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