Addressing the Challenge of Managing and Tracking CPE Compliance for CPAs

A headshot of Victoria Zoccali.

Victoria Zoccali

Victoria (Vicky) Zoccali is a Manager at Educe working in the Software practice and is the Product Owner for…

Continuing Professional Education (CPE) is required for Certified Public Accountants (CPAs) to maintain their professional competence 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. In the United States, the two main CPA regulatory associations are the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 systems in place within their organization. This seems like the logical place to start, but tracking CPA CPE compliance is challenging within existing learning management systems (LMS) for numerous reasons, such as:

  • 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.

The average LMS is not designed to handle complicated calculations or to store all the necessary data points in a way that is easily reportable to the accountancy organizations. As a result, firms have long sought ways to improve the way they track this learning 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.

Larger professional accounting and financial services firms have tried utilizing 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 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 the 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.

The Solution

As a result of the challenges and risks, firms have been moving away from fully managing jurisdiction CPE compliance internally as a best practice. They maintain the core course data and calculate the potential credit an individual could earn, but they no longer apply all the credit rules they did before. Instead, the firm sends the award information to the NASBA rules engine to process for state board consideration. This process, supported by NASBA, provides a standard method to determine how the credits apply towards compliance requirements, rather than the firm owning that determination. Shifting the responsibility 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 a 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.

With this shift in best practices, some of the leading professional accounting and financial services firms reached out to Educe to find a better way to track the required core compliance data. In response, we built Calculo, the leading tool developed specifically to manage CPE. Calculo is a cloud-based software application that interacts with other systems, including learning management systems, via web services. It can be used to manage various regulatory standards and credit rules, including U.S. CPE, Global Continuing Education, and Japanese Institute of Certified Public Accountants (JICPA) credits. 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, reach out by completing this form.

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