the 150-Hour Requirement Affect Student Enrollment? Money
it frustrating that CPAs are still debating the wisdom of
the 150-hour requirement to sit for the CPA exam (April 2004).
The data that the author presents in Exhibit 1, which shows
the increased first-time pass rates, supports the 150-hour
requirement to sit for the CPA exam. The 2001 national wage
information in Exhibit 2 does not relate to the issue. My
interpretation of Exhibit 2 is that these are averages for
all levels of experience, not for first-year employees. Also,
the “Accountants and Auditors” category is not
necessarily CPAs. Robert Half's annual salary guide provides
contrasting information—that salaries are 10% higher
for certified, as opposed to noncertified, accountants. The
Robert Half salary guide also indicates that salaries are
higher for those with master’s, rather than bachelor’s,
can state anecdotally that students who complete a 150-hour
BBA/MBA at St. Bonaventure University generally have better
choices for their first full-time positions, and within
two years appear to be substantially further along in their
careers than many students who graduate with the 120-hour
BBA only. I should also point out that the CPA designation
is needed only for a few specific career options in accounting,
and students who are not interested in those directions,
or in sitting for the CPA exam, are not required to complete
a 150-hour degree. We in academia must realize that a one-size-fits-all,
CPA exam preparation–focused accounting degree, is
best remedy to increase the number of CPA candidates is
for employers to increase the salaries, and the number of
internships, in those fields that require the CPA designation.
B. Anders, PhD, CPA
Associate Professor of Accounting
St. Bonaventure University, School
of Business, St. Bonaventure, N.Y.
150-hour requirement has allowed students in Florida to
earn a higher passing rate on the CPA examination. A higher
percentage of students passing the exam does not necessarily
mean that more CPAs are entering the market for employment.
If fewer students are sitting for the exam, there will be
fewer CPAs in the market. As this trend continues, we can
expect a shortage of accountants, and the accounting profession
will see an increase in salaries because there are fewer
accountants in the marketplace. Firms, however, have not
been willing to pay a sufficient salary differential in
order to compensate for the educational expenses of obtaining
five years of undergraduate education.
to Leslie Shapiro [“When More May Be Too Much,”
40 National Public Accountant 7 (1995)], the financial
burden placed upon students for this extra year of education
is approximately $36,000. In 1999, Miami University accounting
department chair John Cumming noted that a five-year graduate
has a expensive opportunity cost that will enable the graduate
to earn wages of $2,000 or 8.3% more than graduates who
hold a four-year degree. In Exhibit 2, I was demonstrating
that individuals entering other fields receive higher compensation,
on average, than those entering taxation, accounting, and
auditing. The additional costs imposed upon students for
this fifth year of education has created a barrier for some
students, with no substantial increase in wages.
graduate may decide that accounting is a less attractive
career to pursue. The implementation of the 150-hour requirement
has resulted in the decline of students undertaking accounting
as a career. This downward spiral can be seen in Exhibit
1. In 2001, there were only 602 first-time candidates taking
the CPA exam in Florida; in 1980 there were 1,862. The drop
between these years is 67.67%. The passing rates may have
risen from 15.4% to 28.9%, but the fact remains that fewer
students are pursuing accounting as a career. With fewer
students entering the accounting profession, we will see
a scarcity in the supply of accountants.
is evident that this requirement had an impact on students
entering the profession of accounting as a career path.
When there is a shortage within a profession, the demand
will drive up the starting wages. Higher wages can explain
why Florida has seen an increase in the number of first-time
candidates after 1984. In 1985, Florida had 407 first-time
candidates, and in 1991 it reached a high of 824 candidates,
which is still well below the 1,862 candidates in 1980 before
the 150-hour requirement took effect. This 1991 increase
is related to the student’s perception of earning
a higher wage after graduation. Unfortunately, this higher
wage is temporary and will not likely continue in the future.
does talk, and the accounting market will become saturated,
and as supply exceeds demand accountants will find a crowded
market in which they will have to settle for less in the
form of wages. As accountants’ wages are adjusted
to a lower level, the profession will become less appealing
to students. This is evident in the decline of first-time
candidates (560) in Florida in 1996.
the additional classes during the fifth year do not prepare
a student for a career in accounting. Florida CPAs felt
that the new breed of accountants did not lower training
costs, and that its hired graduates were no better prepared
than four-year-degree graduates. The only detectable difference
was the enhanced public perception of the accounting profession.
Many good and bright accounting students will continue to
choose business majors where a four-year degree is sufficient.
The education shifts have already occurred in Florida, where
the law has been in effect since 1984. The effect on student
enrollment and the supply of accountants and accounting
educators may decline as a result of this legislation. Perhaps
the problem perceived by the AICPA and the Bedford Committee
lies not in the quality of education being received by prospective
accountants. The accountants of the Enrons, WorldComs, and
Tycos of this era might be examples of what is actually
wrong with the accounting profession as a whole.
B. Abels, ABD
Business Resources in Government Procurement
“Government Procurement Basics” (May 2004) was
very interesting and informative for those companies seeking
to bid on federal government procurement opportunities.
The authors, however, omitted an important point in their
discussion of seeking resources for a failed proposal, especially
as they affect small businesses.
Many small businesses
bid on federal contract opportunities, especially in the
area of “small business set-asides,” those procurements
solely applicable to small businesses. A small business
vendor whose bid is bypassed for a higher bid can use an
appeal procedure through the U.S. Small Business Administration
(SBA), called a Certificate of Competing (COC). When a small
business is bypassed in favor of the next lowest bidder
because the procuring agency finds the small business to
lack either financial or technical capabilities or both,
the case must be referred to the SBA for COC action. The
SBA will contact the vendor and advise that the company
can file for a COC.
Should the vendor
decline, the case is closed, and the procuring agency goes
to the next lowest bidder. If, however, the vendor avails
itself of COC action, it must file papers with the SBA,
which in turn will perform an independent review of the
vendor’s capabilities, financial and technical. When
the SBA finds affirmatively, a COC will be issued for that
particular procurement, and the procuring agency must then
award the contract to the small business.
agency may request a hearing with the SBA in order to possibly
overturn the issuance of the COC, but in most cases the
SBA and the small business will prevail.
mean to muddy the waters; however, because small business
does bid on many contract opportunities through “small
business set-asides” and unrestricted procurements,
I thought it was important to make known the role of the
SBA in federal contracting.
Bass, CPA (Retired)
Floral Park, N.Y.