Continuing Professional Education

Requirements: General

4.16

Auditors who plan, direct, perform engagement procedures for, or report on an engagement conducted in accordance with GAGAS should develop and maintain their professional competence by completing at least 80 hours of CPE in every 2-year period as follows.

CPE hours Subject matter categories of CPE
24 hours Subject matter directly related to the government environment, government auditing, or the specific or unique environment in which the audited entity operates
56 hours Subject matter that directly enhance auditors’ professional expertise to conduct engagements
4.17

Auditors should complete at least 20 hours of CPE in each year of the 2-year periods.

4.18

The audit organization should maintain documentation of each auditor’s CPE.28

Application Guidance: General

4.19

The continuing competence of the audit organization’s personnel depends, in part, on an appropriate level of CPE so that auditors maintain the knowledge, skills, and abilities necessary to conduct the GAGAS engagement. Obtaining CPE specifically on GAGAS, particularly during years in which there are revisions to the standards, may assist auditors in maintaining the competence necessary to conduct GAGAS engagements.

4.20

CPE used to fulfill the 24-hour requirement may be taken at any time during the 2-year measurement period.

Application Guidance: Subject Matter Categories of CPE

4.21

Determining what subjects are appropriate for individual auditors to satisfy the CPE requirements is a matter of professional judgment to be exercised by auditors in consultation with appropriate officials in their audit organization. When determining what specific subjects qualify for the CPE requirement, the auditors may consider the types of knowledge, skills, and abilities, and the level of proficiency necessary, in order to be competent for their assigned roles. Auditors may consider probable future engagements to which they may be assigned when selecting specific CPE subjects to satisfy the 24-hour and the 56-hour CPE requirements. The audit organization is ultimately responsible for determining whether a subject or topic qualifies as acceptable for its auditors.

4.22

The subject matter categories for the 24-hour requirement may be used to satisfy the 56-hour CPE requirement. If CPE in any of the subject matter and topics that would satisfy the 56-hour requirement, as discussed in paragraph 4.24, is tailored specifically to the government environment, such CPE may qualify toward satisfying the 24-hour requirement. Examples of CPE subjects that may qualify for each of the categories are listed below.

Subject Matter Directly Related to the Government Environment, Government Auditing, or the Specific or Unique Environment in Which the Audited Entity Operates (24-Hour Requirement)

4.23

Subject matter directly related to the government environment, government auditing, or the specific or unique environment in which the audited entity operates may include, but is not limited to, the following:

  1. generally accepted government auditing standards (GAGAS) and related topics, such as internal control as addressed in GAGAS;

  2. the applicable American Institute of Certified Public Accountants’ (AICPA) Statements on Auditing Standards;29

  3. the applicable AICPA Statements on Standards for Attestation Engagements and Statements on Standards for Accounting and Review Services;30

  4. the applicable auditing standards issued by the Institute of Internal Auditors, the Public Company Accounting and Oversight Board, the International Auditing and Assurance Standards Board, or other auditing standard-setting body;

  5. U.S. generally accepted accounting principles, or the applicable financial reporting framework being used, such as those issued by the Federal Accounting Standards Advisory Board, the Governmental Accounting Standards Board, or the Financial Accounting Standards Board;

  6. Standards for Internal Control in the Federal Government;31

  7. Internal Control—Integrated Framework,32 as applicable;

  8. requirements for recipients of federal contracts or grants, such as Single Audits under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;33

  9. requirements for federal, state, or local program audits;

  10. relevant or applicable audit standards or guides, including those for information technology auditing and forensic auditing;

  11. information technology auditing topics applicable to the government environment;

  12. fraud topics applicable to a government environment;

  13. statutory requirements, regulations, criteria, guidance, trends, risks, or topics relevant to the specific and unique environment in which the audited entity operates;

  14. statutory requirements, regulations, criteria, guidance, trends, risks, or topics relevant to the subject matter of the engagement, such as scientific, medical, environmental, educational, or any other specialized subject matter;

  15. topics directly related to the government environment, such as the nature of government (structures, financing, and operations), economic or other conditions and pressures facing governments, common government financial management issues, appropriations, measurement or evaluation of government financial or program performance, and application of general audit methodologies or techniques to a government environment or program;

  16. specialized audit methodologies or analytical techniques, such as the use of complex survey instruments, actuarial estimates, statistical analysis tests, or statistical or nonstatistical sampling;

  17. performance auditing topics, such as obtaining evidence, professional skepticism, and other applicable audit skills;34

  18. government ethics and independence;

  19. partnerships between governments, businesses, and citizens;

  20. legislative policies and procedures;

  21. topics related to fraud, waste, abuse, or improper payments affecting government entities; and

  22. compliance with laws and regulations.

Subject Matter That Directly Enhances Auditors’ Professional Expertise to Conduct Engagements (56-Hour Requirement)

4.24

Subject matter that directly enhances auditors’ professional expertise to conduct engagements may include, but is not limited to, the following:

  1. subject matter categories for the 24-hour requirement listed in paragraph 4.23;

  2. general ethics and independence;

  3. topics related to accounting, acquisitions management, asset management, budgeting, cash management, contracting, data analysis, program performance, or procurement;

  4. communicating clearly and effectively, both orally and in writing;

  5. managing time and resources;

  6. leadership;

  7. software applications used in conducting engagements;

  8. information technology; and

  9. economics, human capital management, social and political sciences, and other academic disciplines that may be applied in engagements, as applicable.

Application Guidance: Exemptions and Exceptions

4.25

Auditors may be exempted from the 56-hour CPE requirement by the audit organization, but not the 24-hour requirement, if they

  1. charge less than 20 percent of their time annually to engagements conducted in accordance with GAGAS and

  2. are only involved in performing engagement procedures, but not involved in planning, directing, or reporting on the engagement.

The 20 percent may be based on historical or estimated charges in a year, provided that the audit organization has a basis for this determination and monitors actual time. For auditors who change status such that they are charging more than 20 percent of their time annually to engagements under GAGAS, the audit organization may prorate the required CPE hours similar to when auditors are assigned to GAGAS engagements after the beginning of a 2-year CPE measurement period, as discussed in paragraph 4.42.

4.26

Nonsupervisory auditors who charge less than 40 hours of their time annually to engagements conducted in accordance with GAGAS may be exempted by the organization from all CPE requirements in paragraph 4.16.

4.27

The audit organization may exempt from the CPE requirements college and university students employed on a temporary basis for a limited period of time (for example, an internship of limited duration) or enrolled in a formal program sponsored by the college or university for a specific period of employment, such as a term or semester.

4.28

Employees or contract employees performing support services within the audit organization, such as individuals who are assigned to positions in budgeting, human resources, training, and administrative functions, and who do not conduct engagement activities are not auditors subject to the GAGAS CPE requirements. Employees or contract employees who assist in the engagement by performing support services, such as performing background research, data entry, writing and editing assistance, proofreading, or report production and distribution are not auditors subject to the GAGAS CPE requirements.

4.29

The audit organization, at its discretion, may grant exemptions from a portion of the CPE requirement in the event of extended absences or other extenuating circumstances if situations such as the following prevent auditors from fulfilling those requirements and conducting engagements:

  1. ill health,

  2. maternity or paternity leave,

  3. extended family leave,

  4. sabbaticals,

  5. leave without pay absences,

  6. foreign residency,

  7. military service, and

  8. disasters.

The audit organization may not grant exceptions for reasons such as workload, budget, or travel constraints.

Application Guidance: Specialists

4.30

External specialists are not auditors subject to the GAGAS CPE requirements. Also, internal specialists assisting on a GAGAS engagement who are not involved in planning, directing, performing engagement procedures, or reporting on a GAGAS engagement are not auditors subject to the GAGAS CPE requirements.

4.31

Internal specialists who are performing work in accordance with GAGAS as part of the engagement team—including planning, directing, performing engagement procedures, or reporting on a GAGAS engagement—are considered auditors and are subject to the GAGAS CPE requirements. The GAGAS CPE requirements become effective for internal specialists when an audit organization first assigns an internal specialist to an engagement. Because internal specialists apply specialized knowledge in government engagements, CPE in their areas of specialization qualifies under the requirement for 24 hours of CPE that directly relates to government auditing, the government environment, or the specific or unique environment in which the audited entity operates.

Application Guidance: Programs and Activities That Qualify for CPE

4.32

CPE programs are structured educational activities or programs with learning objectives designed to maintain or enhance the auditors’ competence to address engagement objectives and perform work in accordance with GAGAS.

4.33

The following are examples of structured educational programs and activities:

  1. internal training programs (e.g., courses, seminars, and workshops);

  2. education and development programs presented at conferences, conventions, meetings, and seminars and meetings or workshops of professional organizations;

  3. training programs presented by other audit organizations, educational organizations, foundations, and associations;

  4. web-based seminars and individual-study or eLearning programs;

  5. audio conferences;

  6. accredited university and college courses (credit and noncredit);

  7. standard-setting organization, professional organization, or audit organization staff meetings when a structured educational program with learning objectives is presented (e.g., the portion of the meeting that is a structured educational program with learning objectives designed to maintain or enhance auditors’ competence);

  8. correspondence courses, individual-study guides, and workbooks;

  9. serving as a speaker, panelist, instructor, or discussion leader at programs that qualify for CPE hours;

  10. developing or technical review of courses or the course materials for programs that qualify for CPE hours; and

  11. publishing articles and books that contribute directly to the author’s professional proficiency to conduct engagements.

4.34

Individual auditors who are members of professional organizations or who are licensed professionals, such as certified public accountants, are cautioned that the GAGAS CPE requirements, while similar in many respects to those of professional organizations and of licensing bodies, may not be identical. Some subjects and topics may be acceptable to state licensing bodies or professional organizations, but may not qualify as CPE under GAGAS. Conversely, some CPE that qualifies for GAGAS may not qualify for state licensing bodies or professional organizations. Careful consideration of auditors’ relevant professional organizations or licensing body requirements is encouraged to meet other relevant CPE requirements.

4.35

Examples of training topics that may qualify as CPE for state licensing bodies or professional organizations but would not generally qualify as CPE for purposes of satisfying requirements under GAGAS include certain training in taxation, personal financial planning and investment, taxation strategies, estate planning, retirement planning, and practice management, unless such training directly enhances the auditors’ professional proficiency to perform engagements or relate to the subject matter of an engagement. However, if certain taxation or other topics relate to an objective or the subject matter of an engagement, training in those related topics could qualify as CPE under GAGAS.

4.36

Examples of programs and activities that do not qualify for CPE hours under GAGAS include, but are not limited to, the following:

  1. on-the-job training;

  2. basic or elementary courses in subjects or topics in which auditors already have the knowledge and skills being taught;

  3. programs that are designed for general personal development, such as résumé writing, improving parent-child relations, personal investments and money management, and retirement planning;

  4. programs that demonstrate office equipment or software that is not used in conducting engagements;

  5. programs that provide training on the audit organization’s administrative operations;

  6. business sessions at professional organization conferences, conventions, and meetings that do not have a structured educational program with learning objectives;

  7. conducting external quality control reviews; and

  8. sitting for professional certification examinations.

Basic or elementary courses would be acceptable in cases where they are deemed necessary as “refresher” courses to enhance the auditors’ proficiency to conduct audits and attestation engagements.

Application Guidance: Measurement of CPE

4.37

A CPE hour may be granted for each 50 minutes of participation in programs and activities that qualify.

4.38

For university or college credit courses, each unit of college credit under a semester system equals 15 CPE hours, and each unit of college credit under a quarter system equals 10 CPE hours. For university or college noncredit courses, CPE hours may be granted only for the actual classroom time.

4.39

For individual-study programs where successful completion is measured by a summary examination, CPE credit may be granted if auditors complete the examination with a passing grade. Auditors in other individual-study programs may earn CPE hours when they satisfactorily complete the requirements of the self-study program. The number of hours granted may be based on the CPE provider’s recommended number of CPE hours for the program.

4.40

Speakers, instructors, and discussion leaders at programs that qualify for CPE and auditors who develop or write the course materials may receive CPE hours for preparation and presentation time to the extent the subject matter contributes to auditors’ competence. One CPE hour may be granted for each 50 minutes of presentation time. Up to 2 CPE hours may be granted for developing, writing, or advance preparation for each 50 minutes of the presentation. Auditors may not receive CPE hours for either preparation or presentation time for repeated presentations that they make within the 2-year period, unless the subject matter involved was changed significantly for each presentation. The maximum number of CPE hours that may be granted to an auditor as a speaker, instructor, discussion leader, or preparer of course materials may not exceed 40 hours for any 2-year period.

4.41

Articles, books, or materials written by auditors and published on subjects and topics that contribute directly to professional proficiency to conduct engagements qualify for CPE hours in the year they are published. One CPE hour may be granted for each hour devoted to writing articles, books, or materials that are published. However, CPE hours for published writings may not exceed 20 hours for any 2-year period.

4.42

Auditors hired or assigned to a GAGAS engagement after the beginning of an audit organization’s 2-year CPE period may complete a prorated number of CPE hours. An audit organization may define a prorated number of hours based on the number of full 6-month intervals remaining in the CPE period. For example, an audit organization has a 2-year CPE period running from January 1, 2020, through December 31, 2021. The audit organization assigns a new auditor to a GAGAS engagement in May 2020. The audit organization may calculate the prorated CPE requirement for the auditor as follows:

  1. Number of full 6-month intervals remaining in the CPE period: 3

  2. Number of 6-month intervals in the full 2-year period: 4

  3. Newly assigned auditor’s CPE requirement: 3/4 x 80 hours = 60 hours

When auditors are newly hired or newly assigned to GAGAS engagements and have had some previous CPE, the audit organization has flexibility and may choose between using a pro rata approach or evaluating whether and to what extent any CPE already taken in that period would satisfy GAGAS CPE requirements.

4.43

For newly assigned auditors who are subject to the 24-hour requirement, the number of prorated hours may be calculated in a similar manner: 3/4 x 24 hours = 18 hours, in this example. The prorated amount of hours would be the total requirement over the partial period. The 20-hour minimum for each CPE year would not apply when the prorated number of hours is being used to cover a partial 2-year CPE period.

4.44

At their discretion, audit organizations may give auditors who have not completed the 80-hour CPE requirement for any 2-year period up to 2 months immediately following the 2-year period to make up the deficiency. Audit organizations may also give auditors who have not completed the 20 hours of CPE in a 1-year period up to 2 months immediately following the 1-year period to make up the deficiency. Any CPE hours completed toward a deficiency in one period may be documented in the CPE records and may not be counted toward the requirements for the next period. Audit organizations that grant the 2-month grace period may not allow auditors who have not satisfied the CPE requirements after the grace period to participate in GAGAS engagements until those requirements are satisfied.

4.45

Auditors may not carry over CPE hours earned in excess of the 80-hour and 24-hour requirements from one 2-year CPE measurement period to the next.

4.46

If an audit organization discontinues conducting GAGAS engagements or reassigns auditors to non-GAGAS assignments before auditors complete the CPE requirements, the auditors are not required to complete the number of hours to satisfy the CPE requirements. However, the audit organization may wish to have its auditors complete those requirements if it is foreseeable that the auditors will conduct GAGAS engagements in the future.

4.47

Auditors who complete a professional certification review course may receive CPE hours only for those segments of the review course that are relevant to the standards, statutory requirements, regulations, criteria, and guidance applicable to auditing or to the engagement objectives being performed, or for subject matter that directly enhances auditors’ professional expertise to conduct engagements.

4.48

To simplify administration of the CPE requirements, an audit organization may establish a standard 2-year period for all of its auditors, which can be on either a fixed-year or rolling-year basis. A fixed-year measurement period, for example, would be the 2-year periods 2019 through 2020, 2021 through 2022, and so forth, while a rolling-year measurement period would be 2019 through 2020, 2020 through 2021, 2021 through 2022, and so forth.

4.49

An audit organization may use a measurement date other than the date it started its first GAGAS engagement, or the audit organization may choose to change its measurement date to coincide with a fiscal year or another reporting requirement, such as one established by a state licensing body or professional organization. For example, if an audit organization changes the end date of the measurement period from December 31 to June 30, during the audit organization’s transition period (January 1 to June 30), its auditors may complete at least a prorated number of CPE hours for the 6-month transition period. The number of prorated hours required may be calculated using the method illustrated in paragraphs 4.42 and 4.43.

Application Guidance: Monitoring CPE

4.50

The audit organization’s policies and procedures for CPE may address the following:

  1. identifying all auditors required to meet the CPE requirements;

  2. providing auditors with the opportunity to attend internal CPE programs, external CPE programs, or both;

  3. assisting auditors in determining which programs, activities, and subjects qualify for CPE;

  4. documenting the number of CPE hours completed by each auditor; and

  5. monitoring auditor compliance with the CPE requirements to ensure that auditors complete sufficient CPE in qualifying programs and subjects.

4.51

Policies and procedures for documentation may address maintaining documentation of the CPE hours completed by each auditor subject to the CPE requirements for an appropriate period of time to satisfy any legal and administrative requirements, including peer review. The audit organization may maintain documentation of CPE or may delegate the responsibility to the auditor and put in place adequate procedures to ensure that its records of CPE hours earned by auditors are supported by the documentation maintained by auditors. Documentation may include the following information:

  1. the name of the organization providing the CPE;

  2. the title of the training program, including the subject matter or field of study;

  3. the dates attended for group programs or dates completed for individual study programs;

  4. the number of CPE hours earned toward the 56-hour and 24-hour requirements;

  5. any reasons for specific exceptions granted to the CPE requirement; and

  6. evidence of completion of CPE, such as a certificate or other evidence of completion from the CPE provider for group and individual-study programs, if provided; documentation of CPE courses presented or copies of course materials developed by or for speakers, instructors, or discussion leaders, along with a written statement supporting the number of CPE hours claimed; or a copy of the published book, article, or other material that name the writer as author or contributor, or a written statement from the writer supporting the number of CPE hours claimed.

4.52

The audit organization may monitor CPE compliance through its internal inspections or other quality assurance monitoring activities.

4.53

The audit organization is not required to prepare reports on CPE. However, the audit organization may consider preparing a periodic CPE report for distribution to the auditors or maintaining or accessing training data online to monitor its auditors’ progress toward meeting the CPE requirements.

  1. See paras. 4.51 and 5.16 for a discussion of CPE documentation. ↩︎

  2. See para. 6.01 for a discussion of the AICPA standards incorporated into GAGAS for financial audits.↩︎

  3. See para. 7.01 for a discussion of the AICPA standards incorporated into GAGAS for attestation engagements and reviews of financial statements.↩︎

  4. GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: September 2014).↩︎

  5. Committee of Sponsoring Organizations of the Treadway Commission, Internal Control—Integrated Framework (New York: American Institute of Certified Public Accountants, 2013).↩︎

  6. See Part 200, Subpart F, of Title 2, Code of Federal Regulations.↩︎

  7. See chs. 8 and 9 for performance audit topics that may be included.↩︎