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Would Mobility Go Away Without the 150-Hour Rule?

a question mark turning into an exclamation in shadow

by Sharon Lassar, PhD, CPA (Florida)
John J. Gilbert Professor and Director of the School of Accountancy, University of Denver

There has been much discussion about the 150-hour rule recently. Going Concern previously reported the AICPA and NASBA are trying to strong-arm Minnesota into maintaining the 150-hour rule. I wrote that NASBA can be a bully because many state licensing laws give them that power. Like many bullies, could NASBA be delivering a hollow threat? Would NASBA truly exercise its power to take away mobility of CPAs licensed in states that drop the 150-hour rule?

That question led to another. When and where did the concept of mobility originate? It probably happened earlier than the first reference I found. In 1991, the subtitle of a Journal of Accountancy article read, “As business operations become global and client operations expand, CPAs in forms of all sizes must be free to practice outside their licensing jurisdictions.”1 Discussions seem to have progressed in earnest during the 1990s.

In 1997, the AICPA and NASBA jointly identified mobility as an important goal and established the concept of “substantial equivalency.”2 States were so slow to adopt the substantial equivalency provisions of the Uniform Accountancy Act (UAA) that the AICPA created a Special Committee on Mobility in April 2006. The committee ultimately recommended a federally mandated state-based mobility provision that would allow any CPA with a valid state license to obtain practice privileges in any other state. The AICPA Board of Directors delayed implementation of the recommendation to allow more time for states to adopt modified substantial equivalency provision of the UAA.3

Let me repeat that. The AICPA’s conviction was so strong that it was ready to go to Congress and seek federal mobility legislation if the states did not adopt mobility provisions in the UAA.

So, just how important is the 150-hour rule? Does it trump mobility? I doubt it. What evidence can we glean from NASBA’s actions?

Interestingly, NASBA has entered into Mutual Recognition Agreements (MRA) that allow professional accountants from other countries to practice in the United States without having to re-credential. For example, a Chartered Accountant (CA) who is a member of the South African Institute of Chartered Accountants (SAICA) may sit for the International Qualification Exam (IQEX) if she meets the eligibility criteria set forth in the 2019 MRA. The educational requirement under the MRA is a baccalaureate degree and completion of the SAICA post graduate qualification. The post graduate qualification is completion of a “training contract.” So, if you are a South African CA, an extra 30 hours of university course credit is not required.

Wait, what is the IQEX? This is an exam that allows CPA-like designation holders from countries with whom NASBA has executed an MRA to practice in a US jurisdiction, providing other eligibility requirements are met. In other words, the IQEX provides a path to reciprocity for certified/chartered accountants from around the world. There are currently eight MRAs, the most recent of which was executed with CPA Ireland less than a year ago.

International candidates are offered a path to licensure as a US CPA without meeting a 150-hour rule. The MRAs might require international candidates to complete certain training in addition to holding a baccalaureate, but they need not earn an extra 30 credit hours.

What about that exam? Is the IQEX what protects the public interest? Well, it turns out that the IQEX is the REG section of the CPA exam.

International candidates covered by MRAs take only one section of the CPA exam and do not have to meet the 150-hour rule to be able to practice in the US. I’m not kidding. Yet, NASBA insists that all US CPAs meet a 150-hour rule and pass all four parts of the CPA exam! That doesn’t seem fair.

How can the AICPA and NASBA justify entering such MRAs? They might be responding to some international pressure. International agreements such as the United States-Mexico-Canada Agreement (USMCA) and the General Agreement on Trade in Services (GATS) impose an obligation by signatory countries to work toward professional licensure international reciprocity. In fact, NASBA refers to GATS signatory countries on its MRA website.

Or, perhaps NASBA likes the $895 fee they charge for candidates to sit for the IQEX. I am just speculating. If you know the reasoning and purpose for executing MRAs, please let me know or post a citation in the comment area.

The point is, NASBA does not require equivalent university education and, in fact, seems to substitute additional training (experience) for additional education when executing MRAs. If this approach is acceptable across international borders, why not across state borders? And, if NASBA is bowing to political pressure to allow international mobility, shouldn’t they bow to pressure by the AICPA and its members to promote interstate mobility?

1 Rimerman, T. W., & Solomon, J. P. (1991). Uniformity of regulation – the time is now. Journal of Accountancy, 171(4), 69. Retrieved from
2 Hock, S. (1997). Erasing the barriers: Interstate mobility for CPAs draws near. Ohio CPA Journal, 56(2), 5-8. Retrieved from
3 Voynich, S. (2007). Barriers to mobility: A crisis for many CPAs. Journal of Accountancy, 203(4), 46-48. Retrieved from

5 thoughts on “Would Mobility Go Away Without the 150-Hour Rule?

  1. Regarding your question about the reasoning and purpose for executing MRAs…..just a thought…..if you were an experienced US CPA in another country, would you want to undergo that country’s full qualification requirements, e.g., training contracts, board exams etc. before you are able to practice, regardless of how many years of studying, training and experience you have from the US? Perhaps the MRAs are good for the profession, when talent is hard to find, and global mobility is something that could be very attractive for young folks.

    1. AICPA is the biggest bully on the block. Both NASBA and AICPA collude with their political influence and money from their private ventures and fees, to ursurp powers of the actual regulators – the State Boards of Accountancy. I applaud Minnesota for standing up to these bullies.

      The 150 requirement was a tuition cash cow for the colleges and universities.

  2. I agree with free-trade principles and the notion of international reciprocity for professionals (although the US generally does not grant such to medical doctors). What I question is a double standard – undergraduate education plus experience being OK for overseas professionals but not US professionals. Whether opening practice in the US to international players is a good thing or not is a different question. I expect if borders were completely open, firms would be able to hire all the CPAs they needed without increasing starting pay. Would that be a good thing? Yes, for partners and clients. Probably not for staff. The ability for US professionals to work overseas is likely a good thing. Whether more international players would come here or more US CPAs would go there — immigration laws prevent free movement both ways.

  3. Dr. Lassar, thanks for sharing your insights/perspectives in this area. Do you have a feel where the state societies are, any divergence from AICPA/NASBA?

    1. I hear that some state societies are having discussions; but, I don’t know how many nor do I know which way they are leaning. I am encouraged by the reports of some discussions taking place.

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