Dive Brief:

• The American Institute of CPAs and the National Association of State Boards of Accountancy took a big step toward giving would-be accountants more ways to obtain a CPA license that don’t require 150 college credit hours — effectively a fifth year of college that some say dampens students’ interest in the profession.
• The professional associations said the move is a joint effort to develop the “next generation” of accountants by adding more paths and flexibility that will also tackle the accounting shortage. They are seeking public comment on the proposed models that contain the alternative routes through Dec. 6. 
• “The proposed pathway encompasses the perfect mix of flexibility for CPA candidates while maintaining rigor for public protection,” NASBA President and CEO Daniel J. Dustin said in a statement in a release last week.

Dive Insight:

The new plan comes as the accounting industry has drilled down this year on finding solutions for something CFOs and finance department recruiters have been grappling with for years: a shrinking pool of the accounting professionals that they need for financial reporting and a range of other tasks that are key to finance departments. 

Last month the National Pipeline Advisory Group, comprised of accounting industry stakeholders convened a year ago to address the accounting talent shortage, cited the cost of education required to become a CPA among the key problems that need fixing, CFO Dive previously reported. 

Under the alternative that is now out for public comment, candidates would need a Bachelor’s degree and those not interested in a fifth year of college coursework could instead take a “competency-based experience pathway.” 

That entails one year of certified work experience using accounting, attestation, compilation, management advisory, financial advisory, tax or consulting skills, and an additional year of general work experience, according to an exposure draft detailing the new model. 

A statement emailed to CFO Dive by an AICPA spokesperson asserted that the new pathway does not remove the 150-hour credit requirement. 

Rather, it provides an additional path to meet the education requirement through “experiential learning (after earning a bachelor’s degree and meeting state requirements for accounting and business courses). The boards of AICPA and NASBA both must agree to final language, but the exposure draft does represent directional support for this path,” the statement says. 

Jack Castonguay, an associate professor of accounting at Hofstra University in New York, said the move by the AICPA, which has previously raised objections related to concerns about mobility of accountants, represents a substantial change for the association that he welcomed.  

“This definitely takes away one of the biggest barriers to people considering the profession,” Castonguay said in an interview, noting that accounting salaries that can’t compete with other higher-paying finance jobs is another barrier that needs to be addressed. Still, he called the new pathway, “the biggest step” the AICPA has taken to changing the licensing model probably in at least a decade and a half. 

The process will take some time. Once the the 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, which is a template for licensure requirements for states, according to the AICPA statement. States will then ultimately need to decide whether to update their licensing requirements.