Member testimony on Senate File 1660
March 14, 2024 | Corey Butler
As you
likely read last week, Minnesota
Senate File 1660, the MNCPA-backed bill aimed to
broaden the pathways to CPA licensure, moved out of the Senate State and Local Government and Veterans Committee last week to the Senate Finance Committee.
Unfortunately, because of the time constraints of the committee, not every testifier was able to testify, and others had to abbreviate their remarks.
We wanted to provide an opportunity to three of these members to share additional commentary here so their fellow MNCPA members can see the perspectives they were going share with senators concerning CPA licensure and the talent pipeline.
The bill, a result of member feedback and support from the MNCPA board of directors, offers an additional option to licensure with a bachelor’s degree (120 credits) and two years of work experience — the same requirement in Minnesota until nearly 20 years ago. The bill also maintains the current 150-hour credit rule.
The House companion bill,
House File 1749, has not received a hearing date yet, so that will provide another opportunity to MNCPA members to have their voices heard about this important issue.
The following texts are excerpts from each individual’s prepared remarks.
Dr. Eric Grube, CPA, chair of accounting program at Concordia University, St. Paul
Public accounting firms have outstanding training programs, similar to apprenticeship programs for the trades. Public accounting firms have a culture of continual learning and professional development. Training and learning are ongoing.
Job experience is the gold standard for professional development as an accountant, not classroom hours/credits.
The CPA exam is the high bar that everyone has to pass. The exam is one element of licensure that is standard across all states and jurisdictions. The exam won’t change.
Pat Plamann, CPA, managing partner, Schlenner Wenner & Co.
Our firm is built on hiring new accounting graduates. Historically, we have had a “Summer Experience” day where students in local accounting programs visit our office to get “real-life” experience observing what a CPA does. In 2018, we had more than 30 students. In 2022, the last year we had the program, we had four. All the firms we talk to are noticing a similar decline, which is entirely due to the decrease in the number of accounting students in the pipeline.
The pipeline issue negatively impacts clients, too. Struggling with internal employee turnover, one city was unable to secure assistance with its book- and record-keeping until after its 2022 audit deadline had passed. In this case, the shortage of CPAs caused the city to lose out on local government aid. It’s not just clients (effected). Because the audit was not complete, the entire community was negatively impacted.
Boz Bostrom, CPA, professor at the College of Saint Benedict and Saint John’s University
You can see Boz’s entire testimony on LinkedIn.
This bill is grounded in research which shows how the 150-hour rule is viewed by students as a major barrier, particularly among students of color, and has significantly decreased those taking the exam.
Today, we heard from professor John Barrios on how the rule impacts the number of people taking the exam without increasing the quality of CPAs.
Research done by professors at Berry College found that elimination of the 150-hour rule (to take the exam) increased those taking the CPA exam by 25%.
A report issued by the Center for Audit Quality found that 32% of business majors who considered but did not pursue an accounting degree cited the 150-hour requirement as a major barrier, with no other barrier being higher. Forty-six percent of Black and 49% of Hispanic business students who considered accounting as a major cited the 150-hour requirement as a major barrier.
A forthcoming article in the Journal of Accounting Research will show a 14% overall decline in new CPAs following a state’s 150-hour rule enactment, with a decline of 26% among Black and Hispanic individuals.
The MNCPA conducted a survey and 85% of our members requested a change.
Learn more about this CPA pathways initiative
Do you want to learn more about this effort? You can keep up with the evolving conversation by visiting the MNCPA’s webpage about the broadening pathways to CPA licensure initiative.
VISIT CPA PATHWAYS PAGE
Topics: Legislative & Government Affairs, Regulation, Staffing, Professional Certification, Government, Education, MNCPA Programs & Activities
Corey Butler
Corey Butler is the MNCPA communications manager, working to enhance the professional reputations of members through content, media relations and public affairs. He's been with the MNCPA since 2013. Corey keeps busy outside of the MNCPA spending time with his wife and children, serving on his local school board, volunteering in his community and catching up on long-lost hobbies. Corey enjoys the works of John Steinbeck and Rankin/Bass Productions, and Paul Bunyan, Robin Hood and Santa Claus lore. You may reach him at 952-885-5530 or cbutler@mncpa.org.
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