Yellow Book CPE Requirements

How to reach the regulator directly.

United States Government Accountability Office
441 G Street, NW
Washington, DC 20548

Tel: (202) 512-9535

Email: yellowbook@gao.gov

The regulator's own published rules and related resources.

The Yellow Book (GAO Website)

GAO Government Auditing Standards (2018 Revision)

GAO Government Auditing Standards (2011 Revision)

The total continuing education hours required.

80 hours for 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.

The detailed rules behind that total -- category minimums, ethics, and other conditions.

Requirements: General

• 24 CPE hours in subject matter directly related to the government environment, government auditing, or the specific or unique environment in which the audited entity operates.
• CPE used to fulfill the 24-hour requirement may be taken at any time during the 2-year measurement period.
• 56 CPE hours in subject matter that directly enhance auditors' professional expertise to conduct engagements.
• Auditors should complete at least 20 hours of CPE in each year of the 2-year periods.
• The audit organization should maintain documentation of each auditor's CPE (refer to "Method of Reporting" below).

How the reporting cycle is structured.

2-year periods.

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.

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 (refer to "Requirements for New Licensees" below).

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.

When a reporting cycle begins.

Refer to "Cycling Period" above.

How completed credits are reported to the regulator.

Monitoring CPE:

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.

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.

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

The renewal or reporting deadline.

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.

→ Get monthly reminders before this deadline

What happens if the requirement is not met.

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.

Effective in 2018 GAO Yellow Book Revision: 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.

• August 21, 2018: Notes from CeriFi CPEdge: The Yellow Book status report is designed as a 2-year CPE period. In the event a professional does not complete the 24-hour government auditing requirement, the 80-hour total requirement, and/or the Year 2, 20-hour annual minimum requirement, by the end of the 2-year period, an extension can be added to the Yellow Book status report. The extension functionality will automatically deduct credits earned in the new CPE period and apply them to the 'previous' extended CPE period that has the deficiency.
• Rolling Periods: For "rolling" periods, CeriFi CPEdge will generate a new status report each year; therefore, in the event you have not met the miniumum annual requirement at the end of any particular year, you can add an extension of up to 2 months to make up for the deficiency.
• Fixed Periods: For "fixed" periods, CeriFi CPEdge will generate a new status report for each 2-year period. In the event that a professional does not meet the 20-hour annual minimum requirement at the end of the first year of the 2-year period, CeriFi CPEdge will automatically "carry back" credits earned from the first 2 months of the Year 2 period to fill in missing credits from the Year 1 annual miniumum requirement. When this occurs, a rule highlight will appear on the affected Yellow Book status report to explain the carry back and how it was applied.

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.

Reduced or prorated requirements for a first renewal.

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.

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.

Who may be excused from all or part of this requirement.

Exemptions and Exceptions:

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 (refer to "Requirements for New Licensees" above).

Effective in 2018 GAO Yellow Book Revision: 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.

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.

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.

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.

Specialists:

Definition: Specialist: An individual or organization possessing special skill or knowledge in a particular field other than accounting or auditing that assists auditors in conducting engagements. A specialist may be either an internal specialist or an external specialist.

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.

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.

Whether unused credits can apply to the next period.

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.

Effective February 29, 2020: Exceptions for Circumstances Related to the COVID-19 Pandemic

Exception provided: From the audit organization’s 2-year period in effect on February 29, 2020, auditors may carry over up to 40 hours of CPE, in excess of the 80-hour requirement, to the next CPE measurement period. For 2-year CPE measurement periods ending after December 31, 2020, only CPE hours earned through December 31, 2020 may be carried over. Auditors may not carry over excess CPE earned in prior 2-year CPE periods.

• If your current Yellow Book CPE end period is between February 29, 2020 and December 31, 2020, the Yellow Book status report has been programmed to allow up to 40 hours of carryover. Excess credits earned at any time in the 2-year period will be used as carryover to the next subsequent CPE period. Carryover credits only count toward the 80-hour requirement in the subsequent period and will not be used to meet the 24-hour AA requirement or the 20-hour annual minimum.
• If your current Yellow Book CPE end period is between January 1, 2021 and February 28, 2022, the Yellow Book status report has been programmed to allow up to 40 hours of carryover. Excess credits earned through December 31, 2020 will be used as carryover to the next subsequent CPE period. Carryover credits only count toward the 80-hour requirement in the subsequent period and will not be used to meet the 24-hour AA requirement or the 20-hour annual minimum.
• Note from CeriFi CPEdge: September 3, 2020: CeriFi CPEdge has confirmed with the GAO that a professional can begin carrying over credits when 80 credits have been earned in a COVID-19 CPE period and there are no deficits. Carryover credits maintain their delivery types (Live/Self Study, Teaching, Publishing).

→ CE Tracking calculates carryover for you

Rule changes the regulator has finalized, with effective dates.

Refer to the specific sections above for more details on any of the items noted below.

Effective February 29, 2020: Note from the GAO Regarding Yellow Book CPE Requirements: COVID-19 Update: Given concerns raised about auditors’ ability to complete continuing professional education (CPE) requirements due to the COVID-19 pandemic, GAO has taken steps to allow for more time and flexibility to complete such requirements. GAO has posted an alert that provides more information on the various flexibilities to help auditors meet their CPE requirements. They include:

• 6-month grace period for completing CPE.
• Waiver of the 20-hour annual CPE requirement.
• Carryover of CPEs earned in this period.
• Clarifying how partial CPE exemptions may be utilized due to COVID-19 issues.

July 17, 2018: The GOA has revised the Yellow Book. Changes to CPE requirements were relatively minor. Changes include:

• Acceptance of CPE delivery types and credit increments based on the 2016 NASBA Standards for CPE, including nano-learning (10-minute learning), self-study (beginning at 1/2 credit), and live learning (in both .2 and .5 increments after the full first credit is earned) (refer to "General Characteristics of Accredited Education" above).
• The 2-month grace period can now be used at the end of Year 1 of the 2-year period if an auditor does not meet the 20-hour annual minimum at the end of Year 1 (refer to "Enforcement" above).
• Revised definitions of acceptable CPE subject matter to meet the 24- and 56-hour CPE requirements (refer to "General Characteristics of Accredited Education" above).
• Exempts from CPE nonsupervisory auditors who charge less than 40 hours of their time annually to engagements conducted in accordance with GAGAs (refer to "Exemptions" above).
• Encourages GAGAS auditors to obtain CPE specifically on GAGAS, particularly during years in which there are revisions to the standards, which may assist auditors in maintaining the competence necessary to conduct GAGAS engagements (refer to "General Characteristics of Accredited Education" above).

Effective Date: The 2018 revision of Government Auditing Standards is effective for financial audits, attestation engagements, and reviews of financial statements for periods ending on or after June 30, 2020, and for performance audits beginning on or after July 1, 2019. Early implementation is not permitted.

The December 2011 Revision to Government Auditing Standards contains no new CPE requirements and it is not expected that any changes related to CPE will result from the clarified SASs. It should be noted that paragraphs 3.79-3.81 of the GAS are new. These paragraphs explicitly address the application of the GAGAS CPE requirements to internal specialists. This is an area that received a lot of questions about after the 2007 revision was issued. This publication supersedes the Government Auditing Standards, July 2007 Revision.

The July 2007 Revision to Government Auditing Standards incorporated the revised CPE requirements that were issued by GAO in April 2005 (GAO-05-568G). Under these requirements:

• All auditors who perform work under GAGAS should complete every 2 years at least 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.
• Auditors involved in any amount of planning, directing, or reporting on GAGAS assignments and those auditors who are not involved in those activities but charge 20 percent or more of their time annually to GAGAS assignments should also obtain at least an additional 56 hours of CPE (for a total of 80 hours of CPE in every two-year period) that enhances the auditor's professional proficiency to perform audits or attestation engagements. Auditors required to take the total 80 hours of CPE should complete at least 20 hours of CPE in each year of the 2-year period.
• Clarified the CPE requirement to include internal specialists who are part of the audit organization and perform as a member of the team.

Effective June 30, 2005: Yellow book was updated and republished. Below is a summary of the major changes from the 1991 CPE Interpretation:

1. Changes the title from "Interpretation" to "Guidance" to better reflect the nature of the document.
2. Modifies language throughout to be consistent with the 2003 revision of Government Auditing Standards.
3. Reorders sequence of information presented to improve clarity and facilitate the use of the guidance.
4. Adds effective date for CPE measurement periods beginning on or after June 30, 2005, with earlier adoption encouraged.
5. Creates a partial exemption for auditors who are only involved in performing field work but not involved in planning, directing, or reporting on the audit or attestation engagement, and who charge less than 20 percent of their time annually to audits and attestations conducted in accordance with GAGAS by requiring that they comply with the 24-hour CPE requirement to take training in each 2-year period in subjects and topics directly related to government auditing, the government environment, or the specific or unique environment in which the audited entity operates but exempts them from the remainder of the 80-hour CPE requirement.
6. Allows an audit organization greater flexibility in granting exceptions to the CPE requirements for such reasons as extended family leave, military leave, and disasters. Also specifies that exceptions to the CPE requirements should not be made for reasons such as workload, budget, or travel constraints.
7. Changes the calculation for pro rated number of hours for periods other than 2-year periods (e.g., transition periods and new hires) to result in a of pro rated approach based on 6-month intervals.
8. Clarifies that CPE programs should have learning objectives.
9. Expands and updates the lists of subjects and topics that could satisfy the 24-hour and 80-hour CPE requirements under GAGAS.
10. Specifies that for certification review courses, the only segments that count are those related to auditing, attestation, the government environment, or the specific environment of the audited entity counts.
11. Allows for auditors who attend meetings of an accounting or auditing standard-setting organization or a professional organization to receive CPE hours for the segments of such meetings that are specifically designated as CPE and are devoted to issues related to audits and attestation engagements, the government environment, or the unique environment in which the audited entity operates.
12. Deletes criteria for providers of CPE programs and activities because such criteria are often beyond the control of the audit organization.
13. Adds a paragraph specifically dealing with taxation and examples of when tax training would and would not qualify as CPE under GAGAS.
14. Specifies that some subjects and topics that are acceptable to state licensing bodies or professional organizations may not qualify as CPE under GAGAS. Conversely, some CPE that qualifies for GAGAS may not qualify for state licensing bodies or professional organizations. Specifies that auditors are responsible for determining the CPE requirements of other entities to which they report their CPE.
15. Adds a paragraph clarifying that certain subjects and topics not generally considered to be related to conducting audits or attestation engagements would not meet GAGAS CPE requirements unless they directly enhance the auditors' professional proficiency to perform audits or attestation engagements or relate to the subject matter of an audit or attestation engagement.
16. Allows credit for half-hours of CPE after the first full hour of CPE has been earned in a given program or activity.
17. Allows for participants' preparation time for a group CPE program to be counted as CPE hours if the provider has designated the preparation time as individual study.
18. Adds the flexibility for the audit organization to delegate responsibility to auditors for maintaining evidence of completion of a CPE program or activity. If the audit organization elects to delegate to the auditor the responsibility for maintaining this information, the audit organization should have adequate procedures in place to ensure that its records of CPE hours taken by auditors are supported by the documentation maintained by the auditors.

Effective March 15, 2004:

• GAO has deleted inclusion of taxation in the listing of subjects and topics that would always satisfy the 80 hour requirement.
• GAO is also rescinding the following section of par. 46:
• "...instruction in subjects and topics that meet the CPE requirements of licensing bodies (such as state boards of accountancy) or professional organizations (such as the American Institute of Certified Public Accountants (AICPA) or the Institute of Internal Auditors) would also satisfy the 80-hour CPE requirement."