201 KAR 1:100. Continuing professional education requirements.

 

      RELATES TO KRS 325.330

      STATUTORY AUTHORITY: KRS 325.240(2), 325.330(4)(a), (7)(b)1.

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 325.240(2) authorizes the Kentucky State Board of Accountancy to promulgate administrative regulations for the administration of KRS Chapter 325. KRS 325.330(4) and (7)(b)1. require the board to promulgate administrative regulations to establish the continuing professional education requirements for certified public accountants. This administrative regulation establishes the continuing professional education requirements a certified public accountant shall satisfy to renew a license.

 

      Section 1. Definitions. (1) "Continuing professional education hour" or "CPE hour" means a fifty (50) minute period excluding meals, breaks and business sessions.

      (2) "Worked" means hours devoted by a licensee that are documented as billable and non-billable hours to a public accounting firm or client.

 

      Section 2. Requirements for Continuing Professional Education Credit. (1) Each licensee who worked 3,000 hours or more in a public accounting firm licensed with the board during the two (2) calendar years prior to the renewal date of his or her license shall complete eighty (80) CPE hours. The eighty (80) hours shall be completed during the preceding two (2) calendar years. All other licensees shall complete sixty (60) CPE hours.

      (2) Each licensee shall complete two (2) CPE hours in professional ethics. These two (2) hours shall be included as part of the eighty (80) or sixty (60) CPE hours a licensee is required to complete to renew his or her license.

      (3)(a) A certified public accountant who, for the two (2) calendar years prior to renewal of his or her license, did not operate or work in an office in this state shall satisfy the requirements of this section by complying with the continuing professional education requirements for renewal of his or her license:

      1. In the state in which the licensee's principal office is located; or

      2. In the state in which the office is located where the licensee worked a majority of the time.

      (b) If the state designated by paragraph (a) of this subsection does not have continuing professional education requirements for renewal of a license, the licensee shall comply with all continuing professional education requirements for renewal of a license in this state.

 

      Section 3. Each licensee who held a license for less than a full two (2) calendar year period shall obtain two (2) CPE hours for each full month a license was held not to exceed the total number of required hours for the reporting period. The two (2) hours in professional ethics shall not be required to be part of the CPE hours completed in this time period.

 

      Section 4. Waivers from Continuing Professional Education. (1) A reduction or waiver may be granted by the board if the licensee:

      (a) Establishes that he or she is temporarily physically or psychologically unable to complete the continuing professional education requirements. The licensee shall submit an Initial Request for Waiver of CPE Requirements form with each request and a written statement:

      1. From a licensed physician or other appropriate licensed health care provider that substantiates the physical or psychological claim of the licensee; and

      2. That describes the licensee’s working status during the time the licensee was unable to complete the continuing education, the licensee's current working status, and if the licensee plans to return to work;

      (b) Has encountered a temporary extreme hardship, which was so severe that it was extremely difficult or impossible to meet the continuing professional education requirements. The licensee shall submit an Initial Request for Waiver of CPE Requirements form and a written statement with each request:

      1. That describes in detail the facts associated with the extreme hardship; and

      2. Documentation to substantiate the extreme hardship; or

      (c) Is completely retired from practice and is fifty-five (55) years of age or older. To be considered completely retired, the licensee shall not perform accounting services in the practice of public accounting (which includes the preparation of tax returns), education, government or industry except for management of personal assets or investments.

      (2) The board shall advise a licensee in writing whether the request is approved or denied.

      (3) A licensee granted a waiver shall reaffirm the basis of the waiver when the license is next renewed by completing the:

      (a) License Renewal - CPE Waiver Due to Medical or Extreme Personal Hardship form; or

      (b) License Renewal - CPE Retirement Waiver form.

      (4) A licensee completing the License Renewal - CPE Waiver Due to Medical or Extreme Personal Hardship form shall submit with the form updated medical documentation to support that the basis of the waiver continues to limit the licensee's ability to meet the CPE requirements.

      (5) If the circumstances which form the basis of the waiver change, the licensee shall notify the board within thirty (30) days from the date of the change and resume compliance with the continuing professional education requirements from the date of the change.

      (6) If the waiver request is granted, the licensee shall pay the license renewal fee listed in 201 KAR 1:065 on or before August 1.

 

      Section 5. Courses that Qualify. (1) The overriding consideration in determining whether a specific course qualifies as acceptable continuing professional education shall be whether it is a formal program of learning which contributes directly to the professional competence of an individual licensed to practice as a certified public accountant in this state.

      (2) Continuing professional education courses may qualify only if:

      (a) An outline of the course is prepared in advance and preserved;

      (b) The course is at least one (1) CPE hour in length. Credit shall be awarded for a course less than fifty (50) minutes in length if it is part of a continuing professional education program where at least one (1) fifty (50) minute course is also being offered;

      (c) The course is conducted by a qualified instructor. A qualified instructor or discussion leader shall be anyone whose background training, education or experience makes it appropriate for him or her to lead a discussion on the subject matter of the particular course;

      (d) A record of registration or attendance is maintained;

      (e) A course completion document is given to each attendee; and

      (f) The course topic is an acceptable field of study.

      (3) Acceptable fields of study.

      (a) The following fields of study shall be considered acceptable if the courses satisfy all of the criteria established in subsections (1), (2), and (5) of this section:

      1. Accounting and finance;

      2. Auditing;

      3. Taxation;

      4. Business management services;

      5. Information technology;

      6. Business communications;

      7. Statistics;

      8. Ethics;

      9. Economics;

      10. Business law;

      11. Securities;

      12. Marketing; and

      13. Specialized areas of industry that contribute directly to the professional competence of a licensee.

      (b) The responsibility for substantiating that a particular course is acceptable and meets the requirements of this administrative regulation shall be the obligation of the licensee.

      (4) Acceptable programs. The following programs qualify for credit if they meet the standards specified in subsections (1), (2), (3), and (6) of this section:

      (a) Professional education and development programs of national, state and local accounting organizations;

      (b) University or college courses.

      1. Credit and not for credit courses completed at or through a university or college that is accredited by one (1) of the (6) six regional accrediting associations listed in 201 KAR 1:190, Section 4;

      2. Documentation to verify completion of a course shall be issued by the appropriate representative of the university or college.

      3. Each unit of credit for a university or college course shall be equal to the following CPE hours:

      a. One (1) semester hour equals fifteen (15) CPE hours; and

      b. One (1) quarter hour equals ten (10) CPE hours; and

      (c) Formal in-firm education programs. Portions of a program devoted to firm administrative, financial, and operating matters shall not qualify.

      (5) Formal individual study courses, Web casts, and online learning courses.

      (a) The amount of credit allowed for any individual study course shall be recommended by the course sponsor.

      (b) A licensee claiming credit for an individual study course shall obtain evidence of satisfactory completion of the course from the course sponsor.

      (c) Credit shall be assigned to the reporting period in which the provider indicates the course was completed.

      (6) Service as lecturer, discussion leader, or speaker.

      (a) Instructors, discussion leaders, and speakers may claim continuing professional education credit for both preparation and presentation time.

      (b) Credit may be claimed for actual preparation time up to two (2) times the class contact hours.

      (c) Credit as an instructor, discussion leader, or speaker may be claimed if the presentation is one which would meet the requirements of this section.

      (d) Credit shall not be granted for repetitious presentations of courses unless it can be demonstrated that the course content was substantially changed and the change required significant additional study or research.

      (e) Maximum credit for preparation and teaching shall not exceed sixty (60) percent of the renewal period requirement.

      (7) Published articles and books.

      (a) A licensee may be awarded credit for articles or books the licensee writes if:

      1. The subject matter of the article or book contributes directly to the professional competence of the licensee; and

      2. Prior to publication, the licensee submits a final draft of the article or book to the board to review and determine the amount of credit to be awarded.

      (b) Credit for preparation of the article or book shall not exceed twenty-five (25) percent of the total CPE hours required.

      (c) The board shall make the final determination of the amount of credit to be granted.

      (8) Certifications and licenses. Licensees who receive a certification or license from a nationally organized business organization or a federal governmental entity following successful completion of an exam in one (1) of the fields of study listed in subsection (3) of this section shall receive credit only for the length of time assigned by the organization or governmental entity to complete the examination.

 

      Section 6. Programs that deal with the following subject areas shall not be considered acceptable continuing education:

      (1) Personal growth or development;

      (2) Self-realization;

      (3) Spirituality;

      (4) Personal health or fitness;

      (5) Sports and recreation;

      (6) Foreign languages or cultures; and

      (7) Any other subjects that do not contribute directly to the professional competence of the licensee.

 

      Section 7. Reporting and Controls. (1) Each licensee shall obtain the appropriate documentation to establish that he or she completed the continuing professional education requirements.

      (2) This documentation shall be retained by each licensee for a period of five (5) years.

      (3) The board shall conduct annually a random audit to verify a certain percentage of licensees completed the amount of continuing professional education hours required to renew his or her license. A licensee who misrepresented that he or she completed the sixty (60) or eighty (80) CPE hours at the time the licensee renewed his or her license shall not be eligible for a retirement, medical, or extreme personal hardship waiver after being selected to participate in an audit.

      (4) Course completion evidence shall consist of a document prepared by the course sponsor indicating the licensee completed a formal program of learning. A document shall include the:

      (a) Names of the licensee and program sponsor;

      (b) Title and field of study;

      (c) Dates attended; and

      (d) Number of CPE hours awarded.

      (5) A licensee who completed continuing professional education courses that complied with the requirements of this administrative regulation and were presented by or on behalf of his or her employer may submit to the board a list of the courses completed if the list contains the:

      (a) Information described in subsection (4) of this section; and

      (b) Signature of the person at the licensee’s place of employment who verifies the accuracy of the information for a third party.

 

      Section 8. Continuing Professional Education Sponsors. (1) Sponsors shall not be required to be preapproved by the board.

      (2) Detailed records of each program shall be kept by the sponsor and shall include:

      (a) The date of the program presentation;

      (b) The name of each instructor or discussion leader;

      (c) A listing of licensees attending each program presentation; and

      (d) A written agenda of the program presentation.

      (3) Records shall be kept by the sponsor for a period of five (5) years following the date each program is presented.

 

      Section 9. Incorporation by Reference. (1) The following material is incorporated by reference:

      (a) "Initial Request for Waiver of CPE Requirements", September 2016;

      (b) "License Renewal-CPE Waiver Due to Medical or Extreme Personal Hardship", September 2016; and

      (c) "License Renewal-CPE Retirement Waiver", September 2016.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the State Board of Accountancy, 332 W. Broadway, Suite 310, Louisville, Kentucky 40202, Monday through Friday, 8 a.m. to 4:30 p.m. (10 Ky.R. 502; Am. 877; eff. 12-2-1983; 17 Ky.R. 1528; eff. 11-29-1990; 18 Ky.R. 2872; 3188; eff. 5-1-1992; 28 Ky.R. 1669; 2187; eff. 4-15-2002; 35 Ky.R. 2782: 36 Ky.R. 319; eff. 9-4-2009; 43 Ky.R. 603, 950; eff. 1-6-2017.)