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 are no CPE requirements for retired or inactive CPAs. To receive credit for a CPE course, an individual must complete the course, the course must meet the requirements of the Board’s rules on CPE, and the course must increase the professional competency of the CPA. 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.
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. 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.
The Board does not approve specific CPE courses, but does register sponsors of CPE courses. Registered sponsors are those that have signed an agreement with the Board stipulating that they will conduct programs in accordance with the Board’s rules. The sponsor determines whether the courses it offers are conducted according to the CPE rules. Some sponsors offer courses that are designed to meet the CPE requirements and courses that are not intended for CPE purposes. 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) are also considered approved sponsors although they are not required to sign an agreement form with the Board. To verify that a sponsor is registered with this Board, please go to the online listing. However, if you want to know if a course is intended for CPE purposes, you must contact the sponsor directly. To verify that CPE credit is being offered for a course, you must contact the sponsor. The Board has authorized a limited amount of auditing of course sponsors to determine if they are complying with the agreement terms. However, it is not possible to audit all sponsors to evaluate quality. Therefore, the Board encourages licensees to file written complaints against sponsors that offer substandard 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. In addition to courses provided by registered sponsors, 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 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 Board or registered with the NASBA National CPE Sponsor Registry will be accepted for compliance with the Board’s annual ethics CPE course requirement.
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 Board or 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 Board or registered with the NASBA National CPE Sponsor Registry.
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.
For more information about the audit process, please contact Cammie Emery.
Becoming a Registered CPE Sponsor
NOTE: AT THIS TIME, THE BOARD IS NOT ACCEPTING APPLICATIONS FOR NEW CPE SPONSORS
CPA firms or other organizations interested in becoming registered CPE sponsors with the Board must complete the CPE Sponsor Registration application. There is no fee associated with becoming a registered CPE sponsor with the Board, but CPE sponsors must annually renew their registration. Sponsors must sign an agreement with the Board stipulating that they will comply with the Board’s rules. The Board may review documentation furnished by a CPE sponsor on specific courses. However, this documentation review is not intended to determine if a course is acceptable for CPE purposes. Instead, the documentation review is done to determine if the sponsor understands and appears to be complying with the terms of the Sponsor Agreement. Failure of an approved sponsor to comply with the terms of the CPE program sponsor agreement is grounds for the Board to terminate the agreement, remove the sponsor’s name from the Board list of approved sponsors, and notify the public of the revocation of approval as a CPE sponsor.
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.