Getting Smart About Continuing Professional Education
Time for Uniformity in Areas Other Than Just the CPA Exam

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MARCH 2008 - Certified public accounting is a profession comprised of individuals regulated and licensed by 54 licensing jurisdictions. The Uniform CPA Examination, administered by the National Association of State Boards of Accountancy (NASBA), is used by the regulatory bodies of all 54 licensing jurisdictions. Boards of accountancy use the exam as a prerequisite for the CPA certificate because it is the primary way to measure the competency of CPA candidates. Candidates who take the exam are tested on the following:

• Four and one-half hours of auditing and attestation;
• Four hours of financial accounting and reporting;
• Three hours of regulation; and
• Two and one-half hours of business environment and concepts.

Despite the profession’s agreement on the Uniform CPA Examination, licensing qualifications and other professional requirements vary significantly among the states. For example, states differ widely in their minimum education and experience requirements for licensure, standards for unprofessional conduct, interstate practice privileges, and disciplinary procedures and sanctions for violating professional standards.

The 54 jurisdictions also have varying requirements for continuing professional education (CPE) standards and ethics requirements to maintain the CPA license. Accounting professionals who attempt to satisfy CPE requirements in multiple states are often frustrated. Although some states’ requirements have similarities, substantial differences exist in the specific content of the requirements.

Nearly every jurisdiction requires an average of 40 hours of CPE per year for CPAs who perform attest functions. Some jurisdictions require 40 hours each year, others require 80 hours over a two-year period, and others require 120 hours over a three-year period. Some jurisdictions, such as New York, reduce the number of required hours if all CPE is taken in the same area of specialization. New York State introduced mandatory CPE requirements at the end of the 1980s. Originally, 40 hours of CPE were required. The New York State Education Department reexamined the implementation of the 40 hours of CPE during the first three-year registration cycle, 1987 to 1990. The review resulted in a change in the early 1990s, when CPAs in New York State were required to take 40 hours of general CPE or a 24-hour concentration of CPE in audit, accounting, or taxation each year.

Most jurisdictions have a minimum required number of hours in technical subjects or in accounting and auditing education, although one jurisdiction might classify a subject as technical while another jurisdiction might not. Some jurisdictions allow no credit for professional development or practice development courses, while most jurisdictions simply limit the number of hours granted for nontechnical courses.

When managing the CPE requirements of multiple states, CPAs must be mindful of many factors. They include: specific subject requirements, the number of hours required in specific periods, and the reporting year.

A Need for Consistency

The profession needs one set of professionally developed practice standards that can be the basis for regulation on a state, national, and international level. What it does not need is 54 jurisdictions setting separate regulations. The easiest way to reconcile the various jurisdictions is for every state to adopt identical requirements, possibly administered by an interstate compact, a contract between states that allows them to solve multistate, regional, and national problems through voluntary agreement.

If the purpose of CPE is to increase the professional competency of practitioners, the requirements should be the same for every jurisdiction. Rather than simply managing and reconciling varying standards across the country, CPAs could then focus on offering quality services, protecting the public they serve, and enhancing the stature of their profession. Uniform CPE requirements coupled with the Uniform CPA Examination would lead toward true mobility of the profession—
a basic necessity in the 21st century.

Louis Grumet
Publisher, The CPA Journal
Executive Director, NYSSCPA
lgrumet@nysscpa.org

©2009 The New York State Society of CPAs. Legal Notices