PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 00-03-033.
Title of Rule: 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), 18.04.105(8), 18.04.215(4).
Statute Being Implemented: RCW 18.04.055(7), 18.04.105(8), 18.04.215(4).
Summary: To implement RCW 18.04.105(8) that requires a certified public accountant (CPA) to verify to the board completion of an accumulation of at least 120 hours of continuing professional education (CPE) during the preceding three-year period to maintain or reinstate a license and/or certificate. WAC 4-25-830 establishes within the 120 hours:
| • | A licensee 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 24 hours in nontechnical subject areas. |
| • | All licensees and certificateholders 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 20 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. |
| • | Establishes a provision for requesting a waiver to the CPE requirements. |
Reasons Supporting Proposal: To clearly outline the requirements for containing professional education to maintain or improve the professional competence of Washington state CPAs as a condition to the renewal of their license to practice and/or certificate.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, 210 East Union, Suite A, Olympia, (360) 586-0163.
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: WAC 4-25-830 sets the continuing professional education (CPE) requirements for Washington CPAs. The goal of the rule 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 amendment to the rule:
1. Aligns the rule with board policy waiving the "20 hours a year minimum" for the first calendar year of a certificateholder's initial CPE reporting cycle.
2. Clarifies the distinction between a CPE waiver and a reasonable cause exemption.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The amendment to the rule 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: Wyndham Garden Hotel -- SeaTac, 18118 Pacific Highway South, SeaTac, WA 98188, on April 28, 2000, at 9:30 a.m.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by April 21, 2000, 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 April 26, 2000.
Date of Intended Adoption: April 28, 2000.
February 29, 2000
Dana M. McInturff, CPA
Executive Director
OTS-3848.1
AMENDATORY SECTION(Amending WSR 99-23-045, filed 11/15/99,
effective 1/1/00)
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 |
Maximum CPE Allowed in Nontechnical Subject Areas | Minimum CPE in Ethics Applicable to Practice in WA State | Total CPE |
| (a) A licensee. | 24 |
4 |
120 |
| (b) A certificateholder whose activities during the 3-year calendar period prior to renewal do not require a license to practice public accounting. | Exempt |
4 |
120 |
(a) 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 certificateholder, you are exempt from the limitation of 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. This requirement is waived for the first calendar year of a certificateholder's initial CPE reporting cycle.
(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))
Retirees and certificateholders who will not make any public,
professional, commercial, or occupational use of the title CPA
during the ((prior)) upcoming three-year((s, you)) period are
deemed to have met the reasonable cause exemption and may
therefore renew their certificate under the reasonable cause
exemption and be exempt from the CPE requirements. However,
individuals holding a certificate under the reasonable cause
exemption may not hold out in public practice nor may they make
any professional, occupational, commercial or public use of the
CPA title.
(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)(b) 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)(b) 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.
(9) CPE waiver request: 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 limited 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 exception in writing on the form provided by the board. The request must include justification for the request and your plan to correct your CPE deficiency.
[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.]