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NextGen Magazine


Minnesota May Abandon the 150-Hour Rule for CPAs

S.J. Steinhardt
Published Date:
Mar 6, 2023

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Facing a shortage of accountants, the Minnesota legislature is considering bills that would reduce the number of credit hours needed for CPA candidates to qualify for licensure, The Wall Street Journal reported.

The bills, which were drafted with the help of the Minnesota Society of Certified Public Accountants (MNCPA), would provide alternative pathways to qualification for four-year degree holders and allow them to skip a fifth year. Instead, these graduates could take one of two paths. One would be to get two years of professional experience and take the CPA exam. The other would be to get one year of work experience, take 120 hours of professional-education courses, and take the CPA exam. Four-year degree holders would also have the option of completing 150 hours of college credit.

The AICPA opposes the bills, maintaining that CPAs licensed in Minnesota under the proposed requirements could not practice outside the state. Big accounting firms need accountants who can practice nationally because they have clients from coast to coast, some professionals told the Journal.

The 150-hour rule started in the 1990s, but accounting or financial courses are not required during the fifth year, and many students take unrelated classes. Some professionals argued that the extra time and expense keeps students from entering the profession, the Journal reported.

“We don’t have enough students coming in,” Robert Cedergren, incoming board chair at the MNCPA, told the Journal. “We have to be able to solve that problem.”

The rule means that CPAs are better prepared to enter the field when they graduate, Susan Coffey, chief executive of public accounting for the AICPA, told the Journal. “It’s clearly a hurdle of entry into our profession, but it’s a purposeful hurdle,” she said.

Other states have, or are considering, alternatives to the 150-hour requirement.

In Ohio, CPAs can obtain a license with 120 hours of college credits, four years of work experience, a score of 670 or higher on the Graduate Management Admission Test (GMAT), and taking the CPA exam. Scott Wiley, president and chief executive of the Ohio Society of CPAs (OSCPA), told the Journal that Ohio accountants have had no barriers to practicing nationally. In South Carolina, a task force is considering allowing CPAs from other jurisdictions to practice locally, even if they have fewer than 150 college credit hours.

A pilot program in New Jersey substitutes a year’s work for the traditional fifth year of course work, with students earning college credit hours on the job. Such a program is already underway, with PwC covering Saint Peter’s University students’ tuition for 30 credit hours while they work for the firm.