The debate over the 150-hour requirement for CPA licensure is ongoing and current. There's a growing recognition that this requirement may be contributing to a shortage of accountants and creating barriers to entry, especially for low-income candidates. However, proponents argue that the additional education is necessary to prepare accountants for the complexities of modern financial reporting and auditing.
Current Landscape
- All states maintain the 150-hour requirement as the standard path with few exceptions
- Many states have adopted a "bifurcated" system, allowing candidates to sit for the CPA exam after 120 credit hours
- Examples: California and New York allow candidates to sit for the exam after completing 120 credits, with specific subject-matter requirements
- As of today, no state has fully eliminated the 150-hour requirement for licensure
- Minnesota and California are actively considering proposals to reduce the requirement to 120 through experience-based alternatives
Recent Updates
ELE Program Shows Strong Growth
AICPA's Experience, Learn and Earn pilot program sees enrollment surge to 94 participants across 50+ employers, offering an innovative pathway to meet the 150-hour requirement through paid work and affordable online courses.
Read MoreAICPA-NASBA Propose New Pathway
AICPA and NASBA introduce groundbreaking Competency-Based Experience Pathway as alternative to 150-hour requirement, focusing on demonstrated professional skills and technical expertise under CPA supervision.
Read MoreTexas Survey Shows Mixed Support
Texas State Board survey reveals 66% support for 150-hour rule, while 53% favor alternative pathways combining bachelor's degree with extended experience, highlighting the profession's complex views on licensure requirements.
View ReportLandmark Research Study
Comprehensive study by John M. Barrios finds 150-hour rule reduced CPA supply by 15% without improving quality metrics, career outcomes, or communication skills, challenging the rule's effectiveness.
View ResearchQuick History
1983
Florida implements the 150-hour rule as a requirement for CPA candidates
1989
AICPA endorses the 150-hour rule, recommending all states adopt the standard
2015
Final states adopt the 150-hour requirement
State Initiatives
Ohio
Effective January 1, 2026, Ohio will implement two new pathways: 1) Master's degree with accounting concentration and 1 year experience, or 2) Bachelor's degree with accounting concentration and 2 years experience, plus CPA Exam for both paths.
Minnesota
Introduced legislation to allow 120 credit hours plus 2 years experience as an alternative pathway to CPA licensure.
Arkansas
Adding a second pathway that allows 120 hours of education combined with 2 years of experience.
California
Considering two pathways: 1) Master's in accounting/tax with 1 year experience, or 2) Bachelor's with accounting concentration or non-accounting degree plus accounting courses.
Utah
Planning to implement multiple options including current 150 hours, 120 hours with 2 years experience, and a pathway for experienced professionals.
Texas
Senate Bill 262 and House Bill 1757 propose a new pathway allowing a Bachelor's degree with accounting concentration, 2 years experience, and CPA Exam completion.
Florida
Senate Bill 160, filed on January 9, 2025, proposes revisions to education and work experience requirements for CPA licensure.
Virginia
The Virginia Society of CPAs is introducing legislation in 2025 to add an alternative pathway to CPA licensure.
Indiana
The Indiana CPA Society is exploring alternative pathways to CPA licensure.
The Debate: 150 vs 120 Credit Hours
Arguments for...
150 Credit Hours
Increased Expertise
More in-depth study of complex accounting topics enhances knowledge and capabilities of CPAs
Professional Prestige
Higher educational requirements may elevate the profession's status, increasing trust from clients and the public
Alignment with Other Professions
Mirrors the advanced degree requirements of fields like law and medicine
Curriculum Depth
More challenging to cover all necessary topics comprehensively in a shorter curriculum
120 Credit Hours
Financial Burden
The additional year increases costs, potentially deterring talented individuals, especially from lower-income backgrounds
Faster Workforce Entry
Reducing education time allows for quicker job market entry, affecting career progression and earnings
Questionable Relevance
Additional hours may not translate to better performance or relevant skills
Addressing Labor Shortage
The stringent 150-hour requirement could exacerbate the existing talent shortage in the accounting field
Alternatives and Compromises
Bifurcated Licensing System
Permit candidates to sit for the CPA exam with 120 credit hours, while requiring 150 hours for full licensure nationwide
Practical Skills-Based Education
Implement more practical, skills-based education in place of purely academic coursework
Experience Substitution
Allow substitution of some credit hours with relevant work experience
Continuous Learning Emphasis
Shift focus to ongoing professional development throughout a CPA's career
Specialization Tracks
Offer focused study options in specific accounting areas
Audit Chat: The 150 Hour Rule Debate
Date: August 21, 2024
In our fifth AuditChat session, we delved deep into the ongoing debate surrounding the 150-hour educational requirement for CPA licensure. This discussion comes at a critical juncture as the accounting profession grapples with talent pipeline challenges and increasing calls for diversity. Our distinguished panelists, representing various perspectives within the field, shared invaluable insights on this complex issue.
Key Topics Discussed
- Origins and intent of the 150-hour requirement
- Debate on reducing the requirement to 120 hours
- Legislative movements at the state level
- Balancing professional standards with addressing barriers to entry
- Impact on diversity within the accounting profession
Historical Context
The push for the 150-hour requirement originated in the late 1970s and early 1980s.
The Case for Change
Senator Rasmusson argued that the current requirement poses unnecessary barriers to entry.
Maintaining Standards
Jeff Johanns offered a balanced perspective on the 150-hour requirement.
Diversity Considerations
The impact of the 150-hour requirement on diversity was a crucial aspect of the discussion.
Featured Speakers
Jordan Rasmusson
Minnesota State Senator
Serving his first term in the Minnesota Senate, representing Senate District 9. A Harvard College graduate with a background in government and roles at McKinsey & Company and Bain Capital.
Jan Taylor, Ph.D., MBA, CPA, CGMA
Senior Director and Academic in Residence at the AICPA & CIMA
Oversees the Association's relationships with academics and institutions, supporting CPA licensure and CGMA certification pathways. Experienced in academia, public practice, and private practice as a CPA.
Jeff Johanns
Associate Professor at the University of Texas, Chair of Professional Standards Committee at Texas Society of CPAs
Teaches Auditing at UT Austin. Former partner at PwC, specializing in auditing public and private companies. Regularly authors articles on accounting, auditing, and regulatory topics.