How do I know if a course qualifies for GAO Yellow Book CPE?

So how do you know if the course you are taking qualifies for GAO Yellow Book CPE?

You aren’t alone in asking that question. It isn’t that easy to figure out for three reasons:

1. The GAO standards are tricky,

2. The organizations that offer CPE aren’t always clear, and

3. Peer reviewers may not agree with your choice.

Let’s cover each challenge in turn:

1. The GAO Yellow Book CPE standards are tricky

The GAO dedicates almost 13 pages of the standards to continuing education. If the standards regarding CPE were simple, the topic could be covered in 2 pages – max!

To begin with, the Yellow Book has not one but two CPE requirements – one for 24 hours and one for 56 hours.

Here is a direct quote from the 2021 Yellow Book, section 4.16:

4.16 Auditors who plan, direct, perform engagement procedures for, or report on an engagement conducted in accordance with GAGAS should develop and maintain their professional competence by completing at least 80 hours of CPE in every 2-year period as follows.

24 hours Subject matter directly related to the government environment, government auditing, or the specific or unique environment in which the audited entity operates

56 hours Subject matter that directly enhance auditors’ professional expertise to conduct engagements

For more details on the nuances of this standard, please enjoy this video.

2. The organizations that offer GAO Yellow Book CPE aren’t always clear

Some providers of continuing professional education clearly label whether a course qualifies for government CPE. And most folks assume that the provider that labels a course as qualifying for “Yellow Book hours” is referring to the 24-hour requirement.

But it wouldn’t be unheard of for a course to qualify for the 24-hour requirement but not be labeled as such.

How could this happen? Part of it is that the 24-hour requirement can be satisfied with three topics:

1. government auditing (which will probably be pretty obvious),
2. government environment (which is a little fuzzier),
3. and specific or unique environment in which the audited entity operates (which is idiosyncratic to the auditor and their client base).

So, a CPE provider might be offering a class on institutional investing which is attended mostly by bankers. This doesn’t sound like a government class and would not be labeled by the CPE provider as such. But if the auditor’s client is a pension system (an institution that invests), then for that auditor the course would qualify for the 24 hours because the course addresses the ‘specific or unique environment in which the audited entity operates.’

3. Peer reviewers may not agree with your choice

As you are probably noticing, what qualifies as GAO Yellow Book CPE is sometimes a matter of judgment. And your judgment may differ from the peer reviewer’s judgment.

Let’s say that you take a class that isn’t clearly labeled as qualifying for Yellow Book CPE. You used your judgment and decided to classify it as part of the 24-hour requirement.

When the peer reviewer comes to perform the peer review, they may not agree with your choice. Now what? What is the worst that can happen?

Well, they could reclassify your course and put it in the 56 hour category instead, and then assert that you are deficient in your CPE.

And if you are unlucky enough to have hired a harsh peer reviewer, they could use this as a justification for giving you a rating of FAIL on your peer review. But it seems very unlikely that a peer reviewer would give you a FAIL if that is the only thing they see that concerns them. However, if this is just one of a number of issues that concern them, your questionable CPE credits could be the thing that pushes them over the edge into their negative opinion.

It is more likely that the peer reviewer will include your CPE deficiency as an issue in their peer review report and ask that you come up with a plan to earn the 24 hours of CPE as soon as possible.

Safe harbor can be so boring…

There are courses that are obviously titled and structured to help you comply with the 24 hour requirement. A Yellow Book update or a GASB update come to mind.

And yes, you can take a GASB update for the tenth year in a row and you will pass muster with your peer reviewer. But do you really want to slog through another one of those this year?

There are dozens of associations and companies that offer more interesting and relevant CPE. A few minutes searching on Google will get you a long way.

And of course, we always welcome you at YellowBook-CPE. We clearly label our courses and only a few do not qualify for the 24-hour requirement.