PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 08-13-024.
Title of Rule and Other Identifying Information: WAC 4-25-830 What are the CPE requirements for individuals? and 4-25-831 What are the program standards for CPE?
Hearing Location(s): The Doubletree Hotel Seattle Airport, 18740 International Boulevard, Cascade 12 Room, SeaTac, WA, on July 28, 2009, at 9:00 a.m.
Date of Intended Adoption: July 28, 2009.
Submit Written Comments to: Richard C. Sweeney, Executive Director, P.O. Box 9131, Olympia, WA 98507-9131, e-mail cheyls@cpaboard.wa.gov, fax (360) 664-9190, by July 21, 2009.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by July 21, 2009, TTY (800) 833-6384 or (360) 664-9194.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules:
| • | Subsections (1)(a) and (7): To clarify continuing professional education (CPE) requirements for individuals. CPE taken prior to initial licensure cannot be used for licensing or renewal purposes. This proposal aligns the rule with WAC 4-25-831(7). |
| • | Subsection (8): To require CPE extension requests be submitted no later than December 31 of the year preceding the year of renewal. |
| • | Subsection (8): To clarify that credit for self-study CPE is allowed for initial licensure as well as for renewal. |
| • | Subsection (12): To correct a reference to WAC 4-25-830(9). Subsection (9) no longer exists. The correct reference should be to WAC 4-25-830(8). |
| • | Subsection (12): To align the language with WAC 4-25-830 that refers to "extensions" and with the current practice for imposing sanctions. |
Reasons Supporting Proposal:
| • | Subsections (1)(a) and (7): WAC 4-25-830(7) requires individuals applying for a Washington state certified public accountant (CPA) license via reciprocity to complete CPE (one hundred twenty hours) within the thirty-six month period immediately preceding the date the application is received. WAC 4-25-831(7) states "CPE credit is allowable only for those programs taken after the issuance of the CPA license." The board intends WAC 4-25-831(7) to apply to all CPAs, including those requesting a license via reciprocity and proposes changes to ensure WAC 4-25-830 (1)(a) and (7) are clear. |
| • | Subsection (8): CPAs request additional time to complete their CPE requirements (extensions) well after the individual hardship caused the need, sometimes up to a year later. The board believes if a situation causes the need for additional time, the request should closely follow the need. The board proposes language to clarify that the board will consider requests for CPE extensions by the end of their CPE reporting periods. |
| • | Subsection (8): This subsection currently implies that a CPA may only use self-study CPE for renewal. However, a certificateholder converting to a license, an out-of-state licensee applying for a Washington license, or a person applying to reinstate a license may also use self-study CPE. The board proposes language to clarify this potential ambiguity. This revised language correlates to the language in Board Policy 2000-1 Continuing Professional Education under Acceptable Evidence Supporting Eligibility for CPE. |
| • | Subsection (12): |
| ▪ | This subsection currently refers to subsection (9) of WAC 4-25-830. In 2001, the board removed WAC 4-25-830(8) (the twenty hour per year requirement) and renumbered WAC 4-25-830 accordingly. The board proposes correcting the reference for accuracy. |
| ▪ | WAC 4-25-830(8) refers to "CPE extension request." The board proposes adding the word "extension" to align the two rules. |
| ▪ | When imposing sanctions, the board may allow a CPA to carry-back CPE hours to a prior reporting period. The board proposes aligning the language with current practice for clarity. |
Statutory Authority for Adoption: RCW 18.04.055(7), 18.04.215(5).
Statute Being Implemented: RCW 18.04.055(7), 18.04.215(5).
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Washington state board of accountancy, governmental.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Richard C. Sweeney, P.O. Box 9131, Olympia, WA 98507-9131, (360) 586-0163.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rule will not have more than minor economic impact on business.
A cost-benefit analysis is not required under RCW 34.05.328. The board of accountancy is not one of the agencies required to submit to the requirements of RCW 34.05.328.
May 2009
Richard C. Sweeney
Executive Director
OTS-2381.1
AMENDATORY SECTION(Amending WSR 08-18-016, filed 8/25/08,
effective 9/25/08)
WAC 4-25-830
What are the CPE requirements for
individuals?
(1) The following CPE is required for
individuals during the three calendar year period prior to
renewal:
(a) An individual licensed to practice in this state must
complete a total of 120 CPE ((credit)) hours ((which is
limited to 24 CPE credit hours in nontechnical subject areas
and must include)), including 4 CPE credit hours in an
approved Washington ethics and regulations course meeting the
requirements of subsection (3) of this section. The total 120
CPE hours requirement is limited to no more than 24 CPE credit
hours in nontechnical subject areas. All qualifying CPE hours
must be taken after the date your initial CPA license was
issued;
(b) A CPA-Inactive certificateholder or a resident nonlicensee firm owner must complete 4 CPE credit hours in ethics meeting the requirements of subsection (3) of this section; and
(c) Individuals holding practice privileges are exempt from the CPE requirements of this section.
(2) CPE requirements for renewal of a license that was issued less than three years before the end of a CPA-Inactive certificate renewal cycle: When you convert your status from a CPA-Inactive certificateholder to a licensee, your CPE reporting period (the three calendar year period prior to renewal) and renewal cycle will remain the same. The CPE requirements for renewal are as follows:
(a) If your license was issued during the first calendar year of your CPE reporting period, you must have completed 80 CPE credit hours which is limited to 16 CPE credit hours in nontechnical subject areas and must include 4 CPE credit hours in ethics meeting the requirements of subsection (3) of this section.
(b) If your license was issued during the second calendar year of your CPE reporting period, you must have completed 40 CPE credit hours which is limited to 8 CPE credit hours in nontechnical subject areas and must include 4 CPE credit hours in ethics meeting the requirements of subsection (3) of this section.
(c) If your license was issued during the third calendar year of your CPE reporting period, you must have completed 4 CPE credit hours in ethics meeting the requirements of subsection (3) of this section.
(3) Ethics and regulations applicable to practice in Washington state: During each CPE reporting period all individuals licensed in this state, individual CPA-Inactive certificateholders in this state, and resident nonlicensee firm owners are required to complete 4 CPE credit hours in approved ethics and regulations with specific application to the practice of public accounting in Washington state. In order to be approved by the board, the CPE sponsor or instructor must submit documentation associated with the ethics and regulations CPE to the board for approval and the sponsor or instructor must obtain written approval from the board. The ethics and regulations CPE must cover all of the following topics, and the ethics and regulations CPE must substantially address these topics:
(a) Chapter 18.04 RCW and chapter 4-25 WAC. The CPE must include general level information on the Public Accountancy Act, the board's rules, policies, and the rule-making process.
(b) WAC 4-25-521 How can I contact the board?
(c) WAC 4-25-550 Do I need to notify the board if I change my address?
(d) WAC 4-25-551 Must I respond to inquiries from the board?
(e) WAC 4-25-600 Series -- Ethics and prohibited practices. The CPE must include detailed information on each rule and all related board policies.
(f) WAC 4-25-800 Series -- Continuing competency. The CPE must include detailed information on each rule and all related board policies.
(g) WAC 4-25-910 What are the bases for the board to impose discipline?
(h) AICPA Code of Conduct: The CPE must include general level information on the AICPA Code of Conduct.
(i) Variances or key differences between Washington state law (chapter 18.04 RCW and chapter 4-25 WAC) and the AICPA Code of Conduct.
(j) Other topics or information as defined by board policy.
(4) CPE requirements to renew a retired license or CPA-Inactive certificate:
(a) In order to renew a retired license you must meet the CPE requirements of subsection (1)(a) of this section within the thirty-six month period immediately preceding the date the renewal application is received by the board; however, the four CPE hours in ethics meeting the requirements of subsection (3) of this section must be completed within the six-month period immediately preceding the date your renewal application was received by the board.
(b) In order to renew a retired CPA-Inactive certificate, you must meet the CPE requirements of subsection (1)(b) of this section within the six-month period immediately preceding the date your renewal application was received by the board.
(5) CPE requirements for a CPA-Inactive certificateholder to either qualify to apply for a license or return to their previously held status as a licensee: If you hold a valid CPA-Inactive certificate and you wish to apply for a license or you want to return to your previously held status as a licensee, you must meet the CPE requirements of subsection (1)(a) of this section within the thirty-six month period immediately preceding the date your application is received by the board.
(6) Reinstatement of a lapsed, suspended, or revoked license, certificate, or registration as resident nonlicensee firm owner:
(a) If you seek to reinstate a lapsed, suspended, or revoked license, you must satisfy the requirements of subsection (1)(a) of this section within the thirty-six month period immediately preceding the date the application for reinstatement was received by the board; however, the four CPE hours in ethics meeting the requirements of subsection (3) of this section must be completed within the six-month period immediately preceding the date your application for reinstatement was received by the board.
(b) If you seek to reinstate a lapsed, suspended, or revoked CPA-Inactive certificate, or registration as a resident nonlicensee firm owner, you must satisfy the requirements of subsection (1)(b) of this section within the six-month period immediately preceding the date your application for reinstatement was received by the board.
(7) Reciprocity: If you are applying for an initial Washington state CPA license under the reciprocity provisions of the act, you must satisfy the requirements in subsection (1)(a) of this section, after you were licensed as a CPA and within the thirty-six month period immediately preceding the date your application was received by the board. For purposes of initial licensure, you do not need to satisfy the ethics requirements of subsection (1)(a) of this section. Thereafter, in order to renew your Washington state license, you must comply with all the renewal requirements in subsection (1)(a) of this section.
(8) CPE extension request: In order to renew your license, CPA-Inactive certificate, or registration as a resident nonlicensee firm owner, you must complete the required CPE by the end of the CPE reporting period preceding your renewal unless you can demonstrate your failure to meet the CPE requirements was due to reasonable cause. The board may provide limited extensions to the CPE requirements for reasons of individual hardship including, but not limited to, financial hardship, critical illness, or active military deployment. You must request such an extension in writing by the end of the CPE reporting period. The request must include justification for the request and identify the specific CPE you plan to obtain to correct your CPE deficiency.
A form useful for this purpose is available from the board's web site or will be provided to you upon request.
[Statutory Authority: RCW 18.04.055(7), 18.04.215(5). 08-18-016, § 4-25-830, filed 8/25/08, effective 9/25/08; 05-01-137, § 4-25-830, filed 12/16/04, effective 1/31/05; 02-04-064, § 4-25-830, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.04.055(7), 18.04.104(8), 18.04.215(4). 00-11-077, § 4-25-830, filed 5/15/00, effective 6/30/00. Statutory Authority: RCW 18.04.055(7), 18.04.215(4) and 18.04.105(8). 99-23-045, § 4-25-830, filed 11/15/99, effective 1/1/00.]
• The program is at least fifty minutes in length;
• Attendance is recorded;
• Participants sign in to confirm attendance and, if the program is greater than four credit hours, participants sign out during the last hour of the program; and
• Attendees are provided a certificate of completion.
(2) Undergraduate and graduate courses: A graduate or undergraduate course qualifies for CPE credit if it meets the standards in subsections (1) and (5) of this section. For both undergraduate and graduate courses one quarter credit equals 10 CPE credit hours and one semester credit equals 15 CPE credit hours.
(3) Committee meetings: Generally, CPE credit is not allowed for attending committee meetings. A meeting qualifies for CPE credit only if it meets the standards in subsections (1) and (5) of this section.
(4) CPE credit hours for volunteer service on the board and its committees and volunteer service on board approved peer review committees: You may receive up to thirty-two hours of technical CPE credit each calendar year for actual time spent on board, board committee, or board approved peer review committee activities.
(5) Subject areas: Programs dealing with the following general subject areas are acceptable so long as they meet the standards in subsection (1) of this section:
(a) Technical subjects include:
(i) Auditing standards or procedures;
(ii) Compilation and review of financial statements;
(iii) Financial statement preparation and disclosures;
(iv) Attestation standards and procedures;
(v) Projection and forecast standards or procedures;
(vi) Accounting and auditing;
(vii) Management advisory services;
(viii) Personal financial planning;
(ix) Taxation;
(x) Management information services;
(xi) Budgeting and cost analysis;
(xii) Asset management;
(xiii) Professional ethics (other than those programs used to satisfy the requirements of WAC 4-25-830(3));
(xiv) Specialized areas of industry;
(xv) Human resource management;
(xvi) Economics;
(xvii) Business law;
(xviii) Mathematics, statistics, and quantitative applications in business;
(xix) Business management and organization;
(xx) General computer skills, computer software training, information technology planning and management; and
(xxi) Negotiation or dispute resolution courses;
(b) Nontechnical subjects include:
(i) Communication skills;
(ii) Interpersonal management skills;
(iii) Leadership and personal development skills;
(iv) Client and public relations;
(v) Practice development;
(vi) Motivational and behavioral courses; and
(vii) Speed reading and memory building.
Subjects other than those listed above may be acceptable provided you can demonstrate they contribute to your professional competence. You are solely responsible for demonstrating that a particular program is acceptable.
(6) Group programs: You may claim CPE credit for group programs such as the following so long as the program meets the standards in subsections (1) and (5) of this section:
(a) Professional education and development programs of national, state, and local accounting organizations;
(b) Technical sessions at meetings of national, state, and local accounting organizations and their chapters;
(c) Formal in-firm education programs;
(d) Programs of other organizations (accounting, industrial, professional, etc.);
(e) Dinner, luncheon, and breakfast meetings which are structured as formal educational programs;
(f) Firm meetings for staff and/or management groups structured as formal education programs. Portions of such meetings devoted to communication and application of general professional policy or procedure may qualify, but portions devoted to firm administrative, financial and operating matters generally will not qualify.
(7) CPE credit: CPE credit is allowable only for those programs taken after the issuance of the CPA license. Credit is not allowed for programs taken to prepare an applicant for the ethics examination as a requirement for initial licensure. CPE credit is given in half-hour increments only after the first full CPE credit hour has been earned. A minimum of fifty minutes constitutes one CPE credit hour and, after the first fifty-minute segment has been earned, twenty-five minutes constitutes one-half CPE credit hour. For example:
• Twenty-five minutes of continuous instruction counts as zero CPE credit hour;
• Fifty minutes of continuous instruction counts as one CPE credit hour; and
• Seventy-five minutes of continuous instruction counts as one and one-half CPE credit hours.
Attendees obtain CPE credit only for time spent in instruction; no credit is allowed for preparation time.
(8) Self-study programs: Credit for self-study programs
is allowed ((in the renewal period in which)) for reporting
purposes on the date you completed the program as established
by the evidence of completion provided by the program sponsor.
(a) Interactive self-study programs: The amount of credit allowed for interactive self-study is that which is recommended by the program sponsor on the basis of the average completion time under appropriate "field tests." In order to claim CPE credit for interactive self-study programs, you must obtain evidence of satisfactory completion of the course from the program sponsor.
(b) Noninteractive self-study programs: The amount of credit allowed for noninteractive self-study is one-half the average completion time as determined by the program sponsor on the basis of appropriate "field tests." To claim CPE credit for noninteractive self-study programs, you must obtain evidence of satisfactory completion of the course from the program sponsor.
(9) Instructor, discussion leader, or speaker: If you serve as an instructor, discussion leader or speaker at a program which meets the standards in subsections (1) and (5) of this section, the first time you present the program you may claim CPE credit for both preparation and presentation time. One hour of credit is allowed for each fifty minutes of instruction. Additionally, you may claim credit for actual preparation time up to two times the presentation hours. No credit is allowed for subsequent presentations. A maximum of seventy-two CPE credit hours are allowed for preparation and presentation during each CPE reporting period.
(10) Published articles, books: You may claim CPE credit for published articles and books, provided they contribute to your professional competence. Credit for preparation of such publications may be claimed on a self-declaration basis for up to thirty hours in a CPE reporting period. In exceptional circumstances, you may request additional credit by submitting the article(s) or book(s) to the board with an explanation of the circumstances that justify a greater credit. The amount of credit awarded for a given publication will be determined by the board.
(11) Carry-forward: CPE credit hours you complete during one period cannot be carried forward to the next period.
(12) Carry-back: As specified in WAC 4-25-830(((9)))
(8), CPE credit hours you complete during one period can be
carried back to the previous reporting period only after the
board has approved your extension request ((to carry back CPE
credit hours)) or has required the carry-back as part of
sanctions for failure to complete required CPE.
(13) Credential examination: You may not claim CPE credit for preparing for or taking a credential examination unless you complete a formal review course and receive a certificate of completion meeting the requirements of WAC 4-25-833. CPE credit may not be claimed for CPA examination review courses.
[Statutory Authority: RCW 18.04.055(7), 18.04.215(5). 05-01-137, § 4-25-831, filed 12/16/04, effective 1/31/05; 01-22-036, § 4-25-831, filed 10/30/01, effective 12/1/01. Statutory Authority: RCW 18.04.055 and 18.04.105(8). 99-23-046, § 4-25-831, filed 11/15/99, effective 1/1/00.]