Annual Continuing Professional Education (CPE) Requirement
As a requirement for continued licensure, the Board requires all active CPAs to complete a specific number of CPE hours, including at least two hours of regulatory or behavioral professional ethics and conduct. [21 NCAC 08G .0410] by December 31 of each year. There is no CPE requirement for inactive CPAs. 21 NCAC 08G .0406 states that all active CPAs must report their CPE by completing the annual license renewal process by July 1 each year. If a CPA fails to complete the CPE requirements prior to the end of the previous calendar year, but the CPA has completed them by June 30, the Board may issue a letter of warning for the first such failure within a five calendar year period and deny the renewal of the CPA’s certificate for a period of not less than 30 days and until the CPA meets the reinstatement requirements set forth in 21 NCAC 08J .0106 for the second such failure within a five calendar year period.
The Board does not register CPE sponsors and does not approve specific CPE courses. Sponsors of CPE programs that are listed in good standing on the National Registry of CPE Sponsors maintained by the National Association of State Boards of Accountancy (NASBA) shall be considered by the Board as compliant with the CPE requirements of 21 NCAC 08G .0403(c).
To receive credit for a CPE course, the CPA must attend or complete the course and receive a certificate of completion as set forth in 08G .0403(c)(13); the course must meet the requirements of the Board’s rules on CPE, and the course must increase the professional competency of the CPA. A course that increases the professional competency of a CPA is a course in an area of accounting in which the CPA practices or is planning to practice in the future, or in the area of professional ethics, or an area of the profession. Because of differences in the education and experience of CPAs, a course may contribute to the professional competence of one CPA but not another. Each CPA must therefore exercise judgment in selecting courses for which CPE credit is claimed and choose only those that contribute to that CPA’s professional competence.
Any CPE hours completed in the calendar year in which a certificate is approved may be used for that year’s requirement even if the hours were completed before the certificate was granted. When a CPA has completed more than the required number of CPE hours in one calendar year, the extra hours, not to exceed 20 hours, may be carried forward and treated as hours earned in the following year. Please note that carry-forward hours may not be used to satisfy the ethics CPE requirement and ethics courses may not be carried forward. A licensee may check his or her carry-forward CPE hours by looking up his or her own record using the “Licensee Search” function of the Board’s website. If there is a discrepancy in the number of carry-forward hours, please contact Cammie Emery. Any CPE hours used to satisfy the requirements for change of status, for reinstatement, or for application for a new certificate may also be used to satisfy the annual CPE requirement. Each CPA must maintain records that substantiate the CPE credits claimed for the current year and for each of the four calendar years prior to the current year. Forms required to report CPE hours are included in the online renewal process and the Board may audit information submitted by a licensee who applies for a renewal license. The amount of credit for all self-study courses is based on the average completion time—in 50-minute hours—as determined by the sponsor, regardless of whether the course is interactive or not. Questions regarding the recommended hours should be directed to the course sponsor. The Board does not require licensees to take QAS-approved self-study courses.
Credit for a CPE course will not be allowed by the Board unless the course is in one of the seven fields of study recognized by the Board; is actually developed by an individual who has education and work experience in the course subject matter; and uses instructional techniques and materials that are current and accurate. Courses taken at regionally accredited colleges and universities; formal correspondence courses; formal education programs conducted within an association of accounting firms; technical sessions at meetings of national and state accounting organizations; and professional development programs of national and state accounting organizations may qualify as acceptable continuing education. CPE credit may also be granted for teaching a CPE course for CPAs or authoring a publication as long as the preparation to teach or write increases the CPA’s professional competency and is in one of the seven fields of study approved by the Board. Please note that the Board does not allow CPE credit for reading or researching accounting journals, periodicals, or reference guides and manuals. The Board also does not allow tests designed to assess the comprehension of reading material to count as CPE credit. Ethics courses for other professions are also prohibited.
21 NCAC 08G .0410, requires that all active North Carolina CPAs complete at least two hours of CPE on regulatory or behavioral professional ethics and conduct. The ethics course may be in a group-study format or in a self-study format. Any ethics CPE course (regulatory or behavioral on professional ethics and conduct) offered by a CPE sponsor registered with the NASBA National CPE Sponsor Registry will be accepted for compliance with the Board’s annual ethics CPE course requirement. Ethics courses not offered by a CPE sponsor registered with the NASBA National CPE Sponsor Registry are not considered compliant with 21 NCAC 08G .0410.
A non-resident North Carolina CPA whose primary office is in North Carolina must complete at least two hours of CPE on regulatory or behavioral professional ethics and conduct. The ethics course may be in a group-study format or in a self-study format. Any ethics CPE course (regulatory or behavioral on professional ethics and conduct) offered by a CPE sponsor registered with the NASBA National CPE Sponsor Registry will be accepted for compliance with the Board’s annual ethics CPE course requirement. All other non-resident licensees may satisfy the ethics CPE requirement by completing the ethics requirements in the jurisdiction in which he or she is licensed as a CPA and works or resides. If there is no ethics CPE requirement in the jurisdiction where he or she is licensed and currently works or resides, he or she must complete at least two hours of CPE on regulatory or behavioral professional ethics and conduct. The ethics course may be in a group-study format or in a self-study format. Any ethics CPE course (regulatory or behavioral on professional ethics and conduct) offered by a CPE sponsor registered with the NASBA National CPE Sponsor Registry will be accepted for compliance with the Board’s annual ethics CPE course requirement.
If you have questions regarding CPE, please contact Cammie Emery .
Annual Audit of CPE Records
Each year, in conjunction with the annual license renewal period, the Board conducts an audit of licensees’ CPE records to ensure compliance with the Board’s rules. If selected for the CPE audit, the licensee must respond to the Board within the specified time frame (usually 30 days) and must provide certificates of completion for each CPE course claimed for credit. NOTE: In accordance with 21 NCAC 08G .0401(i), it is the CPA’s responsibility to maintain records substantiating the CPE credits claimed for the current year and for each of the four calendar years prior to the current year. If it appears that a licensee is not in compliance with the CPE requirement, the matter is referred to the Board’s Professional Education and Applications Committee for review. If the Committee determines that a licensee is, in fact, not in compliance, the matter will be referred to the Professional Standards Committee for possible disciplinary action for violation of Board rules. Failure to comply with the annual CPE requirements for renewal of a licensee’s certificate may result in the forfeiture of the licensee’s certificate for one year and a $1,000.00 civil penalty.
Q&A on CPE
Q. I was licensed in North Carolina this year but I took CPE last year. Can I claim carryfoward from last year?
A. No, you may only claim CPE credit earned at any time during the first calendar year that you are licensed.
Q. I took two different ethics courses last year. Can I carry one of those forward into this year?
A. No, the ethics requirement is an annual requirement. Ethics credit can only be carried forward as a number of generic hours, not specifically as ethics credit.
Q. I was scheduled to take a CPE course but couldn’t attend. The sponsor sent me the course material. Can I read that material and claim credit for this course?
A. No. independent study without an examination to test comprehension of the material studied does not qualify for credit under North Carolina’s CPE rules.
Q. I did a presentation for my local civic group. Can I claim CPE credit for my presentation?
A. No. CPE credit for teaching is only allowed for graduate level accounting courses or for CPE courses taught to CPAs.
Q. I attended an AICPA committee meeting. Does that qualify for CPE credit?
A. No, CPE must take the form of a formal course of learning.
Q. I helped grade the Uniform CPA Examination. Can I claim CPE credit for that activity?
A. No, CPE credit is not allowed for Uniform CPA Exam-related activities.