November 2000

SED Proposes Changes to CPE Regulations

On October 26, the Society and FAE submitted comments to the NY State Education Department on two proposed amendments to the Education Commissioner’s regulations. The first proposal would change the CPE rules to require that CPAs obtain at least four hours of ethics CPE every triennial registration cycle. The second alters the rule for self-study to permit “interactive” self-study to receive full credit. The Society and FAE supported both proposals.

The first proposed change would amend Commissioner’s regulation section 70.6(b), which sets out the requirements for CPA’s continuing education. Currently, the regulations do not require any ethics education of CPAs once licensed.

If finalized, CPAs would be required to have four hours of ethics CPE every three years. The proposal would require those CPAs who utilize the 24-hour, field-of-concentration CPE track to take ethics courses that are related to their field of concentration. In other words, a CPA taking 24 hours of tax would need to take tax ethics courses.

The Society’s and FAE’s comments were drafted by the Professional Ethics Committee and approved by both the Society’s Executive Committee and FAE’s Board of Trustees. While both the Society and FAE supported the ethics requirement, the comments did suggest that the proposal be broadened to permit those following the field-of-concentration track to take any professional ethics courses relating to the profession. The comments would also require CPE in “professional ethics” rather than ethics broadly.

The proposal is not without controversy. Last year, the Society's furtherance committee rejected the idea of a special ethics CPE requirement. In place of additional CPE, the furtherance committee proposed requiring that CPAs complete an ethics quiz, similar to the one used in Florida.

Former Society president and AICPA Chair Robert Israeloff, who is a member of the Society’s furtherance committee, said, “I think CPE requirements should be uniform throughout the country. It just doesn’t make any sense to have a unique CPE requirement requiring ethics New York.”

Professional Ethics Committee Chair Allen Fetterman noted, “The need to stay abreast of the profession’s ethics rules doesn’t end with the CPA examination. The profession’s ethics rules and regulations have changed over the past decade and if the UAA becomes law, ethics rules will undergo significant further development. Formally recognizing the need for ongoing ethics training is important.”

Self study current regulations differentiate between self-study continuing education and other forms of continuing education by permitting self-study to count for only one-half the credit that other educational approaches (such as seminars or conferences) do. In other words an 8-hour self-study course currently only receives 4 hours of credit for New York licensing purposes. The proposed change to Commissioner’s regulation section 70.6(d) would differentiate between self-study that requires interaction between the student and the self-study source. Interactive self-study would qualify for full credit, while non-interactive self-study would continue to receive only half credit. The Society and FAE strongly favored this change.