• Career Center

    If You Can’t Admit You’ve Committed CPE Fraud, Then You Need to Take Another Ethics Course

    By | September 23, 2013

    I just finished a one-hour CPE course in 9 minutes. That included the time it took to log in, select the course, scroll through 58 slides, ace three questions, and get an 80% on the five-question quiz at the end. 
     
    Oh, right. It was an ethics course.
     
    Getting one hour of credit in nine minutes isn't as bad as it sounds because the AICPA and NASBA — for the purposes of CPE — define an hour as 50 minutes. Following their lead, I will be increasing the revenue at my company this year by defining one dollar as 90 cents, which will be disclosed clearly in the footnotes that no one reads. 
     
    Eighty-one percent of CPAs cheat in some manner on their CPE requirements.1 CPE fraud is nearly as common as Going-Concern-blog-post-statistics fraud.2
     
    Regardless of your state of licensure, CPE requirements seem like they were designed to promote fraud. In a live class, they measure seat time, not learning. In a self-study course, you have to pass a quiz, not absorb information. In fact, for CPExpress (an all-you-can-eat, online, self-study program created by the AICPA) if you fail your end-of-course quiz, they tell you your score and allow you to change your answers as many times as you need until you pass.
     
    How did I become aware of this? Let's call it, "research" or "investigative journalism."
     
    Some of the better stories of CPE-related impropriety include: 
    • For the past three reporting cycles, a former-KPMG CPA has completed 80 hours of CPE during the week between Christmas and New Year. He orders self-study courses, goes directly to the exam, and uses the index to find answers to the questions he doesn’t know.
    • A friend of mine “knows a guy” in California who finished 40 hours of CPE in one day. Suck on that, time-space continuum.
    • Checking email, reading the news, or watching college football games on your laptop during a live class are commonplace, pedestrian forms of cheating. One midwest CPA with particularly capacious balls arrived at a live class, opened his laptop, and started taking self-study courses during the live class. To top it off, the CEO of the state society was sitting at the same table.
    • A CPE instructor told me once while he was teaching an ethics course, some guy attending the 8-hour class pulled out a client folder and proceeded to work on an engagement. That guy paid $20 per hour of CPE which he billed back to his client for $220 per hour. He made $1,600 while completing his state mandated ethics requirement. 
    Everyone is aware that the opportunity to cheat abounds in the current CPE framework, but most people dismiss it. CPAs have to be ethical with things that are so much more important than CPE; it’s assumed that they won’t cheat on the little things. But behavioral economist Dan Ariely, author of The Honest Truth About Dishonesty, says just the opposite. 
     
    Human beings are more likely to cheat on seemingly insignificant things. Everyone has what Ariely calls a “Personal Fudge Factor.” In a 2010 Forbes article, Ariely says the following:
    In our experiments we find that people […] cheat only to the extent that they can continue to feel good about themselves.
    It’s easy to rationalize cheating on a CPE course. No one will ever know. You probably wouldn’t have learned anything anyway. You learn tons of really important crap that you don't get any credit for. To research for this post, I cheated my way through an audit and attest course called “Applying A-133 to Nonprofit and Governmental Organizations.” I don’t do audit or attest work, nor do I work with nonprofit or governmental agencies. So even if I did take the 50 minutes to thoroughly learn about A-133 (whatever that is), it wouldn't make me better at what I do. Plus no one will ever know I cheated. No one. Ever. Unless someone reads this blog post.
     
    If you’re a conscientious professional, you keep yourself educated on the latest developments that affect the quality of your output at work, regardless of CPE requirements. CPE requirements exist to maintain the CPA brand. That’s not a bad thing. I personally benefit from the strength of that brand. However, the hoop-jumping nature of most CPE courses supplies our profession with enough rationalization to complete even the most obtuse fraud triangle.
     
    But I don’t commit CPE fraud. Anymore. I took a 9-minute ethics course.
     
    1 No one knows how many CPAs cheat on their CPE. I pulled 81% out of my ass.
    2 Seriously, 81% came out of my ass.
     
    If you have a great story about "someone you know" who's cheated on his or her CPE, we'd love to hear about it in the comments.
     
    • $56523509

      Much like eating hours, trading a client’s stock, or altering workpapers after receiving a subpoena, I think this is a common and acceptable practice that should not be discussed publicly. The accounting profession is esteemed because we exercise discretion.

      • James Ulvog

        Isn’t it an ethics violation to publicly discuss CPE fraud?

        • $56523509

          I don’t know. I wasn’t paying attention during my ethics self-study.

    • LDO

      As someone who worked in public accounting for 4.5 years, I can say that I have never seen a partner who hasn’t sat through every minute of a CPE webcast, taken copious notes, and was a great example for the rest of the firm.

    • OnceANaiveIntern

      As an intern I was carpooling with a partner, who called his wife (also a CPA) and asked about the results of how she did taking HIS ethics CPE course.

      • timreynolds

        OH MY WORD! Report him!

    • jaded_CPA

      I agree, partners are the shining star example of how seriously we should all take the CPE requirements. If it weren’t for the example of partners I would probably already be in jail.

    • Guest

      Great article. I will say that it’s certainly a good thing that CPA’s don’t need math skills.

      “Getting one hour of credit in nine minutes isn’t as bad as it sounds because the AICPA and NASBA — for the purposes of CPE — define an hour as 50 minutes. Following their lead, I will be increasing the revenue at my company this year by defining one dollar as 90 cents, which will be disclosed clearly in the footnotes that no one reads.”

      If an hour (60 minutes) is defined as 50 minutes and you are following their lead, you would actually define one dollar as 83.3 cents. I’m glad I could help.

      Related: http://web2.0calc.com/

      • Guest

        This guy.

    • Jim

      I have no problem using 9 minutes to pass a 50 minute CPE. Heck, I do this for sexual harassment and IT security training and tests at work. I still score 90%+ correct. There are no new topics in ethics. You can answer every question by following one very simple rule: don’t do stupid things. Every thing that can go wrong is a result of negligence, indifference, hubris, arrogance, and / or greed. With this train of thinking, listen to the first CPE and you will have the answer for all subsequent ethics CPE tests.

      • $56523509

        “Every thing that can go wrong is a result of negligence, indifference, hubris, arrogance, and / or greed.”

        And just because I don’t think its important to put any time/effort into my ethics CPE doesn’t mean that I’m negligent, indifferent, arrogant, etc.

      • Tax Nerd

        My state required me to take the exact same ethics CPE five years in a row. The first time, I clicked on every freaking screen like they wanted. After that, I learned to just go straight to the quiz, and got 90+% every time. It’s not like there was something new to learn.

        • YoMom

          Implying that you felt learning occurred the first time.

      • JustAnotherCPA

        Did anyone else spot the irony??
        To wit:
        “I have no problem using 9 minutes to pass a 50 minute CPE…”
        “… listen to the first CPE and you will have the answer for all subsequent ethics CPE tests.”
        “… is a result of negligence, indifference, hubris, arrogance…”

    • Sven

      I never speed

    • Kevin

      One hour of CPE in 9 min, that type of efficiency will make you the envy of the CPA profession.

      The question you didn’t address, which is a corollary of this practice, of course becomes, how much time did you put on your time sheet for that? I once knew a lady that did a similar thing as you mentioned, went directly to the questions and used the index to find the answers. She routinely got a hour of CPE done in 15 min or so and charged an hour on her timesheet.

      • Guest

        You get to put self-study CPE on your timesheets? It’s not “an investment in your career”?

        (Back when I was a senior at a Big Four firm that paid overtime, I was told that reading my non-client email was “an investment in my career” that should be done on my own time.)

        • Donald Manchester

          You were getting overtime. You think they want to create an environment were you are juicing OT.

    • Walter White

      If anybody has the inside skinny on the Breaking Bad finale, Felina, which airs this Sunday evening, it would be ethical to post it here.

      • Lois

        Walter wakes up with all of his hair, next to a different wife played by Jane Kaczmarek. Squabbling in the kitchen are his five sons, rebel Francis, bully Reece, boy genius Malcolm , musician Dewey, and baby Jamie.

    • Read “Audit: Record number of licensed N.J. accountants are lying about education” at http://blog.nj.com/ledgerupdates_impact/print.html?entry=/2011/11/audit_record_number_of_license.html.

      Also read my article “Ethics 7 Ways CPAs Violate the NEW AICPA Requirements” at http://www.theprosandthecons.com/articlepdfs/GDZ-Ethics-7-Ways-CPAs-Violate-the-NEW-AICPA-Requirements-print.pdf.