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Are CPAs laggards when it comes to taking their courses for receiving CPE credits? Suppose you took a CPE session and failed to get credit for it? Who had the bright idea of creating CPE sessions in the first place?

Do these boggling questions keep you up at night? You can stop counting sheep! CPA Insider™ recently chatted with David Tolson, CPA, director, CPE Product Development at the AICPA and Carla Blake, CPA, compliance manager — sponsor services, at the National Association of State Boards of Accountancy (NASBA) to find out all the answers.

For those who are new to the industry, can you tell us why it is necessary to take CPE credits?

Carla Blake (NASBA): As a way to enhance the professional competency of their license holders and to assure the public that CPAs are competent, many state accountancy board jurisdictions mandate a certain number of continuing professional education credits. In order to renew their CPA license, the CPA must demonstrate to the accountancy board that they have completed all of the mandated CPE credits.

David Tolson (AICPA): To clarify, you don't actually take CPE credits. CPAs take a training course and receive CPE credits for that course. As Carla said, CPAs are typically required by their respective state boards of accountancy to receive a certain number of credits per year or at least over a two- or three-year period.

Are all CPE credits accepted nationwide?

Tolson: Acceptance of CPE credits is up to each state board of accountancy and they have different rules specifying what type of credits they will accept.

Blake: NASBA CPE credits are accepted by state accountancy boards who have accepted the AICPA/NASBA Statement of Standards for Continuing Professional Education Programs (Standards). There are currently 48 accountancy boards who accept National Registry and/or Quality Assurance Service credits. However, as David mentioned, each state may place additional conditions on the acceptance of such credits.

When should CPE credits be taken?

Tolson: Credits should be taken when the CPA perceives a need for the training, but in any event before the state board deadline.

Blake: The Standards place responsibility upon the individual CPA to know their CPA license renewal date and the CPE rules for their jurisdiction. The license renewal date and CPE requirements of the state accountancy boards vary. In general, state CPE requirements are divided between non-technical and technical CPE.

What is the minimum number of CPE credits CPAs must take each calendar year? Is there an annual cap?

Tolson: Minimum varies by state; I believe it is 20 in Texas. Not sure if there is an annual cap. In Texas, our credits carry forward to some extent.

Blake: State boards typically establish caps on certain subject areas and delivery methods such as self-study or independent study. NASBA offers CPEmarket as a reference tool for comparing state accountancy board CPE requirements. At this Web site, a CPA can review a snapshot of the state accountancy board CPE requirements and directly link to the state Web site.

Is 40 hours still enough considering all the changes taking place?

Tolson: Many larger firms indicate the complexity of change coupled with additional GAO (Government Accountability Office) requirements means CPAs need 80 plus hours per year.

Blake: State accountancy boards would need to make an individual determination as to the appropriate amount of CPE credits in order to obtain CPA license renewal. This determination would need to be based on research into the CPE needs of each state and balanced with the protection of the public at large.

Relative to other professionals, do CPAs tend to be last-minute CPE takers or do they spread out their courses evenly over the course of the year?

Tolson: Depends. Some wait till the last minute, but many will wait until the busy season is over and work on training over a three-to-four month time frame.

Blake: NASBA has not surveyed CPAs regarding their time frames to complete CPE courses. NASBA occasionally hears from state accountancy board CPE auditors that it seems as though there is a significant number that wait towards the end of a reporting period to take CPE. While NASBA does review information regarding non-accounting continuing professional education credits, NASBA has not conducted a comparison survey in this area.

How does CPE (for accountants) differ from continuing education required of other professionals?

Tolson: Not sure, but I've heard our rules are more stringent.

Blake: The CPE requirements for accountants do not differ from those required of other professions. The Standards surrounding CPE were based on educational research and focus on establishing quality course development, presentation and delivery for each CPE sponsor regardless of size or area of expertise.

This is the same approach to the standards used by the American Psychological Association, American Medical Association and International Association for Continuing Professional Education (a multi-discipline association). There are two key differences from other organizations. The first is the CPE calculation is based on a 50-minute hour compared to a 60-minute hour for continuing legal education and a learning unit hour (contact hour) for the architect and engineering professions. Additionally, there are stronger course development and reporting requirements associated with CPE for accountants compared to a few other professions.

What are some of the hot topic CPE areas that CPAs should consider taking?

Tolson: I would suggest the following:

• Accounting: IFRS, FASB Codification Research Training, FIN 48, accounting for business combinations and fair value accounting.
• Audit: Risk Assessment Standards, internal controls, forensics/fraud, SAS 112 on Internal Controls Communications, Yellow Book Auditing especially focusing on audit deficiency areas, peer reviews, fair value auditing.
• Tax: basis/distributions for pass through entities, Form 990, international taxation and sales and use tax.

One other hot topic CPAs should consider is XBRL. We do have a course coming out in that area.

Blake: I agree with David. Many of today's hot topics currently deal with detecting and preventing fraud. There is also a high interest in state-specific ethics programs.

With IFRS coming to the fore, what CPE courses would you suggest young CPAs or experienced CPAs take to make themselves more marketable?

Tolson: Comparison of U.S GAAP and IFRS (one day), IFRS Standards (two days). AICPA has courses in both these areas.

Many recruiters and industry experts note that there has been a recent shift towards internal auditing and forensic accounting. What CPE credits would you suggest a budding CPA take in these niche areas?

Tolson: We don't focus per se on internal auditing; training in this area is largely provided by the IIA (Institute of Internal Auditors). We do have a half dozen or so courses that focus on fraud/forensics accounting.

Sukanya Mitra is Managing Editor of the AICPA Insider™ e-newsletter group.