Impact of the 150-Hour Requirement: The Jury Is Still Out

In the words of former Montclair State University accounting student Adolfo Alvarado, “freshmen don’t have much interest in majors.”

Presumably there are more than a handful of 18-year-olds who would agree with this statement, but Alvarado’s theory will eventually be put to the test as near nationwide implementation of the 150-hour requirement draws closer.

The requirement states that in order to apply for licensure in public accountancy students must complete 150 semester hours of education from an accredited college or university. As of March of this year, 48 of 54 licensing jurisdictions have passed legislation requiring the increased education, according to The CPA Journal. While many of these jurisdictions already call for the 150-hour rule, others have yet to implement, including New York state, which will apply the requirement on Aug. 1, 2009. Prior to that time applicants in New York may seek the CPA certificate under either the 120-semester hour or 150-semester hour requirement, depending on whether their school offers the additional hours.

The basic premise behind the 150-hour requirement is that CPAs need the additional education to stay abreast of developments in the traditional and nontraditional aspects of the profession. And there are other benefits that stem from the rule, including improved CPA exam performance and higher starting salaries for those who hold a master’s degree, which the 150-hour requirement can afford students who seek it.

Given the expanding nature of the public accounting profession, few if any would argue that a four-year undergraduate accounting program is sufficient preparation for a young CPA, but some believe the additional education—a fifth year of school—may discourage young students from enrolling in accounting programs. As of November 2000, the number of accounting majors at U.S. universities had declined 23 percent, The CPA Journal reported last year.

To try and get a handle on the impact of the 150-hour rule, The Trusted Professional over the last several months contacted practicing CPAs and accounting students and professors at a number of colleges and universities. While their responses don’t exactly portray the issue in black or white, right or wrong, their answers are no less interesting for their many different viewpoints.

“Making them (the students) bite off so much at the beginning is just more than people want to chew,” said Denise Gueli of the issue. Gueli, chair of the Young CPAs Committee for the Buffalo Chapter of the New York State Society of CPAs, said she is very optimistic about the future of the profession, but she believes the 150-hour rule is causing kids to shy away from the profession. Instead of it, the senior manager at Freed Maxick & Battaglia in Buffalo supports a four-year accounting degree whereby college graduates go to work in public accounting, find their area of interest and expertise and then return to school for more training.

Dr. Mark P. Holtzman, an accounting professor at Hofstra University in Hempstead, N.Y., said he believes the accounting profession necessitates a higher level of education, but like Gueli, he supports students receiving their four-year degree, gaining work experience and then returning for additional education.

“I think most students would prefer to spend one less year in school,” said Holtzman, but he noted that Hofstra does not currently have anyone pursuing the 150 hours. While Hofstra has a 150-hour program that has been approved by New York’s Board of Regents, the program has not been implemented.

Syracuse University accounting professor Mary Harris said she believes some of the decline in enrollment can be attributed to the 150-hour requirement and it can be discouraging to students who just want to receive a degree in four years. However, she believes that like many professions, a graduate degree in accounting or related discipline can be very beneficial. Harris also expressed doubts over a student’s plan to work for a couple of years and eventually return for the additional hours. Unless, that individual returns to school as a full-time student, Harris believes the combination of working full time and going to school in the evenings could be too demanding.

“In terms of getting more people into the profession, it’s not great because in today’s society people don’t want to do it,” said Michael Violette, a graduate student at Montclair State University in New Jersey, which implemented the 150-hour rule in July 2000. “But myself—I’ll definitely benefit from it. You can never have enough education, it distinguished you as a professional.”

Junior Antonios Prassos is enrolled in the 150-hour program at Long Island University, Brooklyn campus, and is excited to be pursuing a master’s degree. He is encouraged by the fact that the extra hours will enable him to get his CPA license faster by reducing his work experience to one year. (Currently, New York students enrolled in the 120-hour program must have a minimum of two years work experience to apply for licensure.) Prassos also hopes that future employers will recognize his commitment and reward him financially.

Tashiena McKenzie, also a junior at Long Island University, Brooklyn campus, approves of the 150-hour requirement, too. “It’s longer, but you get more knowledge. I think it’s okay because you learn more.”

Several other students, however, expressed reservations over the 150-hour rule, stating that the entrance problem is at least partially explained through the requirement. Paul Velasquez, a senior at Montclair State University, said the rule probably is one of the reasons for the drop in enrollment, but he perhaps best summed up the decision to pursue public accounting under the 150-hour requirement when he said with a smile: “You gotta do what you gotta do.”