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Opinion: On-the-Job Experiential Learning Credit to Meet the 150-hour Requirement Makes Sense

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Ed. note: the following is by Joseph P. Petito, Esq. Joe currently serves on the Maryland State Board of Accountancy and the board of directors of the NASBA Center for the Public Trust. Full bio at the bottom.

I love accounting. Though an attorney and not a CPA, I’ve spent over 30 years in and around the CPA profession, retiring from PwC as a Principal. The profession provided me with a lifestyle I never believed possible. But not until being appointed to the Maryland State Board of Public Accountancy following my retirement did I truly understand how ‘white’ the profession had become – only 2 percent of CPAs are black – and how difficult it has been to change that. Shame on me for not taking notice sooner.

The CPA profession knows this is a problem and is struggling with its causes – and solutions. A high level Advisory Group was recently empaneled by the AICPA, in conjunction with NASBA, to seek ways to increase the numbers of students becoming CPAs. This follows the previous National Committee on Diversity and Inclusion, as well as the AICPA’s Pipeline Acceleration Plan. CPAs love to study things.

Many in the profession, especially at the state CPA society level, believe the 150-hour education requirement is a major cause for the lack of especially minority students entering the profession, if not the sole cause. Their argument makes sense when you consider the additional year of education was approved by the AICPA and NASBA in the late 1980s when colleges cost much, much less and few students graduated with crushing debt loads. No one could have foreseen that costs would increase an astounding 200 percent. If so, it’s likely the profession would have made a different choice. Given that college costs are unlikely to drop, and probably continue to rise, the issue needs to be addressed.

Many studies have shown that minority students are especially sensitive to the cost of college and wary of debt; as such, the lack of minority students becoming CPAs becomes a cost-benefit function. The juice isn’t worth the squeeze in the words of one politician. Becoming a CPA requires five years of college education including a baccalaureate degree, an additional year of work experience and passing the very difficult Uniform CPA Examination. For around the same amount of time and cost one can become a lawyer, whose bar passage rates in most states are much higher than for the CPA exam, as is starting pay.

To make becoming a CPA less expensive, I support allowing students to use on-the-job ‘experiential learning’ credits to meet their 150-hour requirement. Students work full-time and get paid while concurrently fulfilling their one-year experience requirement. The work they perform is their education, and is incorporated into on-line courses specifically designed by accredited institutions, and the credits go on a college transcript. This approach would satisfy state mobility and substantial equivalency requirements and, from a regulator’s perspective, it provides assurance the courses are as academically rigorous as any other course provided by the accredited institution, on-line or not. Being on-line significantly lowers the cost of providing the course for the institution, and doesn’t take up a physical ‘seat’ which can be taken and paid for by another student, so tuition should be less.

Just as important, since experiential learning credits are no different than any other credit on a student’s transcript, they should be accepted by every state board of accountancy without their having to change a statute or rule. The two state accountancy boards to consider the issue to date, New Jersey and Maryland, have come to this conclusion. This means that experiential learning can be quickly implemented. It can buy time for the profession to think about the 150-hour requirement yet help attract especially minority students to the profession in the interim. Plus, regardless of whether 150-hours is maintained or not, experiential learning still deserves to be utilized.

Accounting academics and especially accounting department chairs fret that experiential learning courses, and the AICPA’s Experience, Learn and Earn program which enables students to work their last year while learning on-line, may deter students from pursuing a Masters in Accounting. The concern is that students who leave the classroom may not return. But the fact is that students are already abandoning Masters in Accounting programs. Neither ELE or experiential learning can be blamed for that.

The good news is that college presidents typically view experiential learning programs positively, and a number of schools utilize them. Vanderbilt was recently honored for its experiential learning program, as was Pace University, Indiana University, Tufts, University of Alabama, the University of North Carolina at Chapel Hill, NYU, Columbia, Boston College, Rutgers University and a number of other nationally recognized schools. In my state, one of the University of Maryland’s schools has an extensive experiential learning program, though not for accountants – yet. What is needed for that to happen are employers who are willing to work with educational institutions to shape experiential learning programs for accounting students, and employ them in their firms and businesses.

If only two percent of the workforce of Starbucks were black, no amount of corporate explanation or detailed studies would keep their customers from boycotting and demanding change. Yet, individuals and businesses which otherwise support social change and racial equity are complacent to allow their CPA advisors to continue to be overwhelmingly white. It’s only a matter of time before their patience with the profession runs out. A CPA degree can lead to a multitude of highly rewarding career paths, including small business owner, corporate CFO and Comptroller as well as consulting and other advisory roles. Minority students should not continue to miss out on these opportunities. It is the obligation of the profession to make sure that does not happen.

Joe Petito currently serves on the Maryland State Board of Accountancy and on the board of directors of the NASBA center for the Public Trust. He has served on numerous AICPA and NASBA committees, including the AICPA-NASBA IQAB Committee, the AICPA-ABA National Conference of Lawyers and CPAs, the NASBA Legislative Support Committee as well as on the board of directors of the National Judicial Conference. He currently resides in Bethesda, Maryland.

4 thoughts on “Opinion: On-the-Job Experiential Learning Credit to Meet the 150-hour Requirement Makes Sense

  1. I had over 150 credits in unrelated fields before I ever took an accounting, business, or economics class and started working in the field. It’s silly that my path to becoming a CPA was made so much easier because of all that unrelated coursework. If someone has a 120 credit accounting degree and can pass the exams, let them in.

  2. Before starting a new experiment, scientists design the study and determine what data needs to be collected to determine efficacy. CPAs, who claim to be data-driven, decide by “opinion” where those whose opinions matter have no real knowledge about what they are deciding. The AICPA owns the CPA exam. NASBA administers it. Neither party has designed the collection of data (in more than 100 years the exam has been administered) to determine factors of success. I have found only one academic study that has tried to determine if online classes sufficiently prepared students to pass the CPA exam. They did not. This commentator claims “The work they perform is their education” — well then, increase the experience requirement and do away with the extra 30 hours of credit requirement. Regardless of how cheap the credits are, putting them on a transcript costs tuition dollars. And, the experiential learning credit solution makes a mockery of the mobility clause the profession says is key to protect. Many states limit the number of internship hours a candidate can apply towards the 150 hour requirement. Others limit the number of community college credits. But now, states like New Jersey, Maryland, and South Carolina are changing their rules to allow all 30 credits to be obtained through those routes and then arguing their CPAs are substantially equivalent to those in other states and should be extended mobility. And, no, Joe, credits on a transcript from an accredited institution does not assure rigor. Most institutions offer non-degree seeking courses to the public as a service. Credits outside our degree programs are not subject to review by our accreditation agencies. But, then, my opinion as a educator with more than 30 years experience in higher education and more than 10 years experience as an accreditation reviewer doesn’t matter. Only those sitting inside the AICPA echo chamber have opinions that matter.

  3. I don’t doubt that the 150 hour requirement is responsible for a significant number of minority students to choose another major, but I dislike using that argument as a crutch. The extra cost in terms of time and dollars with no real benefit will discourage many rationally-behaving students regardless of their background. Its time to admit that the extra 30 hours was a bad idea 15 years ago and its a bad idea today. Young accountants will gain 1,000X more practical knowledge in their first year in the workforce than they will with 30 random credit hours and they’ll be paid for it. Raise the standard back up to the 120 hours/ 2 years.

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