The Ethics Exam After the CPA Exam: What Boards Require, the 90% Rule, and Taking It From the Gulf
Passing four sections is not the last exam. Most boards want an ethics exam or course before they issue the licence, the AICPA's version is open book with a 90% pass mark, Texas sets its own, and California dropped its exam in 2024. What to check on your board's page and when to do it.
The fourth passing score is not the end of the examinations. Between it and the licence sits an ethics requirement that almost every board imposes and almost no candidate plans for, because it is small, it is not part of the CPA Exam, and the review courses stop talking the moment the fourth score arrives.
It comes in three shapes. Most boards accept the AICPA's Professional Ethics course, an online, open-book exam with a 90% pass mark. Some boards run their own: Texas requires a board-approved ethics course and its own exam on the Texas Rules of Professional Conduct. And some have moved the requirement elsewhere: California, which for decades required its PETH exam, stopped requiring it for initial licensure on 1 July 2024. A candidate who assumes any of the three applies to them without checking will either sit an exam they did not need or discover the missing one when the board rejects the application.
The AICPA exam
The AICPA's course is called "Professional Ethics: The American Institute of Certified Public Accountants' Comprehensive Course (For Licensure)," and its page states the facts a candidate needs.
| Item | What the AICPA says |
|---|---|
| Format | Online self-study with an exam at the end, taken on your own schedule with the materials open |
| Pass mark | 90% for licensure; a separate 70% version exists for CPAs meeting continuing education requirements |
| Price | US$250 for AICPA members, US$320 for non-members |
| Continuing education credit | 8.5 hours of regulatory ethics |
| Acceptance | In the AICPA's own words: "Many states do not accept the AICPA course to meet the ethics requirement for earning or maintaining a CPA license" |
The last row is the important one, and it comes from the seller of the course. The AICPA tells prospective buyers to "contact your state board to determine which ethics course is required to earn your license" before paying. That instruction is the whole of this article's advice, and the rest is what to expect once you have followed it.
The AICPA's page does not state a limit on attempts, and boards that accept the course generally accept the certificate whenever it is earned; the price is per enrolment, so a failed attempt inside the enrolment is a matter of the course's own rules rather than the board's. What boards do set is a validity window, discussed below.
The 90% threshold is higher than it sounds. The exam is open book and untimed, which removes the pressure, but a 90% pass mark on a multiple-choice paper means missing one question in ten fails it. Candidates who treat it as a formality and skim the material are the ones who take it twice. Two to three evenings with the course, and the AICPA Code open in another window, is the realistic preparation.
Three kinds of board
Boards sort into three groups, and the only way to know which yours belongs to is its own licensing page. NASBA's jurisdiction pages summarise requirements, but the board's page is authoritative.
| Group | What is required | Example |
|---|---|---|
| Accepts the AICPA exam | The AICPA course passed at 90%, usually within a set period before the licence application | The majority of boards |
| Own exam or course | A board-specific ethics course, exam, or both, sometimes as part of the education requirement | Texas |
| Requirement moved elsewhere | No ethics exam for issuance; an ethics course as a condition of the first renewal, or as regular continuing education | California since July 2024 |
Texas
The Texas State Board of Public Accountancy asks for two things, at two different points. The first is educational: three semester hours in a course "pre-approved by the Board, taken as a standalone course in accounting or business ethics at a Board-recognized educational institution," covering, among other things, "the ethics rules of the American Institute of CPAs and the U.S. Securities and Exchange Commission." That is a university course, and a candidate whose degree did not include one may have to take it before the education requirement is met. The second is the Board's own exam on the Texas Rules of Professional Conduct, which the Board emails to the candidate "after you submit the application for issuance," that is, after all four sections are passed. The AICPA's course does not substitute for either.
California
California's Professional Ethics for CPAs exam, administered by the CalCPA Education Foundation, was for years the best-known state-specific ethics exam: 50 questions, open book, a 90% pass mark, and a two-year validity for licensure. As of 1 July 2024 the California Board of Accountancy no longer requires it for the issuance of a licence. The Board's own explanation is that the 2024 CPA Exam duplicated the PETH content. In its place a two-hour CBA-approved Regulatory Review course is required by the first licence renewal, and a candidate who had already passed PETH could use the pass toward that course through 1 July 2026. A candidate applying to California today who sits PETH because a guide told them to has spent money on an exam the board will not ask about.
The lesson generalises. Ethics requirements change more often than exam requirements, because they are set by regulation rather than statute in most states, and the guides that list them state by state go stale within a year. Read the board's page on the day you apply.
When to take it
Three timing rules cover most boards.
After the fourth section, not before. Boards that accept the AICPA exam typically want it passed within a period before the licence application, commonly one or two years. Taking it before starting the CPA Exam, which some candidates do to "get it out of the way," risks the certificate expiring before the application is made. The safe window is the months between the last score and the application, which are the same months in which experience is being verified.
Before the application, not after. A board that lists the ethics exam as a licensure requirement will not issue the licence until the certificate is in the file, and an application submitted without it sits in a queue while you take the exam and the certificate is forwarded. For a Gulf candidate whose employer is waiting on the licence, that is a delay with a cost.
In the board's format. The AICPA sends results to the candidate; some boards want the AICPA to send the certificate directly, or want a specific version of the course. The board's page will say.
Taking it from the Gulf
This is the one part of the CPA process that needs no Prometric centre, no Notice to Schedule and no surcharge. The AICPA's exam is online and self-paced, and can be completed from Riyadh or Dubai on any evening. Texas's Rules of Professional Conduct exam arrives by email. The logistics that dominate the rest of the route, set out in the Gulf guide to the CPA Exam, do not apply here.
What does apply is the content. The AICPA course is built on the AICPA Code of Professional Conduct: independence and its threats, integrity and objectivity, confidentiality, contingent fees and commissions, acts discreditable, and the independence rules of the SEC and PCAOB for issuer audits. A candidate who passed AUD recently has already studied most of it, because Area I of the AUD Blueprint is the same Code; the AUD study guide describes that area as the cheapest marks in the section, and the ethics exam is where the investment pays a second time. REG's professional responsibilities area, Circular 230 and the standards for tax practice, overlaps with the tax ethics portion.
What comes with it
The ethics requirement is one of four things a board checks before issuing the licence, and it is usually the fastest.
| Requirement | What it involves for a Gulf candidate |
|---|---|
| Exam | Four sections passed inside the credit window |
| Education | 150 semester hours for most boards, with a bachelor's plus two years of experience emerging state by state since 2025 |
| Experience | One to two years, verified by a licensed CPA; whether a non-US supervisor can verify it varies by board |
| Ethics | The AICPA exam, the board's own, or a course at first renewal, as above |
The full sequence, including the experience verification that is the slowest step from the Gulf, is in Getting the CPA Licence from the Gulf. The ethics requirement is the one item in that sequence that can be completed in a week, which is exactly why it is the one candidates forget.
Where to practise this
The material the ethics exam tests is the material Area I of AUD and the professional responsibilities area of REG test, and Prepito's AUD course and REG course cover both with practice questions and full explanations. For the whole route from first section to licence, see the CPA programme.
Sources: AICPA, Professional Ethics comprehensive course for licensure, Texas State Board of Public Accountancy, ethics course requirements, California Board of Accountancy, Understanding the PETH Exam change. Ethics requirements are set by each board's regulations and change often; confirm your board's current requirement and any validity period on its own page before taking any exam.
Try 5 questions on this material
Question 1 of 5
An auditor confirms year-end accounts receivable directly with customers. Which assertion does this MOST directly address?
