Objections
Broadening pathways to CPA licensure
“A single path to achieving CPA accreditation is outdated, produces no differentiation in professional performance, limits the diversity of our profession and is a significant financial obstacle for candidates. By allowing candidates to choose the path that works best for their personal situation, we can better address the workforce shortage and limited diversity in our profession. We need to create opportunities for students of color, students from lower-income families, students in no-college households and for nontraditional students. Someone needs to be the first to develop other options or the CPA profession will be outsourced to other countries that do not require 150 hours.”
— Lisa Miller, CPA, former CFO of Colle McVoy
The MNCPA's proposed changes to CPA licensure requirements, particularly the option allowing for 120 college credits with two years' work experience, have sparked objections.
Naturally, not all organizations and individuals share the same vision as the MNCPA, but the MNCPA believes whatever objections exist are not the primary concern — which remains the talent pipeline — and there are ways to address the objections.
The legislation proposed in Minnesota does not eliminate the option to use 150 college credits to qualify as a CPA; the legislation provides additional pathways to CPA licensure. It is a modification, not a radical gutting of the current requirements. But it's important to invite all voices to the conversation to strenghten the eventual resolution to keep a strong, vibrant profession.
You may read an expanded version of the following by reading a Perspectives blog post from Linda Wedul, MNCPA president and CEO.
Objection No. 1: Any change to CPA licensure will destroy mobility
Some have asserted the proposed option of 120 credits with additional experience will compromise mobility — the capacity for a CPA to practice across state lines without additional licensure.
Mobility, crucial amid increasing demand and CPA shortages, relies on substantial equivalency, allowing for state rule variations. The Uniform Accountancy Act (UAA) includes a 4/10 rule, permitting certification without 150 credits, demonstrating flexibility. Additionally, the National State Board of Accountancy (NASBA) has Mutual Recognition Agreements (MRAs) with countries, allowing foreign accountants to practice without 150 credits.
Despite these examples, NASBA claims Minnesota's change would negate substantial equivalency for its CPAs. Mobility is a hurdle, but it is not the problem. The problem is there are not enough people earning CPA licenses.
Objection No. 2: Demographic changes are temporary and will change, as they always have
Like all professions, demographic changes are impacting the profession, with more than 10,000 baby boomers turning 65 daily. Some argue these shifts are temporary, and the 150-credit requirement serves as a necessary filter.
Minnesota’s legislation will not result in a sudden rush of new CPAs, but it will make the credential attractive to more candidates. It will also make the credential more accessible to candidates who do not have the financial means to pay for an additional 30 college credits and forego a year of wages.
Objection No. 3: Allowing 120 credits and two years' work experience create a reputational risk
This one raises concerns about reputational risks, suggesting that allowing 120 college credits might lower professional standards.
More than 45 states allow candidates to sit for the exam with 120 college credits. If a candidate can pass the exam with 120 college credits and demonstrates the required CPA work experience, the additional 30 credits create a financial burden and a barrier to earning the CPA credential, delaying earnings.
The profession currently has a mix of CPAs who qualified under 120 college credits and 150 credits (Colorado was the 53rd and final jurisdiction to adopt the 150-hour rule in 2015). Ironically, many of those opposed to any changes earned their CPA with 120 hours. The clients and users of the work produced by CPAs do not differentiate between CPAs with 120 or 150 college credits.
