Preproposal statement of inquiry was filed as WSR 98-24-057.
Title of Rule: New section WAC 4-25-831 What are the program standards for CPE?
Purpose: To clearly outline the standards continuing professional education courses must meet.
Statutory Authority for Adoption: RCW 18.04.055, 18.04.105(8).
Statute Being Implemented: RCW 18.04.055, 18.04.105(8).
Summary: The new section set the standards for continuing professional education (CPE) programs.
|•||Defines a qualifying program.|
|•||Allows undergraduate and graduate courses for CPE if the courses meet the standards.|
|•||Disallows CPE credit for attending committee meetings unless the meetings meet the standards.|
|•||Allows CPE credit for service on the board's QAR committee, participation as a QAR team captain or reviewer, and participation on other board approved quality or peer review committees as defined by board policy.|
|•||Lists the subject areas for acceptable courses including (1) accounting/auditing subjects, (2) technical subjects, (3) nontechnical subjects, and (4) professional ethics.|
|•||Allows CPE credit for group programs that meet the standards.|
|•||Defines CPE credit.|
|•||Allows CPE for self-study programs (interactive and noninteractive programs).|
|•||Allows a maximum of seventy-two hours of CPE for preparation and presentation of a CPE course as an instructor, discussion leader, or speaker during each CPE reporting period.|
|•||Allows CPE for published articles and books.|
|•||Disallows carry-forward of CPE credit during one period to the next period.|
|•||Allows carry-back of CPE credit provided the CPA request the exception in writing for board approval.|
Reasons Supporting Proposal: (1) Clearly outlines the board's program standards for CPE.
(2) Moves the adoption of the NASBA/AICPA statement on standards for formal continuing education which are currently under revision to policy rather than including in the rule - therefore eliminating unnecessary rule amendments.
(3) The enhancement of the subject area definition will aid (1) CPAs when choosing courses to meet the board's requirement, (2) sponsors of CPE programs when developing programs for CPE, and (3) board staff when auditing CPE reports for compliance.
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 4-25-831 outlines the standards continuing professional education (CPE) courses must meet. 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 4-25-811 with 4-25-831. The new section (1) changes the definition of "qualifying program" by eliminating reference to the statement of standards for formal continuing education published by the National Association of State Boards of Accountancy, (2) allows CPE credit for undergraduate courses, (3) enhances the definition of accounting and auditing subjects, (4) adds professional ethics with a specific application to the practice of public accounting in Washington state to the list of subject areas, (5) adds the prohibition of carry-forward of CPE credit from one reporting period to the next period, and (6) adds the allowance of carry-back of CPE hours to a previous reporting period provided the CPA requests the exception in writing for board approval.
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
by Cheryl M. Sexton
What are the program standards for CPE?
(1) Qualifying program: A program qualifies as acceptable CPE for purposes of RCW 18.04.215(4) if it is a formal program of learning which contributes to the growth in the professional knowledge and professional competence of an individual in the practice of the profession. A formal program means:
• 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) Quality assurance review: Service on the board's QAR committee, participating as a QAR team captain or reviewer, and participating on other board-approved quality or peer review committees may be considered for CPE credit as defined by board policy.
(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) Accounting and auditing 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;
(b) Technical subjects include:
(i) Accounting and auditing;
(ii) Management advisory services;
(iii) Personal financial planning;
(v) Management information services;
(vi) Budgeting and cost analysis;
(vii) Asset management;
(viii) Professional ethics (other than those programs used to satisfy the requirements of WAC 4-25-830(3));
(ix) Specialized areas of industry;
(x) Human resource management;
(xii) Business law;
(xiii) Mathematics, statistics, and quantitative applications in business;
(xiv) Business management and organization;
(xv) General computer skills, computer software training, information technology planning and management;
(c) 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;
(vii) Speed reading and memory building;
(viii) Negotiation or dispute resolution courses;
(d) Professional ethics with specific application to the practice of public accounting in Washington state covers the following subjects: Revised Code of Washington chapter 18.04, Washington Administrative Code chapter 4-25, and the code of professional conduct promulgated by the American Institute of CPAs.
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 certificate. Credit is not allowed for programs taken to prepare an applicant for the ethics examination as a requirement for initial certification. CPE credit is given for whole hours only, with a minimum of fifty minutes constituting one hour. For example, one hundred minutes of continuous instruction counts as two hours of CPE credit; however, more than fifty minutes but less than one hundred minutes of continuous instruction counts only as one hour CPE credit. 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 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 72 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 30 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: CPE credit hours you complete during one period can be carried back to the previous reporting period; however, only in accordance with WAC 4-25-830(5).