I was a CPA Review Course Instructor for 10 years when the 150-credit hour requirement was proposed. I could not understand why there was a need for accountants to obtain an extra 30 credits to sit for an exam that was already considered the most difficult of all professional exams. In addition, candidates pursuing the CPA license needed to complete 2 years in public accounting or 4 years in private accounting under a CPA. Was that not enough?
Apparently not. Someone came up with the idea that it would make sense to add 30 credits to the requirements to become a CPA. Did they really think this through?
Opportunity Cost of 30 Additional Credits
The cost of college was already skyrocketing, and this would mean foregoing at least one year’s salary. The current opportunity cost of the extra 30 credits can reach $100,000, based on an average starting salary in public accounting of $70,000 and the average cost per credit hour at a four-year private college of roughly $1,200.
Inclusion or Exclusion?
This puzzled me even more because our profession has been focused on diversity and equality. This ruling has made it even more difficult for individuals from disadvantaged backgrounds or those facing financial constraints to obtain the CPA license due to the cost of obtaining 150 credits. As a result, many promising candidates may be deterred from pursuing the CPA designation because of the prohibitive costs involved.
Who Does This Benefit?
When you think about who has benefited from this rule and who has been hurt by the mandate, it makes you scratch your head. At first, it seems like the colleges would benefit from the additional credits students would have to register for to meet this requirement. However, the number of accounting graduates has been steadily declining for years. The AICPA reports a 7.8% drop in bachelor’s degrees and a 6% decrease in master’s degrees in 2021-2022 alone.
No Required Classes = No Enhanced Knowledge
It has been argued that businesses will benefit from a more well-rounded accountant. The argument is that by mandating additional coursework, the 150-credit rule aims to equip aspiring CPAs with advanced knowledge in areas such as taxation, auditing, financial reporting, and business strategy. This comprehensive education better prepares them to navigate complex financial scenarios and serve as trusted advisors to clients and stakeholders.
This may be true if there were an actual required curriculum for those additional 30 credits. Here in NJ, a candidate is required to obtain 24 credits in business coursework and an additional 24 credits in accounting coursework, but there are no specific coursework requirements. The 30 additional credits can be in any subject.
Lack of Potential Employees Leading to Additional Costs to Businesses
With the decrease in accounting graduates, there is now increased competition for talent. Companies are forced to offer higher salaries and better benefits to attract qualified candidates. With many of these candidates being forced to obtain a master’s degree, their expectations for starting salaries have also increased.
What is the Solution?
We are now seeing many solutions being proposed, such as the recently announced pilot programs that allow students to receive 30 credits for working as paid staff. In Minnesota, a significant change was recently proposed. The MNCPA is advancing legislation that would enable Minnesota CPAs to become licensed with 120 hours of accounting education (essentially a bachelor’s degree) and additional work experience or CPE.
Doesn’t this sound like the original requirement for becoming a CPA? Maybe we shouldn’t have tried to fix something that wasn’t broken in the first place.
The profession has so much to offer in terms of career opportunities. Earning a degree in accounting opens doors to some of the best, most interesting opportunities in the job market. There was no need to place another obstacle in the way of pursuing this great career. Maybe it’s time to just go back to the way things were…
