of Pre-Certification Education
An NYSSCPA White Paper and additional commentary
the Quality Enhancement Policy Committee
- The NYSSCPA Quality Enhancement Policy Committee prepared the
following white paper on the occasion of New York’s forthcoming
adoption of the 150-hour requirement to sit for the CPA Exam, in
order to stimulate discussion about what form pre-certification
education should take and what skills and knowledge successful CPAs
should possess. It was approved by the Society’s Board of
Directors on April 4, 2008. The paper represents an official policy
position of the NYSSCPA.
Sharon Sabba Fierstein, Chair
committee was chaired by Sharon Sabba Fierstein, CPA, of Marks
Paneth & Shron LLP. The committee’s members were Brian
A. Caswell, CPA, of Caswell & Associates CPAs P.C.; Andrew
Cohen, CPA, of Weiser LLP; Gerald L. Golub, CPA; John J. Kearney,
CPA, of Jaeckle Kearney & Lepselter; David A. Lifson, CPA,
of Hays & Company LLP; Vincent J. Love, CPA, of Kramer Love
& Cutler LLP; Joel C. Quall, CPA, of Knight Capital Group
Inc.; Robert E. Sohr, CPA, retired from Deloitte & Touche;
C. Daniel Stubbs, Jr., CPA, of Rockefeller Philanthropy Advisors
Inc.; Stephen P. Valenti, CPA, of Stephen P. Valenti, CPA; and
Margaret A. Wood, CPA, of Grant Thornton LLP. John H. Eickemeyer,
Esq., of Vedder Price Kaufman & Kammholz P.C.; and H. Stephen
Grace, Jr., PhD, of H.S. Grace & Company Inc., serve as public
members of the committee.
paper presented below contains minor editorial changes from the
final version available at www.nysscpa.org.
Also presented along with the paper is a commentary from the NYSSCPA’s
Higher Education Committee, chaired by Cynthia Krom of Marist
College, which provides the committee’s viewpoint on the
The New York
State Society of Certified Public Accountant’s (“NYSSCPA”)
Quality Enhancement Policy Committee (“QEPC”) is entrusted
with the responsibility of advising on policy and overseeing the
peer review, ethics, and education processes to meet the standards
and challenges of the CPA profession.
examines pre-certification education for Certified Public Accountants
(“CPAs”) in light of the impending 150-hour pre-certification
requirement to sit for the Uniform CPA Examination. With the additional
30-hour requirement, the QEPC recognizes the unique opportunity
to develop CPA candidates with broader and deeper skill sets.
This will become even more important in an increasingly global
economy where CPAs will be required to think critically, have
appropriate communication skills, and demonstrate proficiency
with increasingly sophisticated concepts.
members discussed the attributes of a quality CPA and explored
the characteristics that accounting education should develop to
further that goal. The Committee believes that the following attributes
are essential for a successful CPA:
- The ability
to think critically
- A keen
communication skills, both written and oral
- A foundation
of technical knowledge in accounting theory, auditing principles,
finance, tax, business law, and management principles
has agreed that partnerships between practitioners and academics
must be forged to result in a balance of theory, application,
and critical-thinking skills throughout the accounting curriculum.
The Committee explored the obligations and responsibilities of
both accounting students and accounting faculty, as well as those
of practitioners in public accounting, government, and private
important recommendation of the Committee is that the expanded
curriculum should culminate in a graduate degree.
reminds all CPAs that pre-certification education only provides
a foundation of knowledge. In order to truly be an accounting
professional, learning must be a lifelong pursuit. At the outset
of their careers, CPAs must have a basic understanding of, among
other things, accounting, auditing, tax, and business law. Accounting
theory is evolving continually, resulting in fundamental changes
in principles and application. This highlights the need for professionals
to remain current. The QEPC recognizes that, as a CPA’s
career progresses, he or she should build upon the foundation
of knowledge obtained during the pre-certification education years.
Knowing how to identify issues and continue the learning process
is critical to a CPA’s success. For many accounting professionals,
this may mean acquiring additional knowledge and skills in the
traditional services offered by CPAs, as well as in other emerging
fields of expertise such as financial planning, valuations, and
of whether higher education in accounting should have a practical
or conceptual focus was a question from the inception of professional
licensing. On April 17, 1896, New York passed the first law providing
for the issuance of a certificate conferring the right to individuals
to use the title “certified public accountant” based
on passing an examination, and prohibiting others from using that
same title. By 1905, there were 332 CPA certificates issued in
New York; 155 were earned by passing the examination and the remainder
by waiver because they were already in practice at the time the
law was passed. Student pass rates on this CPA licensing exam
quickly became a measure of success for academic accounting programs.
advent of mass production and more complex business entities in
the first decades of the 20th century, there was a need to supplement
the curriculum to provide a broader focus that would enable accountants
to understand the issues facing the management of a business.
The American Accounting Association (AAA) struggled to find a
balanced curriculum that would serve the needs of all types of
accounting professionals. Eventually, cost accounting, which evolved
into management accounting, found its place in accounting curricula.
years, the issue of whether accounting was a social science or
a profession arose. A 1954 report by the AAA widened the divide
between academics and practitioners by encouraging colleges and
universities to require career accounting professors to have doctoral
degrees, as well as a strong research record, to qualify for promotion.
academic governance structures in liberal arts and science colleges
wielded significant influence on the required curricula for accounting
students. The majority of the total elective credits needed for
the baccalaureate degree were consumed by general education courses.
In fact, an effort to establish separate schools of accountancy
was made in the 1960s so that accounting faculty might wrest control
of the accounting curriculum away from liberal arts proponents
and make it more relevant to the business/management aspects of
the profession’s needs. By the end of the 1960s, there was
a marked state of confusion in accounting education, as well as
the American Institute of Certified Public Accountants (AICPA)
created the Board on Standards for Programs and Schools of Accounting
to develop standards that could be used to evaluate the quality
of academic accounting programs from the profession’s perspective.
Due to the Board’s accreditation-like focus, the Association
to Advance Collegiate Schools of Business (AACSB), which was primarily
comprised of deans of business schools and whose main purpose
since 1918 had been to accredit business programs, felt threatened.
As a result, the AACSB decided in 1978 to begin accrediting accounting
programs. This organization recently has received some competition
in the realm of accrediting business programs from the Association
of Collegiate Business Schools and Programs (ACBSP), which was
formed in 1988. Currently, the ACBSP is in the process of initiating
an accounting program accreditation standard as well.
the 150-hour requirement, which takes effect in New York State
in 2009, two paths have been acceptable for an individual to become
eligible to sit for the CPA exam. The first, which will continue
after the 150-hour requirement takes effect, states that 15 years
of public accounting experience found acceptable to the State
Board for Public Accountancy qualifies an individual to sit for
the CPA exam. The second avenue requires a bachelor’s degree
(or higher degree) and a minimum of the following to sit for the
- 24 semester
hours in accounting, with courses in accounting principles (including
advanced financial accounting), cost accounting, United States
federal taxation, and external auditing;
- 6 semester
hours or 4 graduate credit hours in business law, including
coverage of the Uniform Commercial Code;
- 6 semester
hours in finance;
- 3 semester
hours in business statistics;
- 21 semester
hours in business and accounting electives; and
- 6 semester
hours of economic principles.
of the remaining credits needed for the baccalaureate degree were
consumed by general education courses.
requirement was instituted to meet the goal of developing professionals
with stronger critical and analytical skills. The expected advantages
of 150 hours of study include better preparation of accounting
students for careers in public accounting through a well-rounded
curriculum that places greater emphasis on issues that will be
faced in practice. Additionally, the 150-hour requirement is also
expected to attract more highly qualified students to accounting
programs and, ultimately, to the CPA profession.
to enhance an entry level accountant’s ability to perform,
the additional curriculum hours should address the attributes
of sufficient communication skills and proficiency in dealing
with higher level concepts. Such attributes are most effectively
addressed through graduate level study. Promoting critical thinking
through graduate-level work that culminates in a graduate degree
should be a requirement for all CPA programs. Combined with the
benefits of work experience, graduate-level CPA candidates will
generally be better prepared than those who followed the apprenticeship
model (working for 15 years) or those who simply obtained a baccalaureate.
three approaches, each equally viable, are envisioned for completion
of a graduate degree. First, a CPA candidate could combine an
undergraduate accounting degree with a master’s degree.
Second, a candidate could combine an undergraduate degree in a
discipline other than accounting with a master’s in accounting
or an MBA with a concentration in accounting. Finally, a student
could enroll in an integrated five-year accounting program leading
to a master’s degree in accounting.
multiple tracks exist, the goal is to have graduate-level work
promote critical thinking that would enhance the profession’s
ability to perform the complex activities that the public expects.
The ability to draw connections through the study of the underlying
concepts of accounting, auditing, business law, tax and information
systems, and to thread them together through the use of communication
skills, is of utmost importance.
that an appreciation of the technical application of theory learned
in the classroom can sometimes be best achieved in the workplace.
It has been suggested that linking practical experience, such
as internships, to formal education, students perceive real-world
relevance to their academic work. It brings focus, increased understanding,
and interest to subsequent academic courses. The QEPC also recommends
this approach as one of the ways to enhance learning.
A major concern
of employers across all professions has been the level of professional
literacy—suitable reading, writing, listening, and oral
communication skills—among college graduates. It is hoped
that the 150-hour requirement will provide students with additional
study time to develop these skills within an integrated curriculum.
The QEPC believes it is important that the curriculum emphasizes
the interrelationship of these skills with technical information
in an accounting and general business context.
education should provide a sufficient knowledge base to allow
students to identify what they don’t know, recognize potential
problems, and provide a framework for identifying potential solutions.
To accomplish this objective, the accounting discipline should
be appropriately linked with other business and social science
disciplines within the college. A basic foundation should be established
by exposure to a core curriculum of liberal arts and science courses
integrated with broad business concepts and greater writing and
speaking exercises, similar to what will be encountered in the
business world. Greater access to comprehensive case studies may
allow educators to integrate communication and critical-thinking
skills within the fabric of more technical classes. Case studies
can also foster research skills, teach students where to look
for relevant sources of information, and apply new knowledge to
understanding of the technical aspects of accounting is becoming
increasingly important due to the expanding body of knowledge
and heightened expectations for CPAs. The requirements under Sarbanes-Oxley
significantly redefined the standards for and responsibilities
of auditors of publicly held companies, as well as for the companies
themselves, their boards of directors, and management. A look
at the changing global landscape of accounting provides additional
evidence of the continuing developments in both the accounting
profession and its regulatory environment. Future CPAs may be
expected to be as conversant in international standards as they
currently are in U.S. GAAP. The 150-hour requirement provides
both a challenge and an opportunity to shape accounting curricula
to address these emerging trends.
Considerations and the Profession’s Commitment
applications are important to accounting because such applications
expand upon the theoretical foundation established through academic
scholarship. It is widely recognized that research and publication
are integral components of the scholarly efforts necessary to
further the profession. It has been asserted that the AACSB’s
criteria for accounting program accreditation implicitly equate
scholarship with an academic degree, namely the doctoral degree.
Doctoral training is beneficial in enhancing research skills,
but it is not the only element of good teaching. The QEPC suggests
that professors with significant work experience can convey practical
examples of the application of accounting theory and auditing
procedures, and thereby enrich a student’s educational experience.
believes ideally that the doctoral training of academics combined
with the “real world” experience of practitioners
would provide the most effective learning environment for accounting
students. However, due to the need for both scholarship and practical
work experience by faculty, that expectation leads to the question
of how to achieve an appropriate balance. The QEPC recommends
that criteria should be set for both practitioners and academics
the importance of practical experience, those holding doctoral
degrees should be required to have two years of relevant work
experience prior to tenure. The relevancy of the work experience
to the subject taught is paramount to how recent work experience
is obtained. Conversely, practitioners who wish to teach should
hold a master’s degree with a minimum of five years of relevant
of accounting faculty considerations would not be complete without
addressing the issue of the number of doctoral level accounting
professors. An American Accounting Association committee recently
estimated the cumulative national shortage of doctoral level accounting
faculty at 471. Another study shows that accounting is the only
business school discipline in which the number of faculty declined
between 1990 and 2004. Clearly, other options must be explored
to address the shortage of qualified doctoral candidates, in addition
to accelerating efforts to expand doctoral preparation programs
and recruit increased numbers of candidates.
many professors lack the “hands-on” experience needed
to successfully merge theory with practical application in the
classroom. However, a mix of academic and practical experience
is an advantage for an accounting program. Accrediting organizations
should acknowledge the importance of significant practical experience
by encouraging academic institutions to afford these individuals
full faculty membership regardless of whether or not they possess
a doctoral degree. Those with the requisite practical accounting
experience, but without a doctoral degree, should not find their
choices in academe limited to the role of an adjunct professor.
attributes practitioners contribute to an accounting faculty need
to be fully appreciated and acknowledged. Those who wish to participate
as full-time faculty members need to be accepted completely into
the faculty’s ranks with tenure tracks open to them. There
should be no “glass ceiling” limiting these individuals’
participation in all of the responsibilities and rewards of a
full-time faculty member. Acceptance of professors who do not
have doctoral degrees, but possess significant work experience,
will also help the discipline to deal with the declining numbers
of accounting doctoral candidates. Nevertheless, all members of
the faculty should be expected to contribute to scholarly research
It is also
impractical to expect those professors with a doctoral degree
to have significant practical work experience after expending
many years studying to earn their doctoral degree. The time commitment
to obtain both may preclude one from pursuing a career in higher
education until very late in one’s professional life. Understanding
the importance of bringing “real life” experiences
into the classroom, the Committee suggests an alternative that
will benefit both practitioners and academics alike.
and businesses should recognize the need to create opportunities
for meaningful work experience for educators. Whether the opportunities
are project specific or planned externships, practitioners need
to provide the experience to keep professors grounded in the “real
world.” These opportunities would enable them to marry the
practical with the theoretical and have life experiences which
will facilitate their ability to convey the significance of what
would otherwise be abstract concepts. Firms that are willing to
engage in such programs can realize benefits for their firm as
well as enhance the future of the accounting profession.
recognizes that arranging meaningful work experience for professors
may not be the most efficient way to run a business in the short
term. However, we believe that it is a necessary contribution
to the continued development of future accounting professionals.
Pre-Certification Educational Goals
most students who have completed post-secondary school are familiar
with general business software like word processing, spreadsheets,
and databases, the Committee proposes goals of all pre-certification
educational accounting curricula; i.e., what students should know
and be able to do.
CPA candidates are expected to have a broad base of accounting
knowledge, including auditing principles, fraud detection and
deterrence, business law, tax concepts, management accounting
and financial concepts, and business and accounting ethics. However,
the QEPC wishes to emphasize that the study of the concepts underlying
accounting, auditing, business law, tax, and communications is
of greater importance than the memorization of specific processes.
In this way, curricula can combine the strengths of academics,
as well as those of practitioners.
to prerequisite knowledge obtained in current 120-hour programs,
the proposed pre-certification educational goals address basic
functions expected of CPA candidates. Functions include accounting
procedures like the preparation of financial statements, analysis
of the effects of simple transactions, and the calculation of
key financial ratios and auditing procedures, such as the critical
evaluation of financial statements or representations made by
management. The ability to communicate issues of business law
and tax law is also essential. The basics of finance and industry-specific
skills are also expected of CPA candidates.
to technical competencies, CPAs also need to attain a high ethical
standard as “trusted professionals.” Therefore, ethics
education should address issues of integrity and good business
associations can be instrumental in helping to make ethics education
more meaningful by working collaboratively with colleges and universities
and encouraging research in ethical principles and attitudes.
To accomplish the desired result of helping to train competent,
reliable, and trustworthy professionals, accounting education
should include a discrete business and accounting ethics course
to serve as an introduction to the general topic and the AICPA
Code of Conduct. In addition, ethics topics and cases should be
integrated throughout the accounting curriculum. Relevant and
updated content should be covered within the context of the technical
course material for each requisite class in the accounting program.
pre-certification educational goals can be found in the appendix
of this document.
is a service business. Ultimately, it is the consumers of CPA
services who dictate the level of quality that is expected of
CPAs. The public demands that CPAs understand the technical issues
of accounting, auditing, and tax, as well as the conceptual issues
of general business, ethics, and corporate management. Above all,
the public expects that CPAs will have sufficient skills to communicate
these issues in an understandable, yet technically correct, manner.
Pre-certification accounting education is an important step in
meeting these expectations. It is essential that accounting education
equips tomorrow’s professionals to fulfill the vital role
that will be expected of them.
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