Accounting Leaders Divided Over Changing 150-Hour Rule for CPAs

The accounting profession is reaching a crisis point. The industry hemorrhaged 334,000 accountants and auditors from 2019 to 2021, including CPAs, and just 22,000 accountants and auditors joined the workforce last year.

The shortfall has led to questions about the requirement for US accountants to have 150 hours of education to receive a CPA license. Two accounting executives offer their perspectives on the issue.

Address the Education Gap

Guylaine Saint Juste, NABA Inc.

The certified public accountant credential has long been a gold standard, requiring 150 college credit hours and a demanding exam, with pass rates often below 60%. The credit-hour mandate rose to 150 from 120 in the late 1990s, but there’s no requirement that those extra 30 hours must be in the accounting field.

Today, the dwindling talent pipeline in accounting compels us to reevaluate and adapt our strategies. A significant disparity exists in bachelor’s degree attainment among Black individuals, with economic burdens as the primary contributor to this gap.

The Center for Audit Quality recently found that around 46% of Black undergraduate business students had considered accounting but opted out—the time and cost of the 150 credit-hour requirement was the greatest reason cited for them not choosing accounting as a major.

This gap must be addressed in a profession that facilitates access to the middle class, fosters generational wealth, and upholds trust in capital markets. Here are some potential educational alternatives that support meeting the 150-hour mandate with minimized time and financial barriers:

Micro-Credentials and Digital Badges. Offer virtual and in-person programs for specific accounting and finance training, providing digital credentials that translate to earned credit hours toward the CPA license.

Industry-Wide Certifications. Establish stackable certifications, starting at the associate degree level, aligned with CPA qualifications.

Apprenticeship Models. Offer educational credits for programs such as AICPA’s apprenticeships and CliftonLarsonAllen’s paid high school summer internships, providing diverse hands-on experiences in various areas of accounting.

Study Groups and Exam Preparation. Use NABA’s CPA Bound program to facilitate employer-based study groups and provide CPA exam resources, supported by both employers and NABA.

Educational Pipelines. Support programs such as NABA’s Pathways to College, encouraging community college students in accounting, finance, and business to pursue CPA qualifications. Explore virtual education options with partner universities and employers to facilitate credit attainment.

These innovative approaches should align with the specific requirements of the state board of accountancy where individuals plan to obtain their CPA license. State boards and educational institutions must ensure these initiatives open new pathways to revitalize and diversify the talent pipeline.

As the world re-imagines skills and competencies in the broader context of traditional degrees, the accounting profession must embrace diverse routes for refining and strengthening skills and competencies evaluated in the CPA exam. The 150-hour requirement alone shouldn’t deter us from seeking innovative ways to bolster standards and ensure a strong pipeline of future CPAs.

An Appropriately High Bar

Rick Reisig, NASBA

The recent pipeline challenges affecting the CPA profession, along with most other professions, have prompted us all to re-evaluate our entry requirements. A popular target is the 150-hour education requirement, which arguably 70% to 75% of our current CPAs have met, as the main culprit for our pipeline problem.

I strongly believe that calls to revert to pre-1990 requirements would be detrimental, given the profession’s elevated stature in today’s business environment.

In my more than 40-year career, I can point to two initiatives that were revolutionary in the enhancement of the accounting profession.

The first was implementing the 150-hour education requirement. In response to severe pipeline challenges in the mid-1980s, the profession understood that attracting the best and brightest to meet evolving market demands meant raising the stature of accounting to align with similar competing professions. Our newly licensed CPAs needed to bring an expanded array of skill sets and business acumen for the profession to remain competitive and relevant.

The 150-hour education requirement helped to elevate the CPA to being viewed as the client or employer’s most valuable and trusted adviser from being considered just a bean counter or number cruncher—providing guidance on a wide array of business and non-business topics, and leading to record numbers of accounting graduates and new CPA candidates through 2016.

The second was adopting CPA Evolution in 2019. Again, in response to pipeline challenges, the profession realized it needed to adapt to the rapidly changing business environment, enhance its competitive relevancy, and build on the skill sets of newly licensed CPAs. This prompted changes to the recommended college curriculum, and of course, revisions to the CPA Exam to be launched on Jan. 1, 2024.

There are now proposals to replace education with another year or years of experience. Experience is a great teacher to quicken the pace of learning for what has already been acquired, but it does little to quicken the pace of learning for what has yet to be acquired.

The concept of the additional year of education has always been for newly licensed CPAs to bring something new to the profession and the public it serves—an expanded bank of knowledge in establishing the foundation on which future experience can be based.

We must arrive at alternative pathways to licensure to provide greater opportunities for all who want to enter the profession. However, those alternative pathways must maintain an equivalent educational component to allow for something new to be brought to the profession.

If there ever was a time for our newly licensed CPAs to come with an education and skill set needed for tomorrow, it’s now.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Guylaine Saint Juste is CEO of NABA Inc. She spent more than 25 years in the financial services industry, where she served as a business banking market executive at Capital One Bank.

Rick Reisig is chair of NASBA, a trustee of the Financial Accounting Foundation, and a principal at Pinion. He has over 40 years of experience as an auditor and consultant on accounting, tax, and financial reporting issues.

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