Cal. Code Regs. tit. 16 § 87

Current through Register 2024 Notice Reg. No. 49, December 6, 2024

Section 87 - Basic Requirements

(a) 80 Hours.

As a condition for renewing a license in an active status, a licensee shall complete at least 80 hours of continuing education in the two-year period immediately preceding license expiration, and meet the reporting requirements described in Section 89(a). A licensee engaged in the practice of public accountancy as defined in Section 5051 of the Business and Professions Code is required to hold a license in an active status. No carryover of continuing education is permitted from one license renewal period to another.

(1) A licensee renewing a license in an active status, shall complete a minimum of 20 hours in each year of the two-year license renewal period, with a minimum of 12 hours of the required 20 hours in technical subject areas as described in subsection (a)(2).

(2) Licensees shall complete a minimum of 50 percent of the required continuing education hours in the following technical subject areas: accounting, auditing, fraud, taxation, consulting, financial planning, business law, economics, management services, statistics, ethics as defined in subsection (b), regulatory review as defined in Section 87.8, computer and information technology (except for word processing), and specialized industry or government practices that focus primarily upon the maintenance and/or enhancement of the public accounting skills and knowledge needed to competently practice public accounting.

(3) Licensees may claim no more than 50 percent of the required number of continuing education hours in the following nontechnical subject areas that contribute to the professional competence of a licensee:

(A) Behavioral ethics (e.g., ethical decision-making; personal ethics; diversity, equity and inclusion; etc.).

(B) Business management and organization (e.g., organization of a public accounting practice, etc.).

(C) Communications and Marketing (e.g., business presentations; business writing; social media; customer communications; marketing professional services; etc.).

(D) Computer software and applications (e.g., courses in the general use of software used in a business environment, etc.).

(E) Personal Development (e.g., career planning; leadership; time management; etc.).

Personnel/Human resources (e.g., attracting; motivating; developing and retaining employees; social justice in staff recruitment and retention; etc.).

(F) Production (e.g., operations management; inventory management; supply operations, etc.).

(4) Programs in the following subject areas are not acceptable continuing education: personal growth, self-realization, spirituality, personal health and/or fitness, sports and recreation, foreign languages and cultures and other subjects which will not contribute directly to the professional competence of the licensee.

(b) Ethics Continuing Education Requirement.

A licensee renewing a license in an active status shall complete four hours of the 80 hours of continuing education required pursuant to subsection (a) in an ethics course. The course subject matter shall consist of one or more of the following areas: a review of nationally recognized codes of conduct emphasizing how the codes relate to professional responsibilities; case-based instruction focusing on real-life situational learning; ethical dilemmas facing the accounting profession; or business ethics, ethical sensitivity, and consumer expectations. Programs in the following subject areas are not acceptable toward meeting this requirement: sexual harassment, workplace harassment, or workplace violence. Courses must be a minimum of one hour as described in Section 88.2.

(c) Government Auditing Continuing Education Requirement.

A licensee who engages in planning, directing, conducting substantial portions of field work, or reporting on financial or compliance audits of a governmental agency shall complete 24 hours of the 80 hours required pursuant to subsection (a) in the areas of governmental accounting, auditing or related subjects. This continuing education shall be completed in the same two-year license renewal period as the report is issued. A governmental agency is defined as any department, office, commission, authority, board, government-owned corporation, or other independent establishment of any branch of federal, state or local government. Related subjects are those which maintain or enhance the licensee's knowledge of governmental operations, laws, regulations or reports; any special requirements of governmental agencies; subjects related to the specific or unique environment in which the audited entity operates; and other auditing subjects which may be appropriate to government auditing engagements. A licensee who meets the requirements of this subsection shall be deemed to have met the requirements of subsection (d).

(d) Accounting and Auditing Continuing Education Requirement.

A licensee who engages in planning, directing, performing substantial portions of the work, or reporting on an audit, review, compilation, or attestation service, shall complete 24 hours of the 80 hours of continuing education required pursuant to subsection (a) in the course subject matter pertaining 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. This continuing education shall be completed in the same two-year license renewal period as the report is issued.

(e) Accounting and Auditing Continuing Education Requirement When Providing Preparation Engagements as Highest Level of Service.

A licensee who provided preparation engagements as their highest level of service shall complete eight hours of the 80 hours of continuing education required pursuant to subsection (a) in preparation engagements or accounting and auditing as described in Section 87(d).

(f) Fraud Continuing Education Requirement.

A licensee who must complete continuing education pursuant to subsections (c), (d), or (e) of this section shall also complete an additional four hours of continuing education specifically related to the prevention, detection, and/or reporting of fraud affecting financial statements. This continuing education shall be part of the 80 hours of continuing education required by subsection (a), but shall not be part of the continuing education required by subsections (c), (d), or (e).

(g) Failure to Comply.

A licensee's willful failure to comply with the requirements of this section shall constitute cause for disciplinary action pursuant to Section 5100(g) of the Accountancy Act.

Cal. Code Regs. Tit. 16, § 87

1. Amendment filed 12-24-75; effective thirtieth day thereafter (Register 75, No. 52).
2. Amendment filed 4-12-83; effective thirtieth day thereafter (Register 83, No. 16).
3. Amendment of subsections (a)-(c) and (e) filed 6-26-90; operative 7-26-90 (Register 90, No. 35).
4. Amendment of subsections (b)-(d) filed 8-4-95; operative 9-3-95 (Register 95, No. 31).
5. Amendment of subsection (a) and repealer of subsection (e) filed 3-28-96; operative 7-1-96 (Register 96, No. 13).
6. Editorial correction of subsection (d) (Register 96, No. 16).
7. Amendment filed 6-17-98; operative 7-1-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 25).
8. Amendment of subsections (a), (d) and (e) filed 5-9-2000; operative 6-8-2000 (Register 2000, No. 19).
9. Amendment of subsection (c) filed 2-18-2003; operative 3-20-2003 (Register 2003, No. 8).
10. New subsection (d), subsection relettering and redesignation of portions of subsection (e) as new subsections (e)(1)-(4) filed 7-19-2004; operative 8-18-2004 (Register 2004, No. 30).
11. Amendment of section and NOTE filed 12-18-2009; operative 1-1-2010 pursuant to Government Code section 11343.4 (Register 2009, No. 51).
12. Change without regulatory effect amending NOTE filed 2-27-2012 pursuant to section 100, title 1, California Code of Regulations (Register 2012, No. 9).
13. Amendment filed 9-10-2013; operative 1-1-2014 (Register 2013, No. 37).
14. Amendment of subsection (d), new subsection (e), subsection relettering and amendment of newly designated subsection (f) filed 6-22-2017; operative 10-1-2017 (Register 2017, No. 25).
15. Amendment of subsections (a)(2)-(3), new subsections (a)(3)(A)-(F), amendment of subsections (b), (e) and (f) and amendment of NOTE filed 2-1-2023; operative 7-1-2023 (Register 2023, No. 5).

Note: Authority cited: Sections 5010 and 5027, Business and Professions Code. Reference: Sections 5026, 5027, 5028 and 5051, Business and Professions Code.

1. Amendment filed 12-24-75; effective thirtieth day thereafter (Register 75, No. 52).
2. Amendment filed 4-12-83; effective thirtieth day thereafter (Register 83, No. 16).
3. Amendment of subsections (a)-(c) and (e) filed 6-26-90; operative 7-26-90 (Register 90, No. 35).
4. Amendment of subsections (b)-(d) filed 8-4-95; operative 9-3-95 (Register 95, No. 31).
5. Amendment of subsection (a) and repealer of subsection (e) filed 3-28-96; operative 7-1-96 (Register 96, No. 13).
6. Editorial correction of subsection (d) (Register 96, No. 16).
7. Amendment filed 6-17-98; operative 7-1-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 25).
8. Amendment of subsections (a), (d) and (e) filed 5-9-2000; operative 6-8-2000 (Register 2000, No. 19).
9. Amendment of subsection (c) filed 2-18-2003; operative 3-20-2003 (Register 2003, No. 8).
10. New subsection (d), subsection relettering and redesignation of portions of subsection (e) as new subsections (e)(1)-(4) filed 7-19-2004; operative 8-18-2004 (Register 2004, No. 30).
11. Amendment of section and Note filed 12-18-2009; operative 1-1-2010 pursuant to Government Code section 11343.4 (Register 2009, No. 51).
12. Change without regulatory effect amending Note filed 2-27-2012 pursuant to section 100, title 1, California Code of Regulations (Register 2012, No. 9).
13. Amendment filed 9-10-2013; operative 1-1-2014 (Register 2013, No. 37).
14. Amendment of subsection (d), new subsection (e), subsection relettering and amendment of newly designated subsection (f) filed 6-22-2017; operative 10/1/2017 (Register 2017, No. 25).
15. Amendment of subsections (a)(2)-(3), new subsections (a)(3)(A)-(F), amendment of subsections (b), (e) and (f) and amendment of NOTE filed 2-1-2023; operative 7/1/2023 (Register 2023, No. 5).