As you are aware, CPAs maintain their licenses by meeting requirements set forth by their state’s board of accountancy. While the exact requirements vary by state, CPAs are generally required to maintain and improve their skills via continuing professional education (CPE) programs.
Last year, three major changes were made regarding CPE programs for CPAs, and this year has brought along with it a few significant changes to CPE programs as well. However, perhaps the most notable change is one coming to the Uniform Certified Public Accountant exam, set to take effect in January 2024.
With that being said, whether you are currently a CPA or plan on sitting for the CPA exam in 2024, here is what you need to know about the latest CPE and testing changes:
Recapping Last Year’s Changes
There are no major changes to CPE programs set to occur in 2024, but even with that being said, it is vital to have a full understanding of the changes that took effect in January 2023 so that you’re ready for the new year.
These changes have included the following:
One of the biggest CPE changes that took effect earlier this year was the introduction of the new grace period.
If your license expires, you’ll no longer enter revoked status, at least not right away; instead, your status will enter a grace period, during which you can’t display your certification after your name or use any benefits associated with your license. You can return to active status after reporting your completed CPE requirements to your state’s board of accountancy.
Surplus CPE Hours
In the past, excess CPE hours were lost, as they didn’t roll over to the new year. Fortunately, that is no longer the case: If you have exceeded your CPE hour requirements, you can roll some of those hours toward your continuing education in the new year. For most licenses, the cap is 10 hours, but if you are a certified internal auditor (CIA), you can roll over up to 20 hours.
Not all of the changes to CPE requirements were beneficial. Under the new rules, you can no longer have your license reinstated from revoked status by reporting your CPE hours. If you exceed the grace period and your license is revoked, you will have to complete the licensure program again, from scratch, paying all requisite fees.
The 3 License Statuses
Under the new CPE rules in 2023, there are three license statuses, which are as follows:
If you are up-to-date on your CPE requirements, you hold active status, and to maintain that status, you must keep up with CPE compliance and submit proof that you have completed the requisite hours by December 31st of each calendar year. While in active status, you can use your certification after your name and enjoy all of the benefits associated with your license.
If you fail to report your CPE hours by December 31st, your license will enter a grace period. Under the new rules, that grace period lasts for two years, giving you plenty of time to report your CPE hours.
However, until you do so, you cannot list your certification after your name or use any benefits associated with your license. Additionally, if your grace period expires and you have not reported your CPE hours, your license will be revoked.
Prior to 2023, CPAs who failed to report their CPE hours would enter expired status, but the newest updates have since eliminated the expired status, replacing it with the aforementioned grace period and the new revoked status.
If your license is revoked, your only recourse is to recertify. You’ll need to complete the licensure program, retake the exam, and pay any fees before receiving your new license.
The CPA Evolution Initiative: A Game Changer
The CPA Evolution Initiative is a joint effort of the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA). Together, these organizations have voted to move forward with a new core and discipline CPA licensure framework. Additionally, the organizations are launching a new Uniform CPA Exam in January 2024.
The CPA Evolution initiative can be seen as a major overhaul to the framework, in which the goal is to make the CPA licensure model more relevant and future-ready. If you are currently licensed, the initiative will not impact your license status, but if you allow your license to lapse, you will have to navigate the new exam process.
The new model focuses on building a strong foundation in accounting, auditing, tax, and technology. On top of that, candidates can choose a niche discipline to specialize in, such as business analysis or information systems. Overall, the CPA Evolution initiative represents a much-needed change to the CPA exam and will help carry the profession into the future.
What These Changes Mean for You
As in the past, completing your continuing professional education hours and reporting those activities to your state board of accountancy is critical, but should unforeseen circumstances cause a reporting delay, the grace period can help you protect your license and avoid revocation. Staying up-to-date with CPE requirements can make you more knowledgeable and empower you to better serve your clients.