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Don’t fear the CPE audit

BOA Business

Anne Janotta Erickson, MNCPA senior business & industry marketing coordinator | April 2019 Footnote

What scares you? Flying? Needles? Heights? All are reasonable fears that can be overcome by digging deeper into the root cause.

Some CPAs may add the Minnesota Board of Accountancy’s (BOA) annual CPE audit to this list. But, by digging deeper and understanding the purpose, timing, logistics and common errors surrounding the CPE audit, you’ll quickly realize that you have nothing to fear.

Purpose

The BOA’s mission is to protect the public by regulating the accounting profession. This is achieved in part by enforcing the rules that require CPAs to maintain their professional competence — i.e., CPE.  

The annual CPE audit ensures CPAs stay abreast of the rules and regulations vital to their roles in firms and companies.

Timing

The CPE audit is an annual process handled administratively by the BOA’s staff. In past years, the CPE audit was conducted in one round in the spring.

This year, the process is changing.

In 2019, the CPE audit for the reporting period of July 1, 2015, through June 30, 2018, will be done in batches throughout the course of the year. This change accommodates staffing needs at the BOA.

The first round of CPE audits began this spring. As of our print date, the BOA has not released a schedule for subsequent rounds; it’s based on staff schedules. CPAs, therefore, could receive notice that their CPE is under audit anytime between now and the end of the year. 

Logistics

CPAs are selected at random for the annual CPE audit. This list is computer-generated. One BOA member is also chosen.

If chosen, you’ll receive a letter from the BOA notifying you that you’ve been selected for the 2019 CPE audit. This letter clearly states the response deadline. Not responding is not an option and could result in disciplinary action.

Within your response, include:
  • A completed CPE Audit Form. This is available for download on the BOA’s website as a fillable PDF.
  • CPE supporting documentation. Supply documents for all courses taken between July 1, 2015, and June 30, 2018.
Once received, the BOA reviews all documentation. If there are no issues, expect a letter notifying you that the audit is complete. If mistakes are found, you’ll receive a follow-up letter with instructions.

Common CPE audit errors

Ensure smooth sailing should you be audited by understanding where CPA peers have made mistakes in the past.

Common issues include:
  • Missing documentation, including:
    • CPE certificates.
    • Supporting documents for nonapproved classes.
  • Failing to respond.
    • BOA rules require a timely response. A late response, or none whatsoever, could result in disciplinary action.
  • Missing carryback credits.
    • Carryback credits need to be reported as soon as you discover and make up the shortage.
    • Noncompliance fees accrue monthly. Contact the BOA to understand what you owe.
  • Failing to use the required forms.            
  • The audit form clearly instructs you to not use your own spreadsheets or attachments.
  • Misclassifying courses.
    • Use the NASBA Fields of Study to confirm whether a course is technical or nontechnical.

Questions?

The CPE audit, just like CPA certification, is regulated by the Minnesota BOA. They can be reached at 651-296-7938 or www.boa.state.mn.us.

The MNCPA is here for you. Reach out anytime at 952-831-2707 or customerservice@mncpa.org.