In Brief
The supply of new accounting students and CPAs—the pipeline to the profession—has been a topic of growing concern over the past several years, driven by research indicating that barriers to entry were shrinking the pipeline. Recent efforts to address the issue have been attempted by state legislatures, CPA societies, firm-university partnerships, and online educational programs. This article reviews these recent initiatives and finds reason to believe that progress is being made, even if much remains to be done.
In 2016, the Illinois CPA Society alerted the profession about developing CPA pipeline issues (Illinois CPA Society, “Pipeline Disruption: The Search for Solutions to the Weakening Supply of CPAs,” Insight Special Issue, August 1, 2016, https://tinyurl.com/4dubj7fk). The report amplified the discussion about the pipeline, but it resulted in little action. Five years later, the Center for Growth and Opportunity at Utah State University published a comprehensive study that pinpointed a number of barriers to entry that were causing the CPA accounting pipeline to shrink, the most notable being the 150-hour rule (B. Meehan and E. F. Stephenson, “Reducing a Barrier to Entry: The 120/150 CPA Licensing Rule,” January 7, 2021, http://tinyurl.com/2z5eftew).
In February 2023, the Minnesota Legislature proposed changes that would provide alternatives to the 150-hour rule (Minnesota Legislature, HF 1749, https://tinyurl.com/4huw4mdp). Since the Minnesota bill was introduced, substantial equivalency, mobility, and pipeline barriers have received significant attention in the professional press (a selected list of studies is shown in Exhibit 1).
EXHIBIT 1
Selected Studies Investigating the 150-Hour Rule
While the impact of the 150-hour rule is being debated, the AICPA and the National Association of State Boards of Accountancy (NASBA) have cautioned against adopting alternative approaches. They reminded state boards of accountancy that to be consistent with the Uniform Accountancy Act (UAA), “States’ concurrence on one, consistent level of required education—150 semester hours of undergraduate and/or graduate-level studies—is one critical element in establishing substantial equivalency and maintaining CPA mobility” (D. Dustin and M. Zaniewski, “The Link Between CPA Mobility and the 150-Hour Requirement,” Florida CPA Today, Spring 2023, https://tinyurl.com/2xhanu89).
Within this environment, market participants have adapted. Approaches to solving CPA pipeline issues have been undertaken by both individual states and educational institutions. Besides Minnesota mentioned above, South Carolina has also advanced legislative alternatives to the 150-hour rule. Some states have adopted automatic mobility, and some institutions have introduced new academic programs that provide less expensive ways to accumulate the additional required thirty hours of college credit. Furthermore, the AICPA and NASBA established groups charged with investigating how a unified approach to solving the accounting pipeline, substantial equivalency, and mobility issues can be accomplished in a manner consistent with the UAA.
Legislative Initiatives
As mentioned above, NASBA raised concerns that the Minnesota bill looking to provide alternative pathways to licensure would fracture interstate mobility. Minnesota’s concerns were centered on both the cost and time requirements associated with obtaining an additional 30 hours of college credit.
Nationwide, the average cost of a typical master’s degree at a private institution can be as much as $62,100 (S. Mintz, W.F. Miller, and T. J Shawver, “Rethinking the 150-Hour Requirement for CPA Licensure,” The CPA Journal, September/October 2023). Using the University of Central Florida as an example, its Master of Science in Accounting (MSA), Assurance Track requires 30 hours of credit, or 10 courses. Using per-credit fees, this program costs $11,090 for an in-state student and $35,820 for an out-of-state student. (University of Central Florida, “Accounting (MSA)–Assurance,” https://tinyurl.com/mw4sm5ja).
In addition to the monetary cost, the time investment needed to complete a master’s degree is significant. Franklin University cautions students that a three-credit course will normally require students to schedule three hours of in-class seat time plus six hours of outof-class preparation time each week. This weekly nine hours multiplied by 15 weeks in a semester requires that 135 hours be invested in each class (Franklin University, “How Long Will It Actually Take to Earn Your MBA?” http://tinyurl.com/bdh2kf8n). This comes to 1,350 hours for a 10-course master’s program, or about 67.5% of a work year. Furthermore, these hours must often be invested while working full-time at a CPA firm and at the same time studying for the CPA exam.
It is such time and cost concerns that led the Minnesota Society of CPAs (MNCPA) in 2023 to propose legislation intended to provide two additional ways for CPA candidate licensure. If passed, the law would provide a CPA candidate with three licensure options. One option would be to pursue the currently required 150 hours of college credit plus one year of experience. A second option would allow a licen-sure candidate to obtain 120 hours of college credit and two years of work experience. A third option would allow a licensure candidate to obtain 120 hours of college credit, one year of work experience, and 120 hours of continuing education credit. The bill was not brought to a vote in 2023, but the MNCPA indicates that the legislation “will carry over to the 2024 legislative session where legislative committees will debate the proposal” (G. Fragnito, “Broadening the Pathways to CPA Licensure Discussion Will Continue,” May 22, 2023, https://tinyurl.com/mrdfss33). This legislation remains in committee. It was reintroduced in 2024 but stalled as the legislature failed to take action. The intent is to reintroduce this legislation in 2025 (M. Sadovi, “Minnesota CPAs Eye 2025 After 120-Hour Bill Stalls,” July 30, 2024, https://tinyurl.com/483jd5n6).
In South Carolina, Senate Bill S. 1049 was introduced to the South Carolina General Assembly on February 4, 2024. This Bill proposes, in section 40-2-35(D)(2), to allow the Board, with certain exceptions, “to recognize and accept up to thirty hours of educational credit derived from nonaccredited sources” for licensing purposes. Examples of nonaccredited sources set forth in section 40-2-35(D)(2)(c) are experiential learning, certificates, and alternative educational programs (South Carolina General Assembly, “Senate Bill S. 1049,” https://tinyurl.com/4b88efwd). This bill remains in committee.
Automatic Mobility
Automatic mobility is an inbound approach to alleviating the accounting pipeline problem. When a state adopts automatic mobility, either individual CPAs or CPA firms licensed by other states are granted an unrestricted practice privilege in the adopting state. Alabama, Nebraska, Nevada, and North Carolia have been early adopters of automatic mobility. The provisions of their individual and firm practice privilege laws are detailed in Exhibit 2.
EXHIBIT 2
Selected Provisions of Individual and Firm Automatic Mobility Statutes
![State; Individual; Firm Alabama1; Act 2009-620; A CPA whose principal place of business is outside the state of Alabama may exercise all the privileges of Alabama CPAs without the need to obtain a license or pay a fee, if the individual holds an active permit, certificate, or license which allows the person to engage in the practice of public accountancy as a CPA in another state. Non-resident CPAs and firms practicing in Alabama under the Practice Privilege provisions will be subject to the disciplinary provisions of the Alabama State Board of Public Accountancy and the courts of Alabama.; Out-of-state firms with no office in Alabama will not be subject to Alabama's firm registration requirements, which is consistent with current law. Nebraska2; Individual 1-125.01; Public Accountancy Act As Amended, August 2017; 1-125.01: (1) A person who does not hold a certificate as a certified public accountant or a permit issued under subdivision (1)(a) of section 1-136 and who possesses an active permit, certificate, or license which allows the person to engage in the practice of public accountancy as a certified public accountant in another state and whose principal place of business is outside this state shall have all the practice privileges of a certified public accountant who holds a permit issued under subdivision (1)(a) of section 1-136, including the use of the title or designation certified public accountant or C.P.A., without the need to hold a certificate or a permit issued under subdivision (1)(a) of section 1-136, or to notify or register with the board or pay any fee.; Nebraska currently does not recognize and/or have adopted “firm mobility.” Thus, any firm providing attest services in our state [Nebraska] must register with the Board under PAA 1-136.1(b) and obtain a permit.; For an out of state firm conducting attest services the firm must obtain a permit (PAA 1-125.01 (4); however, the CPAs working on the engagement can practice under the “practice privilege.”; (Source: Email from Nebraska Society of CPAs, Feb. 6, 2024) Nevada3,*; Individual, NRS 628.315; Firm, NRS 628.315.3; NRS 628.315: Except as otherwise provided in this chapter, a natural person who holds a valid license as a certified public accountant from any state other than this State shall be deemed to be a certified public accountant for all purposes under the laws of this State other than this chapter.; 2. A natural person granted practice privileges pursuant to subsection 1 is not required to obtain: (a) A certificate pursuant to NRS 628.190; or (b) A permit pursuant to NRS 628.380.; (Editor's note: Other provisions omitted); A natural person granted practice privileges pursuant to subsection 1 and a partnership, corporation, limited-liability company or sole proprietorship that employs such a natural person or a certified public accounting firm granted practice privileges pursuant to subsection 1 shall be deemed to consent, as a condition of the grant of such practice privileges: (a) To the personal and subject matter jurisdiction, and disciplinary authority, of the Board. (b) To comply with the provisions of this chapter and the regulations of the Board.; (Editor's note: Other provisions omitted) North Carolina4; Section 19-10: Practice Privileges; (a) An individual whose principal place of business is outside this State is granted the privilege to perform or offer to perform services, whether in person or by mail, telephone, or electronic means, in this State as a certified public accountant without notice to the Board, the submission of any other documentation, or the payment of any fee if the individual meets all of the following conditions:; (1) Holds a valid and unrevoked certificate as a certified public accountant, or its equivalent, issued by another state, a territory of the United States, or the District of Columbia.; (2) Holds a valid and unrevoked license or permit to practice as a certified public accountant issued by another state, a territory of the United States, or the District of Columbia.; (3) Has passed The Uniform CPA Examination.; (4) Has not been convicted of a felony under the laws of the United States, any state, a territory of the United States, or the District of Columbia and has never been convicted of a crime, an essential element of which is dishonesty, deceit, or fraud unless the jurisdiction in which the individual is licensed has determined the felony or other crime has no effect on the individual's license.; (c) A firm whose principal place of business is outside this State and has no office in this State is granted the privilege to perform or offer to perform services, whether in person or by mail, telephone, or electronic means, in this State as a firm without notice to the Board, submission of any other documentation, or payment of any fee, except as otherwise provided in subdivision (3) of this subsection. A firm that exercises the privilege afforded under this section simultaneously consents as a condition of the grant of the privilege to:; (1) Comply with the laws of this State, the provisions of this Chapter, and rules adopted by the Board.; (2) Be subject to personal jurisdiction, subject matter jurisdiction, and disciplinary authority of the Board.; (3) Provide notice without a fee to the Board if any individual with the firm who has been granted privileges in North Carolina to practice as a certified public accountant performs any of the following services for a client in this State:; a. A financial statement audit or other engagement performed in accordance with the Statements on Auditing Standards.; b. An examination of prospective financial information performed in accordance with the Statements on Standards for Attestation Engagements.; c. An engagement performed in accordance with [PCAOB] auditing standards. Sources: 1) Alabama State Board of Public Accountancy (https://www.asbpa.alabama.gov/mobility.aspx); 2) Nebraska Public Accountancy Act, as amended 2017 (http://govdocs.nebraska.gov/epubs/A1500/Q001-2017.pdf); 3) Nevada Revised Statutes, Chapter 628 -- Accountants (https://www.leg.state.nv.us/nrs/nrs-628.html#NRS628Sec315); 4) North Carolina Board of CPA Examiners (https://nccpaboard.gov/resources/mobility-practice-privilege); Note (*): Nevada Revised Statutes 628.315 and 628.335 were amended and approved with an effective date of July 1, 2023. The code changes have not yet been entered into the Nevada statutes. Section 6 of the bill extends the authority of the board to grant such practice privileges to a CPA firm organized as a partnership, corporation or limited liability company or a sole proprietorship which holds a valid registration in good standing from another state. Such a CPA firm is not required to register with the board but is required to consent to the same conditions as natural persons, such as consent to the board's disciplinary authority.](https://www.nysscpa.org/cpaj-images/CPA.2024.94.9.030.t002.jpg)
To be clear, the four states that have adopted automatic mobility require 150-hours of college credit to obtain a CPA license. They are not imposing their licensing requirements, however, on other states. These states accept the CPA licensing requirements of other states. Using Alabama as an example, if New York maintains the 150-hour requirement for CPA licensure, their CPAs are welcome to perform services in Alabama. If Minnesota licenses CPAs by substituting either two years of work experience or one year of work experience plus 120 hours of continuing education credit as an alternative to the150-hour requirement, Minnesota CPAs are also welcome to perform services in Alabama.
In October 2023, CPA mobility was reviewed at an Ohio Board of Accountancy meeting, where Scott Wiley, the president and CEO of the Ohio Society of CPAs, told the board that “the OSCPA believes that Ohio should adopt this [automatic mobility] as they believe that mobility will be broken over the next 12 months.” (Accountancy Board of Ohio, “Board Meeting Minutes of October 20, 2023,” http://tinyurl.com/2unhtjk2). If all states were to adopt this approach to practice privilege, the national mobility concern would be resolved.
Credentialing Workplace Learning
While some states are looking to modify the law, other market participants are investigating creative ways to credential workplace experience. This movement to credential workplace experience can be traced to Daniel Geltrude, the founder and managing partner of Geltrude CPAs and Profitability Advisors, in association with the New Jersey Board of Accountancy. As reported by NJBIZ, Geltrude coordinated with NASBA during 2021, and his work-place credentialing idea resulted in a 2022 joint venture between Saint Peter’s University in New Jersey and PricewaterhouseCoopers (PwC) (M. Fazelpoor, “Pilot Program a ‘Gamechanger’ for CPA Profession,” NJBIZ, Oct. 31, 2022, https://tinyurl.com/2ckzcpak). As a pilot program, six students were enrolled in what is termed a paid internship. This initial collaboration in New Jersey seems to be the one upon which subsequent efforts are modeled.
In a similar manner, Seton Hall University and Withum announced the CPA Pathway Apprenticeship Program, which started in September 2023 (“Seton Hall University and Withum Launch CPA Pathway Apprenticeship for Aspiring Accounting Students,” Aug. 16, 2023, https://tinyurl.com/bdzxwzp8). In this pilot program, employees at Withum who are seeking to obtain the additional 30 hours of credit needed for CPA credentialing are simultaneously enrolled at Seton Hall. Seton Hall indicates that those enrolled in this program will “work in all service lines and industries while earning credits for their curriculum-driven experience alongside University coursework” (University Relations, “New CPA Apprenticeship Program for Aspiring Accountants,” Monday, August 21, 2023, https://tinyurl.com/559mpftz). Withum indicates that the CPA Pathway Apprenticeship Program was developed with input from Dan Geltrude. It is similar to the Saint Peter’s/PwC collaboration mentioned previously. How costs are shared between the CPA candidates, the universities, and the collaborating CPA firms in these two programs has not been disclosed.
Tulane University’s School of Professional Advancement (SoPA) is involved in a joint program with the AICPA and NASBA. This program has received much media attention, and began in January 2024. “‘The ELE program demonstrates the kind of creativity, collaboration, and follow-through we need to remove barriers to a successful and rewarding career in accounting,’” said Sue Coffey, CPA, CGMA, AICPA & CIMA’s CEO–Public Accounting (Kevin Brewer, “CPA Licensure Program Off to ‘Promising’ Start,” Journal of Accountancy, April 2, 2024, https://tinyurl.com/4kwxewnm).
The following are key components of the SoPA/NASBA joint venture: 1) an accountant possesses a bachelor’s degree in accounting and is employed by a CPA firm; 2) the CPA firm must agree to mentor the candidate as well as provide time during working hours to complete coursework; and 3) all coursework will be taken online. It is called the Experience, Learn and Earn Program (ELE) and its cost is expected to be under $5,000 for a full 30 credit hours of study (NASBA, “Experience, Earn and Learn Program,” https://tinyurl.com/5y9pcpwk). NASBA reports that the ELE program currently has “94 summer-session students representing more than 50 employers” (NASBA, “Growth Seen in Pilot Program That Reduces Barriers to Completion of CPA Licensure’s Education Requirement,” https://tinyurl.com/4rzas6m9).
While the SoPA/NASBA program seems to have incorporated many of the elements that Geltrude built into the collaborations at both Saint Peter’s and Seton Hall, his work is not mentioned by NASBA.
These programs may reduce the monetary cost of obtaining an additional 30 hours of college credit, but they do not eliminate the time CPA candidates must spend doing so.
Low-Cost Nondegree College Coursework
A different approach to helping CPA candidates obtain the needed 30 hours of additional coursework more efficiently and cost effectively is being offered by CPACredits.com. Through partnerships with a few regionally accredited schools, CPACredits.com offers a variety of courses “that are accepted by all state boards” (“The Solution to Fulfilling Your 150 State Board Credits Requirement,” https://cpacredits.com). Their primary college partner is Upper Iowa University (UIU), a private institution that is regionally accredited through the Higher Learning Commission. All courses are developed and delivered by faculty at UIU, and tuition is $675 for each three-credit hour course. Thus, if a student takes ten classes to accumulate the needed 30 credit hours, the total cost would be $6,750 (UIU, “Self-Paced Web-Based,” https://tinyurl.com/4572vyav). In comparison, the tuition for an MBA at UIU would amount to $22,500 for their 36-credit hour program.
Courses can be taken in a variety of formats, but the most popular is the self-paced option. In a conversation with the author, Joshua Jacoby, the chief operating officer for CPACredits.com, shared that most students complete a self-paced course in three to five weeks, and some candidates have completed all ten courses within six months.
Whether a student has a bachelor’s degree or not, Jacoby indicated that students are eligible to receive an optional free transcript evaluation in order to determine the specific courses needed to meet a particular state’s licensure requirements. Once specific needed courses are identified, a candidate can register for courses through the CPA-Credits.com website. A student may take these courses whether they have completed a bachelor’s degree, or are continuing to pursue a degree at another college or university.
Because UIU is a regionally accredited university, The CPACredits.com course offerings through UIU meet the requirements of the 150-hour rule in all states. This in turn provides an educational approach that is consistent with the UAA’s substantial equivalency requirements (“The Solution to Fulfilling Your 150 State Board Credits Requirement,” https://cpacredits.com).
What’s Next?
As a result of the national attention given to the alternatives presented in this paper, in 2023 the NASBA formed a Professional Li-censure Task Force charged with considering new concepts for CPA licensure (NASBA, “Professional Licensure Task Force Established,” November 2023, https://tinyurl.com/y42zk52f). Similarly, the AICPA formed a National Pipeline Advisory Group whose purpose is to identify issues impacting the accounting pipeline and to develop a “continuous research-driven national pipeline strategy” (National Pipeline Advisory Group, “FAQ,” 2024, https://accountingpipeline.org/faqs).
These two groups are currently studying the constraints and alternatives to CPA licensure. They are charged with identifying barriers to entry and with proposing alternatives that will grow the accounting pipeline. Their deliberations will likely include consideration of the several alternatives discussed in this article.
In order to determine whether other states are considering the adoption of either an alternative approach to CPA licensure or automatic mobility, the author sent an email survey to each state’s CPA society. Forty percent responded, and the results indicate that the responding states do not currently plan to adopt either the Minnesota or the automatic mobility approach. Rather, they are waiting to see what the AICPA and NASBA recommend.
The 150-hour rule, substantial equivalency, and mobility are integral parts of the profession’s pipeline problem. Progress is being made, but, for now, issues persist.
