NASBA Studying 120-/150-Hour Merits


NASBA has issued a paper to examine issues surrounding the educational requirements for candidates to sit for the Uniform CPA examination. Pointing out that 48 boards of accountancy require candidates to earn 150 hours of education for licensure and that typically boards have required candidates to complete their educational requirement prior to sitting for the examination, the paper adds that in the past few years some boards have revised their educational requirement model to allow candidates to sit at less than 150 hours of education, (i.e., at 120 hours or a bachelor's degree, with the condition that they continue their educational requirement and become licensed when they have received 150 hours). Other boards are considering this 120/150 model.

The paper contends that this educational model raises many questions for state boards and others:

  • Does the 120/150 model ensure that boards are maintaining their public protection responsibility?
  • Does this model increase the number of candidates entering the profession?
  • Does this lesser educational requirement for sitting for the examination provide greater opportunities for women and minorities?
  • Does this model assist candidates with the costs associated with becoming a CPA?
  • Is the number of candidates entering the profession a public protection issue for boards?
This paper concludes, "We have found no direct evidence of detriment to the public interest in those states allowing candidates to sit for the CPA examination at less than 150 hours of education and later fulfilling the 150 hours for licensure."

The paper has also occasioned responses from a number of accounting agencies and entities. "In a time of increased complexity of accounting and auditing rules, reducing the educational requirements to sit for the CPA exam is inappropriate," read the response of the AICPA's Pre-Certification Education Executive Committee. "Recent issues related to fair value measurement, XBRL, fraud detection, and IFRS affect the skills and knowledge demanded for minimal competency and, in turn, the number of hours of education needed to sit for the CPA exam. There is the strong possibility of significant unintended consequences with a shift from 150 to 120 hours."

Partner Insights

The California Board of Accountancy, in its response, countered that it "has long thought that 120 hours of education adequately prepares candidates to acquire the minimum competency levels to sit for the CPA exam." The Kentucky Society of CPAs also pointed out that in some states, such as Kentucky, where per-capita spending on education is low, accounting students must "often juggle work and other family priorities with sporadic course work. While the KyCPA board of directors is strongly committed to the 150 credit hour licensing requirement, offering the early exam option for students can have many advantages."

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