The boards of the American Institute of CPAs and the National Association of State Boards of Accountancy have given the green light to expanding the accounting profession’s model law, the Uniform Accountancy Act, to include a new optional pathway for CPA candidates to obtain licensure, the two groups said on Wednesday.
A proposal from the AICPA and NASBA to create an alternative path, which was introduced last February and made available for public comment in March, comes at a time when an increasing number of thought leaders in the accounting profession have pointed to the 150-hour rule for CPA licensure as being a contributing factor to the pipeline of accountants drying up in recent years. Because CPA candidates must complete 150 semester credit hours of education—30 credits beyond the typical 120 credit hours earned in a four-year undergraduate degree—many CPAs end up spending five years in college instead of four.
Candidates can still choose to get licensed with 150 hours, but now it’s no longer the only means to become a CPA.
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The new pathway “maintains public protection while providing added flexibility and options for CPA candidates,” the AICPA and NASBA said in a May 14 media release.
The changes to the Uniform Accountancy Act add the following optional pathway to licensure:
- Requires candidates to earn a bachelor’s degree with an accounting concentration, completing two years of professional experience as defined by state board rule, and passing the CPA exam.
- Shifts from state-based mobility to an individual-based mobility model, which maintains a CPA’s ability to practice across state lines with just one license.
- Adds safe harbor language to ensure CPAs who were licensed under differing education, experience, and CPA exam requirements as of Dec. 31, 2024, to continue to have practice privileges under mobility.
The additional path will be included in the amended Uniform Accountancy Act to be released early this summer, the AICPA and NASBA said. The Uniform Accountancy Act provides state legislatures and boards of accountancy with a national model that can be adopted in full or in part to meet the licensure needs of each jurisdiction.
“Kudos to all who worked to get this necessary change across the finish line: AICPA and NASBA staff, state societies, regional firms, academics, commenters, and those supporting the next generation of CPAs,” Jack Castonguay, PhD, CPA, an accounting professor at Hofstra University and a proponent of an alternative path to CPA licensure, wrote Wednesday on LinkedIn. “It took a village, but it worked.”
The new alternative pathway would be added to the existing two paths to CPA licensure:
- Earning a master’s degree with an accounting concentration, completing one year of professional experience as defined by state board rule, and passing the CPA exam.
- Earning a bachelor’s degree with an accounting concentration, plus an additional 30 semester credit hours, completing one year of professional experience as defined by state board rule, and passing the CPA exam.
The updated edition of the Uniform Accountancy Act maintains that oversight and disciplinary authority over licensees continues with a state board of accountancy.
The new optional pathway incorporates a broader role for experience to be determined at the jurisdiction level, the AICPA and NASBA said. Individual states will need to formally enact legislation and/or adopt rules and regulations, depending on the jurisdiction, before candidates can pursue this path. To date, 14 states have done so, among them Ohio, Indiana, Virginia, and Georgia.
- Related article: Indiana Becomes Latest State to Reform CPA Licensure Rules
- Related article: Georgia Reforms CPA Licensure Process, Broadens Professional Mobility
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- Related article: Virginia Passes Law Enabling Alternative Paths to CPA Credential
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“By aligning our model legislative framework with the laws recently adopted in certain states, we’re encouraging removal of outdated barriers and reaffirming our commitment to a truly mobile CPA profession,” Susan Coffey, the AICPA’s CEO of Public Accounting, said in a statement. “Businesses today demand seamless practice across state lines, and this action provides legislators and regulators with a model under which CPAs can meet that need without disruption. This is how we protect the public while keeping the profession strong, relevant, and ready for what’s next.”
The AICPA and NASBA said they will continue to have discussions on maintaining the relevance of the Uniform Accountancy Act while also exploring the knowledge and skills needed for a newly licensed CPA to serve the public, promote public protection, and be positioned for a career as a CPA. The organizations are discussing conducting a wide-ranging study that will include research and engagement with stakeholders, including regulators and the CPA profession.
The AICPA and NASBA also said they are exploring opportunities for how to assist CPAs with navigating practice mobility as states enact legislation.
“NASBA and boards of accountancy remain committed to maintaining public protection while implementing these changes to the UAA,” NASBA President and CEO Daniel Dustin said in a statement “We will continue to work closely with state boards as the new pathway and changes to CPA mobility are implemented.”
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Tags: Accounting, accounting education, AICPA, CPA exam, CPA licensure, NASBA
