More than 300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline, and the dwindling number of college students coming into the field can’t fill the gap.
One sticking point, some in the profession say, is the fact that would-be CPAs need to attend college for five years to amass the 150 hours of college credit required to get their license. That high standard gained traction in the 1990s as states boosted education requirements from a traditional 120-hour, four-year bachelor’s degree. Some in the industry say the extra time in school and the expense are keeping students from entering the field. Accounting or financial courses aren’t required during the fifth year, and many students take unrelated classes, from liberal-arts electives to earning a minor, accountants say.
For that reason, legislators in Minnesota are considering bills that would reduce credit hours needed for getting a CPA license. The move has sparked debate among national CPA groups that say states need to meet the national standard for accountants to be able to service clients around the U.S., and others who say the profession needs to be more flexible. In addition to schooling, CPA licenses require work experience and passing a test.
“We don’t have enough students coming in. We have to be able to solve that problem,” said Robert Cedergren, incoming board chair at the Minnesota Society of Certified Public Accountants. His group helped draft the legislation, introduced by a bipartisan group of lawmakers last month.
The bills, which are in committee in the state Senate and House of Representatives, seek to allow graduates to skip the fifth year. Instead, four-year degree holders could take one of two paths: get two years of professional experience and take the CPA exam or get one year of work experience, take 120 hours of professional-education courses, and take the CPA test. (They could also complete the current path of 150 hours of college credit.)
The bills face staunch opposition from national industry groups, including the Association of International Certified Professional Accountants, a trade organization. The group says that adjusting the requirements would mean CPAs licensed in Minnesota couldn’t practice outside the state. Big accounting firms, some industry groups say, need accountants who can practice nationally because they have clients from coast to coast.
Support for the 150-hour rule grew in the 1980s and means CPAs are better prepared to enter the field when they graduate, said Susan Coffey, chief executive of public accounting for AICPA.
“It’s clearly a hurdle of entry into our profession, but it’s a purposeful hurdle,” Ms. Coffey said.
Many practicing accountants who graduated decades ago have four-year degrees, not five-year degrees, and do quality work, said David Knoble, the incoming chair of the South Carolina Association of CPAs.
In addition to Minnesota, three other states have alternatives to the 150-hour requirement or are looking to change their rules.
Ohio law has for decades allowed CPAs to get licensed without 150 hours, said Scott Wiley, president and chief executive of the Ohio Society of CPAs. In Ohio, people can obtain a license with 120 hours of college credits, four years of work experience, a score of 670 or higher on the Graduate Management Admission Test and passing the CPA exam, he said, and Ohio accountants have had no barriers to practicing nationally.
A South Carolina task force is evaluating whether the state could approve CPAs from other places to practice locally, even if those accountants have fewer than 150 college credit hours. In New Jersey, a pilot program is under way that substitutes a year’s work for the traditional fifth year of course work; students would earn college credit hours on the job.
Saint Peter’s University, based in Jersey City, N.J., and PricewaterhouseCoopers LLP are testing that program. The company is covering students’ tuition for 30 credit hours at Saint Peter’s while they work for the accounting firm.
The extra year of university is pushing Triston McKay, 21 years old, away from accounting and toward computer science classes at Salem University in West Virginia. He is wary of the costs of a fifth year of school and says that in recent years jobs in the tech sector have paid more than accounting.
“It’s not a burden I would like to put on my parents,” he said of an extra year of tuition and fees.