Accounting Bill Deal Sought

A state Senate committee Monday abruptly canceled a hearing on a bill that would roll back taxpayer protections put in place after Enron Corp.’s collapse so that the opposing sides would have a chance to settle their differences.

The hearing was supposed to have taken up a bill by Assemblyman Rudy Bermudez (D-Norwalk) that would allow out-of-state accountants to perform unspecified “tax services” in California without notifying the regulatory board that oversees the industry.

The bill has already passed the Assembly.

Consumer watchdog groups, state Atty. Gen. Bill Lockyer and some lawmakers warn that if the bill passes, it could invite accounting firms to market dubious tax shelters without proper oversight.

Accounting firms and trade associations, which are backing the bill, have contributed thousands of dollars to both Bermudez and Gov. Arnold Schwarzenegger, who appoints members of the state Board of Accountancy. The board has also taken a position in favor of the bill.

Enron’s 2001 collapse, partly caused by questionable accounting practices, spurred the state to tighten the regulations.

After the Senate committee adjourned, watchdog groups and accounting industry lobbyists walked to Bermudez’s office to see if they could reach a compromise.