Guidelines for Financial Audits Contracted By Foreign Recipients (2009)

Auditors must maintain their professional competence through CPE, completing at least 24 hours of CPE every 2 years that directly relates to government auditing, the government environment, or the specific or unique environment in which the audited entity operates. Auditors involved in planning, directing, or reporting on GAGAS audits, or those who charge 20 percent or more of their time annually to GAGAS audits, must obtain at least an additional 56 hours of CPE, for a total of 80 hours of CPE in every 2-year period. Auditors required to take the total 80 hours of CPE must complete at least 20 hours of CPE in each year of the 2-year periods. Auditors hired or initially assigned to GAGAS audits after the beginning of an audit organization's 2-year CPE period must complete a prorated number of CPE hours. The GAGAS general standard related to Competence places responsibility on audit organizations to ensure that each audit or attestation engagement is performed by a team that, taken as a whole, possesses the technical knowledge, skills, and experience necessary to be competent for the type of work being performed. Auditors may not carry over CPE hours earned in excess of the 80- and 24-hour requirements from one period to the next. The GAGAS CPE requirements must be satisfied every 2 years. Audit organizations may establish a standard 2-year period for all its auditors, which can be on either a fixed-year or rolling-year basis. Auditors hired or assigned to a GAGAS audit or attestation engagement after the beginning of an audit organization's 2-year CPE period should complete a prorated number of CPE hours. An audit organization should define a prorated number of hours based on the number of full 6-month intervals remaining in the CPE period. For example, an audit organization has a 2-year CPE period running from January 1, 2005, through December 31, 2006. The audit organization assigns a new staff member to a GAGAS audit in May 2005. The audit organization should calculate the prorated CPE requirement for the staff member as follows: Number of full 6-month intervals remaining in the CPE period: 3; Number of 6-month intervals in the full 2-year period: 4; Newly assigned auditor's CPE requirement: 3/4 x 80 hours = 60 hours or 3/4 x 24 hours = 18 hours. At their discretion, audit organizations may give auditors who have not completed the required number of CPE hours for any 2-year period up to 2 months immediately following the 2-year period to make up the deficiency. Audit organizations that grant the 2-month grace period should not allow auditors who have not satisfied the CPE requirements after the grace period to participate in GAGAS audits or attestation engagements until those requirements are satisfied. CPE hours may be granted for various activities, including group programs and activities, individual study programs, presentations, and published writings. A CPE hour may be granted for each 50 minutes of participation in group programs and activities that qualify. One-half CPE hour increments (equal to 25 minutes) may also be granted after the first CPE hour has been earned in a given program or activity.