The Secret Code

by Mark Hugh, CPA | Dec 19, 2019

As Chair of the Washington Accountancy Board, I am using my sole executive rule making authority (of which I have none), to issue Board Chair Order 0001 (which you do not have to follow).

My order is, when you meet another CPA in 2020, the official greeting, official response, and secret code word, are all: annual minimum.

First CPA: Annual minimum.

Second CPA: Annual minimum?

First CPA: Annual minimum!

Effective January 1, 2020, there are two minimum continuing professional educational (CPE) requirements, an individual must complete a minimum of 120 CPE credit hours within their three-year CPE reporting period AND a minimum of 20 CPE credit hours during each calendar year included in the three-year CPE reporting period. That latter requirement, an annual minimum, is new in 2020.

There are two reasons the Board felt it was important to establish an annual minimum requirement for CPE.

First, it is the national standard in Uniform Accountancy Act model rules. Because all CPA licensing in the United States is inherently local and determined on a state by state basis, adhering more closely to national model standards, when appropriate, increases the ability of Washington CPAs to reside and/or practice freely in other states without any unusual restrictions on their Washington license by that other state.

Second, and most importantly, a foundational principle of a CPA is competency. This is both a professional benefit and a regulatory requirement, as competence builds trust in professional services performed by CPAs and also protects the public.

It is December, and like other CPE instructors, I am in a whirlwind of teaching CPE throughout the state. Every December, I meet CPAs who are having the worst December of their lives, because they waited until the last month of their 36-month, three-year CPE reporting period to take all 120 credit hours of CPE.

I guarantee that I will meet some of them this year. And, a few of them will be tax practitioners. Has a tax practitioner who has not taken any CPE in the last three calendar years missed any important federal tax changes? Federal tax reform in 2018, perhaps? Has a tax practitioner who has not taken any CPE in the last three calendar years missed any important state tax changes? The U.S. Supreme Court’s Wayfair decision in 2018 and tax law changes in 45 states, perhaps?

So, they have pretty much missed everything in the prior 35 months, and yet were providing professional services the entire time.

I met the same CPAs in December three years ago, when they were having the second worst December of their lives, by waiting until the last month of their 36-month, three-year CPE reporting period to take all their CPE.

This is not just a tax practitioner issue, the same problem occurs with CPAs both in industry and in all disciplines in public practice.

For almost all of us, the new annual 20 hour minimum will not be an issue. As a group, CPAs are educated, conscientious, and dedicated professionals and most of us already exceed any required minimums for CPE. And, Washington’s flexible rules for CPE allow many formats of education to qualify, including nontechnical classes, industry conferences, in-house education, and starting in 2020, nano-learning.

However, starting in 2020, we all need to pay a little more attention on an annual basis to our total CPE hours, to make sure that in the interim years of our 36-month, three-year CPE reporting cycle, we meet the 20 CPE credit hour annual minimum. And, since this is a new requirement, it is important we remind other CPAs about the new annual minimum as well.

So, I will see you in the New Year, and when we meet, remember the code:

Annual minimum.

Hugh_DSC5776_SmallMark Hugh, CPA, is the principal of Mark Hugh PLLC. He is Chair of the Washington State Board of Accountancy. You can contact him at

Originally published in the Winter 2019 Washington Board of Accountancy E-newsletter. Published here with permission.

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