150-Hour Requirement: Perceived Impact on Quality and Image
of the Profession
William H. Dresnack and Jeffrey C. Strieter
JUNE 2006 - The
150-hour requirement remains one of the most studied and
discussed topics in accounting education. Papers calling
for an advanced degree in accountancy can be traced back
to the 1880s, but only within the past 20 years have most
states legislated such a requirement, and many requirements
remain to be implemented. Yet the question remains: Is the
additional education having the positive impact on the profession
that was predicted?
authors conducted a survey regarding the 150-hour requirement’s
effects on the quality of education, the image of the profession,
and the value of the fifth year to firms and the profession.
The results suggest that the jury is still out on whether
some of the anticipated effects of the requirement have
been achieved. Whether the 150-hour requirement is a net
positive or a net negative may never be completely settled.
But the requirement continues to demand more from potential
CPA candidates, and it remains among the most important
developments in the profession during the past 50 years.
Instrument and Sample
was sent to a random sample of CPAs, composed of AICPA members
in nine states (Alabama, Kansas, Louisiana, Mississippi,
Montana, South Carolina, Tennessee, Texas, and Utah) that
began requiring a 150-hour degree between 1993 and 1997.
This time period was chosen because the 150-hour law was
still new, but respondents would have had enough time to
form opinions on it. (A different portion of the results
of this survey was reported in “The Effectiveness
of the 150-Hour Requirement,” published in the April
2005 CPA Journal.)
came from CPA firms (40%), industry (40%), and other categories
(not-for-profit, education, government, and retirees: 20%).
There were no statistically significant differences between
the three sets of respondents, so they will be discussed
as a group.
survey results indicate, perhaps not surprisingly, that
many CPAs’ opinions about the 150-hour requirements
are different from what was anticipated when the requirement
was initially developed and proposed.
1 presents the results of a series of questions regarding
educational benefits of the requirement. The data suggest
that respondents did not generally find benefits in educational
quality from the 150-hour requirement. Only about one-quarter
to one-third agreed or strongly agreed with the statements
asserting significant improvements in the depth or breadth
of education from the requirement. Generally, 35% to 45%
of respondents disagreed or strongly disagreed that the
requirements had significantly improved accounting education.
The remaining one-quarter to one-third were neutral. As
a whole, the data suggest that practitioners are not seeing
significant benefits from the additional year of education
in terms of both accounting and nonaccounting topics.
2 examines the effects the requirement may have had
on individuals pursuing accounting careers. The most positive
response was that 57% of respondents agreed or strongly
agreed that the 150-hour requirement will result in their
commanding significantly higher salaries. At the other extreme,
only 17.5% agreed or strongly agreed that the requirement
resulted in enhanced and improved career opportunities.
Together, this suggests that new practitioners can be paid
more for doing the same level of work. Some may worry, however,
that uninteresting or unchallenging work is turning individuals
away from accounting.
results of the other items are less clear, with around one-third
of respondents agreeing or strongly agreeing, another third
disagreeing or strongly disagreeing, and the remaining one-third
to one-quarter of respondents being neutral. These results
suggest that the impact of the 150-hour requirement on individual
opportunities is still undetermined.
item in Exhibit 2 is an important factor for attracting
talented individuals to the profession. Except for the expectation
of higher salaries, the questions of individual opportunity
offer mixed results. It may simply be that the profession
collectively is as yet unable to change the type of work
done or the somewhat rigid structure for advancement to
data in Exhibit
3, about organizational issues and perceptions of the
profession, do not suggest that the 150-hour requirement
has had the expected positive effects. Only about 21% of
respondents agreed or strongly agreed that the requirement
has resulted in better-qualified people being attracted
to the profession, while 59% disagreed or strongly disagreed.
A similar result was seen for the question of whether the
requirement has been beneficial to the respondents’
organizations. Half of the respondents disagreed or strongly
disagreed that the requirement has improved the overall
image of professional accountants, a fundamental justification
and expectation when the 150-hour movement began in earnest.
Another anticipated result, that the requirement would reduce
training staff costs, is also belied by the data. Only 12%
agreed or strongly agreed with the statement. Additionally,
more than 40% of respondents reported difficulty with hiring
sufficient entry-level staff immediately after the requirement
was implemented in their state. Significant proportions
of respondents were neutral on each of these questions,
indicating that more time and experience might change the
results. Overall, the data in Exhibit 3 do not suggest any
overwhelming positive attributes for the profession or the
following summary question was also asked of survey participants:
“Overall, do you believe the 150-hour requirement
is better for the accounting profession than allowing four-year
graduates to become CPAs?” Sixty-four percent said
no. In other words, about two-thirds of practitioner-respondents
did not agree that the requirement was better than the traditional
the 150-hour requirement has achieved anything other than
adding costs for students pursuing certification is debatable.
Tracing the history of the requirement, it is clear that
many observers anticipated benefits for companies, the profession,
advancement opportunities for graduates, and society as
a whole. Yet it remains unclear whether any of these constituencies
have realized the benefits, or whether the benefits have
H. Dresnack, Esq., CPA, is an associate professor
of accounting and law and is chair of the department of business
administration and economics, and
Jeffrey C. Strieter, PhD, is an associate
professor of marketing and statistics, both at SUNY College
at Brockport, Brockport, N.Y.