Existing law regulates certain uses and developers of artificial intelligence and requires the California Department of Technology to inventory high-risk automated decision systems proposed for use, development, or procurement by state agencies. California law, however, did not previously establish a statewide registration system or professional standards specifically for persons conducting audits of artificial intelligence.
AB 1405 requires the Government Operations Agency, by January 1, 2029, to establish an AI Auditor Registry on its website. Beginning January 1, 2029, a person may not offer, sell, or conduct a covered AI audit unless registered with the Agency. Registered auditors must provide specified identifying and professional information, pay an annual registration fee, display their registration number when advertising covered AI audit services, and provide auditees with a report containing specified information and a signed statement confirming that the audit complied with the law.
AB 1405 also establishes standards intended to preserve an auditor’s independence, objectivity, and integrity. Among other requirements, an auditor may not perform a covered audit where financial, business, employment, or other relationships would reasonably be expected to impair independence or objectivity, and generally may not seek or accept employment with an audience while participating in the audit. Registered auditors are also prohibited from interfering with or retaliating against employees who engage in specified whistleblower activity. The Government Operations Agency may investigate alleged violations, remove violators from the registry, and refer violations to the Attorney General or another appropriate enforcement authority. Certain accountants and accounting firms regulated by the California Board of Accountancy may be exempt from specified requirements if statutory conditions are met.
AB 1405 does not itself require businesses or public agencies to have their AI systems audited. Instead, AB 1405 regulates persons who conduct an AI audit when another law requires an audit or an entity voluntarily obtains one. Entities that contract with a vendor for an AI audit should therefore confirm, beginning January 1, 2029, that the auditor is properly registered and that the audit complies with the new statutory requirements.
AB 1405 adds Chapter 5.9.5 (commencing with Section 11549.80) to Part 1 of Division 3 of Title 2 of the Government Code.
