Challenges for Managing and Tracking U.S. CPE Compliance for CPAs
Continuing Professional Education (CPE) is a requirement for Certified Public Accountants (CPAs) to maintain their professional competence and provide quality professional services. CPAs must complete a certain amount of credits in different fields of study (FOS) in order to keep their license. They have a duty to know and comply with the requirements set by the accountancy boards in their state and country, as well as any firm-specific requirements. In the US, the two main CPA CPE associations are American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA).
CPE is a challenge to track within existing learning management systems (LMS) for numerous reasons, such as:
- Most systems are not built to support complex credit calculations like excess duration.
- Many systems do not have enough customizable fields to store all of the required information and documentation needed to process, deliver, and award credit.
- CPE worthy courses need to be approved 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 for different FOS that CPAs must meet per year and per multi-year period that determine whether or not they are in compliance.
- Each state/jurisdiction imposes a maximum limit on the FOS or types of learning that can count for CPE, so a CPA’s learning history record may have additional credits that cannot be applied towards compliance requirements.
- Credits are applied based on a combination of many pieces of data. The following flowchart illustrates how the main data elements for US CPE interact to produce a credit output.
The average LMS is not designed to handle such complicated calculations and house all of these data points in a way that is easily reportable to the accountancy organizations, so firms have had to figure out how best to track this learning information.
The larger professional financial services firms utilize a separate learning administration system (LAS) to store all of the required documentation and detailed session information for each course. They worked with vendors to create a custom tool to calculate compliance, including classification, jurisdiction, and specialized credit rules, so employees can report their training directly to their respective state boards. This is a huge undertaking and highly risky as the code to calculate the credit rules is extensive and extremely complex due to the combination of data points and requirements described above. For example, any changes in state requirements or FOS may create several months of work in order to update the code and properly test the workflows. Most significantly, calculating CPE in-house puts data integrity at risk as miscalculations may be hard to spot.
Maintaining accurate credit records is critical for CPAs. Failure to meet compliance requirements results in the revocation of an individual’s CPA license and would restrict them from client engagements until they are compliant. If a firm were over reporting (granting more credit than allowed), it would be subject to fines and would lose its NASBA Sponsor Organization Number, so they would not be able to offer courses for CPE credit or produce CPE content.
As a result, firms are moving away from managing jurisdiction compliance requirements internally. They are still tracking learning data in their LAS and calculating the potential credit an individual could earn, but they report that information out to the accountancy boards so that the boards themselves determine how the credits apply towards compliance requirements instead of the firm owning that determination.
Educe Group is currently working with one of the leading professional financial services firms to create a new tool to calculate and manage CPE data. The Attendance-based Credit Calculator (ABC) is a hosted cloud-based app that interacts with the LMS via web services. It encompasses not only US CPE credit, but also Global CE and Japanese Institute of Certified Public Accountants (JICPA) credits. The ABC provides robust functionality; it most notably allows administrators, instructors, authors, reviewers, and learners to record their CPE which is then passed to the LMS and displays on their transcript record. Other main capabilities include the ability to:
- Build and approve detailed agendas broken out by FOS
- Establish the maximum amount of credit available for a course
- Annotate the start and end times for each agenda module within a specific offering of a course
- Record attendance and capture missed time for each participant
- Calculate individualized credit awards for each participant
Removing the responsibility from the firm is a smart move because it eliminates the risk of human errors that may result in miscalculating CPE and reduces the amount of data to be captured to only what is essential. In turn, this reduces the amount of time, money, and people required to manage a CPE calculation system.
In terms of the ABC, the tool pulls in only the necessary user, course, and offering information for credit calculations, improves the process for awarding credit, and publishes credit awards once a course concludes. In the past, individuals often had to wait weeks before credits were awarded and displayed on compliance reports, but the ABC posts credits to the LMS in real-time. As a result, the data for reporting is more accurate and available sooner.
There are many more details than I can fit into a blog post, so if the Attendance-based Credit Calculator sounds like the solution for you or you would like to discuss similar projects, please reach out to us at firstname.lastname@example.org or fill out our form to see how we can help!