In Brief

The accounting profession continues to suffer from the barrier to entry caused by the 150-hour CPA licensure requirement and is struggling to find ways to ensure a greater supply of well-prepared professionals. Some jurisdictions have moved towards a 120/150-hour bifurcated system, which enables accounting students to take the CPA exam after graduating with a bachelor’s degree—or after completing 120 units of education—and then completing the 150 units needed for licensure. One goal is to alleviate the barriers to entry into the profession, both in time and the costs of additional education. CPA firms can help by offering paid internships and partnering with universities to reduce these costs. Whether the 150-hour requirement remains unchanged, or it evolves fully into a 120/150 regime, the additional 30 units should be targeted to best serve client needs, including information technology skills, and incorporate critical thinking, analytical reasoning, and ethical skills to enhance professional judgment. Nevertheless, the question remains whether alternative paths to CPA should be considered.


One of the most talked-about issues in accounting centers around whether the 150-hour requirement to qualify for a CPA license has resulted in fewer students choosing accounting as their major in college and therefore led to fewer candidates pursuing a CPA. To help address this decline, many states have moved to a bifurcated system in which students must have 120 credit hours of college education (180 for quarter-system schools) to sit for the CPA exam and 150 credit hours (225 for quarter schools) to become licensed.

Each state board of accountancy determines the requirements to sit for the CPA exam and subsequently become licensed, which results in jurisdictional differences. For example, in Texas 150 hours are required to sit for the exam and for licensure. In California and New York, candidates can sit for the exam after they have completed 120 credits, so long as they meet specific subject-matter requirements, but need 150 credits to become a licensed CPA. Other states allow candidates to sit for the exam once they are within a certain time of completing 150 hours. In North Dakota, this means within six months of completing the 150 hours. In South Dakota, candidates can apply to sit for the CPA exam within at least 100 days of completing 150 hours. Of course, all states have experience requirements as well.

It appears there may be the beginnings of a crack in the support for the 150-hour requirement. The Minnesota Society of CPAs is advancing a bill in the state legislature that could create cross-border restrictions for licensed CPAs and public accounting firms in the state; the bill would allow a second pathway to licensure of 120 units and two years of experience. Jen Leary, CEO of Clifton Larson Allen, the ninth largest CPA firm in the United States, has voiced support of the Minnesota bill. She believes that creating alternative paths to CPA licensure is needed to help eliminate the barrier to entry created by the 150-hour educational requirement (“Addressing the CPA Pipeline Issues Requires Collaboration and Bold Leadership,” March 3, 2023,

The proposal could make it harder for Minnesota CPAs to practice across state lines, because no other states are presently considering such a proposal (Adrienne Gonzalez, Going Concern,

Responding to the proposed legislation, NASBA reaffirmed its support for the 150-hour requirement and cautioned states and jurisdictions that lowering licensure requirements to 120 hours would jeopardize the “substantially equivalent” requirement and the mobility and reciprocal practice privileges licensed CPAs now enjoy as a result (B. Strickland, “NASBA Upholds 150-Hour Education Requirement for CPA Licensure,” Journal of Accountancy, February 10, 2023,

Blake Oliver reported that an informal poll of managing partners attending the 2023 BDO Alliance found only 20% support the 150-hour requirement, with the other 80% supporting changing or eliminating it (“Rethinking the CPA 150-hour requirement: There must be a change,” Jun. 16, 2023, The lingering question, given the various state requirements for CPA licensure, is whether a student who completes the 150-hour requirement is better prepared to pass the CPA exam than one who sits for it after completing only 120 units. This issue is addressed below.

120-Hour, 150-Hour Requirement and Candidate Performance

Researchers at Utah State University collected data from 2006 to 2016 examining the effect of these changes on the number of first-time candidates sitting for the CPA exam and on candidate performance. The findings indicate that a reduction in the number of credit hours required to sit for the CPA exam increased the number of candidates, while an increase in the number of prerequisite hours reduced the number of candidates (E. F. Stephenson and B. Meehan, “Reducing a Barrier to Entry: The 120-150 CPA Licensing Rule,” Center for Growth and Opportunity at Utah State University, working paper, January 2020.

The authors found no relationship between changes in the CPA exam requirements and pass rates or scores. They suggest that requiring 150 hours instead of 120 creates a potential barrier to entry for licensed CPAs with no accompanying increase in candidate quality. This may be why a majority of states have changed their requirement from 150 credit hours to 120 credit hours to sit for the exam while requiring 150 credit hours for licensure. The numbers may be higher now since this is an evolving area.

Conversely, in an earlier study using data from the National Association of State Boards of Accountancy’s (NASBA 2006–2013) annual edition of the Uniform CPA Examination Candidate Performance guide, the authors found that 150-hour jurisdictions outperform 120-hour jurisdictions on passing rates and average scores. But these findings also suggest the following: 1) waiting for the completion of all 150 hours imposes a burden on candidates to either delay employment or begin working while preparing for the exam; 2) allowing candidates to sit for the exam while still enrolled in their coursework improves performance over candidates who must complete the 150-hour requirement prior to sitting for the exam (J. S. Soileau, S. C. Usrey, and T. Z. Webb, “Sitting Requirements and the CPA Exam,” Issues in Accounting Education, vol. 32, no. 1, pp. 1-15).

Kusaila et al suggest that the jury is still out; although some studies do show students who have a 120-hour bachelor’s degree perform better on the CPA exam than those with an advanced degree, other studies show the opposite (M. M. Kusaila, M. M. McCarthy, and M. G. Kulesza, “150 Credit Hours: Stakeholders’ Benefits and Students’ Skills and Attributes,” Journal of Accounting and Finance, vol. 21, no. 3, pp. 191-204, 2021). Even though a candidate might be just as capable, or even more so, of passing the CPA exam with only a 120-hour bachelor’s degree compared to one meeting the 150-hour requirement, an important question is whether the extra credits might result in a more qualified licensee—one better able to serve client needs.

Stephenson and Meehan believe it all depends on “the quality-improvement aspect of the increased educational requirement”—meaning the subject matter of those extra courses. A NASBA-funded study found some evidence that CPA firms prefer recruits with an MBA with an accounting emphasis, or a master’s of accountancy (MAcc), over those with a bachelor’s degree in accounting. This study also found that students who completed a MAcc with a concentration in data analytics were in greater demand in larger than smaller firms. These firms, however, do not appear to pay a higher starting salary when compared to candidates who chose the advanced degree route to attain their 150 credits (T. B. Johnson, J. R. Hardin, M. C. Howard, and D. S. Mauldin, “Options for Meeting the 150-Hour Requirement to Maximize Students’ Demand as Public Accounting Recruits: Have Things Changed?” Accounting Educators’ Journal, vol. 32, 2022).

This article will explore the following: the expanding knowledge base for CPAs that drives the 150-hour requirement; the impact of the CPA Evolution Initiative; barriers to entry into the profession that create pipeline issues; the potential benefits of the 120/150 model; cost considerations, including joint programs with CPA firms to help fund the extra 30 units; and future research considerations.

Expanding the Knowledge Base for CPAs

Leading professional organizations such as the AICPA, NASBA, and the Federation of Schools of Accountancy have consistently supported the 150-hour education requirement for entry into the accounting profession. The AICPA was an early supporter of the 150-hour requirement. According to the AICPA (“Why an Emphasis on 150 Hours of Education for Aspiring CPAs,”, the following reasons are given why a traditional four-year undergraduate program is no longer adequate for obtaining the requisite knowledge and skills to become a CPA:

  • ▪ Significant increases in official accounting and auditing pronouncements and the proliferation of new tax laws have expanded the knowledge base that professional practice in accounting requires.
  • ▪ Business methods have become increasingly complex. The proliferation of regulations from federal, state, and local governments requires well-educated individuals to ensure compliance. Also, improvements in technology have had a major effect on information systems design, internal control procedures, and auditing methods.
  • ▪ The staffing needs of accounting firms and other employers of CPAs are changing rapidly. With more sophisticated approaches to auditing now in use, and with the increase in business demands for a variety of highly technical accounting services and greater audit efficiency, the requirements for effective professional practice have increased sharply. The demand for a large quantity of people to perform many routine auditing tasks is rapidly diminishing. (“Why an Emphasis on 150 Hours of Education for Aspiring CPAs,”

In addition, the Bedford Committee (1986) and Treadway Commission (1987) supported the need for the fifth year of education for students to develop higher-quality technical skills, communication skills, analytical skills, and problem-solving skills.

Prior to the adoption of the 150-hour requirement to sit for the CPA exam in August 2008, the NYSSCPA Quality Enhancement Policy Committee prepared a white paper to stimulate discussion about what form pre-certification education should take and what skills and knowledge a successful CPA should possess. Committee members discussed the attributes of a quality CPA and explored the characteristics that accounting education should develop to further that goal and identified the following:

  • ▪ The ability to think critically
  • ▪ A keen analytical sense
  • ▪ Effective communication skills, both written and oral
  • ▪ A foundation of technical knowledge in accounting theory, auditing principles, finance, tax, business law, and management principles
  • ▪ Well-developed research skills
  • ▪ High ethical standards. (“Examination of Pre-Certification Education: An NYSSCPA White Paper,” and additional commentary, Quality Enhancement Policy Committee, Sharon Sabba Fierstein, Chair,

Some research studies have addressed the importance of “hard-skill” and “soft-skill” development. Pernsteiner surveyed accounting majors that completed internships and asked them which skills were valued by their employers. They found the following: confidence in ability, working independently, working with others, writing effectively, communicating with others, understanding technical aspects in the profession, time management, speaking in front of others, analyzing data, using judgment in completing tasks, and using Excel or other computer software (A.J. Pernsteiner, “The Value of An Accounting Internship: What Do Accounting Students Really Gain?” Academy of Educational Leadership Journal, vol. 19, no. 3, pp. 223–233, 2015).

Weaver and Kulesza (“Critical Skills for New Accounting Hires: What’s Missing from Traditional College Education?” Academy of Business Research Journal, vol. 4, pp. 34-49, 2014) found that employers demand that new accounting hires possess problem-solving skills, critical thinking skills, and both written and oral communication skills.

Employers often note that newly minted accounting graduates lack some soft skills or employability, according to one study. Students may have accounting textbook knowledge, but research indicates that employers believe that many of the soft skills are missing (L. Bressler and D. Pence, “Skills Needed by New Accounting Graduates in a Rapidly Changing Technological Environment,” Journal of Organizational Psychology, vol. 19, no. 2, pp. 50-59).

More recently, technology knowledge has become a must for most practicing CPAs as well. Skills in areas such as big data, data analytics, cybersecurity, artificial intelligence, and block-chain are among the biggest trends in accounting and finance (Bernard Marr, “The 6 Biggest Technology Trends in Accounting and Finance,” Forbes, July 27, 2020, The accounting profession may choose to hire specialists in these areas outside of accounting.

Although support for the 150-hour requirement is high among professional organizations, as discussed above, support from the public accounting profession appears mixed. Kusaila et al (2021) examined whether the 150-hour requirement provides significant benefits for stakeholders. The authors surveyed professionals in CPA firms, individuals, and corporate executives and found that 47% disagreed or strongly disagreed that significant benefits accrued, whereas 33% agreed or strongly agreed that those benefits accrue to CPA firms. The authors found that 42% of individual respondents agreed or strongly agreed that significant benefits accrued to individuals as a result of the 150-hour requirement while 31% of corporate executives agreed or strongly agreed and 33% of CPA firms answered the same.

In summary, the call for 150 hours versus 120 hours of education was— and still is—based on the assumption that attaining the knowledge and skills outlined above requires: 1) more hours of education than a typical undergraduate education can provide, and 2) that this education be completed prior to sitting for the exam (in most jurisdictions) and licensing (in all jurisdictions). The CPA Evolution model appears to be built on that same assumption, as it suggests that the new exam tests for those skills required of a freshly minted CPA entering the profession.

CPA Evolution

The CPA Evolution Initiative that was adopted by the AICPA and NASBA in 2020 aims to transform the licensure model to recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future. In its statement of support, NASBA recognized that:

Entry-level CPAs are performing more procedures that require deeper critical thinking, problem-solving and professional judgment. Responsibilities that were traditionally assigned to more experienced staff are being pushed down to the staff level. As a result, newly licensed CPAs need to know more than ever before to meet the needs of practice. To protect the public, the CPA licen-sure model must reflect these changes. (


The new licensure model, scheduled to launch in January 2024, addresses two areas: the “core,” or the knowledge and skills considered essential for practicing CPAs, and the “disciplines,” or subject matter specific to certain areas of practice. The core includes a foundation of knowledge, accounting and data analytics, auditing and accounting information systems, and tax. The disciplines include business analysis and reporting, information systems and controls, and tax compliance and planning (AICPA and NASBA, CPA Evolution Model Curriculum, Candidates need only pass one discipline on the CPA exam.

In the discussion of disciplines, the CPA Evolution Model Curriculum states: “Most Master’s programs will prepare students for one of the three discipline areas. For schools without a Master’s program, elective courses may be added to prepare students for the discipline areas” ( This seems to suggest that accounting programs should have 30 units beyond the bachelor’s degree.

In the authors’ opinion, the CPA Evolution initiative may be a step in the right direction. According to NASBA: “The new model enhances public protection by producing candidates who have the deep knowledge necessary to perform high-quality work, meeting the needs of organizations, firms and the public.”

In their evaluation of the CPA Evolution initiative published in The CPA Journal, Dorata and Shea suggest that the initiative will “expand the appeal of the profession and ensure candidates are better prepared for the current environment.” They conclude their analysis “with an urgent call to action to mitigate the declining CPA candidate pipeline in New York State” (

It makes sense that the addition of an elective fourth part of the exam could expand the potential pool of students who might be interested in pursuing their CPA (i.e., an information systems major who takes enough accounting-specific courses to be able to pass the overall exam). But the CPA Evolution initiative may also decrease the percentage of students who want to pursue licensure; although the changes may increase the potential candidate pool, the same barriers to entry will exist for this potential new source of candidates, as discussed below.

Barriers to Entry: Cost of Additional Education

The cost and time required to complete the credits to meet the 150-hour requirement is a barrier to entry that the authors believe needs to be addressed. The average cost of a college education has been increasing over time, with the notable exception of the COVID years. According to the National Center for Education Statistics (NCES), between the years of 2010/11 and 2020/21, the cost of an undergraduate degree increased by 11% at public institutions and 19% at private nonprofit institutions (

According to Education Data Initiative (EDI), the average cost of a master’s degree at a private institution is $62,100, whereas it is $29,150 at a public institution. The data cited notes that the master’s of accounting program at the University of Michigan costs $50,910 per year in tuition and fees.

The accounting degree is the only business degree that requires 150 credits to complete. The average starting salary of graduates with an accounting degree is not much different than those with one in complimentary acumens like finance or information systems. The additional credit requirement has resulted in fewer students pursuing accounting as a career. Moreover, the mixed data on 150-hour graduates’ preparedness for the CPA exam and improved readiness for the workplace has heightened concerns about the benefits of requiring candidates to complete the extra 30 units and related cost issues.

To help offset the additional educational costs, some organizations have implemented programs to help decrease the financial burden. For example, the AICPA provides financial support in a variety of ways. Its foundation awards more than $1 million in scholarships, grants, and fellowships to hundreds of students each year, with recipients receiving on average $5,000 towards their education. The John L. Carey Scholarship Award is part of the AICPA Legacy Scholars program. The award provides financial assistance to liberal arts and non-business degree holders who are pursuing both graduate studies in accounting and CPA licensure. These awards are intended to encourage students with little or no previous accounting education to consider professional accounting careers.

Minorities represent an important stakeholder group in any discussion about barriers to entry. A July 2023 report from the Center for Audit Quality (CAQ) found that minorities are disproportionately affected by the 150-hour rule. It concluded that “the narrow pathway to CPA licensure, namely the added time and costs of the 150-credit hour requirement, is turning off business majors who considered accounting and that this requirement is disproportionately impacting students of color” (Center for Audit Quality, “Increasing Diversity in the Accounting Professions Pipeline: Challenges and Opportunities,” 2023,

Professor Sharon Lassar at the University of Denver has called for the elimination of the 150-hour requirement: “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” (“Keeping the Professions 150 Hour Requirement is Making the Professions Diversity Problem More Pronounced,” Sept. 18, 2023,

The AICPA Minority Scholarship awards outstanding minority students to encourage their selection of accounting as a major and their ultimate entry into the profession. The National Association of Black Accountants (NABA) points out that the accounting firms have described the extra 30 hours as a barrier that disproportionately affects minority CPA candidates and stymies firms’ efforts to broaden the pipeline of recruits and meet new diversity hiring goals. According to NABA, fewer than 7,000 CPAs nationwide are Black (1%), with only 2% in public accounting (

Some state boards of accountancy also provide financial aid. For example, the Texas State Board of Public Accountancy has scholarships available to help fifth-year accounting students become Texas CPAs. The Illinois CPA Society has a range of scholarships available from $1,000 to $4,000. They proclaim that students should not let cost stand in the way of earning an accounting degree.

The largest U.S. accounting firms have launched initiatives to support underrepresented CPA candidates, an important step in alleviating the pipeline problem. PricewaterhouseCoopers has partnered with Northeastern University and developed a program to support minorities who have completed their bachelor’s degree by May 2023 or earlier, and identify as an underrepresented minority, to obtain additional credit hours and a master’s degree while working at the firm. This is a paid part-time fellowship that combines real work experiences at PricewaterhouseCoopers and a tuition-paid online master’s degree program at Northeastern. The program is expected to launch in summer 2024 (

Loyola Marymount University and Deloitte announced the creation of the Deloitte Tax Diversity Scholarship to help fund the cost of tuition for ethnically and racially diverse students seeking a Master of Science in Taxation degree. Selected students will see half of their tuition paid by Deloitte and the remaining half paid by Loyola Marymount. Deloitte’s goal is to ease the financial burden to pursue a degree in tax, with the aim of opening doors to minority students.

Ernst & Young has an EY Career Path Accelerator to prepare interns who want to major in accounting as undergraduates with the ambition of becoming CPA-eligible to jump-start their careers by entering the profession earlier. The program provides accredited business and elective post-baccalaureate courses—administered by Hult International Business School—toward the 150-credit hour requirement. It offers hands-on learning through their Ernst & Young internship, ensures participants receive the guidance they need to be successful, and equips students with the future-focused skills and subject-matter experience that they will need upon entering the workforce. The Ernst & Young Foundation is also providing more than $100,000 in need-based financial aid to 75% of the inaugural EY Career Path Accelerator cohort (Ernst & Young, “Investing in Equity, Inclusion and the Future of our Profession,” November 3, 2021, Although these initiatives help, they cannot eliminate the financial barrier to entry the 150-hour requirement has created.

Pipeline Issues

According to Adrienne Gonzalez, there is a list of concerns identified as “the pipeline problem that is leading to an accountant shortage.” The following are considered important issues:

  • ▪ Low CPA exam candidate numbers
  • ▪ A worsening accounting professor shortage
  • ▪ Baby Boomers—who make up 47% of AICPA membership—are retiring en masse, accelerated by the pandemic
  • ▪ Ongoing difficulty recruiting diverse candidates to the profession, thereby missing out on an entire pool of potential accountants. (Adrienne Gonzalez, “State of the Accounting Profession 2022 Via the AICPA Trends Report,” April 20, 2022,

The 2021 AICPA Trends report on accounting education, the CPA exam, and public accounting firms’ hiring of recent graduates, shows that the number of accounting graduates with bachelor’s and master’s degrees declined between the 2009/10 and 2019/20 periods. The decline is most pronounced during the past four years (

Exhibit 1 details the number of degrees awarded starting in 2014/15. This year was chosen as a baseline because the comparative numbers in 2015/16 are the last year of degree increases before the declines began in 2016/17. The net decline over the five-year period was 6,251 degrees, approximately 8%; the decline has been most pronounced during the past two years. Given these results, it is not surprising that CPA firms are concerned about the pipeline. If this trend continues, firms may increasingly turn to nonaccounting students to fill their needs. According to the AICPA Trends report, the hiring mix is 57.3% of new graduate hires being accounting graduates and 42.7% being non-accounting graduates, a shift of 11.5% from 2018.

Exhibit 1

Trends in Accounting Degree Completion 2014/15 to 2019/20

Degree Programs; Change from Previous Year Academic Year; Bachelor's; Master's; BS & MS; Amount; Percentage Baseline: 2014/15; 56,397; 22,777; 79,174; –; – 2015/16; 56,715; 23,139; 79,854; 680; 0.86% 2016/17; 55,963; 22,949; 78,912; (942); (1.18%) 2017/18; 55,377; 23,141; 78,518; (394); (0.5%) 2018/19; 53,991; 22,323; 76,314; (2,204); (2.81%) 2019/20; 52,481; 20,442; 72,923; (3,391); (4.44%) Totals: 2015/16 through 2019/20; 274,527; 111,994; 386,521; (6,251); (8.07%) % of Degrees; 71%; 29%; 100%

The AICPA Trends report indicates that accounting programs are optimistic that enrollment in both degree programs would be the same or higher in 2021/22 compared to 2020/21.

The number of college-age students is on the decline. Due to the lack of births during the Great Recession (2008–2011), universities face an enrollment cliff come 2025. Colleges and universities are expecting a 15% drop in enrollment for at least the years 2025 through 2028 ( This shortage will then equate to 15% fewer students who could pursue accounting by the end of the decade.

Potential Benefits of Adopting the 120/150 Model

The bifurcated 120/150-hour model may be the answer to reducing the barriers to entry into the accounting profession. Currently, most CPA firms require students to complete 150 hours before they are hired. Once students start, firms encourage them to take the CPA exam over the first few years at the firm. Firms typically require their employees to have passed the CPA exam before a promotion to a manager-level position.

Some firms have started to hire students with 120-hour degrees and encourage them to get the extra 30 credits and study to take the CPA exam while working at the firm. There is no reason firms cannot hire students with a 120-hour degree but require them to be licensed before being promoted. This would be a good first step in helping to reduce the financial barrier to attaining those credits.

One possible advantage of firms adopting such a model is that they would have an opportunity to influence what those additional 30 credits consist of. Currently, there is much flexibility as to choosing where the extra credits are taken, but as previously stated, research on the benefits of taking these credits is inconclusive.

Firms should consider offering loans to pay for the extra education, which would be forgivable if the recipient remains with the firm for some set period (e.g., five years). The firm would then have ample time to convince accounting graduates to remain with the firm, build their careers, and address the retention challenge.

Serving Clients’ Interests

Looking back at the expanded knowledge base required of CPAs, the increase in technical knowledge, skill sets, and overall staffing needs represent three ways that the extra 30 units can serve client interests. The challenge is to prepare accounting students through their education to be better prepared to serve client interests than if they were not required to take an additional 30 units.

The EY Career Path Accelerator program shows that approximately 55% of the firm’s CPA-track hires comes to them through a traditional master’s program—typically, accounting or tax. The firm acknowledges the client service benefits by emphasizing that these graduate students not only meet the CPA credit-hour requirement through their studies; they also must use their fifth year of collegiate-level studies to build the business knowledge and leadership skills they will need to succeed in the workplace.

Current Educational Pathways

Students do not necessarily have to get a master’s degree to obtain 150 semester hours of education. Students can also choose any of the following paths:

  • ▪ Combine an undergraduate accounting degree with a master’s degree at the same school or a different one.
  • ▪ Combine an undergraduate degree in some other discipline with a master’s in accounting or a master’s in business administration with a concentration in accounting.
  • ▪ Enroll in an integrated five-year professional accounting school or program leading to a master’s degree in accounting.
  • ▪ Complete a double major in accounting and another complimentary discipline like information systems or finance.
  • ▪ Complete an online or hybrid degree program in accounting (if permitted under state law).

Double-majoring in information systems makes sense given that CPAs need to be knowledgeable about technology topics for personal and professional development. This is supported by the fact that a bill was introduced in Congress that would add accounting to the Science Technology Engineering and Math (STEM) education category (Michael Cohn, “Bill Would Make Accounting Part of STEM Education, Accounting Today, June 11, 2021, The AICPA voiced its strong support for the Accounting STEM Pursuit Act of 2021 because it would establish the accounting profession as a STEM career pathway and support long-standing efforts to create more diversity in the future accounting workforce.

A double major in accounting and finance makes sense as well. The skills needed in finance areas—such as advanced derivatives, financial management, financial markets, financial planning, private equity, risk management, and venture capital—have increased, and knowledge of them would enable accounting students to better serve client needs.

A double major may be the best option if the university allows for students to get degrees in two areas. The cost to do so would be less than enrolling in a master’s degree program. The extra knowledge obtained can enhance students’ knowledge and provide additional options after graduation, such as an advisory service position. On the other hand, a master’s in taxation is a sought-after degree by CPA firms because it prepares students to work on both the theoretical and technical aspects of taxes and serve client needs in these areas.

Rethinking the Model

The problems confronting the accounting profession are nothing new. The number of accounting graduates sitting for the CPA exam year over year has been an ongoing subject of concern within the profession (D. Hood, “Filling the Pipeline,” Accounting Today, October 24, 2016, Data compiled by the AICPA indicates that total accounting degree completions peaked in 2015/16 (AICPA 2019 Trends report, Only time will tell whether the 120/150 bifurcated system will help mitigate the pipeline problem.

In the authors’ view, four factors need to present for the 150-hour requirement to succeed: 1) adequate programs provided by colleges and universities that appeal to a wide variety of accounting students and make them more marketable; 2) a CPA exam (as envisioned by the CPA Evolution) that incorporates knowledge of targeted disciplines and competencies, thereby making accounting students better prepared to serve client needs; 3) a supportive accounting profession that is willing to help offset the additional educational costs or develop partnerships between CPA firms and universities to help fund the cost of the extra 30 units while providing work experience; and 4) proof that the additional educational requirements are necessary, as research to date is inconclusive.

The authors find the following benefits to the 120/150 model, as compared to the 120-hour requirement:

  • ▪ It provides students with the option to sit for the CPA exam and start their careers after completing the 120-hour requirement or obtaining a bachelor’s degree, or waiting until the 150-hour requirement is met.
  • ▪ It provides students with the ability to earn an income right away rather than delay it until the completion of the extra units, thereby mitigating the additional costs to complete the 30 units.
  • ▪ The additional 30 units may enhance candidates’ technical competencies in areas such as accounting information systems, information technology, and finance.
  • ▪ The additional 30 units may enhance communication, problem solving, and analytical reasoning skills.
  • ▪ The additional 30 units may better serve client needs by applying information systems and finance knowledge to client services.
  • ▪ The 120/150 model, when paired with some form of tuition reimbursement by employers, has the potential to substantially reduce the barrier to entry that the 150-credit hour requirement created.

The authors believe that CPA firms should seriously consider providing financial aid through more paid internships, paying for all or part of the additional 30 hours, or through the kinds of initiatives as discussed above. The 120/150 model may be a good compromise that provides benefits to mitigate the barriers to entry into the accounting profession; however, the alternative path to CPA being considered in Minnesota may be a better option given the immediate positive impact it would have.

The shortage of qualified CPA candidates continues to shrink, and the looming enrollment cliff of college-age students will only exacerbate this problem. Although the efforts of the profession and the firms discussed previously may help mitigate the financial barrier to entry caused by the 150-hour requirement, they cannot eliminate it. Blake Oliver suggests that in lieu of eliminating the 150-hour requirement, we allow “future CPAs to swap the fifth year of education with an additional year of experience” (Oliver, 2023). Although this option may have merit, given Minnesota’s proposed legislation and the support it has received, more research is needed before a final judgment can be made.

Future Research

Any analysis of whether the 150-hour requirement, or the 120/150 model, is good or bad for the profession would rely upon gathering additional information to address the following issues, which can only be determined through further research over time:

  • ▪ Are the extra units of education cost-effective?
  • ▪ Can the decline in the number of accounting graduates be reversed?
  • ▪ How does the additional education impact students’ career path?
  • ▪ Are there differences in employee retention or turnover rates between the 150 and the 120/150 models?
  • ▪ Do the additional hours create a more competent CPA, one who is better able to thrive in the profession?
  • ▪ Do the additional hours provide the skills needed to better serve client interests?
  • ▪ Do the additional hours create a candidate better prepared to protect the public interest?

Accounting educators are urged to conduct research in these areas to better understand the long-term benefits of additional education and implications for the accounting profession.

Steven M. Mintz, PhD, is a professor emeritus of accounting at California Polytechnic State University, San Luis Obispo, Calif.
William F. Miller, EdD, is a professor of accounting at the University of Wisconsin, Eau Claire, Wisc.
Tara J. Shawver, DBA, is a professor of accounting at King’s College, Wilkes-Barre, Pa.