Sacramento, Calif. (Sept. 3, 2002) -- California accountants will face tougher rules beginning Jan. 1, 2003, when three bills aimed at strengthening California's corporate accountability laws take effect.
Governor Gray Davis signed AB 2970, which prohibits accountants from taking jobs at companies they have audited within the last year. A second bill, AB 2873, requires accountants to retain audit records for seven years, and specifies information standards for audit documents. It also prohibits intentional document destruction. The third bill, AB 270, calls for a majority of nonaccountants on the Board of Accountancy, making California the first state to have a public-member majority on its board.
Davis also announced the establishment of an interagency task force to review the implementation of the new federal corporate accountability law. The task force, to be headed by State and Consumer Services Agency Secretary, Aileen Adams, and Business, Transportation, and Housing Agency Secretary, Maria Contreras-Sweet, will issue a development plan for the legislation within 180 days as required by the new federal law. It will also provide further recommendations for improving corporate governance and investor protection in securities and accounting professional laws.
In addition, Governor Davis announced that the state Board of Accountancy is moving to strip Arthur Andersen's license to practice in California. The Texas board last month revoked Andersen's license.
-- Electronic Accountant Newswire staff
