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Soon, students may not need an extra year of college to attain CPA licensure. The AICPA and NASBA have proposed a “competency-based experience pathway” to licensure—with no post-bachelor’s coursework required.
Currently, students must complete 150 credit hours—30 more hours than the 120 needed for a bachelor’s degree—to be eligible for a CPA license. The “150-hour rule,” as it’s called, has been a requirement in all US states and territories since 2015.
Recently, the rule has come under fire. Critics argue that it poses an unnecessary barrier to entering the profession at a time when fewer students are earning bachelor’s degrees in accounting or sitting for the CPA exam. Students don’t want to incur the financial costs and additional time to earn the extra credits, they charge. Research has borne this out: An MIT Sloan study, for instance, found that the 150 hour rule reduced the numbers of new CPAs by 14%—and the number of minority candidates by 26%.
In the past few years, states have begun to challenge the rule. Minnesota legislators have proposed bills that would cut the number of credit hours necessary for a CPA license, while Ohio has an alternative pathway in place that allows licensure with 120 hours plus work experience and other requirements, the Wall Street Journal reported. South Carolina and New Jersey are exploring similar alternatives.
The AICPA and NASBA have historically opposed any weakening of the 150-hour rule, contending that any changes individual states make could threaten CPAs’ ability to practice across state lines. The additional coursework, the AICPA has said, is necessary to prepare students to meet the demands of a more complex profession. “It’s clearly a hurdle of entry into our profession, but it’s a purposeful hurdle,” Susan Coffey, CEO of public accounting for the AICPA, told the Wall Street Journal in 2023.
Alternative route: Now, though, the trade groups have softened their stance. They’re proposing what they’ve named the CPA Competency-Based Experience Pathway to licensure. Instead of taking 30 additional hours of coursework, students can attain a year of full- or part-time paid or volunteer work “providing any type of services or advice using accounting, attestation, compilation, management advisory, financial advisory, tax, or consulting skills,” and have licensed CPAs who’ve observed their work attest that they’re proficient in seven professional competencies and at least one of three technical competencies. The professional competencies include communication, critical thinking, and ethical behavior, while the three technical competencies are tax, audit and assurance, and financial reporting. College internships do not count toward the competency experience requirement.
Candidates would still need to earn bachelors’ degrees in accounting, meet their jurisdiction’s requirement for business and accounting courses, finish a separate year of work experience, and pass the CPA Exam.
The proposal is open for comments until December 6.