Change is in the air: And it is helpful.

By Raymond Johnson, CPA Retired and Jason Orme, CPA

Changes are coming from the Oregon Board of Accountancy – and they should help CPA Candidates, Licensees, and Firms.

The Oregon Board of Accountancy and its Laws and Rules Committee have been busy this year, working on a major overhaul of the Board’s rules. Change has been motivated by a variety of factors facing the profession, including the supply of talent.

The Oregon Board of Accountancy Laws and Rules Committee put significant time and effort in this year to investigate these changes, understand the Uniform Accountancy Act, and practices in other states in order to bring these proposals to the Board of Accountancy, and to licensees for public comment. These rule changes were discussed at two town hall meetings sponsored by the Oregon Society of CPAs. The public comments received by the Oregon Board of Accountancy were quite helpful.

The changes fall into two broad categories:

1. Rule changes to better align Oregon with the Uniform Accountancy Act and rules in Oregon’s neighboring states. These rule changes make Oregon more employer and CPA candidate friendly, and they remove a lot of speed bumps from Oregon’s rules. Many of these rule changes took effect on October 1, 2023.
2. Rule changes associated with CPA Evolution, a new CPA exam, and implementing HB 2523 that allows CPA Exam candidates to sit for the CPA Exam after completing 4 years (120 semester hours or 180 quarter hours) of education. The Laws and Rules Committee also took the opportunity to further align Oregon with our surrounding states. These rules were recently discussed by the Oregon Board of Accountancy, and after considering public comment and minor revision, were approved with an effective date of January 4, 2024.
   Following is a summary of what is new and how it may impact both current and prospective licensees.

On October 1, 2023 a number of new rules were put in place, to make Oregon more employer and CPA candidate friendly. The following is a brief summary of these new rules.

New Rules for CPA Candidates
The list of courses that count toward a CPA candidate’s accounting credits has been updated and expanded to match the Uniform Accountancy Act and include the types of accounting courses that most students take in their accounting education. The Board of Accountancy has moved away from putting some accounting classes in the business bucket. This is a change that is more candidate friendly.

A significant change has been made in the number of internship credits that can count toward the 150-hour requirement to be licensed. Previously internship credits were limited to 4 semester hours or 6 quarter hours. The new rule allows total internship hours of 12 semester hours or 18 quarter hours to count toward the 150-hour requirement*. This is a significant change that will potentially have positive impacts on both CPA candidates and CPA firms. A student can work full time, say during Winter quarter, get paid, gain practical experience, develop professional skills, and earn university credit. Firms can take this opportunity to develop their talent pipeline. Note the new rules still permit up to 4 semester or 6 quarter hours of internship credits to count toward the accounting credits if coded as an upper division accounting internship on the transcript.

Another change for CPA candidates involves the process of documenting practical work experience. The Oregon Board of Accountancy asked its Laws and Rules Committee to develop an affidavit that a candidate can complete to document meeting their experience requirement. The basic competencies that a candidate must demonstrate are still in place. The board now has three different affidavits: one for attest experience, one for tax experience, and one for experience in industry, government, and not-for-profit organizations. This simplifies the process of documenting a candidate’s experience for both the candidate, and the CPA verifying the candidate’s experience. The new affidavits can be found on the Board website (https://www.oregon.gov/BOA/Pages/Licensing-Forms.aspx).

Finally, the window to retain credit for a section of the CPA Exam begins when scores are released to a candidate. This aligns Oregon with the national standard.

New Rules of PA Candidates 
Candidates for a public accountant’s (PA) license now must pass only two sections of the CPA Exam, Financial Accounting and Reporting (FAR) and Regulation (REG). Previously, PA candidates had to pass FAR, REG, and Business Environment and Concepts (BEC). However, with the new CPA Exam BEC will no longer be part of the CPA Exam. Requiring PA candidates to pass FAR and REG also aligns Oregon with other states that offer a PA license.

New Rules for Retired Licensees
The Board of Accountancy also liberalized the rules regarding what a retired CPA can do. As of October 1, 2023, a retired CPA may be employed by a public accounting firm, limited to performing work that someone without any CPA license is entitled to perform in a CPA firm. The work of a retired CPA should be reviewed and supervised by an actively licensed CPA. A retired CPA should also note that because a license as a retired CPA is a license issued by the Oregon Board of Accountancy, the retired CPA is also bound by the Code of Professional Conduct in Division 30 of the Oregon Rules.

Clarifying Rules for Foreign Licensees Applying for an Oregon CPA License
The Board of Accountancy clarified the rules regarding how a foreign licensee can apply for an Oregon CPA License. A critical issue is whether the foreign licensee holds a license or credential that is recognized in a mutual recognition agreement (MRA) recognized by the International Qualification Appraisal Board (IQAB). If a foreign licensee holds a license that is recognized by IQAB, the licensee must supply a certification from NASBA together with the application for initial licensure (and payment of the applicable fee) that the applicant has met the applicable provision of an MRA recognized by the Board, including but not limited to passage of IQEX (if required under the MRA, and any restrictions on practice in the United States). Further, the candidate must complete and pass an initial licensure ethics exam that has been approved by the Oregon Board.

If a foreign licensee is not from a jurisdiction that is covered by an MRA recognized by IQAB, then the foreign licensee must go through the same process as an initial licensee to earn an Oregon license, including meeting Oregon’s education, examination, experience, and ethics exam requirements.

New CPE Rules
The Oregon Board made a number of changes to the CPE rules. These include:
•    Changing the minimum number of CPE hours in a given year from 24 hours to 20 hours to align Oregon with the Uniform Accountancy Act.
•    Dropping the cap on nano learning credits.
•    Changing the Ethics requirement to requiring 4 hours of ethics CPE every biennium from requiring 4 hours of Oregon specific ethics every biennium.
•    Allowing CPE Reciprocity, which allows an Oregon licensee whose principal place of business is out of state to meet Oregon’s CPE requirements by meeting the licensee’s home state’s CPE requirements.

A second set of rule changes are effective January 4, 2024. These are discussed below.

CPA Exam Candidates Can Sit for the CPA Exam After Four Years of Education
The first of these changes will allow relates to HB 2523, led by the Oregon Society of CPAs and supported by the Oregon Board of Accountancy, which easily passed the Oregon Legislature in 2023. HB 2523, and the new related rules will allow a CPA Candidate to be eligible to sit for the CPA exam with a bachelor’s degree, including upper division accounting education and business education. Only four years of education (120 semester hours or 180 quarter hours) are required to be eligible to sit for the CPA exam, allowing many candidates to sit for the CPA Exam while they complete their 5th year of education. This is a significant change for CPA exam candidates in Oregon and it better aligns Oregon with most other states. Five years of education (150 semester hours or 225 quarter hours) are still required for initial licensure.

CPA Evolution – A New CPA Exam
January 1, 2024, brings a new CPA Exam. The new CPA exam has three required sections and one elective section. As a result, Oregon rules have been updated to be consistent with the new CPA Exam. A candidate must still pass four sections, three required sections and one elective section to pass the CPA exam.

A New CPA Exam Window
As of January 4, 2024, CPA Exam candidates will be able to retain credit for a section of the CPA exam for 30 months from the date the scores are released for the section of the exam which they passed, an increase of one year from the current rule. For candidates that struggle with completing the CPA exam while working through busy season, this allows candidates additional time to complete the exam. This rule change is retroactive, so candidates who, for example, passed a CPA exam section in December of 2022 will be able to retain credit for passing this section for 30 months from the date their scores were released with the results of passing that section.

The National Credit Relief Initiative
Oregon joined other states in passing the National Credit Relief Initiative into rule. Candidates who lost credits between January 30, 2020 and May 11, 2023 will have those credits extended through June 30, 2025. The proposed text of the Oregon rule changes removes the need for an Oregon CPA exam candidate to submit a request to the Board to seek relief under this initiative.

Qualifying for Retired Status
The Oregon Board of Accountancy made it easier to qualify for retired status. A CPA can qualify for retired status after 20 years of practice as an actively licensed CPA. The board also removed the age requirement of having to be age 65.

Reinstatement Rules
The Oregon Board of Accountancy changed its rules for reinstating a lapsed license, a retired license, or an inactive license to active status. The general approach to regain active licensure is to complete 80 hours of CPE in the last 24 months, including 4 hours of ethics CPE (it does not need to be state specific). This is a significant reduction in CPE hours compared to prior rules and aligns Oregon with neighboring jurisdictions. Further, those reinstating to inactive CPA status can count CPE in the last 24 months that they applied or intended to apply toward their inactive license renewal. Finally, the rules have also been changed for late filing of CPE. The monetary penalty for late filing of CPE is maintained but the new rules eliminate the 16-hour CPE penalty associated with late filing of CPE.

The Oregon Board of Accountancy and its Laws and Rules Committee are continuing their review of the statutes and rules related to our profession. We expect more changes in the next year or two. We believe that the current and future changes will be beneficial for candidates, licensees, and firms for years to come.

*CPA candidates should note that 4 semester hours (6 quarter hours) can count toward their accounting credits if they are coded as upper division accounting hours by their university. The remainder will count toward the 150 hour requirement.

Dr. Raymond Johnson is Professor Emeritus from Portland State University, where he taught for 35 years. He has served on the NASBA Board of Directors, the AICPA Professional Ethics Executive Committee, is Immediate Past Chair of the International Accounting Education Standards Board’s Consultative Advisory Group, and is current Chair of the Oregon Board of Accountancy Laws and Rules Committee. He is a past Chair of the OSCPA.

Jason Orme is Managing Partner of Talbot, Korvola & Warwick, and Partner in Charge of TKW's Tax Department. He has over 35 years of experience as a tax expert, providing consulting and compliance services to closely held businesses, their owners, individuals and not-for-profit organizations. He is past Chair of the OSCPA and serves as a member of the OSCPA Taxation Committee, a member of the Oregon Board of Accountancy Laws and Rules Committee, and as a member of AICPA Council.