PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 98-24-056.
Title of Rule: New section WAC 4-25-830 What are the CPE requirements?
Purpose: To clearly prescribe the board's continuing professional education requirements.
Statutory Authority for Adoption: RCW 18.04.055(7), 18.04.215(4), 18.04.105(8).
Statute Being Implemented: RCW 18.04.055(7), 18.04.105(8), 18.04.215(4).
Summary: The new section in compliance with RCW 18.04.105(8) provides that a certified public accountant shall verify to the board completion of an accumulation of at least one hundred twenty hours of continuing professional education (CPE) during the preceding three-year period to maintain or reinstate a license and/or certificate. The rules establish within the one hundred twenty hours:
| • | A license in public practice must complete at least eight hours in the subject area of accounting and auditing during each year of the CPE reporting period in which the CPA was in public practice. |
| • | A licensee is limited to a maximum of twenty-four hours in nontechnical subject areas. |
| • | All licensees and certificate-holders are required to complete a four-hour course in professional ethics with specific application to the practice of public accounting in Washington state. |
| • | A minimum of twenty hours of CPE each calendar year. |
| • | Establishes provision for a reasonable cause exemption to the CPE requirements. |
| • | Provides direction to CPAs holding a certificate under the reasonable cause exemption and wanting to change status. |
| • | Requires CPAs applying for a Washington license and/or certificate by reciprocity to comply with the CPE requirements as outlined in this rule except for the four-hour ethics course. |
Reasons Supporting Proposal: (1) Clearly outlines the board's CPE requirements.
(2) RCW 18.04.105 and 18.04.215 were amended by the 1999 legislature to require the board to issue certificate and licenses on a three-year basis and require CPAs to complete at least one hundred twenty hours of CPE during the last three-year period. The board's existing rule conflicts with the new statute. The proposed changes would conform the current rule to the new statute.
(3) Responds to stakeholder requests to eliminate the accounting/auditing subject area requirement for certificate holders and licensees not in public practice.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, 210 East Union, Suite A, Olympia, (360) 664-9194.
Name of Proponent: Board of Accountancy, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: Using the clear rule writing technique that eliminates confusion, WAC 4-25-830 sets the continuing professional education (CPE) requirements for Washington CPAs. The goal of the new section is to: Promote clarity, ensure effective communication, ensure fairness in interpretation and application of the rule, and promote efficiencies through minimizing gray areas.
Proposal Changes the Following Existing Rules: The board is proposing to replace WAC 4-25-810 with 4-25-830. The new section changes the CPE requirement to one hundred twenty hours every three years to conform with revisions to RCW 18.04.105 and 18.04.215 by the 1999 legislature. Additionally, the new rule (1) requires a minimum of twenty hours of CPE every calendar year, (2) reduces the accounting/auditing subject area requirement for licensees in public practice from thirty-two hours every two years to eight hours each year in which the licensee was in public practice, (3) eliminates the accounting/auditing subject area requirement for licensees who were not in public practice and for certificate holders, (4) changes the ethics course requirement from a four-hour course every four years to a four-hour course every three years, and (5) clarifies that requests for exception to the CPE requirements due to reasonable cause (other than retirement or nonuse of the CPA title) must be in writing to the board.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The new section will have negligible economic impact on the accounting profession and business.
RCW 34.05.328 does not apply to this rule adoption. The Board of Accountancy is not one of the agencies required to submit to the requirements of RCW 34.05.328.
Hearing Location: Western Washington University, Viking Addition, Room 461, Bellingham, Washington, on July 29, 1999, at 1:30 p.m.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by July 22, 1999, TDD (800) 833-6384, or (360) 664-9194.
Submit Written Comments to: Dana M. McInturff, P.O. Box 9131, Olympia, WA 98507-9131, fax (360) 664-9190, by July 27, 1999.
Date of Intended Adoption: July 30, 1999.
June 11, 1999
Dana M. McInturff, CPA
Executive Director
by Cheryl M. Sexton
OTS-3159.1
NEW SECTION
WAC 4-25-830
What are the CPE requirements?
(1) For CPE reporting periods beginning January 1, 2000, or later, the following CPE is required during the three calendar year period prior to renewal:
Category |
Minimum CPE in Accounting and/or Auditing |
Maximum CPE Allowed in Nontechnical Subject Areas | Minimum CPE in Ethics Applicable to Practice in WA State | Total CPE |
| (a) A licensee in public practice during the 3-year calendar period prior to renewal. | 24 |
24 |
4 |
120 |
| (b) A licensee not in public practice during any portion of the 3-year calendar period prior to renewal. | Exempt |
24 |
4 |
120 |
| (c) A certificateholder whose activities during the 3-year calendar period prior to renewal do not require a license to practice public accounting. | Exempt |
Exempt |
4 |
120 |
(a) If you are a licensee and you were in public practice during the CPE reporting period, you are required to complete a minimum of 8 hours of CPE in the subject area of accounting and auditing during each year of the CPE reporting period in which you were in public practice. Licensees are limited to a maximum of 24 CPE credit hours in nontechnical subject areas during the CPE reporting period.
(b) If you are a licensee and you were not in public practice during any portion of the CPE reporting period, you are exempt from the accounting and auditing CPE subject area requirement. Licensees are limited to a maximum of 24 CPE credit hours in nontechnical subject areas during the CPE reporting period.
(c) If you are a certificateholder, you are exempt from both the accounting and auditing CPE subject area requirement and the requirement on CPE credit hours in nontechnical subject areas.
(3) Ethics applicable to practice in WA state: During each CPE reporting period all licensees and certificateholders are required to complete a four-hour course on professional ethics with specific application to the practice of public accounting in Washington state.
(4) 20 hours a year minimum: For CPE reporting periods beginning after December 31, 1999, you must complete a minimum of 20 hours of CPE each calendar year.
(5) Reasonable cause exemption: In order to renew your license and/or certificate you must complete the required CPE unless you can demonstrate your failure to meet the CPE requirements was due to reasonable cause. The board may make exceptions to the CPE requirements for reasons of individual hardship including health, military service, foreign residence, or other reasonable cause. You must request such an exemption in writing to the board. The request should include justification for the exemption and your plan to correct your CPE deficiency.
If you are retired, or you are a certificateholder and did not make any public, professional, commercial, or occupational use of the title CPA during the prior three years, you are deemed to have met the reasonable cause exemption.
(6) Return to previous status: If you seek to change your status as a certificateholder exempted from the CPE requirements under the reasonable cause exemption to a:
(a) Licensee, you must satisfy the requirements of subsection (1)(a) of this section within the three-year period immediately preceding the date the application for change in status was received by the board; or
(b) Certificateholder, you must satisfy the requirements of subsection (1)(c) of this section within the three-year period immediately preceding the date the application for change in status was received by the board.
(7) Reinstatement of a lapsed, suspended, or revoked license and/or certificate: If you seek to reinstate a lapsed, suspended, or revoked license and certificate, you must satisfy the requirements of subsection (1)(a) of this section within the three-year period immediately preceding the date the application for reinstatement was received by the board. If you seek to reinstate a lapsed, suspended, or revoked certificate, you must satisfy the requirements of subsection (1)(c) of this section within the three-year period immediately preceding the date the application for reinstatement was received by the board.
(8) Reciprocity: If you are applying for an initial Washington state CPA license and/or certificate under the reciprocity provisions of RCW 18.04.180 or 18.04.183, you must satisfy the applicable requirements in subsection (1) of this section within the three-year period immediately preceding the date the application was received by the board. For purposes of an initial license and/or certificate, you do not need to satisfy the ethics requirements of subsection (3) of this section.
Thereafter, in order to renew your Washington state CPA license and/or certificate, you must comply with all the applicable renewal requirements in subsection (1) of this section, including the ethics requirements in subsection (3) of this section.
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