Do You Offer Compilations, Reviews Or Audits? Read This! - Brief Article

California CPA, Jan, 2001 by Bruce Allen

California CPAs who perform audits, reviews and compilations are subject to a continuing education requirement of 24 hours in accounting and auditing. This means 24 out of the CBA's 80 hours of required CE must be in the area of accounting and auditing related to reporting on financial statements.

The CBA does not consider all courses described as auditing and accounting by a CE provider to fulfill this requirement. The CBA has notified a small, but disturbing, percentage of CPAs that general assurance services courses or courses in computer software preparation of financial statements do not qualify to fulfill the 24-hour requirement for attest service providers.

Regulation 87(c) states that, "Course subject matter must pertain to financial statement preparation and/or reporting (whether such statements are prepared on the basis of generally accepted accounting principles or other comprehensive bases of accounting), auditing, reviews, compilations, industry accounting, attestation services, or assurance services."

According to CBA, the purpose of the 24-hour requirement is to ensure that licensees are current on professional standards and pronouncements related to financial statement preparation, and not on the general professional standards related to the provision of assurance services or on learning the mechanics of a specific computer program to generate such financial statements. While these courses are valuable to CPAs and fulfill the general CE requirement, CBA does not believe that they contribute to the technical knowledge necessary to prepare financial statements.

CaICPA is reviewing the requirement, which exceeds national professional standards, as well as the availability of courses to meet the requirement. Members who are subject to the requirement should verify that courses will qualify to meet the requirement prior to renewing their license. For questions about whether or not a course qualifies, call CBA at (916) 263-3680.

Note: All Education Foundation courses meeting this requirement are correctly designated in promotional materials.