Learning

New CPE audit process planned for license renewals

Maryland's State Board of Public Accountancy has announced that the procedure for CPA license renewal will be changed.

A random number of licensees will be selected upon renewal and asked to support the CPE credits they have claimed. Although the CPA license will be granted, the official notice of license approval will be subject to CPE approval.

The new procedure will take effect on July 1, 2006.

In instances where inappropriate CPE is provided, an investigation will be opened. According to the State Board, the most common issue is that CPAs cannot adequately document the courses they have taken. Another common issue is a misunderstanding of seminar format vs. self-study programs.

State Board auditor Bert Fenwick reports that of the CPE claimed:

51 percent had problems in the CPE presented; either it was not documented or not in accordance with law.
31 percent had carryforward decreased.
12 percent had to make up shortages.
18 percent had excess self-study.
16 percent had bad addresses.

Part of the problems noted above may be due to the fact that the CPE audits related to several years earlier and CPAs had trouble locating the documentation. The new process will notify licensees immediately upon renewal to provide CPE information for the most recent two-year period.

CPE transcripts will be requested upon an audit. The transcript should include information on self-study, teaching and interactive self-study courses separately from seminar or group study. It should also identify subject matter, including specific ethics CPE programs. Additional documentation will be required to support the courses listed on the transcript.

CPAs should maintain the following details of CPE as described in the CPE regulations:

Sponsoring organization.
Location of course.
Title of program.
Topical outline of the course.
Description of content.
Dates attended.
Hours claimed and information that reflects the expertise of the instructor in the subject matter.

The MACPA can help

The MACPA maintains records of the courses taken from the MACPA for each member. This information can be downloaded by each member in a format that can be submitted to the State Board of Public Accountancy upon request.

Additionally, the MACPA will provide all of the details listed above for each course taken with us. Members can modify the online transcript to add CPE courses obtained from other sponsors. This will allow you to maintain one record in an easy to use format.