Why are so many people being audited?

Written by Allen Lloyd, Montana Society of CPAs Executive Director

Does this sound familiar:

On behalf of the Montana Board of Public Accountants, the National Association for State Boards of Accountancy (NASBA) is conducting an audit of continuing professional education (CPE) for the 2017 CPE Renewal Period and has randomly selected you as an audit candidate. To meet your CPE requirement you must have completed 120 hours of CPE with a subset of 2 hours in Ethics between January 1, 2015 and December 31, 2017.

The Montana Board of Public Accountants sent out audit notices on July 13th and for the second year in a row half the licensed CPAs will be audited.  This audit is for 2015, 2016, and 2017.  As a reminder starting January 1, 2018 the Board implemented new rules on the hours needed, more information on the changes is available here: http://boards.bsd.dli.mt.gov/Portals/133/Documents/pac/licensee%20notice.pdf?ver=2018-07-10-083554-057

Why are so many people being audited?  The short answer is because prior year audits results have not been very good.

audit stats

It isn’t all bad news as the vast majority of the 161 failures were able to correct their issue and those who did not correct their issue had their license administratively suspended.  The past two audits have seen fail rates around 20%, which is not acceptable.  The Montana Board of Public Accountants have been discussing ways to solve the issue, including legislation allowing them to audit everybody if fail rates are above a threshold.

If you were audited this year it is critical that you report your hours by August 13th.  To report your hours go to the CPE reporting tool located at http://mt.cpetracking.com.  You will need your Montana CPA license number and your password to log into your account.  You can find your license number on your license or here: https://ebiz.mt.gov/POL/GeneralProperty/PropertyLookUp.aspx?isLicensee=Y&TabName=APO select Public Accounting from the Licensing Board list and enter your name and click Search.  Your license number is the entire string of characters (PAC-CPAP-LIC-11223 not just the 11223)

If you need help with your password you will need your license number and your email address, if you can’t remember the email address you used give Grace Berger a call at the State Board (406) 841-2244.

Once you log into the tracker you should see any classes taken through MSCPA, we have a relationship with NASBA that allows us to upload those credits so you don’t have to go through the hassle.  For classes from other sources you will need to enter the event information and upload a Certificate of Completion.  Remember 40% of those who failed last year were due to documentation issues.  Make sure your documentation has all the required information:

24.201.2124    STANDARDS FOR CPE REPORTING

  1. Licensees are responsible for accurately reporting the appropriate number of CPE hours and must retain appropriate documentation of their participation in learning activities.
  2. Participants in group, self-study, nano-learning, or blended learning programs must obtain a certificate of completion or transcript issued by the program sponsor. All acceptable documentation must include the following information:
    • participant’s name;
    • sponsor;
    • course title and/or description of content;
    • date(s);
    • location;
    • number of continuing education credit hours granted; and
    • NASBA National Registry of CPE Sponsors ID (if applicable, applies to self-study).
  3. Documentation must be retained for not less than five years.
  4. The sponsor of group, self-study, nano-learning, or blended learning programs shall retain evidence of an individual’s participation in a program for not less than five years. Pertinent information includes:
    • participant’s name;
    • record of participation;
    • outline of the course (or equivalent);
    • date(s);
    • location;
    • instructor(s); and
    • number of contact hours/continuing education credit hours granted.
  5. Documentation for technical committee sessions must include a written certificate including the following:
    • the nature of the activity (e.g., topic or specific new competency acquired), the items discussed, and the source/material considered;
    • the dates of the learning activity; and
    • the number of CPE credits attributed to the learning activity.
  6. Acceptable evidence for credit of publications is a copy of the publication that names the licensee as author or contributor, a statement from the licensee supporting the number of CPE credits claimed, and the name and contact information of the independent reviewer(s) or publisher.

We heard from many members that the tracking site can be difficult to navigate.  NASBA has a resource available to help here: https://nasba.org/app/uploads/2013/08/CPEtracking_Licensee_Manual_for_Audit_Services-041414.pdf It is important to remember that once you submit your information to the State Board you will not be able to go back in to add or update information.

Continuing education is one of the cornerstones of being a CPA.  It is critical that you respond if you were selected for audit.  We are here for you if you have trouble with the process, just give us a call or email.  If we can’t help you we will connect you with the right person to help you navigate the process.

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