Why Keeping the 150 Hour Rule Is Making the Profession’s Diversity Problem More Pronounced

September 29, 2023

Opinion from GoingConcern - by Sharon Lassar, PhD, CPA (Florida)
John J. Gilbert Professor and Director of the School of Accountancy, University of Denver

The AICPA announced the formation of a National Pipeline Advisory Group, published an article about its focus on the accounting talent shortage, and scheduled a webinar titled “Special Pipeline Series: Path to 150.” All of this happened after the Center for Audit Quality (CAQ) released its study titled “Increasing Diversity in the Accounting Profession Pipeline.” I previously wrote about this CAQ diversity study and I have been watching for the AICPA to acknowledge its existence. I have yet to see it.

Why is the AICPA ignoring a study that provides insight on an issue the AICPA has been trying to address since the mid-1960s? From 2008 to 2011, I served on the AICPA’s Minority Initiatives Committee and learned the history of various initiatives. Yet, the AICPA is ignoring a sound study that identifies root causes for the lack of diversity in the profession pipeline.

Maybe the study shows something the AICPA and NASBA do not want known. That is, the 150-hour rule has a disproportionate effect on underrepresented minorities. Those arguing to keep some version (any version – no matter how watered down) of the 150-hour rule will not consider other points of view.


The CAQ surveyed 1399 undergraduate business students with 35% identifying as Black/African American and 33% identifying as Hispanic. Black and Hispanic students change majors during college at a higher rate than other students. Overall, 40% of non-accounting majors considered majoring in accounting, and the percentage is higher among Black and Hispanic business students at 50% and 48%, respectively. Given such a high percentage considered majoring in accounting, it is important to understand why they ultimately decided against it. There are many reasons; please read the study.

Relevant to this commentary, is that 56% of White students who decided against accounting as a major identified not wanting to pursue 150 hours to become a CPA as a reason. This percentage jumps to 64% and 70% for Black and Hispanic students, respectively. Data show the 150-hour rule is a barrier and it is more of a barrier for Black and Hispanic students than for White students.

Rather than removing the barrier, some professional associations propose alternative paths to obtain the 150 hours. Those paths, however, may be a way to keep down those from humble beginnings.

Academic research finds no value in a 150-hour rule. Conversely, it demonstrates the value of a master’s degree. Dr. John Barrios found those with a master’s degree are more likely to be employed by a Big N firm, spend less time at each position, have more jobs, and are promoted more quickly. Dr. Alisa Brink and her coauthors found that individuals obtaining a 150-hour bachelor’s degree compare unfavorably to those who obtain a graduate degree in the likelihood of promotion from Senior Manager to Partner. The Experience, Learn and Earn (ELE) program created by the AICPA and promoted by NASBA falls in the 150-hour bachelor’s program category. ELE students do not earn a graduate degree.

A master’s degree is the most valuable way to meet the 150-hour rule. Students with the means to pursue this path will continue to do so. For those students without the means, less-valuable paths are available and ELE is yet another one. That less-valuable path may just “keep you in your place” – with more time in your position and a slower promotion track. Is that really what we want? The decision to keep a 150-hour rule where NO research demonstrates it has value is making our lack of diversity more pronounced.

If you believe that the CPA profession can be a life-changing choice for individuals, particularly those who come from humble beginnings and are willing to learn, work hard, and improve their communities, remove the 150-hour barrier.



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