Minnesota Society of CPAs has sent a message to educators in the state regarding legislation that would introduce an alternative pathway to CPA licensure and the message to these stewards of the next generation of accountants is clear: no one is trying to eliminate MAcc programs.
As you should well be aware, MNCPA wants to add another lane to the CPA highway that would offer candidates an option of 120 units of education and two years of experience as an alternative to, but not a substitute for, the state’s existing 150 units and one year of experience rule. In a January blog post, MNPCA clarified its position:
The MNCPA does not believe that legislation to broaden the licensing requirements is a magic solution and candidates will flock to the CPA exam. It is one part of a multi-layered campaign to promote the accounting profession and make it an attractive career choice to students.
The MNCPA initiative does not eliminate 150-college credit hours with one year of work experience as a path to licensure. That should remain an option for candidates who have the means and time to take the additional credits.
Alas, this is a contentious issue and much more clarifying must be done going forward. The educator email you’ll read in a moment contains some interesting factoids:
- Of MNCPA members working in public accounting polled, 85% of respondents supported additional pathways to CPA licensure
- New hires with 120 college credits are unlikely or very unlikely to take the CPA exam
- CPA exam first-time applicants dropped by 15–25% once the 150-hour rule was applied
- The 150 hour rule has not improved quality, though it has done a great job at serving as a barrier to entry, particularly to diverse candidates
Now for the email:
A poll of MNCPA members working in public accounting found 85% of respondents supported additional pathways to CPA licensure. When evaluating the decision to pursue legislation, the MNCPA board focused on attracting students to the accounting degree and, ultimately, CPA certification. The additional tuition expense and delay of entering the workforce are deterrents to earning an accounting degree when other degrees offer similar or higher salaries with a four-year degree with 120 college credits.
A decline in CPAs is affecting smaller cities, counties and school districts that are unable to find a CPA to perform their audits. A meeting with Julie Blaha, the Minnesota state auditor, confirmed this issue in Minnesota.
The member poll also showed the number of firms hiring accountants with 120 college credits is increasing. More than 50 percent of the respondents also shared that those new hires with 120 college credits are unlikely or very unlikely to take the CPA exam. There is a significant pool of potential candidates who have an accounting degree and multiple years of experience but do not see enough value in paying for additional college credits for licensure.
The time for action is now
The CPA profession is at an inflection point where the declining number of CPAs in our communities is eroding financial stability and creating a public protection issue. Academic studies published in 2020 and 2022 show that the education requirement has not improved quality, it has reduced the number of first-time candidates and it has created a barrier to entry that is affecting the profession’s effort to improve DEI. We know offering alternative pathways is not a silver bullet to fix the pipeline problem, but the academic studies find that CPA exam first-time applicants dropped by 15–25% once the 150-hour rule was applied.
With the aforementioned in mind, the MNCPA is increasing our outreach to high schools and colleges to communicate the benefits of an accounting degree and the many career paths that are available. Both college accounting programs and the profession will benefit with more students enrolling in accounting programs.
The AICPA has also proposed a new program called Experience, Earn, and Learn (ELE). The AICPA proposal is to partner with one private college starting September 2023 to offer up to 30 college credits. In time, the number of schools would be increased to four or five institutions. Students who enroll are hired by a firm, work reduced hours and take online college credits. This is not an internship or an apprenticeship. The goal is to have a tuition rate equivalent to community college. Candidates enrolled in the program would be considered first-year staff. We do not believe this is an effective solution because the barrier to 150 credits is not the lack of options for college credits, especially with students more comfortable in pursuing online options from a variety of colleges due to COVID-19. This program would not eliminate the additional tuition expenses, and the reduced work hours would also mean a reduced salary and benefits. This program would drive students from Minnesota schools where students already have a relationship. The MNCPA sent a comment letter to the AICPA to share we don’t believe the program will have the impact the AICPA is suggesting.
This is not a short road
As the MNCPA licensure initiative moves forward, we expect the legislation to evolve. It is rare that legislation is passed as originally introduced. We are working with MNCPA members, the AICPA, NASBA, other states and the Minnesota Board of Accountancy as this initiative moves forward.
We know that those of you who offer MAcc programs may be especially concerned. However, our members have made their message loud and clear: We do not need new CPAs who have additional college credits; we need more CPAs, period.
We welcome your feedback and questions. We expect more dialogue among the many stakeholders as we seek to broaden licensure and attract more students to accounting programs.
FWIW in our informal survey of @s, random people on Reddit, and anonymous commenters, the consensus seems to be that the unwashed masses are not particularly interested in fighting for 150 hours, something the AICPA should be mindful of when sending scaremongering letters to membership on the subject.
You are welcome to use the comment section to share your feelings. You are also encouraged to let your state board of accountancy know how you feel because they are not hanging out in our comments, or around here at all for that matter (lucky them).
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