Advertising. 43

Example of CBA Disciplinary Action. 43

Independence. 45

Approval of Use of Fictitious Name. 45

Retention of Client's Records. 45

Example of CBA Disciplinary Action. 45

Working Papers Defined; Retention. 47

Identification of Audit Documentation. 47

Example of CBA Disciplinary Action. 47

Retention Period for Audit Documentation. 49

The Document Assembly Period and Subsequent Changes in Audit Documentation. 49

Example of CBA Disciplinary Action. 50

Audit Documentation Retention and Destruction Policy. 51

California Accountancy Act, Article 2 – General Powers and Definitions. 51

Ownership of Accountants’ Work Papers. 51

Review Questions. 53

Answers to Review Questions. 54

California Accountancy Act, Article 1.5 – Continuing Education. 56

Continuing Education. 56

Continuing Education Regulations. 56

CBA Regulations, Article 12 – Continuing Education Rules. 56

Inactive license conversion. 57

Renewing a delinquent license. 58

Basic Continuing Education Requirements. 58

Continuing Education Commentary from the CBA License Renewal Handbook. 60

Example of CBA Disciplinary Action. 62

California Board of Accountancy Frequently Asked Questions. 64

California Accountancy Act, Article 5.5 - Audit Documentation. 65

Audit Documentation Requirements. 65

Audit Documentation Regulations. 66

Example of CBA Disciplinary Action. 66

CBA Regulations, Article 6- Peer Review.. 69

Definitions. 69

Enrollment and Participation. 70

Firm Responsibilities. 70

Exclusions. 70

Reporting to the Board. 70

Document Submission Requirements. 71

California CBA Commentary – Peer Review.. 71

Example of CBA Disciplinary Action. 72

California Board of Accountancy Frequently Asked Questions. 74

California Accountancy Act, Article 6 - Disciplinary Proceedings. 75

Discipline in General 75

Examples of CBA Disciplinary Action. 76

Article 6, Section 5100.5 - Disciplinary Proceedings. 79

Excerpts from the Enforcement Handbook for Licensees. 80

California Accountancy Act, Article 6.5 - Administrative Penalties. 83

Administrative Penalties General Provisions. 83

California Accountancy Act, Article 7 - Prohibitions and Offenses Against the Chapter Generally. 84

Violations as Misdemeanor. 85

Evidence of Violation. 85

Injunctions. 85

CBA Regulations, Article 12.5- Citations and Fines. 85

Failure to Comply with Citation. 87

Appeals. 87

Unlicensed, Unregulated Practice. 87

CBA Regulations, Article 13- Denial, Suspension, and Revocation of Certificates, Permits, or Licenses. 88

Disciplinary Guidelines. 88

Mediation Guidelines. 88

Substantial Relationship Criteria. 88

Rehabilitation Criteria for Denials, Suspensions, Revocations, Restorations, 89

Reduction of Penalty, Etc. 89

Review Questions. 90

Answers to Review Questions. 91

Glossary. 93

Index. 94

Exam Questions. 95