Should the CPA certification require 150 credit hours?
In recent years, a lively debate has sparked among accountants, students, and regulatory bodies about whether or not CPA certification should require 150 college credits. In the last few weeks, certain states have done what was thought to be impossible and actually abolished the requirement after holding it for a number of years. Is this a good thing? As usual, the answer is it depends, and today we are going to talk about it.
Why Does a 150 Credit Requirement Exist in the First Place?
Every state has different requirements for taking the CPA exam and obtaining a CPA license, and many states have required 150 college credits as a core requirement for licensure. I believe the idea behind this reasoning is mainly prestige. The harder it is to become a CPA, the more prestigious the certification is. By adding some additional barrier to entry, the thought is that those with the license will be viewed as more educated and would therefore be more respected.
Why Doesn't it Work?
As they are written, most of the 150 credit hour requirements do not specify the type or level of education required outside of certain accounting courses that would make up a portion of the 150 credits. If an aspiring CPA does not have 150 credit hours by the time they graduate with their accounting degree or equivalent, they are faced with the following options:
Take random classes to achieve 150 credit hours - because these classes don't need to be in anything specific, they can be taken at a community college and just impose a financial and time burden on the candidate.
Add another major - if a student is proactive enough with their education, they can plan for the 150 credit hour requirement, spend another year in school, and leave with another set of skills
Obtain a master's degree - most master’s programs are roughly 30 credits and can open the door to new opportunities beyond those that just require an undergraduate degree. However, master's degrees can be expensive, and the benefit greatly depends on specific career goals and the quality of the master’s program.
With options on the table, every aspiring CPA needs to choose what's best for them, but it certainly won't be the same choice for everyone. This means that while most CPAs have the equivalent of 5 years of education, the quality of that education can vary greatly. However, it's important to note that the quality of the additional 30 credits was never the primary gatekeeper to certification. The CPA exam is one of the hardest professional exams out there, and you have to be pretty smart to pass it regardless of your education.
In the current state of the world with increasing education costs, an additional one-year of education is a huge turnoff for many would-be CPA candidates and this requirement for 150 hours is narrowing the pool of potential CPAs. Because of this dynamic, I would say that the credit hour requirement is doing more harm than good.
How Would You Fix It?
In my opinion, the value of the CPA license is a combination of education and practical work experience. CPA candidates should be encouraged to pursue both avenues in a way that makes sense for them. After the initial accounting course requirements, I would allow 2 paths to licensure:
Path 1 - with 120 credits and a bachelor's degree in hand, pass the CPA exam and document 2 years of practical working experience
Path 2 - with 150 credits and a master's degree in hand, pass the CPA exam and document one year of professional work experience
My thought process behind this structure is simple: allow students who forgo education through credit hours to make up that time with practical work experience. Every state will have their own quirks about what classes to take and if a certain amount of time is required to be spent auditing as they always have, but I believe it's important for the profession to adapt to the modern working environment in order to attract candidates from wider backgrounds. As someone who teaches accounting to college students, the number one reason why my students don't want to be CPAs is because of the extra time and money required for that extra one year of experience. I can only hope that state governing bodies start to wake up and address this key issue for up and coming CPA candidates.