Understanding the Professional Ethics (PETH) Exam Requirement Change
The implementation of the new CPA Exam that launched on January 10, 2024, has created a duplication of content in the Professional Ethics (PETH) Exam.* Therefore, the CBA is pursuing a change to no longer require applicants to complete the PETH Exam for issuance of a CPA license. Instead, applicants will need to complete a CBA-approved Regulatory Review Course for their first renewal.
It is important to note, the CBA remains committed to protecting consumers, and this change does not reflect a relaxing or loosening of the requirements to become a CPA.
A rulemaking package to implement the change is currently in progress. The effective date of this change is anticipated to be midsummer, but the timeline is still pending final approvals.
The CBA is committed to making this transition period easy for applicants. Here’s what you need to know:
- To be licensed BEFORE the effective date, applicants will need to have passed the PETH Exam, and will not need to complete a Regulatory Review Course for their first license renewal.
- Anyone licensed AFTER the effective date will not need to pass the PETH Exam, but will need to complete a Regulatory Review Course for their first license renewal.
You do not need to complete a Regulatory Review Course for your first license renewal.
May use passing score to meet a Regulatory Review Course requirement for first renewal.
- OR -
May use passing score as two hours of technical CE.
You must complete a Regulatory Review Course for your first license renewal.
The CBA understands it is impossible for applicants to predict exactly what date they will be granted their license, and the CBA is aware that many who will be applying for licensure in the upcoming months have already paid for and perhaps passed the PETH Exam.
To ensure any money or time spent studying will not be wasted, an applicant licensed after the effective date who has passed the PETH Exam may use the passing score at their first renewal to meet the new Regulatory Review Course requirement or to satisfy two hours of technical continuing education (CE). These options will be available for two years following the effective date of the rulemaking change to ease the transition.
Keep in mind, as illustrated in the visual above, the date a license is issued, NOT when you applied, is the key to whether an applicant will be subject to the current rule (PETH Exam required to be licensed) or the new rule (Regulatory Review Course due for first license renewal).
The CBA remains committed to ensuring that consumers receive quality accounting services from professionals they can trust. Stay informed of the latest updates on this developing topic, such as when the effective date becomes official, by adding the CBA website to your favorites and following the CBA on LinkedIn, 𝕏, Facebook, and Instagram.
* The California Department of Consumer Affair’s Office of Professional Examination Services reviewed the PETH Exam and determined that most of its topics are now covered in the new version of the CPA Exam. The new Regulatory Review Course requirement will fill in the gaps related to California-specific laws and regulations related to the practice of accountancy in the state. Additionally, many college courses now embed ethics within their curriculum.
Replacement of PETH Requirement FAQs
- What will be replacing the PETH Exam?
- When does this rule change become effective?
- Will any type of credit alternatives be given to applicants that have already taken and passed the PETH Exam once it is no longer required??
- I found a Regulatory Review Course online, but I can’t find it listed on the CBA website. Is it possible the CBA would accept it?
- I plan on applying for my CPA license at some point in the next couple of months. Should I purchase the PETH Exam or not?
- If I apply before the effective date, will I fall under the old rules or the new rules?
- How can I know if the CBA will approve my license before or after the effective date?
- I already paid for the PETH Exam but have not completed it. Since it is no longer required, am I eligible for a refund?
- Can I still take the PETH Exam after the effective date of the rule change?
- I worked hard for my CPA designation. Why is the CBA loosening the requirements for licensure?
- Do I still need to complete 4 hours of Ethics CE to renew my CPA license?
- If I have further questions about the replacement of the PETH Exam requirement, who may I contact?