Facts
A survey of MNCPA members shows an increase in the number of new hires who hold accounting degrees with 120 credit hours. Fifty percent of respondents say it is unlikely or highly unlikely staff with 120 hours will sit for the CPA exam.
A 2019 study titled, “Occupational licensing and accounting quality: Evidence from the 150-hour rule,” by John Barrios, a professor at University of Chicago Booth School of Business, found a 15% reduction in first-time CPA exam candidates after the 150-credit requirement was implemented. This decline aggregates over multiple years. The study also found there wasn’t an increase in work quality after the 150-hour rule was adopted.
A study published in 2020 by Brian Meehan and E. Frank Stephenson from Utah State University found the 150-hour education requirement acts as a barrier to entry, and their analysis suggests that that the additional educational requirement does not enhance candidate quality.
We see the impacts across Minnesota with a disproportionate effect on Greater Minnesota as businesses, governmental entities, nonprofits and individuals report they are unable to find CPAs. This is also happening in other states.
Members who have a voice in hiring were surveyed concerning the CPA pipeline. Two takeaways:
- 67% say they hire college graduates without 150 college credits for entry-level positions that require accounting/tax knowledge.
- More than 50% say, historically, new hires in accounting-related roles without 150 college credits were unlikely to pursue the CPA credential.