NASBA Releases Proposed Changes to CPE Standards

Chris Gaetano
Published Date:
Feb 15, 2017
FAE Conference

The National Association of State Boards of Accountancy (NASBA) released an exposure draft detailing proposed new standards on continuing professional education (CPE), changes that include differentiating between technical and non-technical materials, and accounting for new blended learning and nano-learning models. 

The exposure draft is different than the Statement on Standards for Continuing Professional Education which was formally approved last year, which focused mainly on CPE providers. The exposure draft is concerned mostly with how practitioners get and maintain their licenses, and would provided as a set of rules that prescribe baseline standards for use by Boards of Accountancy in state rules and law as part of their Model Rules. While the draft was released just yesterday, the NASBA formally approved it for exposure at the beginning of January. 

The first set of proposed changes is several additions to Article 3 of the Model Rules, which concerns definitions. The exposure draft proposes definitions for Continuing Professional Education, CPE reporting period, Technical committee, and Subject matter expert, all of which are not in the current Model Rules.

Also included as a proposed change under this section is the differentiation between "Technical fields of study" and "Non-technical fields of study." A technical field of study is a technical subject contributing to the competence of a CPA in the the profession of accountancy and that directly relate to the CPA's field of business, some examples of which include auditing, business law, economics, taxes or regulatory ethics. By contrast, a non-technical field of study are those areas that contribute to the competence of a CPA in areas indirectly related to their field of business, such as business management and organization, communications and marketing, computer software and applications or personal development. 

The exposure draft will require that at least 50 percent of someone's CPE credits per reporting period be drawn from technical fields of study. It also proposes that licensure renewal require the Completion of no fewer than 40 credits of qualified CPE, including an average of 2 credits of qualifying ethics CPE for each annual period included in the CPE reporting period, and the completion of a minimum of 20 credits of qualiftying CPE during each annual period included in the CPE reporting period. 

This is in contrast with the current UAA, which says that someone seeking to renew their license needs to complete 120 hours of CPE, including four hours of ethics, during a three-year period, with a minimum of 20 credits completed per year. 

However, it is similar to regulations already existing in New York state. The NY State Board of Accountancy requires the completion of a minimum of 40 hours of CPE per calendar year in accounting, attest, auditing, taxation, advisory services, specialized knowledge and applications related to specialized industries, and such other areas appropriately related to the practice of accounting as may be acceptable to the Department; or a minimum of 24 hours per calendar year of concentrated education in auditing, accounting or taxation. 

New York further requires that any licensee who supervises attest or compilation services or signs or authorizes someone to sign the accountant's report on financial statements on behalf of a firm must complete at least 40  hours of continuing education in audit, accounting, and/or attest during the three years immediately prior to the performance of such services. These contact hours may be counted toward the annual contact hour requirement in the calendar year that they are completed.

In contrast to the proposal, New York state requires 4 hours of professional ethics CPE during the prior three-year calendar period. 

The exposure draft also proposes changes for reinstating someone's license. While the current UAA says that someone whose certificate has lapsed needs to complete no less than 120 hours of CPE during a three-year period as well as take a program designed to demonstrate the currency of the licensee's competencies, the proposal requires that person to complete "qualifying CPE that averages no fewer than 40 credits of qualified CPE for each annual period included in the CPE reporting period, not to exceed 120 credits," on top of completing the aforementioned program. 

A new addition, though, is that if someone's certificate has been lapsed, suspended or inactive for five or more years, the board has the discretion to determine the number and type of CPE credits required for reinstatement. 

In New York, right now, re-registering from an inactive status requires 24 hours of CPE in a 12 month period prior to the return to public practice and, following re-entry into practice, the completion of a pro-rata portion of the mandated yearly requirement on the basis of one-half of the number of hours required under the option selected for each full six-month period from the date of reentry to the end of the current reporting year.

The proposal also goes over what activities qualify for CPE credit in more specificity than the current UAA. Current rules say that a program qualifies as acceptable if it is a "program of learning which contributes to the growth in the professional knowledge and professional competence of a licensee. The program must meet the minimum standards of quality of development, presentation, measurement, and reporting of credits set forth in the Statement on Standards for Continuing Professional Education Programs jointly approved by NASBA and AICPA or such other standards acceptable to the Board." 

The proposal goes into more detail over what exactly is meant by a "learning activity." It can include, but is not limited to, group programs, self-study programs, blended learning programs, or nano-learning programs. It also counts taking a non-basic college or university course covering a qualified subject area, authorship of published articles, books and other publications relevant to maintaining professional competence, participating and working on a technical committee of an international, national or state professional association, council or member organization, or of a governmental entity that supports professional services or industries that require unique and specific knowledge in accounting or tax compliance. 

People can also qualify for credit if they are an instructor or developer of any of the above areas, save working on a technical committee. 

In a later section, the exposure draft notes that credits earned from serving on technical committees or governmental entities can make up no more than 25 percent of someone's total CPE allotment. It also says that credits earned from authorship, technical review, or instruction/program development each can make up no more than 50 percent of someone's CPE total. 

The proposal intersects several times with New York's regulations on what's an appropriate program. Like the proposal, New York allows credit for academic courses falling within recognized subject areas, preparing and teaching courses, and authoring books or academic articles. 

The exposure draft also makes it clear who counts as a qualified CPE provider: The AICPA and state CPA societies; Universities or colleges accredited at the time the CPE program was delivered by virtue of accreditation by an organization recognized by the Council for Higher Education Accreditation as a specialized, professional, or regional accrediting organization; Persons, firms, associations, corporations or other groups that are members of NASBA’s National Registry of CPE Sponsors; and Persons, firms, associations, corporations or other groups that are recognized by
the Board. 

New York's regulations don't focus on who specifically can be a sponsor, but, rather, on how someone becomes a sponsor. Persons or organizations wanting to offer a recognized CPE program needs to register with the state, and submit evidence the sponsor has the will and ability to maintain the programs, such as making sure they're qualified to give the program and that their materials are technically accurate. 

The NASBA is accepting comments on the exposure draft until April 17, 2017. Feedback should be directed to Louise Haberman at

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