What is the Difference Between CPD and CPE for CPAs
In many ways the Canadian and US designations are similar. That being said, in a few important areas there are different rules and regulations to be aware of. One of the major areas they differ is in their systems of ongoing professional education required for CPAs to maintain their designation.
In Canada, as in most commonwealth countries, the system is called Continuing Professional Development (CPD) and the requirements are expressed in hours. In the US, it is known as Continuing Professional Education (CPE) and the requirements are expressed in credits.
Every year, thousands of CPAs move countries for career or personal reasons. The knowledge of these systems and the difference between them is an often overlooked factor that can be crucial for a CPA looking to move.
CPD for Canadian Accountants
CPD It is a yearly requirement for all Canadian CPAs to maintain their designation. The requirements are expressed and tracked in hours. A minimum of 20 hours per year and 120 hours in every rolling three year period is required.
CPE for US Accountants
CPE is required for every US CPA in order to maintain their designation. The system for tracking is credits, you receive one credit for every 50 minutes of study. Requirements for credits required vary from state to state but generally average out to 40 credits per year.
What is consistent across regions
- Completion is a requirement to maintain designation
- Documentation is normally required to confirm participation
- Completion must be reported in some form to regional accounting body
- Hours can be earned through both live instruction or self-study
- There may be exemptions available under certain circumstances
Where CPD and CPE differ
- Self Study Limits
- Subject Requirements
- Region Specific Requirements
- Reporting Periods (Length and End Date)
- State Specific Ethics
- Verifiable CPD/CPE
Self Study Limits:
Self-Study for PD is any course that isn’t presented by a live instructor. Some of the most popular self-study methods include On-demand videos, podcasts and audio based courses, and online pre recorded webinars.
In Canada there are no limits on the amount of CPD that can be earned through self-study. All of a Canadian CPAs’ yearly hours can be earned through self-study methods as long as they have evidence of participation and completion.
In the US, the amount of CPE that can be earned through self-study varies from state to state. Some states including California and New York allow you to complete all required credits through self-study. In a few others including Illinois and Michigan, there is a limit to the total number of CPE credits that can be earned through self-study. The rest of the credits must be earned through sources with live instruction.
Subject Requirements:
In Canada there are no specific subject requirements aside from any ethics requirements. Any subject relevant to the role or development of the CPA can be taken as CPD.
In some US states there are specific minimum requirements for certain areas of study in each period. For example, in Kentucky and Minnesota at least 50% of credits earned in each period must be in technical subjects (Accouting, Audit, Tax, Finance, Business Law, etc.).
Many states additionally have a maximum in the amount of personal development (Soft Skills, Leadership, Marketing/Communications, etc.) that can be taken, the remaining required credits must be in technical areas (Accounting, Audit, Tax, etc.)
Region Specific Requirements:
In Canada, CPD requirements are generally consistent between provinces. The reporting period, number of hours per period, and subject requirements are basically identical from province to province. The one major difference is Quebec which requires reporting CPD hours September 30th, as opposed to December 31st in all other provinces.
In the US, CPE requirements can vary greatly from state to state. Both in terms of subject requirement and length and deadline date of reporting periods. More info on these differences can be found below.
Reporting Periods:
As mentioned above, aside from Quebec all provinces have the same CPD reporting period dates. All require 20 CPD hours in a year and 120 CPD hours every three years, with 50% being verifiable. (Maybe diffs between reporting methods)
In the US, reporting periods vary across states in both length and date reporting is due.
Requirements can vary in length from 40 CPE credits every year to 120 CPE credits every 3 years. Of the states that have a reporting period of over 1 year, some still have a yearly minimum credits required and some have none. A full list of CPE requirements by state is available here.
Ethics Requirements:
In Canada, all CPAs are required to complete a minimum of 4 hours of ethics content every three years. Content must involve more than knowledge of the rules and must involve the application of the standards and guidelines in real and theoretical examples and scenarios.
In the US most states have some form of ethics content requirement but that makeup varies in length and number of credits required. In Ohio and Georgia there is no requirement for any amount of ethics content. All other states have some form of minimum CPE ethics requirement, often as a part of the larger requirements over a CPE reporting period.
Many states, including New York, California, Florida, Texas, and Illinois, require you to complete a state specific ethics course every reporting period. This can be done through any source that has had their course approved by that state’s accounting board.
Verifiable CPD/CPE:
In Canada there are two different types of CPD, verifiable and non-verifiable. Verifiable CPD requires proven verification of participation. You are required to attain and hold on to sufficient documentation supporting any hours earned. Non-Verifiable hours include independent activities relevant to job duties that aren’t able to be verified
At least half of your one year and three year CPD hours must be completed through verifiable sources.
In the US, some states including Illinois have introduced a similar system, similar to Canada, some our must be Verifiable and have supporting documents the rest only need to be reported when you submit your CPE declaration. All other states have there own specific criteria for how you report your CPD hours and whether documented proof is required.
TL;DR
There are many significant differences between the rules and regulations for CPD and the rules for CPE. This article is a good starting place but if you have any questions or are unsure of anything reach out to your regional accounting body.
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