Flesher, Tonya K.

Nix, David E.

Nix, Paul E.

English

eGrove (Univ. of Mississippi)

Woman C.P.A. Volume 49 Issue 2 Article 5 4-1987 Education: Mandatory Continuing Education: How Do State Accounting Societies View This Requirement? David E. Nix Paul E. Nix Tonya K. Flesher Follow this and additional works at: https://egrove.olemiss.edu/wcpa  Part of the Accounting Commons, and the Women's Studies Commons Recommended Citation Nix, David E.; Nix, Paul E.; and Flesher, Tonya K. (1987) "Education: Mandatory Continuing Education: How Do State Accounting Societies View This Requirement?," Woman C.P.A.: Vol. 49 : Iss. 2 , Article 5. Available at: https://egrove.olemiss.edu/wcpa/vol49/iss2/5 This Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion in Woman C.P.A. by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu. EducationMandatory Continuing EducationHow Do State Accounting Societies View This Requirement?By Dave E. Nix and Paul E. NixEditor: Tonya K. Flesher, The University of Mississippi, University, MS 38677Historically, state accounting so­cieties have been providers of high quality continuing professional edu­cation (CPE) for CPAs. The expe­rience of state accounting societies in both mandatory and voluntary CPE should reveal much about the efficacy of mandatory continuing education (MCE) requirements for CPAs.MCE for accountants is now wide­spread in the United States, with 46 states having some form of manda­tory requirement. Advocates of MCE have long argued that mandatory requirements will (1) raise the pro­fessional competence of accoun­tants, (2) help avoid governmental intervention in the profession, and (3) improve the public image of the profession.Opponents of mandatory require­ments counter that: (1) MCE has had little positive effect because CPAs who received good training in the past continue to work to improve competence while inadequately trained CPAs meet state require­ments in the easiest way possible and do little to further their profes­sional competence; (2) there is little, if any, evidence that mandatory as opposed to voluntary professional education is more effective; (3) the administration of MCE requirements is expensive both for state boards and the accountants subject to the requirements; and (4) having fulfilled the requirements, CPAs have little or no defense against professional mal­practice claims.Although the jury is not in yet regarding the costs and benefits of mandatory requirements, CPAs, boards, and state societies have now had several years of experience with the requirements. CPAs are aware that a much larger number and vari­ety of CPE providers have now en­tered the arena in response to the demand created by mandatory re­quirements. CPAs also are aware that difficulty in defining exactly what CPE is has resulted in at least some CPE activities of little profes­sional merit being allowed to meet mandatory requirements.60 percent of the respondents indicated that the quality of CPE increased since MCE was required in their state.With this background in perspec­tive, a survey regarding MCE was mailed to the directors of the state societies of accountancy in each of the 46 states with a mandatory re­quirement. Twenty-eight of these46 states responded, providing a re­sponse rate of over 60 percent. Sev­eral additional responses were not included in the data analysis because the state’s mandatory requirement had been in effect for only a short period of time or because, in one instance, the requirement was a state society rather than a state board requirement.The questionnaire was divided into the following five areas:1. questions on the background of the respondents2. questions regarding the possible effect of the states’ MCE require­ment on the quality of CPE3. questions regarding providers of CPE4. questions regarding use of the American Institute of CPAs’ na­tional curriculum5. questions calling for a written response on the results of the move from voluntary to manda­tory continuing professional edu­cation.Results of the SurveyThe results of the survey, divided into the five areas, are as follows:AREA 1: Questions on the profes­sional background of the respon­dents. Seventy percent of those re­sponding held the position of execu­tive director of their state society. The remaining respondents were CPE coordinators, directors of CPE, or held an equivalent position. Fur­thermore, more than one-half of the respondents had ten or more years’ experience in the accounting field. Thus, the respondents have a pro­fessional background in MCE in ac­counting.AREA 2: Questions regarding the possible effect of the states’ MCE requirement on the quality of CPE. It may be reasonable to assume that before MCE was required, market demand helped ensure that only “quality” CPE would survive in the marketplace. Accountants had little reason to take low-quality CPE courses. Now, with MCE require­ments in effect, accountants may have an additional reason to take CPE courses — to fulfill a manda­tory requirement. This need to meet mandatory requirements could re­sult in low quality CPE courses re­maining in the marketplace. How­ever, 60 percent of the respondents indicated that the quality of CPE increased since MCE was required 12/The Woman CPA, April, 1987in their state. This increase in quality, which occurred during a corres­ponding increase in the quantity of CPE offerings, may bea result of the state societies providing a better quality product in response to in­creased competition among CPE providers.In regard to who should monitor MCE requirements and the quality of allowed MCE credit, 85 percent of the respondents indicated that monitoring should be done by the state boards of accountancy.All of the respondents indicated that MCE had widespread “legiti­macy” from the perspective of their state’s CPAs. Thirty percent of the respondents thought that this legi­timacy would increase while less than 10 percent thought that it would decrease. Nearly 90 percent of the respondents felt that their state should not change the number of MCE hours required. These results indicate that the states will retain their MCE requirements at about the current level.In regard to who should monitor MCE requirements and the quality of allowed MCE credit, 85 percent*  of the respondents indicated that monitoring should be done by the state boards of accountancy. Other frequent choices were state account­ing professional organizations (36 percent*)  and a national organiza­tion such as the AlCPA (29 percent*).In regard to funding for monitor­ing MCE requirements, over60 per­cent of the respondents indicated that this should come from CPA license fees. Other choices selected were provider fees and tuition charges on MCE courses.*These responses will not total 100 percent because respondents could make more than one choice.Sixty-five percent of the respon­dents indicated that the quality of MCE should be controlled by moni­toring providers of MCE. Only 17 percent indicated that the quality of MCE should be controlled by moni­toring what is allowed MCE credit.An issue closely related to the quality of MCE is what should be allowed MCE credit. MCE is often described as a learning experience which contributes to the profes­sional competence of the licensee. Definitions which are this broad are difficult to administer and inevitably give rise to horror stories regarding what, under particular circumstan­ces, is allowed MCE credit. When asked if their state should more closely limit what it allows as MCE credit, approximately 60 percent of the respondents indicated that tight­er controls were needed. Over 80 percent of the respondents indicated that there should be a limit on the number of MCE hours accepted from certain areas of study, such as per­sonal development. When asked if their state should require all CPAs to complete a minimum number of MCE hours in specified areas of study such as auditing or practice, well over one-half of the respondents answered in the affirmative. Depend­ing on the particular area, between one-fourth and one-third of the re­spondents indicated that there should be limits on the amount of MCE credit accepted from the fol­lowing:In-house trainingDiscussion leaderAccounting professional meetings VideoCassetteSelf-studyMagazine examsA number of respondents suggested that there should be no credit al­lowed for magazine exams.These results suggest that those providing CPE at the state society level believe that their respective state boards of accounting should place at least some additional restric­tions on what is allowed MCE credit. As previously mentioned, profes­sional education is frequently de­fined as “that which contributes to the professional competence of the accountant.” Practically any activity could be claimed as CPE credit under definitions of CPE such as this. Therefore, unless the states furtherClassic business suits and dresses for aprofessional image throughout pregnancy. Weekend and evening wear.Catalog with swatches and fit guide $3, refundable with order. Visit our stores in: Atlanta, Baltimore, Boston, Charlotte, NC, Chicago, Cleveland, Costa Mesa, CA, Dallas, Denver, Harrisburg, PA, W. Hartford, CT, Haverford, PA, Houston, Los Angeles, Mesa, AZ, Minneapolis, New Orleans, New York, Philadelphia, Pittsburgh, San Diego, San Francisco, Stamford, CT, Washington, D.C. or inquire about opening a store. Telephone 215-625-0151. P.O. Box 40121 Dept. WW77, Phila., PA. 19106.W07Drestrict what is allowed as CPE credit, the requirements may be abused to such an extent that a number of states will discontinue their manda­tory requirements. However, in sug­gesting tighter restrictions on what is allowed MCE credit, we should keep in mind that 75 percent of the respondents indicated that their state should have the same MCE require­ment for accountants in industry, public practice and government. Fur­thermore, 55 percent of the respon­dents indicated that a minimum number of hours be required in the areas of industrial, public and gov­ernmental accounting. With this in mind, possibly all CPAs should be required to take a minimum number of hours (such as 15-20) in the ac­counting, auditing and tax areas.PAs are the losers when poor quality products are offered.The Woman CPA, April, 1987/13It is encouraging to note that when asked if market demand would result in high-quality CPE offerings, over 85 percent of the respondents an­swered in the affirmative. However, it should not be overlooked that there are now many non-profes­sional vendors in the CPE provider market. CPAs are the losers when poor quality products are offered. But, as several respondents sug­gested, CPAs are becoming more sophisticated and are turning back to their profession for quality CPE.w When asked if their state should require that a minimum number of MCE hours be obtained from professional provider groups such as the AICPA or their state society, less than 20 percent of the respondents indicated that such a requirement was desirable. AREA 3: Questions regarding pro­viders of MCE. As MCE requirements have become more widespread, the number and variety of those provid­ing CPE has increased dramatically. In addition to traditional suppliers of CPE such as the AICPA and state societies, we now have stockbrok­ers, insurance salesmen, real estate salesmen, bankers and numerous other parties providing CPE. This increased number and variety of suppliers have made it more difficult to ascertain and control the quality of CPE. As earlier discussed, 65 per­cent of the respondents indicated that providers of CPE should be regulated as a means of insuring high-quality CPE. Thirty percent of the respondents indicated that pro­viders of CPE are required to regis­ter with their state board of accoun­tancy before providing CPE. At the same time, 90 percent of the respon­dents indicated that their state did allow MCE credit from providers who had not registered in advance. Although only one respondent indi­14/The Woman CPA, April, 1987cated that providers of CPE must be “accredited,” approximately one- half of the respondents indicated that providers of CPE should be accredited. These results are inter­preted to mean that there will be additional regulation of providers in the future. Perhaps the state boards of accountancy should require that providers of CPE be registered and that they pay a one-time registration fee of $100. This would have the effect of limiting the number of pro­viders who are perhaps less quali­fied to offer CPE. When asked if their state should require that a minimum number of MCE hours be obtained from professional provider groups such as the AICPA or their state society, less than 20 percent of the respondents indicated that such a requirement was desirable. Thus, changes such as this do not appear likely.AREA 4: Questions regarding use of the American Institute of CPAs’ National Curriculum. Although only two of the respondents indicated that, in their state, providers of CPE were required to submit or prepare their offerings in the format devel­oped by the AICPA, one-half of the respondents indicated that their state should require that the format be used. Since the national curriculum is still being developed, it is not sur­prising that the respondents indi­cated both CPAs and providers of MCE need to be significantly more familiar with the curriculum in order to benefit from it. As time progresses and the curriculum becomes more widely known, the curriculum is ex­pected to be far more widely used by CPAs and their state boards.Use of the national curriculum developed by the AICPA could pos­sibly provide an ideal format for state board officials to evaluate the legitimacy of CPE credit claimed. CPAs can benefit from use of the curriculum by being in a position to better plan and select CPE offerings appropriate to their career paths and unique needs.Perhaps the state boards should require the use of the AICPA’s sug­gested curriculum in the areas of accounting, auditing and tax. This would allow the states to better eval­uate how much MCE credit should be granted for particular events.AREA 5: Questions calling for a written response. In response to the question, “In your opinion, what has been the result of the move from voluntary to mandatory continuing professional education?” the com­ments received were generally posi­tive. The following comments were offered as benefits of a mandatory requirement:“More interest and attendance in CPE program,”“greater awareness of changes in the field programs,” and“a forcing of marginal accountants to be at least minimally exposed to current standards.”In response to the question, “In your opinion, what changes do you feel should be made in your state’s MCE requirement?” the following suggestions were made:“Tighter controls on the quality of programs,”“disallowing soft courses and moni­toring more closely what is al­lowed CPE credit,”“clearer definitions of what is accep­table for MCE credit and stricter standards for and better defined criteria for CPE provided by those developers not in the accounting professions,” and“an equitable method to disallow ‘soft’ courses.”These comments may indicate that state boards of accountancy need to develop stricter definitions regard­ing what is allowed MCE and to limit the acceptance of “soft” courses.u Use of the nationalcurriculum developed by the AICPA could possibly provide an ideal format for state board officials to evaluate the legitimacy of CPE credit claimed.ConclusionsThose at the state society level in states with mandatory requirements have had a generally favorable ex­perience with the mandatory require­ments. As a result of the require­ments, there are now many more vendors offering a much broader variety of CPE topics. As state boards of accountancy gain experience in administering mandatory require­ments, they are undoubtedly clarify­ing and improving their MCE re­quirements.The state societies indicate that the issues of allowed CPE credit and the quality of that credit need to be addressed by the state boards of accountancy. Limits need to be placed on the amount of credit al­lowed for “soft” CPE courses such as personal development. Also, the results of this survey indicate that the quality of CPE should be moni­tored by evaluating providers of CPE rather than evaluating what is al­lowed CPE credit. In order to further improve continuing professional education for accountants, it may be necessary that the state boards of accountancy more closely limit what is allowed CPE credit. Also, the state boards may need to begin imple­menting the AICPA’s national cur­riculum format and perhaps put at least some controls on providers of CPE. Further research regarding the effectiveness of mandatory, as op­posed to voluntary, CPE is needed.REFERENCESAmerican Institute of Certified Public Accoun­tants, National Curriculum: A Pathway to Excellence, 1985 Exposure Draft, 1985., Position Paper on Mandatory Con­tinuing Professional Education for the Accounting Profession (September 1985), pp.1-8.Brandenberg, Mary,“CPE— Essential Devel­opment,” Accountancy (February 1979), pp. 60-64.Carson, Samuel A., “Continuing Professional Education — By Mandate or Market?” Accountant’s Record (February 1981).Englebret, William G., “Continuing Profes­sional Education: A New Frontier,” Penn­sylvania CPA Journal (Summer 1983), pp. 7-9.Harmelink, P.J. and P.L. Kintzele, “A Recon­sideration of the Mandatory Continuing Education Requirement for CPAs,” Ohio CPA (Summer 1968), pp. 73-74.LaBrot, Robert C., “How to Develop a CPE Program for Your Firm,” The Practical Accountant (May 1983), pp. 31-38.“News Report,” Journal of Accountancy (September 1984), pp. 11-18.Pointer, L.G. and P. Wilhoite, “CE Curricula: Developing National CE Curricula for the Accounting Profession,” Oregon Certified Public Accountant (February 1985), pp. 1-5.Topple, Barry, “Further Education for the Qualified Accountant,” The Accountant (September 18, 1984), pp. 473-474.MOVING???Please Give Us Six Weeks Advance NoticeCHANGE OF ADDRESSATTACH LABEL FROM RECENT ISSUE HERE OR PRINT OLD ADDRESS AS WELL AS NEW IN SPACE BELOWName (please print)Old AddressCity State ZIPNEW ADDRESSCity State ZIPReturn this to:CIRCULATION DEPARTMENTTHE WOMAN CPAP.O. BOX 39295CINCINNATI, OHIO 45239David E. Nix received his Ph.D. in the area of behavioral management from Oklahoma State University in 1974. He is an Associate Professor of Accounting at Boise State Uni­versity. At Boise, he taught man­agement/organizational theory from 1974-1980 and currently teaches financial and management account­ing courses. He holds both the CPA and CMA designations.Paul E. Nix received his Ph.D. in the area of accounting from North Texas State University in 1977. He is cur­rently an Associate Professor of Ac­counting at Montana State Univer­sity, where he has taught in the accounting discipline since 1971. He holds both the CPA and CCA designations.BIG 8 CPA FIRMS & FORTUNE 500 CO’S. NATIONWIDE (USA) AND OVERSEASAll levels of responsibility in Finance, Accounting, Tax, Consulting, Audit and EDP Audit in most industries and public accounting throughout entire USA and in major cities overseas.Send confidential resume to either or both offices:ALLIED SEARCH, INC.2001 Union Street, Suite 300 San Francisco, CA 94123 8530 Wilshire Blvd., Suite 309 Beverly Hills, CA 90211The Woman CPA, April, 1987/15

Education: Mandatory Continuing Education: How Do State Accounting Societies View This Requirement?

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Education: Mandatory Continuing Education: How Do State Accounting Societies View This Requirement?

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