Continuing Professional Education (CPE) is required for Certified Public Accountants (CPAs) to maintain their professional licensure, remain eligible for engagements, and provide quality services to their clients.
CPAs must complete training to earn a specified number of credit hours over a defined timeframe in order to keep their licenses active in a state or jurisdiction. CPE requirements vary across jurisdictions and in the United States, are shaped by two main regulatory associations: the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA). For enterprise accounting and financial services firms operating across multiple regions, ensuring accurate credit calculation and defensible reporting is not simply an administrative task, it is a business-critical compliance function.
The Challenge
Given the duty to know and comply with the various CPE requirements set forth by the accountancy boards in each jurisdiction, as well as any firm-specific requirements, employers and employees often try to leverage the learning management systems (LMS) in place within their organization. While this seems like the logical place to start, tracking CPE compliance is challenging within LMS platforms for numerous reasons, including:
- Many systems do not have enough fields to store all the required information and documentation needed to process and award credit.
- Most systems are not built to support complex credit calculations, like rolling up credit when there is “excess” duration.
- Courses that are designated as eligible for CPE credit must pass an approval process before they are live for learners.
- Board standards can be vague and left open to a firm’s interpretation.
- Each state/jurisdiction has unique requirements for individuals that vary based on the type of work they conduct.
- There are credit minimums and maximums for the different types of learning that can count for CPE, so there may be additional completions on a CPA’s transcript that cannot be applied towards compliance requirements.
- Compliance periods can vary between annual, biennial, and triennial cycles.
LMS platforms are effective at delivering learning. However, they were never designed to manage the complexities of regulatory credit logic or to store all the necessary data points in a way that is easily reportable to the accountancy organizations. As a result, accounting and financial services firms have long sought ways to improve the way they track this information.
The Risk
Maintaining accurate credit records is critical. For an individual, failure to meet compliance requirements means the loss of their CPA license. Without an active license, they are unable to work on accounting engagements, resulting in lost revenue for their employer. For organizations approved as CPE sponsors, over-reporting (granting more credit than allowed) or not following CPE guidelines could result in fines and the loss of their Sponsor Organization Number, making them unable to offer courses for CPE credit or produce CPE content.
To address the risk, many enterprise-level accounting and financial services firms have tried building their own custom systems, separate from their LMS, to not only store the documentation and detailed session information for each course, but also to apply all classification, jurisdiction, and specialized credit rules. The goal of these solutions was to include all the credit rules upfront to calculate final credit awards so employees would know which completions counted for their specific requirements. Taking all of this on was a huge burden and highly risky as the code required was extensive and extremely complex due to the combination of variables, requirements, and constantly changing regulations. Each code change created several months of work to properly develop, test, and deploy. In the end, trying to manage CPE credits at such a detailed level was too difficult to maintain. The systems were not able to cover all requirements, did not always apply credit correctly, and involved many manual interventions. Most significantly, there were serious data integrity issues that were hard to identify.
A Shift Toward Specialized Compliance Platforms
As a result, best practices at leading enterprise firms have shifted away from fully managing jurisdiction CPE compliance internally. A new operating model has emerged wherein a firm’s LMS platform remains the system of record for learning delivery (maintaining the core course and attendance data) and complex jurisdictional compliance logic is handled by specialized platforms. Shifting the responsibility of credit calculation away from the firm eliminates the risk of errors that may result if the firm miscalculates CPE, and it reduces the amount of data that the firm has to maintain to only what is essential. In turn, this minimizes the amount of time, money, and people needed to manage a CPE calculation system.
The Solution
With this shift in best practices and in response to enterprise client demand, Educe developed Calculo, the leading cloud-based platform designed specifically to manage continuing education compliance and credit calculation. Calculo is a software application that integrates with enterprise LMS environments and supports multiple regulatory frameworks including U.S. CPE requirements, Global Continuing Education, and standards aligned with other regulatory bodies such as the Japanese Institute of Certified Public Accountants (JICPA). At its core, Calculo calculates potential credit at the course level and earned credit at the individual level. Some key features include the ability to:
- Build detailed course and class agendas broken out by subject area.
- Record attendance and capture missed time for each participant.
- Provide feedback comments on the specific fields that need to be addressed as part of the approval workflow.
- Submit external learning requests for continuing education taken outside of the firm.
- Generate certificates of completion.
If you are interested in learning more about tracking CPE compliance with Calculo for your organization, please reach out by completing this form.
