The pursuit of reasonable, appropriate, and more economical paths to licen-sure is justified, in this author’s opinion. But as the profession is reshaped by market and technological changes—and now a pipeline crisis—we must be reminded of our responsibility to produce highly skilled professional accountants capable of succeeding in their careers. The Three E’s—Education, Experience, and Examination—represent the bedrock of professional licensing in the United States. Each “E” involves a commitment to distinct and unique categories of scholarly excellence (Uniform Accountancy Act, Eighth Edition, Section 5, https://tinyurl.com/preview/fpjwvyfk).
The proposed changes to the Model Rules of the Uniform Accountancy Act (UAA), which, in the author’s opinion, seek to redefine established definitions of education and educational institutions and blur the distinctions between education and experience, must be carefully considered and strictly construed. When considering changes to the Model UAA rules, we must remember that these rules are intended to offer state-of-the-art counsel to the state boards of accountancy, which are legislatively empowered to protect public interest. They do so by ensuring that candidates for licensure will 1) be equipped to satisfy minimum licensure criteria, and 2) possess the adequate skills and knowledge to become competent, post-certification CPA professionals in the manner required to protect the public. (UAA, Eighth Edition, https://tinyurl.com/fpjwvyfk). Thus, to serve their intended purposes, all proposed changes to the model rules should involve open and transparent debates that include all interested stakeholders, with changes being supported by rigorous evidence and subject to strict scrutiny.
Experience Learn and Earn (ELE) Program
Prior to the rollout of the Competency Pathway, NASBA and the AICPA unveiled “The Experience Learn and Earn (ELE) Program” that seeks to integrate and connect work experience in a CPA firm with an accredited higher education program, aiming to enhance an accounting student’s practical abilities, level of critical thinking, and overall preparedness for entering the industry (M.G. Butler, K.S. Church, and A.W Spencer, “Do, Reflect, Think, Apply: Experiential Education in Accounting,” Journal of Accounting Education, vol. 48, 2019). In this case, experiential learning bridges the gap between college professors, textbooks, and classroom learning of theory and practice. The UAA Model Rules have historically recognized the value of connecting educational theory and practical methods of learning by utilizing pre-approved internships and independent study programs sponsored by colleges and universities and appropriately supervised by faculty [Rule 5-1(f) and (g)]. For example, in 2020, the UAA Model Rules were specifically amended to increase the number of college credits that can be earned through internships and independent study from six to nine [Rule 5-2(d)(7)]. In the author’s opinion, the ELE pathway represents an excellent opportunity to gain the required 30 additional credit hours of formal accounting education at reduced cost.
Challenging the Boundaries Between Academia and Professional Practice
The Competency Pathway stands in stark contrast to the ELE and other university- and college-sponsored internships and independent study programs. It represents a reimagined form of experiential learning designed exclusively for the workplace, without involvement from colleges and universities or experienced educators. All CPA firms would automatically qualify to become the equivalent of a provider of continuing professional education programming, without the need for an accredited institution overseeing their educational development and assessment.
This transformative approach to satisfying educational licensing criteria takes the form of a work-study/certification program. It offers accounting students the chance to earn the equivalent of 30 hours of college credit by enrolling in an alternative educational model (Proposed Amendments to UAA Section 5). In exchange, for at least one year, the CPA firm agrees to offer candidates exposure to diverse types of accounting work experience that will enable candidates to display a predetermined list of general and technical competencies (Proposed UAA Model Rules Article 3). Upon successful completion of the program, the student will be awarded a CPA competency certificate issued by a CPA evaluator—a CPA who has been licensed for at least three years. The CPA certification serves to exempt candidates from having to satisfy the additional 30 credit hours of higher education at a college or university (Proposed Amendments to UAA Section 5).
Highlighting the Industry’s Call for More Formal Education in Accounting
Ironically, the additional 30 credits of formal education that are targeted for substitution were specifically mandated to address a significant CPA competency crisis highlighted when the then–Big Eight CPA Firms published a white paper, “Perspectives on Accounting Education: Capabilities for Success in the Accounting Profession” (Arthur Anderson & Co., 1989). Shortly thereafter, NASBA and the AICPA recognized that 120 hours of pre-certification formal accounting education, combined with pre- and post-certification work experience, was insufficient to equip CPAs to become the competent professionals required in the 21st century (S. Foster and C.B. Lee, “New Competencies for Accounting Students,” The CPA Journal, January 2002, http://archives.cpa-journal.com/2002/0102/dept/d016802.htm). The consensus was that CPA candidates needed more pre-certification formal education and not more work experience to equip them with the necessary knowledge and skills required. In fact, the two-year pre-certification experience requirement was reduced to one year (UAA, Eighth Edition, Section 5). These required changes clearly demonstrated the essential role that the minimum education licensing criteria plays in developing the bedrock foundation that underpins the entire process of professional formation (S. Fierstein, “Examination of Pre-Certification Education,” The CPA Journal, August 2008, http://archives.cpajournal.com/2008/808/infocus/p26.htm). The industry learned firsthand that a comprehensive pre-certification education of at least 150 credit hours from a university or college is essential. This education ensures that CPAs are well-equipped to offer professional accounting services and protect the public.
CPA Firms Are Not Educational Institutions, and CPAs Are Not Trained Educators
On its face, the Competency Pathway does not appear remotely similar to an educational institution in topography, curriculum, or pedagogy. Instead, it—
- ▪ replaces accredited higher education colleges and universities that have historically led the educational development and assessment processes with accounting firms;
- ▪ replaces experienced and professionally-qualified college professors with CPA evaluators who are not required to have any special form of teaching or experience other than being licensed as a CPA for a minimum of three years;
- ▪ replaces textbooks, lectures, internships, and independent study projects with work experience;
- ▪ replaces education and assessment processes with evaluations conducted by CPAs; and
- ▪ replaces college credits with CPA certificates of competency issued by a CPA evaluator.
The certificate, issued in place of a college transcript, would not demonstrate that students gained the same education and skills as those acquired through 30 additional credit hours in a formal higher education program. Such a program is specifically designed to develop the post-certification professional competencies required of CPAs.
The Role of Educational Institutions in Developing Competent CPAs
The debates that gave rise to the need for more formal education for CPAs stressed that the goal of accounting education is not merely to pass the CPA exam but rather to equip students with analytical and conceptual skills desperately needed to become competent professional accountants. In response, academia has remained committed to developing educational programming that fosters core competencies required for professional formation, including developing strong intellectual and technical skills, and striking the appropriate balance between business, accounting, liberal arts, and science courses (UAA Model Rules 5-2). Colleges and universities possess superior resources and skills to better prepare students to satisfy the educational licensing requirement and to prepare them for their careers in the practice of accountancy. The additional 30-credit hour mandate was specifically crafted to properly task colleges and universities, not employers, with the responsibility of equipping accounting students with the competencies required to become competent professional CPAs who can earn the public’s trust and confidence (E.J. Hensler, “Implementing the 150 Hour Accounting Requirement,” Mid-Atlantic Journal of Business, January 1, 1990).
There is a clear and undeniable fundamental distinction between formal education received in a structured educational program versus learning that takes place in a work experience. Poorly guided efforts that seek to redesign the future education of accountants, by blurring this distinction and merely assuming substantial equivalency, will serve to deny students a genuine opportunity to receive a top-rated, evidence-based education and professional training.
Risk of Reducing the Educational Requirement—Striking the Right Balance Between Flexibility and Rigor
Professional competence is an extraordinarily complex determination and is judged by the public at the time services are rendered. Proponents must be reminded that the strategic goal of a state board of accountancy is to ensure that CPA licenses are issued to candidates who have pursued appropriate, robust educational paths that will equip them with the capacity to develop post-certification competency and ensure public protection (UAA, Eighth Edition.). Historical precedent shows that the current 150 credit hour educational requirement has successfully provided a solid foundation for CPAs. Reducing this time frame risks weakening the quality, credibility, and reputation of the profession, which could harm both individual careers and the broader accounting profession.
NASBA and the AICPA say they desire to offer flexibility for candidates without compromising the rigor needed to protect the public. But the burden is on the proponents to demonstrate their claim that the reduction of 30 credit hours of formal education in exchange for workplace learning leading to a CPA certificate will have no adverse effects on the public. To prevent the pipeline crisis from becoming a competency crisis, the author believes that the proposed Competency Pathway should be tabled until all stakeholders are offered an opportunity to present evidence and participate in an open and transparent debate.
Need for Strategic Solutions
Securing a traditional, robust educational experience is vitally necessary to equip CPA candidates with the competence they need to effectively address the complex needs of the accounting profession. While the pipeline crisis is a challenge, this author believes that reducing the education requirement is not the right solution. Reducing the prelicensure educational requirement risks diluting the competence, credibility, and reputation of the profession, harming both individual career prospects and the profession at large. Instead, the accounting profession should focus on making the existing 150-credit-hour mandate more accessible through financial aid, scholarships, and innovative program structures. By turning our attention to investing in making the amazing institution of formal accounting education more accessible and affordable, the profession can address its pipeline crisis while preserving the high educational standards necessary for professional competence and public protection. NASBA, the AICPA, and all other interested stakeholders must work together to promote affordable education, market the profession, and enlighten college recruits about the extraordinary career path available to CPAs.
