On June 30, 2002, President Bush signed the Sarbanes-Oxley Act into law (for a trip down memory lane, you can read Broc Romanek’s post reporting that momentous event here). Less than a month later, Governor Gray Davis signed AB 270 (Correa) into law. AB 270, one of several California laws enacted in the wake of the financial crises in 2001-2002, focused on improving oversight of the accounting industry by the California Board of Accountancy.

Among many other structural and regulatory changes, AB 270 imposed a requirement on licensees to report any restatement of earnings by an audit client. Cal. Bus. & Prof. Code § 5063(b)(1). The Board of Accountancy subsequently adopted an implementing regulation, 16 CCR § 59.