AICPA and NASBA push forward with CPA licensure reform

The unpopular “150-hour rule” may soon be no more.

The AICPA and NASBA are offering a new pathway to CPA licensure that doesn’t require students to take another year of college.

Under proposed changes to the Uniform Accountancy Act—a national model for states to follow in crafting CPA license requirements—AICPA and NASBA would eliminate the requirement that accounting students receive at least 150 semester hours of college education,30 more hours than needed for a bachelor’s degree.

Instead, students may earn their CPA license by completing an undergraduate degree in accounting and logging two years of work experience before taking the CPA exam. Other pathways include a post-graduate degree with one year of experience, or a bachelor’s degree plus another 30 credit hours and a year of experience. So while a form of the 150-hour rule may live on in some form, it’ll be relegated to a Pirate’s Code level of prominence.

AICPA and NASBA are accepting comments on the proposed changes through May 3.

Long time coming. All US states and territories have required 150 hours for CPA licensure since 2015. But the requirement came under pressure recently, with opponents arguing it sets an unreasonable burden on accounting students.

Big Four accounting firm KPMG came out against the 150-hour rule in October. Paul Knopp, KPMG US chair and CEO, wrote on LinkedIn that “the cost of becoming a CPA has become too high.” And a 2024 study from MIT Sloan found the rule was responsible for a 14% decrease in new CPAs and a 26% drop in entrants who were members of historically disadvantaged racial and ethnic backgrounds.

AICPA and NASBA signaled they would scrap the requirement back in September when they proposed the CPA Competency-Based Experience Pathway to licensure.

New mobility model. The organizations also proposed a new “individual-based,” rather than state-based, mobility model for CPAs, which would allow them to practice across state lines with a single license. They would also insert safe harbor language into the UAA allowing CPAs who’ve already met the licensure requirements to retain their practice privileges.