Broadening the pathways to CPA licensure discussion will continue
May 22, 2023 | Geno Fragnito
As many of you know by now, in February, the MNCPA introduced legislation at the Minnesota Capitol to make a regulatory change to help address the shortage of CPAs by offering additional pathways to earning the CPA licensure. This action came after the MNCPA board, following two years of discussion about the pipeline challenges, unanimously approved drafting the legislation.
The bill, with bipartisan support in both the Minnesota House and Senate, did not become law this year, but this is not the end of this bill. More on that later.
What’s in the legislation?
The legislation proposed by the MNCPA would create two additional pathways to supplement the current path that requires 150 hours of college credit and one year of work experience.
The first additional path would require 120 hours of college credit and two years’ work experience, which was the path to licensure before the change to the current requirements.
The second additional path would require 120 hours of college credit, one year of work experience and 120 hours of continuing professional education before licensure.
In all three pathways, candidates must pass the CPA exam and the required ethics exam.
The need for change
The demand for accounting services continues to increase while those available or wanting to enter the accounting profession declines. Regulators need to make changes that reflect the current environment but also maintain the public protections components built in the exam, experience and education requirements to become a CPA.
The decline in the number of people in the workforce has been well-documented and known for many years. Demographic data has shown significant reductions in birthrates and demographers have raised this issue as a concern when they talk about the effects the potential population reduction will have on our society. This issue alone has created a pipeline issue for the CPA profession, as well as many other professions, compounding the battle for talent.
Add in other factors, such as a reported 300,000 accountants and auditors leaving the profession in the past two years, a projected 15% drop in college enrollments from 2018-25, a 9% drop in accounting majors from 2012-20 and fewer exam passers, and we have several factors working against filling the pipeline.
There’s not much the profession can do to change demographic data, but we can address pipeline challenges that may be self-created by looking at ways to broaden the pathways to becoming a CPA.
The conversation will continue
Minnesota is the first state to introduce legislation exploring additional pathways to CPA licensure. Many other states are now discussing similar changes and what their own legislation could look like. Making changes to licensure requires input from many stakeholders and the conversation will continue over the next year.
The MNCPA legislation to create additional pathways to licensure will carry over to the 2024 legislative session where legislative committees will debate the proposal. In the interim, more conversations will take place and additional solutions may be presented with the plan to make regulatory changes to increase the flow in the talent pipeline to becoming a CPA.
After three decades at the Capitol, I know this to be true: Doing nothing is not a plan, and nothing changes legislatively without having conversations. I encourage you to join this important discussion.
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, Succession, Government, Education
Geno Fragnito
Geno Fragnito is the MNCPA government relations director, advocating on behalf of the CPA profession. His days consist of last-minute meeting changes, building relationships with lawmakers, helping CPAs navigate state government, and putting in more than 15,000 steps per day walking the halls of the Capitol. Geno unwinds with a little golf and traveling with his family. If he weren’t a lobbyist, Geno would perfect his cast and be a professional fisherman. Geno can be reached at 952-885-5550 or gfragnito@mncpa.org.
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