Across state legislatures nationwide, the number of states that have passed laws providing alternative pathways to Certified Public Accountant (CPA) licensure is approaching the halfway mark. These new laws, aimed at alleviating the accounting talent shortage, typically either phase out the 150-credit-hour college requirement, seen by many as a heavy hurdle, or retain it while allowing two alternative routes: one requiring a master's degree, 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.

According to Robert J. Pawlewicz, an assistant professor of accounting at the University of Richmond in Virginia, by the end of this year, states such as California, Massachusetts, and New Jersey may sign similar CPA pathway legislation into law, increasing the total number of states implementing new laws from the current 21 to 25. New York's legislation has passed and is awaiting Governor Kathy Hochul's signature.

"If California and New Jersey also pass it, we've far exceeded the tipping point," Pawlewicz said in an interview. He noted that many states with high concentrations of accounting talent, such as Virginia, Texas, and Illinois, have already joined the 22 states (including New York) that have passed such legislation.

Since Ohio Governor Mike DeWine signed that state's CPA pathway legislation in January, states of all sizes have followed suit, gradually shaking up a licensure system that had been in place for decades. That system previously required U.S. CPA candidates to complete 150 college credit hours (typically a fifth year of university education), pass the CPA exam, and obtain one year of work experience.

Looking ahead to 2027

The pace of legislative progress has surprised some experts, especially given that many industry leaders had previously been cautious about the proposed changes. "The speed of change is lightning-fast, and we're discovering new issues and receiving questions as we go," Pawlewicz said.

Geno Fragnito, director of government relations at the Minnesota Society of CPAs, said that after a dense first half of legislative action, the number of states advancing measures in the second half is expected to decline, with a resurgence in 2026, partly due to the scheduling of state legislative sessions. Minnesota was one of the first professional associations to push for change.

"Using my cloudy crystal ball for this year, we might add two or three or four more states; 2026 could see another large wave of states following. By the end of 2027, we should be close to all states having completed legislation," Fragnito said.

The main event is yet to come

Meanwhile, employers and financial executives who hire accounting teams, universities, students, and regulators are all busy preparing for and adapting to the new era of CPA licensure, as new rules in many states take effect on January 1, 2026. At the same time, the current patchwork of state regulations presents additional challenges.

"We know this will be a turbulent period," Geoffrey Brown, president of the Illinois CPA Society, told CFO Dive. "I'd say the legislative part is the easiest. The real difficulty is in rulemaking and communication and coordination with various audiences."

Illinois Governor JB Pritzker signed that state's CPA pathway legislation earlier this month. Although the law does not take effect until 2027, Brown said he is already receiving numerous inquiries about how it will work.

Looking ahead to the rest of the year, the Illinois CPA Society will help draft administrative rules to implement the new law. Meanwhile, the society will hold a series of town hall forums to answer questions about the changes and reach out to employers and universities to share what the new law means in practice.

For employers, Brown advises companies to be sure they understand the educational backgrounds of their current accounting team members and to keep an eye on the long-term development of their employees.

"A very important theme for us is: this is not going to be a panacea that automatically solves all workforce needs," Brown said. "We still need to be highly vigilant... and continue to focus on the importance of licensure."

Changes in advising guidance

Universities are also responding to these changes. Shail Pandit, associate dean of graduate programs in the accounting department at the University of Illinois Chicago, said the school is reviewing its curriculum to determine if revisions are needed, but he noted that one of the most pressing challenges is how to advise students—who must now decide which pathway suits them better and, given their personal circumstances, whether an extra year of professional experience or additional coursework would better prepare them for the rigorous CPA exam.

"I don't want to say one pathway is better, but if you choose the 120-credit-hour pathway, you need strong self-motivation to ensure you stay on track and keep preparing for the exam," Pandit said in an interview. "If you're self-disciplined, it's a good pathway."

There are signs that pathway legislation has begun to influence educational and career choices. At James Madison University in Harrisonburg, Virginia (where the state has passed legislation), the number of students enrolling in accounting this year is 10% to 15% higher than last year, according to Nicole Wright, an associate professor in the university's School of Accounting.

Wright sees this as a positive outcome for the profession, but she is also watching the regulations and details being developed by state boards regarding the evolving licensure pathways. Most states that have adopted alternative pathways have maintained requirements similar to the past, but there has been discussion that some states are considering eliminating accounting education requirements to address the talent pipeline issue.

"As far as I know, no state has passed such an extreme bill, but I'm keeping an eye on it," Wright said in an email. "I think the public expects that a CPA should be a qualified CPA regardless of where they practice... These differences between states could be significant."

For ongoing tracking of CPA licensure changes, see CFO Dive'sspecial tracking report。