California Ethics Exam Requirements
Many candidates who pass the CPA Exam face one more important test before they earn a license to practice as Certified Public Accountants—an Ethics Exam. States vary their ethics requirements for a CPA license just as they vary their requirements for the CPA Exam.
About 35 state boards require CPA candidates to pass a course and take the AICPA Ethics Exam. The AICPA Ethics Exam focuses on ethics questions that arise in the accounting profession. It tests the candidate’s understanding of the conduct required of CPAs who serve the financial integrity of businesses and individuals.
Some jurisdictions administer their own Ethics Exam through their State Society of CPAs. Other jurisdictions don’t require either an ethics course or an ethics examination for a license.
The Ethics Exam requirement takes a lot of candidates by surprise because it does not get a lot of attention while they are working to pass the CPA Exam. Compared to the CPA Exam they’ve just passed, this last hurdle is a very small one. Take time to read the study material. Be careful answering questions when you take the test. These can be tricky, and only a few wrong answers are enough to cost you the score you need to pass.
Below we will be discussing the requirements for the state of California.
California Board of Accountancy regulations require all applicants to complete and pass a CBA-accepted ethics examination within two years of applying for the CPA license. It is not necessary to take the California ethics examination until you are prepared to apply for the CPA license.
The only ethics examination CBA accepts is the Professional Ethics for CPAs (PETH) examination administered by the
California CPA (CalCPA) Education Foundation. The PETH examination can be ordered at CalCPA’s website at www.calcpa.org/ethics-exam or sending an email to CalCPA at firstname.lastname@example.org. Applicants also may telephone CalCPA at (800) 922-5272.
Preparing for the Exam
Candidates receive the PETH self-study course in either an online or text format. Candidates should allow 5-7 business days for delivery for text purchases. Rush shipping is available for an additional fee. The online course may be accessed through the candidate’s account on calcpa.org/SelfStudy. Allow about 16 hours to read the 300-page study book and complete the test.
The exam materials cover the AICPA Code of Professional Conduct and California Accountancy Act and Accounting Rules and Regulations.
The Exam Format
There are 50 multiple-choice questions. No time limit is set on completing the exam. Candidates must pass the exam with a grade of 90 percent or no more than five missed questions.
Completing the Test
The exam must be completed within one year from the date of purchase. Test results are valid for two years while the candidate completes all licensing requirements for the California Board of Accountancy.
Results are available instantly to candidates by email. CalCPA Education Foundation notifies the California Board of Accountancy on a weekly basis of all successfully completed exam scores.
Candidates must pay the following fees to CalCPA:
- Online Format $150 for Nonmembers $125 for CalCPA Members
- Text Format $165 for Nonmembers $130 for CalCPA Members
CPA Candidates are eligible for one year of free membership in CalCPA. Visit calcpa.org/join or call (800) 922-5272 to join.
Retaking the exam
Candidates have six attempts to pass the PETH Exam. After the third attempt, candidates will need to request reactivation of the course by CalCPA Education Foundation Customer Service at (800) 922-5272. Candidates must repurchase the self-study course after the sixth effort. Candidates may retake the PETH Exam at any time within one year of their purchase date.