Key Takeaways

  • Ohio Governor Mike DeWine signed a series of regulatory reform bills on Wednesday, including House Bill 238 (HB 238). According to the Ohio Society of CPAs (OSCPA), the bill eliminates the requirement for accountants to complete 150 college credit hours to obtain a CPA license in the state and provides alternative pathways to licensure.
  • Starting January 1 of next year, the state will offer two redesigned CPA licensure pathways: one requiring a master's degree in accounting, one year of professional experience, and passing the CPA exam; the other requiring a bachelor's degree in accounting, two years of professional experience, and passing the CPA exam. This information comes from an OSCPA post on LinkedIn.
  • The new law places Ohio at the forefront of a recent movement to eliminate or reduce the requirement to 120 credit hours. The movement has gained momentum as the industry competes for talent in response to an accounting talent shortage. A spokesperson for the American Institute of CPAs (AICPA) said in an email on Thursday: "This is the first state to pass such legislation. While a few states have had special alternative pathways, this is the first legislation passed since the recent debate on this topic heated up."

Deep Dive

Ohio's new law comes as attracting and retaining finance talent remains one of the biggest challenges for many CFOs, and the shortage of qualified accountants increases the risk of costly financial reporting errors.

The momentum for change has recently intensified. Last year, the AICPA—a leading industry organization that had been critical of the so-called '120-credit solution'—shifted its stance to support alternative licensure pathways that do not include what is effectively a fifth year of college, which some believe has dampened student interest in the profession.

According to Scott Wiley, president and CEO of the Ohio Society, the OSCPA has been working with other state counterparts for about two years to create additional 'entry points' for CPAs to enter the profession. Wiley expects other states to quickly follow suit with similar legislation this year.

"Are we the first state? The answer is yes, but we won't be the last," Wiley said in an interview. He noted that states with large numbers of CPA licenses, such as California, Texas, and Florida, are also advancing efforts to offer new licensure pathways. He said more than 30 states either have legislation in progress or are actively developing approaches similar to Ohio's.

Wiley pushed back against viewing the law as simply reducing the number of required education years. Instead, he said, it reflects a change in the language describing the required education: the new law focuses on degrees and elevates graduate education, rather than relying on credit hours. "What we focus on is the outcome, and the outcome is the degree," he said. He noted that the new approach also provides an alternative pathway for CPA candidates who cannot afford more coursework beyond a bachelor's degree—they can choose the pathway requiring more work experience.

Ohio's law also allows qualified CPAs from other states to practice in Ohio, an effort aimed at encouraging cross-state mobility. However, the AICPA expressed concerns in a statement about the bill, noting that Ohio's new law could affect the ability of Ohio CPAs to practice in other states.

"For a period of time, Ohio's new law may hinder out-of-state mobility—that is, the ability of Ohio CPAs to practice outside their home state's jurisdiction, whether in person or remotely," the AICPA said in a statement sent to CFO Dive.

Nevertheless, the AICPA also noted that it stands ready to work with the OSCPA and state regulators to ensure the legislative outcome successfully builds a talent pipeline while protecting the public, and to minimize disruption to CPA practitioners and firms.

"There is a shared urgency to address the accounting talent shortage. Stakeholders from all parts of the profession have the same goal of building a strong workforce and providing more accessible and affordable licensure options for all who aspire to become CPAs," the AICPA said in the statement.