Dive Brief:

• The American Institute of CPAs and the National Association of State Boards of Accountancy’s are seeking public comment on a revised alternative CPA licensure path proposal, according to a Tuesday release. The move revamps an earlier plan, stripping a requirement that evaluators verify candidates had “competencies” in professional areas such as ethical behavior and critical thinking as well as in technical areas such as audit, assurance, tax and financial reporting. 
• The major accounting trade associations’ newly revamped “third licensure pathway” would instead require a bachelor’s degree, the passage of the CPA exam and two years of professional experience, effectively substituting an extra year of work for the competencies component. An earlier alternative licensure plan proposed last year required the competencies, a bachelor’s degree meeting state requirements for accounting and business courses, one year of professional experience and the CPA exam passage.    
• The removal of the competencies framework came after concerns were raised about them during the initial public comment period that ended in December. “Responses to the competency pathway varied and numbered 600+ survey completions and more than 150 comment letters. Among the themes were questions about implementing the competency framework, such as feasibility for smaller employers and liability for competency evaluators,” the AICPA stated in an emailed response to CFO Dive’s questions sent by a spokesperson. 

Dive Insight:

The role of the UAA language as a potential legislative template is particularly important now as a rising number of states are eliminating or providing alternatives to the requirement that CPAs have 150 hours of college credit, which typically equals a fifth year of college or graduate school. Last month Virginia became the second state to pass new CPA pathways legislation that offers an alternative path to licensure that doesn’t require the 150 hours, CFO Dive previously reported. 

The changes that the AICPA put out for public comment this week would be made to the industry’s Uniform Accountancy Act, a model bill which often impacts how state legislatures regulate CPA licensure. Public comments are due May 3. 

Nicole Wright, an associate professor at James Madison University’s School of Accounting, was not surprised by the changes, saying in an interview that there was a lack of clarity in the competency piece even in so far as what role, if any, schools would play in assuring competency. The new plan without the competencies is more straightforward, which also makes it easier for students weighing their career paths to understand, she said. 

“I think they’ve made it more clear,” she said. “It’s a checked box. ‘I’ve got my education requirements down, now do I decide to go for two years of experience?’ That’s much easier.” 

In its statement, the AICPA signaled that the push for some type of competency gauge was still alive. “While the Competency-Based Experience Pathway has been tabled, the AICPA is exploring plans for a longer-term, data-driven approach working with stakeholders to understand how competencies can help shape the future of our profession,” the statement reads. “This aligns with recommendations made in 2024 by the National Pipeline Advisory Group and reinforces the profession’s longstanding commitment to competence as a core principle already in our profession’s Code of Professional Conduct and in the UAA.” 

Separately, in addition to revising the requirements, the proposed changes also seek to shift to what it called “individual-based” mobility model, meaning CPAs would be allowed to practice in other states with just one license, according to the release Tuesday. The changes would also add “safe harbor language” to ensure CPAs meet existing licensure requirements.