Understanding the Professional Ethics (PETH) Exam Change

Watch this video for everything you need to know about the 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, beginning July 1, 2024, the CBA will 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.

The CBA is committed to making this transition period easy for applicants. Here’s what you need to know:

To be licensed BEFORE July 1, 2024, 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 July 1, 2024 will not need to pass the PETH Exam, but will need to complete a Regulatory Review Course for their 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 July 1, 2024, who has passed the PETH Exam may use the passing score to satisfy two hours of technical continuing education (including as a substitute for the newly required Regulatory Review Course) at their first renewal. These options will be available for two years following the effective date of July 1, 2024, to ease the transition.

Keep in mind, as illustrated in the visual below, 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).

Passed PETH Exam

Licensed BEFORE July 1, 2024

PETH Requirement Complete.

You do not need to complete a Regulatory Review Course for your first license renewal.

Licensed AFTER July 1, 2024

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.

NOT Passed PETH Exam

Applied BEFORE July 1, 2024

Active applications with all other requirements met will be approved. You must complete a Regulatory Review Course for your first license renewal.

Applied AFTER July 1, 2024

You must complete a Regulatory Review Course for your 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 embed ethics within their curriculum.

Replacement of PETH Requirement FAQs

What will be replacing the PETH Exam?

Once the CBA approves your license, you will need to complete a CBA-approved Regulatory Review Course as part of your first license renewal.

When does this rule change become effective?

The effective date is July 1, 2024. Please follow the CBA on LinkedIn, 𝕏, or Facebook for the latest updates.

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??

If you are licensed after July 1, 2024, you may use your PETH Exam passing score at your first renewal to either meet the new Regulatory Review Course requirement or as two hours of technical CE. If you have already passed the PETH Exam and are licensed before July 1, 2024, you WILL NOT need to complete a Regulatory Review Course for your first license renewal.

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?

No. Unfortunately, only a CBA-approved Regulatory Review Course may be used to satisfy this requirement.

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?

The rule change effective date is July 1, 2024, so if you wish to be licensed before then, you must purchase and pass the PETH Exam. You will need to check with CalCPA to determine how long the PETH Exam will be available for purchase. Please note, there is no danger of your money being wasted, as the CBA will accept a passing PETH score to meet the new Regulatory Review Course requirement for first renewal or as two hours of technical CE for two years after the effective date of July 1, 2024.

If I apply before the effective date of July 1, 2024, will I fall under the old rules or the new rules?

Whether the old rules (must pass PETH Exam) or new rules (must complete Regulatory Review Course for first renewal) apply to you will be determined by when your licensure application is approved, and you become licensed. The CBA posts our processing timeframes weekly on our website and social media, so these dates can help you determine about how long it may take for your application to be reviewed.

How can I know if the CBA will approve my license before or after the effective date?

The CBA understands it is impossible for applicants to predict exactly what date their application will be approved, and they will be granted their license. To ensure any money or time spent studying will not be wasted, an applicant licensed after July 1, 2024, who has passed the PETH Exam may use the passing score at first renewal to meet the new Regulatory Review Course requirement or to satisfy two hours of technical CE. These options will be available for two years following the effective date of July 1, 2024, to ease the transition.

I already paid for the PETH Exam but have not completed it. Since it is no longer required, am I eligible for a refund?

There will not be refunds for candidates who have purchased and started the PETH Exam. Even if the PETH Exam is no longer a requirement, it may be worth your while to still take and pass the exam, as you may use the passing score at first renewal to meet the new Regulatory Review Course requirement or to satisfy two hours of technical CE. CalCPA will be reaching out to everyone in this situation to explain their options once the rule change has become effective on July 1, 2024.

Can I still take the PETH Exam after the effective date of the rule change?

If you already purchased the PETH Exam, you can still take it after the rule change on July 1, 2024. For two years after the effective date, we will accept a passing PETH Exam score at your first renewal to meet the new Regulatory Review Course requirement or to satisfy two hours of technical CE.

I worked hard for my CPA designation. Why is the CBA loosening the requirements for licensure?

The CBA is not loosening the requirements for CPA licensure and remains committed to ensuring that consumers receive quality accounting services from professionals they can trust. Simply put, the implementation of the new CPA Exam has created a duplication of content in the PETH Exam. This change does not reflect a relaxing or loosening of the requirements to become a CPA.

Do I still need to complete 4 hours of Ethics CE to renew my CPA license?

To renew a license to an active status, as part of your minimum of 80 hours of qualifying CE, it must include at least four hours of Ethics , within the two-year period immediately preceding the date on which the licensee applies for license renewal. This is not changing with the new rules.

If I have further questions about the removal of the PETH Exam requirement, who may I contact?

Any additional questions regarding the requirements change may be submitted to examinfo@cba.ca.gov or asked via phone at (916) 561-1703. For questions specific to the PETH Exam itself, please contact CalCPA Support at support@calcpa.org or (800) 922-5272.

Understanding the Professional Ethics (PETH) Exam Change

Replacement of PETH Requirement FAQs

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