Groundbreaking AICPA Report Signals Major Shift: The Future of CPA Licensing

In a surprising move, the National Pipeline Advisory Group, a joint effort by the AICPA, NASBA, and top accounting firms, released a draft report that takes dead aim at the 150-hour education requirement for CPA licensure. We dig into the report in this clip from Episode 385.

A survey in the report says a staggering 69% of CPAs surveyed said the education requirement should change.

The report lays out a vision for a competency-based approach to CPA licensing rather than one based on hours. But that's not all - the report addresses 6 key areas contributing to the severe shortage of accounting graduates and CPAs, with detailed recommendations for each.

From telling a more compelling story about the profession to enhancing the employee experience at firms, no stone was left unturned. The question is, will these bold proposed changes become reality? Hit the subscribe button and stay tuned as this story develops - you won't want to miss it!

[SG-lcvi]

People aren’t being totally honest about how much the low salary for a career with a notoriously bad work life balance affects the pipeline. The requirements and the study is the equivalent to that of a law graduate, and starting salaries are $55K for a CPA with no experience and $120K for a law graduate with no experience.

Want more CPA’s? Value the industry with higher pay. The industry will get flooded with more type A personalities eager to earn their place.

It will be the most effective way to fix the industry, albeit the most costly. But, without higher pay the other initiatives will be a waste of money.

[faithy]

Passing the CPA exams is when you study hard, if you can't study or you don't have time for your studies I'd advise you get yourself a help like Mr Dylan

[PineyLGT]

Educators need to be better about exposing their students to what they actually see in the profession and not just teach the classes geared towards passing the CPA. Almost 95% of what I learned in college about accounting did not apply to my real job right out of college.

[jamesreed]

Pay more! You want people into this... pay

[GnarshredProductions]

There should be a federal license to perform attestation services similar to how there is a federal license to practice in taxation (enrolled agent). The SEC could be in charge of it. The way it is currently set up with all these different state boards where you cant even move to another state to work is pretty stupid. Also if they wanted to increase the number of people who sucessfully pass the CPA exam they should not only lower the credit requirement but also increase the amount of time to pass all parts from 18 months to something like 3 years. There are too many people that spend years trying to pass this exam because they either struggle on one part or are working so much that they dont get enough study time to even pass all parts in the given timeframe. If you are working 60-70 hours a week for the 3-4 months of the year that busy season takes place that is time that you most likely will not be able to study and then you have to hope that you will get enough free time out of busy season to study and pass these exams which becomes more difficult as there are less people working as the people who are in accounting will have to work more hours even outside of busy season due to the shortage or workers in the industry. So it becomes a viscious cycle where people are fighting not only financial difficulties to acquire the license but also a lack of free time needed to be able to prepare for the exam all while an 18 month rolling window of time keeps ticking away.

[CPATuttle]

There’s no shortage of medical school applicants. I guess the extra credits doesn’t cause an issue there

[augustoliver]

Fewer hours and better pay is all that is needed. Lowering the standards will just create more sloppiness.

[trevorh]

Credentialism and elitist gatekeeping is killing accounting.

[dazzlenovak]

Pay more and stop offshoring. CEOs and businesses should be heavily taxed for offshoring work to India, Mexico, and the Philippines.

[bebdaumon]

that has to be a lie about not enough bodies. I got the 150 credit hours for the CPA. I cannot get an entry job nor an internship and I want to get the CPA designation. I am living proof but I can't get a entry position job because they require 5 to 10 years of work experience and internships are given to people that went to a better school and have a higher GPA like a 4.0 and a 5.0. They go in but don't have the 150 credit hours required for the CPA and don't want to even go to the CPA. Route. Get rid of the experience requirements. I would take the exam. If they don't then make it easier to get that 1 year experience required for the cpa. license.

[Dakid]

Been ranting about the flaws of the accounting curriculum before accounting fogeys started opening their eyes. The accounting curriculum is long overdue for reform, a total overhaul even in my opinion. I 100% agree about getting the practical experience mixed in the classroom. In fact, management classes and case studies should be heavily emphasized. I believe accounting majors need to get deep in this first before even touching debits and credits and GAAP. Maybe require each student to do some job or work study to get exposed to corporate management and decision making..Before they take their first accounting class. Then have an orientation exclusively for freshman accounting majors so they know what they're getting into.

[allprolemontonz]

My big 4 starting class everyone had 150 credits required to get hired yet many of them didn’t even attempt the exam while working there don’t predict any material change in candidates

[slinkdawg]

Is it just a coincidence that this policy shift followed shortly after news of Barry Melancon's retirement came out?

Also, imagine if the profession had taken a similar data driven approach PRIOR to implementing the 150 credit hour requirement. I am thrilled with the news that AICPA and NASBA are changing their position on this. But this one policy caused a great deal of damage, and I can't say it was particularly well thought out, supported by data, or strongly demanded by practitioners.

[nicholasshook]

Why do people have to be CPAs? It’s not obvious that having it means you’re a good accountant. With advancements in technology, I’d argue that learning tech skills is more important than studying for the exams

[shaochiavang]

Make it 30 months instead of 18 months

[besverjin]

Release state control for the CPA make it federal uniform standard 150 hours. If the cpa is mainly for federal level then states should release control over who gets to be one. Expérience requirement is brutal. States are doing a bad job of it

[moustakimsannoh]

The problem is that, you have to obtained profession qualifications before you could be extremely valued and employers prefer ACCA, CIMA holders in Africa than university graduates and the pay is less compared to C.H.O in medical field with a diploma. Even the professionals, who are directors does not value or compensate young accountant, they pay more to business administrator to that of an accountant.

[JM-psle]

Public accounting sucks for one. And then the pay is higher in finance and IT with 0 certs. Companies want you to get the cpa but give no time to study. A 3k decreasing bonus isn’t enticing. There is no guarantee that you get a significant bump in pay by obtaining it. If you get a bachelors it also doesn’t help you really learn bookkeeping which is the basis of accounting. So even if you’re a straight A student you’ll struggle because a lot of people’s books are not done properly. Studying is also mind numbing and sims are terrible. Even if you get the license, companies don’t train!

[ForNoOne]

It's likely too late for the profession to fix itself and industry isn't going to wait. Necessity is the mother of invention. With a global lack of accountants, tech will develop software to replace what can't be hired. There is nothing magical about what an accountant does. When I have these discussions, people will cite human judgement as some magical factor in why our jobs can't be automated. Judgement is just the aggregation of experience with the application of rules. If software can get a 500, 000 ton metal tube full of people from one side of the planet to the other with little human intervention, I'm confident software developers can tackle accounting.

[skeeterbodeen]

I got my 150 hrs by the worst community college to university credit transfer process in CUNY. I had to retake many courses bc they didn’t count.