Revamped Perspective on Changing CPA Certification Requirements
Alterations to CPA Licensure Impacting Websites and Accounting Pros
As states across the nation are shaking up the CPA licensure prerequisites, an aim to inject fresh blood into the financial services sector, industry experts, accounting professors, and CPAs unanimously concur that financial power players ought to keep a pulse on these modifications.
While state societies are joining forces to ensure unified alterations, these decisions have stirred questions regarding the consistency and optimal timing, especially in the face of Barry Melancon's retirement. Melancon, a vocal opponent of any changes to the 150-hour requirement, made his stance publicly known throughout his tenure as longtime AICPA president.
Despite the 150-hour requirement's initial aim to produce well-rounded accountants, some contend that its run has come to an end. Industry leaders and academics agree that changes to address the current confusion within the CPA licensing process and the profession's talent pipeline are desperately needed. However, disagreements persist on developing accounting curriculums, the value of the CPA, and more.
Generational and Big Four's Influence
The transformation in the 150-hour requirement may mean a quicker path to becoming a CPA, but the real-world impact varies among accounting bigwigs. Dr. Tim Naddy, Savannah Bananas' vice president of finance and a professor at the Savannah College of Art and Design, regards this as a generational predicament.
"The industry's struggle in accounting stems from a wide disconnect between the elderly regime and the incoming generation," says Naddy. "It's comical; the industry looks at students and says, 'They just don't get us.' Yet we don't need to understand them; we need to understand us."
Naddy casts doubts on the productivity of conventional mentorship programs that supposedly bring together advisors and mentees. He maintains that many opportunities have lost their worth in tackling the real challenges future accountants face.
"We need to chip away at campus, having genuine conversations with students, as opposed to the regular route of appearing at Beta Alpha Psi events, hosting icebreakers, or doing something during homecoming," he says. "These events don't facilitate meaningful discourse. We need to talk to them during their academic year—when they're stressed, unsure about jobs, questioning the relevance of the CPA license."
Andrew Hunzicker, a CPA and DOPE program founder, echoes the generational perspective but believes the CPA is still a premier financial credential. He argues that as Baby Boomers retire, talent shortages create an "insolvable problem" beyond accounting. Nevertheless, Hunzicker contends that diluting requirements, like repealing the 150-hour requirement, lowers standards.
"Consider brain surgeons; we know there's a shortage, but would you want us to make the process less rigorous to become a brain surgeon? Or a pilot? Of course not," counters Hunzicker. "There are sectors where we must solve the crisis in different ways—devaluing the qualification is not the solution."
He expands on the current high demand driving lucrative careers for skilled accountants because of the talent shortage.
"Most industries are still serviced by people who are clueless, whether CPAs, accountants, or students," argues Hunzicker. "They're not doing superb work, and their clientele are discontent. On the flip side, if you're a high-quality CPA, there's plenty of income to be made, but it starts with gaining the expertise, and the CPA is that initial step."
Naddy concurs that the removal of the 150-hour requirement is only a small part of solving the shortage challenge but points out that the present system has "inadvertently" engendered a workforce of well-trained accountants, trained by the Big Four, who don't perceive the CPA license as valuable. He attributes this as a "major issue" because by spreading out the CPA exam and lowering the urgency, major accounting firms have eliminated the CPA as a prerequisite for employment at CPA firms.
Addressing the Curriculum and Student Concerns
Dr. Jack Castonguay, an associate professor of accounting at Hofstra University, reports that apprehensions among finance leaders focus on the impact these changes will have on the CPA exam passing rate.
"Some have raised concerns that the removal of the extra 30 credits could negatively affect the passing rate for the CPA exam," Castonguay admits, "but I do not share that opinion."
Dr. Tim Naddy and Dr. Jack Castonguay find themselves at an impasse when it comes to how accounting should be taught. While Castonguay supports the traditional model of teaching financial accounting before cost accounting, Naddy advocates flipping those two courses.
"I've contemplated this for 25 years; if we started cost accounting first, we would inadvertently provide the profession a massive favor," argues Naddy. "Students would appreciate the mechanics of operating a business before learning how to report them in accordance with GAAP."
"I understand this idea; it's trying to tackle the right issue while simultaneously making accounting education more appealing," Castonguay said. "At this point, I've undergone a 180 on my opinions about financial accounting at the undergraduate level."
Castonguay explains that instead of teaching debits and credits to undergraduate students, the course should introduce them to financial statement analysis. "For instance, the relationship between income and the balance sheet. Instead, we introduce them to all these journal entries with debits and credits and T-accounts," he shares.
Bringing Clarity to the Chaos
Calvin Harris, New York State Society of CPAs CEO and former nonprofit executive, acknowledges that the confusion surrounding the credential process may persist for some time, but a roadmap for young accounting talent can be developed.
"A clear reality is that the confusion might linger for a while," admits Harris. "When I meet with students, like a group from Marist University recently, I try to break it down class by class. I let them know: Freshmen and sophomores will likely have both options, the 120 credits plus two years of experience or 150 credits plus one year of experience. Juniors are on the cusp, it depends on the specific state they plan to get licensed in. Seniors should assume 150 plus one is their only option, and maybe they'll get lucky with a second pathway."
Harris admits that although confusion is prevalent, it is nothing new. Nevertheless, he emphasizes the responsibility of organizations like the NYSSCPA to improve their communication about the emerging requirements.
"When I graduated from Morehouse College in Georgia and transferred to Maryland, I found out that I was missing two classes Maryland required," recounts Harris. "So for my first year at Arthur Andersen, I had to attend evening school. This was more than 30 years ago, so the difference now is, the information is more accessible through NASBA, AICPA, and state societies. But we all, the schools, societies, and firms, need to do a better job of educating students on state-specific requirements."
Harris adds some context regarding the timing of Barry Melancon's retirement and the simultaneous state moves to offer additional pathways. He concedes that although it may appear that Melancon's retirement was the last obstacle to the 150-hour requirement, Harris says there is no significant connection between the two events. "I can understand how some might think that, but it's unfair to [Melancon]. He's been a consistent leader, and while people might not agree with his stance, he's been dependable. I've been in this role for about three years, and from my very first meeting with state society CEOs, it was evident that these conversations had been happening for some time."
He goes on to detail how "states dish more than people realize"; they're almost constantly in contact with collaboration being a constant theme, but denies that Melancon's retirement had an effect on the decision-making process. "Did people quietly hope to progress after [Melancon's] tenure? Maybe. But I never heard anyone say, 'As soon as he retires, we go.'"
- Industry experts, academics, and CPAs agree that changes in the CPA licensing process and the talent pipeline are urgently needed to address the current confusion within the profession.
- Andrew Hunzicker, a CPA and DOPE program founder, argues that diluting requirements like repealing the 150-hour requirement lowers standards and is not a solution for talent shortages.
- Dr. Tim Naddy, a professor at the Savannah College of Art and Design, contends that conventionally structured mentorship programs have lost their effectiveness in addressing the real challenges future accountants face.
- Naddy suggests that the industry should have genuine conversations with students during the academic year, instead of relying on events like Beta Alpha Psi events, icebreakers, or homecoming, which he argues do not facilitate meaningful discourse.
- Dr. Jack Castonguay, an associate professor of accounting at Hofstra University, argues that students should learn financial statement analysis instead of debits and credits to make accounting education more appealing.
- Calvin Harris, New York State Society of CPAs CEO, acknowledges that there may be confusion surrounding the CPA credential process for some time, but insists that a roadmap can be developed for young accounting talent.
- The removal of the 150-hour requirement is only a small part of solving the shortage challenge, according to Naddy, who attributes the present system's inadvertent creation of a workforce of well-trained accountants who don't perceive the CPA license as valuable.
- Margin trading options in finance offer counterintuitive opportunities for income, especially with the ongoing trend of crypto markets, which can provide substantial returns when used strategically.
- Investors looking to diversify their portfolios should consider education and self-development in finance, business, and accounting to better understand the complexities of financial markets and make informed decisions for their retirement income.
