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CPE Ethics Requirement

There has been a lot of confusion over New York state's ethics continuing professional education (CPE) requirement. The New York State Society of CPAs has received a number of telephone calls from members inquiring about the necessity of completing the ethics CPE requirement by the end of the current CPE reporting year, which is Aug. 31, 2002.

No one has to complete the ethics CPE requirement by Aug. 31, 2002. The requirement is the completion of four hours in professional ethics during the CPA's first triennial registration period that begins on or after Sept. 1, 2001.

Those registration periods will vary greatly and usually are based on the CPA's birthday. Any CPA who last registered prior to Sept. 1, 2001, does not have to complete the ethics requirement until his or her next registration period. Anyone who has registered since Sept. 1, 2001, has the full three-year period to complete the ethics CPE. The earliest that any New York state licensed CPA must have the CPE completed is the reporting period ending Aug. 31, 2004. Be aware that coursework completed prior to an individual CPA's effective triennial registration period cannot be applied toward the requirement.

Members who do not know their triennial registration period can look it up on the New York State Education Department, Office of the Professions' website at www.op.nysed.gov/opsearches.htm.

Individuals who have elected to complete a minimum of 24 hours of CPE per year in the areas of auditing, accounting or taxation instead of 40 hours of general CPE should be aware that the four hours of ethics must be in the subject areas they have chosen for the rest of their coursework. Therefore, for example, those who are doing 24 hours of CPE per year in the area of taxation must complete four hours of CPE in taxation ethics over three years.

The requirement of four hours of ethics CPE is not in addition to the 24 or 40 hours already required; it is included in the 24 or 40 hours.

The Foundation for Accounting Education has been running ethics courses around the state and will continue to do so in the future. Check the Society's website at www.nysscpa.org for details.

The applicable regulation is as follows:

Regulations of the Commissioner

Part 70.6-Continuing Education

(b)(2) For each triennial registration period beginning on or after Sept. 1, 2001, an applicant for registration shall be required to complete as part of the contact hour requirement…at least four contact hours in professional ethics during the triennial registration period, except that an applicant who has completed the entire contact hour requirement for the triennial registration period by meeting the requirement in subparagraph (1)(ii)* of this subdivision in each year of the triennial registration period shall be required to complete at least four contact hours in professional ethics in one of the three subject areas in which study was completed pursuant to subparagraph (1)(ii)* of this subdivision.

*(b) Minimum continuing education requirement. (1) During each year of the triennial registration period, an applicant for registration shall have the option of: (ii) completing a minimum of 24 contact hours of acceptable formal continuing education concentrated in any one of the following three subject areas: auditing, accounting, or taxation.