Key Takeaways

  • The American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) are taking a significant step toward reshaping pathways to CPA licensure, proposing to offer more routes for those aspiring to enter the profession that do not require 150 college credit hours, equivalent to a fifth year of university. Some argue this credit requirement has dampened student interest in accounting careers.
  • The two professional associations said the move is part of a joint effort to develop a "next generation" CPA initiative aimed at addressing the accounting talent shortage by adding more pathways and flexibility. They are seeking public comment on the proposed model, which includes alternative routes, through December 6.
  • "The proposed pathways offer the perfect mix of flexibility for CPA candidates while maintaining the rigor needed to protect the public," NASBA President and CEO Daniel J. Dustin said in a statement last week.

Dive Insight

The new plan comes as the accounting profession has been digging deep this year for solutions to a problem CFOs and finance department recruiters have faced for years: a shrinking pool of accounting professionals needed for financial reporting and other critical finance department roles.

Last month, the National Pipeline Advisory Group, a group of accounting industry stakeholders formed a year ago to address the talent shortage, pointed to the cost of education required to become a CPA as one of the key issues to tackle, CFO Dive previously reported.

Under the alternative proposal currently open for public comment, candidates would need a bachelor's degree, while those not interested in a fifth year of college coursework could choose a "competency-based experience pathway."

That pathway would require candidates to have one year of experience using accounting, attestation, compilation, management consulting, financial consulting, tax, or consulting skills, plus an additional year of general business experience, according to the exposure draft detailing the new model.

The new pathway does not eliminate the 150-hour requirement, an AICPA spokesperson emphasized in a statement emailed to CFO Dive. Rather, it offers an additional route to satisfy the education requirement through "experiential learning, after earning a bachelor's degree and meeting state accounting and business coursework requirements." "The AICPA and NASPA boards must agree on final language, but the exposure draft does indicate directional support for this pathway," the statement said.

Jack Castonguay, an associate professor of accounting at Hofstra University in New York, said the AICPA move, which previously raised concerns about accountant mobility, represents a major shift for the association, and he welcomed it.

"This definitely removes one of the biggest barriers people consider when entering the profession," Castonguay said in an interview, noting that accounting salaries not competing with other high-paying finance roles is another hurdle to address. Even so, he called the new pathway the "biggest step" the AICPA has taken in changing the licensure model "in at least 15 years."

The process will take some time. Once public comments are reviewed, final language must be approved by the AICPA and NASBA boards, and changes will also be proposed to the Uniform Accountancy Act, the model for state licensure requirements, according to the AICPA. States will ultimately need to decide whether to update their licensure requirements.