April 11, 2024 — The California Board of Accountancy (CBA) is pursuing a change that no longer requires 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 license renewal. The effective date of this change is anticipated to be no earlier than July 1, 2024, but the timeline is still pending final approvals.

As someone who has not yet passed PETH, here’s what you need to know:

• To be licensed BEFORE the effective date, applicants will need to have passed the PETH Exam, and will not need to complete the Regulatory Review course for their first license renewal.
  
  

• Anyone licensed AFTER the effective date will not need to pass the PETH Exam, but will need to complete the Regulatory Review course for their first license renewal.

To ensure any money or time spent studying will not be wasted, an applicant licensed after the effective date who has passed the PETH Exam may use the passing score at their first renewal to meet the new Regulatory Review Course requirement or to satisfy two hours of technical CE.

Additionally, anyone who has purchased PETH but has not passed the exam before the effective date will have complimentary access to a CBA-approved Regulatory Review Course specifically designed for new licensees that will meet the requirements of your first license renewal period. More details will be available once the effective date is determined. 

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).

The CBA and CalCPA remain 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 exam covers professional conduct and accounting rules and tests how well you would handle professional, ethical questions you may encounter while in the accounting profession. CPAs serve the financial integrity of their clients, individuals, organizations, and businesses. The exam strives to refresh and remind you of the conduct expected and required when being a CPA.

If you are applying for a California CPA license for the first time or you have a canceled license and are seeking a reissue, you must pass the Professional Ethics for CPAs (PETH) exam. Even if you are licensed outside of California, you must pass the PETH before applying for a California license.

About the Materials

Our exam materials provide comprehensive coverage of the AICPA Code of Professional Conduct and California Accountancy Act and Accounting Rules and Regulations. You will find clear, detailed explanations of the rules that will assist you in answering tough ethical questions. Please allow about 16 hours to read the 300-page study book and complete the test.

About the Exam

• There are 50 multiple-choice questions; there is no time limit on the exam.

• You will have six attempts to pass the exam with a grade of 90 percent or better, or no more than five missed questions.

• All self-study and PETH exam questions are random. That means exam questions are issued in a random order each time the test is taken.

• The exam must be completed within one year from the date of purchase. Please make sure to allow enough time for all six attempts to pass, if needed, within the year.

• CalCPA notifies the California Board of Accountancy on a weekly basis of all successfully completed exam scores.

• Your test results are valid for two years while you complete all of your licensing requirements for the California Board of Accountancy.

Grading

• Online grading is included in the price of PETH for both the online and text-based course. It can be accessed via this website by going to My Account » My Activities » Self-Study.

• You will receive instant results.

• All passing scores are sent directly from the CalCPA Education Foundation to the California Board of Accountancy on a weekly basis.

Frequently Asked Questions

• Ethics Exam FAQs

There's no better place than CalCPA to fulfill your ongoing CPE license renewal requirements! View all of our CPE courses.