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CBA committee flags standards and oversight gaps in proposed AI auditor enrollment (AB 1405); staff authorized to engage
Summary
On March 20, 2025 in Sacramento, California Board of Accountancy staff presented concerns about Assembly Bill 1405, which would enroll auditors of artificial intelligence systems under the Government Operations Agency but does not define qualifications or standards for those auditors.
California Board of Accountancy staff told the board’s legislative committee on March 20, 2025, that Assembly Bill 1405 would create a state enrollment process for auditors of artificial intelligence systems but currently lacks specificity on who may enroll and what standards would apply.
Information and Planning Officer David Hemphill said the bill’s current language would allow both certified public accountants and non‑CPAs to enroll as AI auditors and does not set clear qualifications. That, he told members, could produce inconsistent assurance reports because CPAs performing attest work are subject to AICPA attestation standards while non‑CPAs would not be bound by those standards.
“Staff has no recommended position on this measure, but I invite any insight members may have and do request to be given the authorization to work with stakeholders and the author to share information, provide guidance, and be a resource to help shape this overall legislation,” Hemphill said. Committee members agreed that staff should continue discussions with the bill author and stakeholders; the committee gave direction to staff rather than taking a formal position.
Committee members asked for clarification about who was driving the bill and whether large accounting firms were preparing frameworks for AI auditing standards. Executive Officer Dominic Franzilla told the committee staff had limited history on the bill and that it had been brought to attention primarily by CalCPA; staff said they would continue to investigate how oversight and standards might be implemented.
Public commenters on the Webex echoed staff concerns. Pat Joyce, representing national accounting firms, said the lack of uniform standards and inclusion of non‑CPAs were troubling and noted related bills addressing impact assessments for automated decision systems. Jason Fox said the profession and policymakers will need to work together as assurance for nonfinancial AI systems becomes more common.
The committee did not adopt a formal position at the meeting. Staff were authorized to engage with the author and stakeholders to provide technical input and monitor the bill’s progress.
