Accounting firms: peer review.

Existing law provides for the licensing and regulation of certified public accountants and other licensees by the California Board of Accountancy. Existing law requires an accounting firm providing attest services, with certain exceptions, to complete a peer review every 3 years in order to renew its registration, if the board, prior to September 1, 2011, determines that a peer review program should be implemented and identifies the resources necessary for that implementation. This bill would instead impose a peer review requirement for all accounting firms relative to accounting and auditing practice, which would be conducted by a board-recognized peer review program. The bill would require the board to adopt emergency regulations as necessary to implement the program and to adopt, by January 1, 2010, regulations defining a substandard peer review report. The bill would require an accounting firm and a peer review program provider to file copies of substandard peer review reports with the board. The bill would also require the board to appoint a peer review oversight committee, as specified. The bill would require the board to provide a report to the Legislature and Governor, by January 1, 2013, that includes specified information on the impact of these peer review requirements on certain small firms and sole practitioners. The bill would specify that these provisions shall become inoperative on January 1, 2014, unless a later enacted statute, enacted prior to that date, deletes or extends that date. The bill would also make specified findings and declarations of the Legislature regarding the value of peer review.