State Education Department Proposes Changes to Annual Professional Ethics CPE Requirement

By:
Ruth Singleton
Published Date:
Aug 8, 2017

FAE Conference

Beginning in 2018, New York-licensed CPAs will be required to earn six CPE credits in ethics every three years, up from the current four-credit requirement, if the New York State Board of Regents approves the measure this fall.

Once the requirement takes effect, CPAs would have to earn those six credits at a rate of two ethics credits a year; however, they would be able to take a wider variety of ethics courses to fulfill four of those six credits, including behavioral ethics and other non-New York-focused courses.

The change comes after a recent state board CPE audit found that half of all New York-licensed CPAs failed to meet their professional ethics CPE requirement in 2016. The state board pointed to multiple reasons for the failure, but they all seemed to stem from confusion surrounding the type of ethics course the state requires and when CPAs need to take them.

Priscilla “Penny” Z. Wightman, chair of the board’s Education Committee, believes the streamlined standard will increase compliance.

“Two hours every year will make CPE easier to track,” Wightman said after a recent state board meeting. “We were a little cautious about adding hours. But just saving the time in tracking the credits is worth paying for two more credits.”

Under the new requirements, New York-licensed CPAs would have to take two credits of professional ethics per year—adding up to six credits every three years, as opposed to four under the current requirements—and a minimum of two credits every three years would have to focus on New York-specific ethics. But CPAs would also have significantly more flexibility in satisfying the other four credits every three years.

While two credits every three years would need to be in New York state-specific ethics, the other four credits can be satisfied in a variety of ways. Those other credits could consist of regulatory, other state-specific and behavioral ethics from in-state or out-of-state sponsors, but no more than two credits could be in behavioral ethics in a three-year period. In tandem with the changes to the ethics CPE requirements, the board moved behavioral ethics from the advisory services subject area and added it to professional ethics. 

The two credits earned from New York-focused ethics courses would count toward a CPA’s 40-credit or concentrated 24-credit CPE requirement per calendar year.

Wightman said that committee members asked each other, “How can we make more sense with portability, the notion that CPAs are crossing boundaries?”

The committee’s goal, she said was to “make it something that’s not onerous to the practicing professionals. We looked to all the states and what the states require,” she said, and came up with requirements that made sense for New York CPAs.

“We’d like this to be as straightforward as possible and give folks choices,” she said. But committee members were also “concerned that CPAs be aware of the fact that [there are] changes every once in a while. They need to know what’s happening in New York.”

With regard to expanding options for ethics CPE beyond the New York requirements, Wightman said, “Everyone’s excited about mixing up what people can choose as the ethics topics.”

Wightman said she also wanted to emphasize “the notion that New York [ethics] is important in the time frame. She pointed out that “someone could elect to do all New York ethics.”

Wightman is hopeful that the CPE changes will boost the CPE compliance rate. “Hopefully this whole package will come out on the other side, and practitioners will understand what we’re trying to do to make these changes make more sense. I’m hopeful we as regulators can … evolve, and our responsibility is to help practitioners be the best they can be as well as to protect the public interest.”

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State Board now accepts digital analytics, IT courses as CPE

The New York State Board for Public Accountancy voted unanimously at its July 26 meeting to expand approved continuing education subject areas in New York state to include courses with a focus in digital technology. The State Education Department now accepts data analytics courses under the auditing CPE category and computer software and applications and information technology courses as valid advisory services CPE. The board will begin recognizing these approved courses immediately.

The board also voted to remove behavioral ethics courses from the advisory services category and include them under the professional ethics CPE category; however, that change needs to be approved by the New York State Board of Regents, which is expected to vote on the regulation change in the fall, in time for the 2018 CPE calendar year.

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