IN-HOUSE SEMINARS--DO YOURS QUALIFY FOR CPE CREDIT?

By Steven Rubin, CPA, Weissbarth, Altman & Michaelson

CPAs take continuing professional education (CPE) to maintain or increase their professional competence and to meet the requirements of state regulations, certain professional membership organizations, and--in some cases--the U.S. General Accounting Office.

Many employer organizations (firms)--in public practice, industry, and academia--have been absorbing all or a substantial portion of their employee's CPE costs for self-study and group-study programs.

In order to reduce costs, an increasing number of firms are presenting more in-house group study programs.

Just as there are standards for performing audits, there are standards for presenting seminars that qualify for CPE credit. The following paragraphs are intended to alert firms and their accounting professionals to the CPE standards and actions that must be taken to help ensure that their seminars qualify for CPE credit under the widely-adopted AICPA Statement on Standards for Formal Continuing Professional Programs.

Appoint a CPE Administrator

Though a number of people may be involved in a firm's CPE activities, there should be a CPE administrator, who is responsible for ensuring that in-house seminars meet applicable CPE standards.

Become a CPE Sponsor

While AICPA standards do not require firms to be "approved" sponsors, many licensing jurisdictions (states) do. The process for becoming an approved sponsor is fairly simple. The firm should--

• determine whether the states in which their CPAs are licensed require that firms become approved CPE sponsors and, if so, what subjects do and do not qualify for CPE credit in those states. New York and New Jersey, for example, require that firms presenting in-house seminars become approved sponsors, and both do not allow CPE credit for so-called soft subjects, such as business writing or practice management.

• obtain appropriate applications from the applicable state boards.

• complete and return the applications, with the required filing fees. Applications typically ask prospective sponsors to
  specify types and numbers of seminars they expect to present during the next
  12 months.

A firm with CPAs licensed in more than a few states may prefer to apply for sponsor status through the National Association of State Boards of Accountancy Registry. The registry enables a firm to apply for sponsorship once, and the sponsor number assigned is recognized by all participating state boards, considerably reducing paperwork and filing fees.

Plan and Schedule

After sponsor numbers are obtained, seminars should be planned and scheduled to ensure compliance with the following requirements.

Educational Activities. Seminars should be designed primarily as formal educational activities. For example, on-the-job training, reading professional publications, and serving on committees are, at most, informal learning activities.

From time to time, firms hold meetings designed to accomplish a variety of objectives, such as setting policy, establishing standards, handling management or operational problems, planning, and educating participants. The formal program-of-learning portion of such meetings can qualify for CPE credit, provided all other CPE standards are met.

Participation. Seminar participation should be limited to individuals with appropriate education, experience, or both. For example, entry-level persons should not attend seminars in computer applications unless they have basic knowledge of computers gained in college or elsewhere. Similarly, experienced controllers should not attend seminars in basic financial statement preparation; such seminars are not likely to help maintain or increase their professional competence.

Instructors. Instructors are key to the seminar process, and should be competent as to seminar content and teaching methods used. A qualified instructor is--

• proficient in the subject matter;
• capable--through background, training, education, and/or experience--of communicating effectively and providing an environment conducive to learning;
• skilled in the use of appropriate teaching methods; and
• prepared in advance.

The Physical Facility. Firms generally present seminars either in an office conference room or at an outside location, such as a hotel or conference center. The seminar site should provide--

• room enough to accommodate the expected number of participants;
• easy accessibility;
• good lighting and ventilation; and
• necessary aids, such as blackboards, flip-charts, overhead projector (with spare bulbs), TV and VCR for video-assisted seminars, and computers where necessary.

If the seminar room is relatively large, additional attention needs to be paid to seating arrangements and the possible use of microphones and large screens so that every participant is able to hear and see.

Buy or Develop Materials

Seminar materials may be purchased from qualified CPE developers, such as the AICPA and state societies or developed in-house. If in-house, the firm must ensure that they are developed by someone qualified in the subject matter and knowledgeable in instructional design and then reviewed for technical accuracy, currency, and sufficiency--periodically if necessary--by a second qualified individual. A developer may become qualified in the subject matter and knowledgeable in instructional design through practical experience, education, or a combination the two.

Different firms have different approaches to acquiring seminar materials. Some prefer to buy materials from qualified CPE developers to avoid expending substantial time and other resources required in developing their own materials. Others prefer to develop materials--which hopefully meet requirements--tailored to their specific needs and circumstances. Still others buy materials but supplement them with materials developed in-house.

Announce Seminar and Distribute Materials

Every seminar should be announced formally, using a brochure or memorandum, and materials required for advance preparation should be distributed well in advance of the seminar. The announcement should contain the information covered in the following paragraphs.

Seminar Title. The seminar title should be as informative as possible. For example, the title "Workpaper Review for Managers" is more descriptive than "Workpaper Techniques."

Learning Objectives. Learning objectives specify what participants are expected to be able to do after taking the seminar, e.g., "to prepare budgets and analyze variances effectively and efficiently."

Level of Knowledge. Level of knowledge refers to the nature and depth of knowledge, skills, and expertise covered in the seminar. A seminar's level of knowledge may be basic, intermediate, advanced, or update. The accompanying exhibit describes each level of knowledge.

Advance Preparation. Advance preparation means just what it says, and it is intended to ensure that participants get the most out of the seminar. For example, participants might be asked to read a particular pronouncement or article.

Not every seminar requires advance preparation, and there is no credit granted for preparation time. This practice applies to participants only; instructors may claim credits for their preparation.

Recommended CPE Credits. Credit hours should always be expressed in terms of recommended numbers; it is the organizations and regulators requiring CPE that have the final say as to which CPE programs qualify and how many credits are to be given.

In determining the number of recommended CPE credits, the following guidelines apply:

• A seminar should last a least 50 "contact" minutes;

• Every 50 minutes of "contact" equals 1 recommended CPE credit; and
• Fractional credits are not allowed. For example, a seminar of 2.5 contact hours (150 minutes) equals three recommended CPE credits, but a seminar of 2.25 contact hours (135 minutes) equals only two recommended CPE credits.

In recognition of the time instructors spend preparing for a seminar they have never presented before, instructors may claim--in addition to presentation time--up to twice the number of CPE credits awarded for presentation time. For example, if presentation time (same as contact hours) is eight hours, the instructor may claim eight hours for presentation time, plus up to 16 hours for preparation time. However, an instructor who subsequently leads the same or similar seminar may not claim additional CPE credits unless it can be demonstrated that the subsequent seminar content substantially changed and such change required significant additional study or research.

Fields of Study. AICPA standards do not require that seminar announcements specify the seminar's field or fields of study, for example accounting, auditing, taxation, consulting services, or specialized industries. Firms would be advised to specify this information, however, because some governing bodies require CPE credits to be taken in required fields of study, and the fields are not always apparent from information specified elsewhere in the announcement.

Prerequisites. Prerequisites relate to the experience or education that participants should possess currently to benefit from the seminar. These should be written clearly and unequivocally so that potential participants can easily ascertain whether the seminar is suitable for them. For example, a prerequisite for a seminar called "Preparing Tax Refund Claims--Part II" might be: "Preparing Tax Refund Claims--Part I" or "one year's experience preparing tax refund claims."

Teaching Method. Teaching method refers to the manner in which a seminar is conducted. Examples include lecture, group discussion, video-assisted, computer-assisted, etc.

Relevant Administrative Policies. The seminar announcement should specify various other information, such as--

• name of instructor;
• location of seminar;
• travel instructions, if the seminar is to be held outside the office;
• date;
• starting and ending time; and
• whether and at what time lunch is served, if the seminar is a full day.

Take Attendance

Attendance should be taken at the beginning of a seminar. Typically, participants should sign an attendance list along with their Social Security numbers and CPA license numbers, if applicable.

Notations should be made of latecomers, early departures, and those who take protracted breaks. Their recommended CPE credits should be reduced.

Obtain Evaluations

Evaluations should be obtained from participants and instructor(s) at the end of a seminar. They are generally based on answers to preprinted questions or statements with space for the evaluator's comments. Feedback from the evaluations are used to help improve the presentation of future seminars. The forms should cover whether--in the evaluator's (participants) opinion--learning objectives were met, prerequisites were necessary or desirable, seminar materials contributed to the achievement of the learning objectives, seminar content was timely and relevant, the knowledge and presentation skills of the instructor(s) were effective, and the facilities were satisfactory.

Update Individual CPE Records

Because individuals are required to document their participation in all CPE, wherever and however obtained, some firms provide each participant with a certificate of attendance. This practice is unnecessary if the firm places a copy of the attendance list and seminar announcement in each participant's individual CPE or personnel file. In any event, individual CPE records should be updated in a timely manner to reflect the number of recommended CPE credit awarded.

Maintain Files

In order to support claims of CPE participation and presentation, firms should maintain files for each in-house seminar presented, for five years. Each file should include--

• a copy of seminar announcement;
• the participants' attendance record,
• the participants' and instructors'evaluations;
• outlines of other seminar materials;
• evidence that materials developed in-house were developed and revised by qualified individuals; and
• the credentials of the instructor(s)