California Governor Signs CPA Pathway Bill, Breaking the 150-Credit Barrier

Key Takeaways

• California Governor Gavin Newsom signed the CPA Pathway Act (AB 1175) last week, establishing an alternative route to obtaining a CPA license that no longer requires 150 college credits—which typically equates to five years of higher education.
• According to the California Society of CPAs, the state's new licensing requirements are set to take effect on January 1, 2027. At that time, CPA candidates must earn a bachelor's degree in accounting, pass the Uniform CPA Exam, and complete two years of general accounting experience. Additionally, a qualifying master's degree can substitute for one year of experience, or an approved accounting certificate program can substitute for six months of experience.
• "The bill was authored by Assemblymember Jacqui Irwin, sponsored by the California Board of Accountancy, and supported by CalCPA. This landmark legislation preserves the 'Three Es'—Education, Exam, and Experience—while creating new flexibility," read a post on CalCPA's LinkedIn account. "This update replaces the 'one-size-fits-all' 150-credit rule with multiple pathways to increase flexibility, reduce costs, and improve accessibility, all while maintaining the high standards that define our profession."

Deep Dive

With California joining, 22 states have now enacted new laws providing alternative paths to CPA licensure that do not include the 150 college credits—a requirement critics have cited as a factor contributing to the accounting talent shortage.

By the end of this year, states such as Massachusetts and New Jersey are considered likely to pass similar CPA pathway legislation, which would bring the total number of states with new laws from the current 22 to nearly half.

Robert J. Pawlewicz, an assistant professor of accounting at the University of Richmond's Robins School of Business, said in an email Monday that he is watching Massachusetts and New Jersey, both of which have active CPA pathway bills, and he still expects those to pass in 2025. He is also monitoring state legislatures in Michigan, New Hampshire, and Wisconsin, as those states or their CPA societies have indicated plans to introduce CPA pathway legislation in 2025.

Currently, New York's law is in a holding pattern. The bill received legislative approval in June, but the legislature's website tracking the state's legislation shows it is still awaiting Governor Kathy Hochul's signature. A spokesperson for the governor's press office said Hochul "will review the legislation," but did not respond to questions about the timing of that step.

Pawlewicz is also watching how public accounting firms respond to CPA licensure changes. For example, one Big Four firm has told new hires that it intends "to require them to meet the 150-credit requirement by May 2027," Pawlewicz said. "Other firms are staying quiet or encouraging new employees to get licensed in whatever way they can."

Because California is a large state, the bill has been closely watched by licensure policy advocates, as the state's law could help drive momentum for licensure reform. As CFO Dive previously reported, California's new legislation will also change the requirements for out-of-state CPAs to practice in the state.

The 22 states that have passed legislation so far include: Ohio, Virginia, Utah, Indiana, New Mexico, Iowa, Texas, Georgia, South Carolina, Tennessee, Minnesota, Montana, Oregon, Nevada, Hawaii, Alaska, Illinois, Connecticut, North Carolina, Pennsylvania, Delaware, and now California.

For more updates on CPA licensure changes, follow CFO Dive'stopic trackerfor ongoing coverage.