By Paula B. Thomas and Betty S. Harper
In Brief
Modernizing and Renewing a Commitment to Lifelong Learning
The accounting profession has had a long-standing dedication to lifelong learning. In 1971, the AICPA cited “the explosion of knowledge and the increasing complexity of practice” as the challenge for continuing professional education and advocated that CPAs “demonstrate that they are continuing their professional education as a condition precedent to the … validation of a CPA’s designation.”
The form and substance of CPE have changed considerably over the past 30 years. To keep standards current, the AICPA and NASBA released a joint exposure draft, Statement on Standards for Continuing Professional Education, last year. Its proposed standards emphasize learning plans that assess a CPA’s progress toward individual competency goals. They would also recognize a broader range of qualified learning activities that would move beyond the traditional definition of CPE and place greater emphasis on self-directed learning activities (with a program review process introduced for heavy users). If enacted by the state boards, the proposed CPE changes will make great strides toward bringing the AICPA Vision closer to reality.
CPAs throughout the country recently participated in a grassroots effort to shape the AICPA Vision for the profession in 2011 and beyond. While the Vision builds on the profession’s current strengths, it is clear that many accounting professionals will need additional competencies to succeed in the future. CPAs will benefit by evaluating their own personal skills to determine whether they are prepared for the radical changes facing the profession. Some accountants will likely find that they need additional skill sets to remain competitive.
Although CPAs attain the knowledge needed for increasingly demanding tasks in a variety of ways, continuing professional education (CPE) is one of the most visible and recognized. Numerous forces are changing the CPE landscape. Technology is changing the way information is conveyed and work is done. Despite the AICPA’s efforts to create a unified vision for the profession and initiatives like the Uniform Accountancy Act (UAA), CPE requirements remain markedly different among states, creating burdens for both CPAs practicing across state lines and state regulatory authorities. It is not clear that traditional CPE is the best vehicle for CPAs to master new information and remain competitive.
Background
CPE is a relatively new development in the accounting profession. AICPA Council advocated mandatory CPE for all CPAs in 1971, at a time when only one state—Iowa—required it. The intent behind mandatory CPE is apparent from Council’s resolution:
WHEREAS, the explosion of knowledge and the increasing complexity of practice make it essential that certified public accountants continue to develop their competence, and
WHEREAS, the public interest requires that certified public accountants provide competent service in all areas of their practice, and
WHEREAS, formal programs of continuing education provide certified public accountants with the opportunity to maintain and improve their competence,
THEREFORE BE IT RESOLVED that the Council of the American Institute of Certified Public Accountants urges each of the several states to institute a requirement, by legislation or regulation as may be appropriate, that certified public accountants demonstrate that they are continuing their professional education as a condition precedent to the reregistration, renewal of permit to practice, or other validation of a CPA’s designation (“Some Observations on Required Continuing Education,” The CPA Journal, June 1972).
While the AICPA’s concern in 1971 about the “explosion of knowledge” was certainly valid, growth continues at a rapid pace. Furthermore, the only vehicle initially specified for CPAs to address this challenge was “formal programs of continuing education.” Perhaps Council at that time could envision no viable alternatives.
The recommendation for mandatory CPE was an important first step. Three decades later, it is instructive to focus on Council’s intent, which was clearly for CPAs to remain professionally competent. It would be counterproductive to limit recognized learning and not to utilize new ideas, approaches, and technology developed since 1971.
States’ Jurisdiction
Like almost all aspects of accounting regulation, CPE requirements are determined by individual state boards of accountancy. The significant diversity among requirements can make practicing across state lines difficult: A CPA who serves clients in two states would have to meet two sets of CPE requirements to be licensed in both jurisdictions ((See the Sidebar for a sampling of CPE requirements). The diversity among the states, one of the driving factors behind the UAA’s substantial equivalency provision, makes a unified accounting profession much more difficult to attain.
Furthermore, technology is quickly blurring traditional geographic boundaries. With a few strokes on a keyboard or clicks of a mouse, CPAs can “work” virtually anywhere in the world. How will regulators respond to technology that can render the CPA’s physical location a moot issue?
Current Movements in CPE
The AICPA’s Special Committee on CPE Standards and its counterpart committee at the National Association of State Boards of Accountancy (NASBA) have issued an exposure draft (ED) proposing significant changes in CPE standards. The proposed standards, which can be downloaded from the AICPA’s website (www.aicpa.org), were available for exposure and comment through August 1, 2000. Final authority for approving the standards rests with the AICPA and NASBA boards.
The proposed standards use language similar to that employed by AICPA Council in 1971: “An explosion of relevant knowledge, a changing and expanding nature, and increasing complexity characterize the profession of accountancy” (paragraph 100.02). They reiterate the importance of CPAs continuously maintaining and enhancing their knowledge, skills, and ability to maintain public confidence. Specifically, the preamble notes that “the continuing development of professional competence involves a program of lifelong educational activities” (paragraph 200.03).
Traditionally, CPE measures have been input based, meaning that participants are awarded credit for attending a requisite number of session hours. Credit is granted for attendance, regardless of whether any learning takes place. While this model may have served its initial purpose, it is inconsistent with the core value of lifelong learning expressed in the CPA Vision. The proposed standards suggest that the “[s]election of learning activities should be a thoughtful, reflective process addressing the individual CPA’s current work and future work plans, current knowledge and skills level, and desired or needed additional competencies to meet future opportunities [or] professional responsibilities” (paragraph 200.04).
Recommendations
In today’s frenzied workplace, it is easy to view CPE as a necessary evil; however, it is doubtful that most CPAs would dispute the importance of maintaining the skills and knowledge necessary to perform their jobs. The ED addresses this potential conflict by noting that “CPE standards should facilitate the learning process” (paragraph 100.04).
A similar view is expressed by Nita Clyde, chair of the AICPA Special Committee on CPE Standards: “The proposed standards are an attempt to recognize the fact that CPAs learn in different ways.”
The proposed standards begin with the suggestion that each CPA develop a learning plan. Such a plan could consist of the following steps:
The proposed standards move beyond the approach inherent in current CPE standards and recommend that individuals receive credit in two categories: sponsored learning activities and self-directed learning activities.
Sponsored learning activities. Sponsored learning encompasses traditional CPE activities such as seminars and conferences, workshops, and self-study courses. The proposed standards continue the current recommendation that individuals teaching courses for the first time be awarded three times the recommended credit (e.g., 24 hours for an 8-hour course: 16 for preparation, 8 for presentation). Sponsored learning activities clearly have their place in a learning environment. Traditional lecture methods are particularly efficient for sharing technical information in relatively short periods of time, presenting material too complicated for participants to understand on their own, quickly conveying information that would take participants longer to find on their own, and raising interest in a subject (“Energizing Your Teaching: A View from Deep in the Trenches,” Issues in Accounting Education, May 1999).
Self-directed learning activities. This is a new CPE category. Self-directed learning activities should follow from learning objectives based on self-assessments of learning needs. The learning activities should match a CPA’s existing levels of knowledge, skills, and abilities. CPAs will also be required to self-assess the impact of these activities on professional competency.
Consistent with the notion that different people have different learning styles, knowledge can be attained using a variety of approaches. The proposed standards list the following activities as acceptable forms of self-directed learning:
Concerns
If the proposed CPE changes are approved and enacted by state boards, most CPAs will probably opt for a mix of sponsored and self-directed learning activities. Both kinds of activities possess advantages and raise concerns. As noted earlier, a major concern with traditional CPE is that only inputs are measured: There is no requisite evidence that learning has taken place. Participants actively engaged in a seminar receive the same credit as those that idly sit in the room where the instructor is speaking.
In the current CPE structure, a disconnect frequently exists between classes attended and skills or knowledge that would benefit the CPA’s area of practice specialty. CPAs can be driven to register for classes on the basis of convenience rather than professional development. Of course, tax practitioners can benefit from exposure to new FASB pronouncements—if broadening one’s range of professional knowledge rather than lack of a convenient CPE alternative is the motivation.
Although the self-directed approach is conceptually appealing, it is not without its potential pitfalls. Of particular concern is the measurement issue. While it is easy, though arguably unreliable, to measure input, there are few available standards for measuring outcomes. What is the appropriate metric? How will self-directed learning be reported and verified?
The proposed standards suggest the use of learning logs or self-designed portfolios to document that learning activities have been completed. CPAs could compare the amount of time devoted to completing an activity to the time that they believe it should have taken, then claim CPE credit accordingly. The standards further suggest that CPE credit should be measured by learning outcomes. The ED offers the following examples of learning outcomes that could be used as evidence that CPAs have maintained or increased their professional competence:
The proposed standards limit the number of hours that can be earned in this category unless the CPA engages a program reviewer. The program review process would be similar to peer review. Specifically, no more than half of an individual’s CPE requirements could be satisfied by self-directed programs without a program reviewer. The ED notes that program reviewers would possess training and experience in areas such as professional education, human resources, or the functional practice of accountancy (paragraph 200.41).
Focus on Competency
Under the Vision, CPAs are increasingly expected to have more and different types of knowledge. The process must begin at the collegiate level in order for entry-level accountants to be prepared for the evolving needs of the profession. An AICPA task force has developed the Core Competency Framework for Entry into the Accounting Profession, endorsed by the AICPA board and Council, to identify and define requisite competencies needed for all individuals entering the profession, regardless of career path. The framework provides the foundation for lifelong learning. Consistent with the proposed changes in CPE standards, specialized skills will be built upon the competencies identified in the framework.
After beginning their professional career, accountants have access to numerous professional competency models; most focus on developing specialized technical knowledge for specific practice areas. Some competency models (e.g., the AICPA’s New Finance Model, www.cpatoolbox.org) have self-assessment components that allow individual CPAs to determine specific areas where additional skills are needed. These models mesh well with the proposed CPE rules, which allow CPAs to identify the skills and competencies needed for their professional growth and choose the best avenue to achieve them.
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