201 KAR 1:100. Continuing professional education requirements.
RELATES TO KRS 325.330
STATUTORY AUTHORITY: KRS 325.240, 325.330(4)(a), (7)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 325.330(4) requires the board to promulgate administrative regulations established 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. Definition. "Continuing professional education hour or CPE hour" means a fifty (50) minute period excluding meals, breaks and business sessions. Each unit of credit for a university or college course shall equal the following continuing professional education hours:
(1) One (1) semester hour equals fifteen (15) CPE hours; and
(2) One (1) quarter hour equals ten (10) CPE hours.
Section 2. Requirements for Continuing Professional Education Credit. (1) Each licensee who worked 3,000 hours or more in a public accounting firm registered with the board during the two (2) calendar years prior to the renewal date of his or her license shall report to the board successful completion of eighty (80) hours of continuing professional education. The eighty (80) hours shall be earned during the preceding two (2) calendar years. All other licensees shall obtain sixty (60) hours.
(2) Effective with license renewal for July 1, 2010 and subsequent years, each licensee shall report to the board successful completion of two (2) hours of continuing professional education in professional ethics. These two (2) hours shall be included as part of the eighty (80) or sixty (60) hours a licensee is required to complete to renew his or her license.
(3)(a) A certified public accountant who for the majority of 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) hours of continuing professional education 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 hours completed in this time period.
Section 4. Waivers From Continuing Professional Education. (1) The request for a reduction in or waiver of the continuing professional education requirements shall be submitted on a form prepared by the board.
(2) A reduction or waiver may be granted by the board if the licensee:
(a) Establishes that he or she is physically or psychologically unable to complete the continuing professional education requirements. The licensee shall submit with each request a statement from a licensed physician or other appropriate licensed health care provider that substantiates the physical or psychological claim of the licensee;
(b) Has encountered a severe personal hardship which made it extremely difficult or impossible to meet the continuing professional education requirements. The hardship shall be described in writing on the waiver form. The board may request the licensee to substantiate with documentation the hardship described on the waiver form; 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, education, government or industry except for management of personal assets or investments.
(3) The board shall advise a licensee in writing whether the request is approved or denied.
(4) A licensee granted a waiver shall reaffirm the basis of the waiver when the license is next renewed.
(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.
Section 5. Exemption from Continuing Professional Education. (1) A licensee who at the time of renewal is sixty-five (65) years of age or older and has been licensed continuously for twenty-five (25) years or more shall be exempt from the continuing education requirements.
(2) This exemption shall end after the renewal of licenses in 2009.
Section 6. Programs which Qualify. (1) The overriding consideration in determining whether a specific program 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 programs may qualify only if:
(a) An outline of the program is prepared in advance and preserved;
(b) The program is at least one (1) continuing professional education hour in length;
(c) The program 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 program;
(d) A record of registration or attendance is maintained; and
(e) A course completion document is given to each attendee.
(3) Acceptable subject matter.
(a) The following general subject matters shall be considered acceptable if the programs satisfy all of the criteria established by this administrative regulation:
1. Accounting and auditing;
3. Management services;
4. Information technology;
5. Communication arts;
10. Business law;
13. Specialized areas of industry; and
14. Administrative procedures associated with the offering and performance of attest services.
(b) Areas other than those listed in paragraph (a) of this subsection may be acceptable if the licensee can demonstrate that they contribute directly to his or her professional competence as a certified public accountant. The responsibility for substantiating that a particular program is acceptable and meets the requirements of this administrative regulation shall be the obligation of the licensee.
(4) Acceptable group programs. The following group programs qualify for credit if they meet the standards specified in this administrative regulation:
(a) Professional education and development programs of national, state and local accounting organizations;
(b) University or college courses (both credit and noncredit courses); 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 Section 6 of this administrative regulation.
(d) Credit shall not be granted for repetitious presentations of group programs unless it can be demonstrated that the program content was substantially changed and the change required significant additional study or research.
(e) Maximum credit for preparation and teachings shall not exceed sixty (60) percent of the renewal period requirement.
(7) Published articles and books.
(a) Credit may be awarded for published articles or books if they contribute directly to the professional competence of the licensee.
(b) Credit for preparation of the publications may be given on a self-declaration basis up to twenty-five (25) percent of the total education hours required.
(c) In exceptional circumstances, a licensee may request additional credit by submitting the article or book to the board with an explanation of the circumstances which he or she believes justifies a greater amount of credit.
(d) The board shall determine the amount of credit to be granted.
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.
(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) Name of the program sponsor;
(b) Title and description of course content;
(c) Dates attended; and
(d) Number of continuing professional education 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 register with the board.
(2) Detailed records of each program shall be kept by the sponsor which 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 outline 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", 2009;
(b) "License Renewal-CPE Waiver Due to Medical of Personal Hardship", 2009; and
(c) "License Renewal-CPE Retirement Waiver", 2009.
(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. 12-2-83; 17 Ky.R. 1528; eff. 11-29-90; 18 Ky.R. 2872; 3188; eff. 5-1-92; 28 Ky.R. 1669; 2187; eff. 4-15-2002; 35 Ky.R. 2782: 36 Ky.R. 319; eff. 9-4-2009.)