CPAs Pitch More ‘Flexible’ Licensing Rules to Expand Workforce

Accounting regulators and industry leaders are drafting reforms to state CPA licensing rules in an effort to expand the profession’s ranks by providing new pathways that could include skills acquired outside a classroom to earn the credential.

Draft changes to model legislation that serves as a template for state accounting regulations could be ready as soon as September for public comment. The goal is to finalize recommended licensing changes before legislative sessions begin next year, said Sue Coffey, CEO of public accounting for the Association of International Certified Professional Accountants.

“We don’t want to dilute our standing among other professions,” Coffey said. “But we want to create flexibility so that there are a variety of ways that an individual can achieve licensure.”

The pending reforms are among industry efforts to grapple with declining graduation rates and a workforce that has contracted 17% since the start of the pandemic.

Accountants could earn the CPA credential through a range of formal education and work experience, including a skills-based path without specific schooling or experience requirements, according to a report released Thursday by a group of industry stakeholders tasked with finding solutions to the shrinking pipeline of new accountants.

Under current state requirements, accountants must earn 150 college credit hours, work for one year, and pass the CPA exam to earn their license. That extra year of college beyond the traditional bachelor’s degree is seen as a barrier that has turned away perspective accountants, especially minority students.

The report builds on initial recommendations issued in the spring that urged employers to boost wages for starting accountants. Other suggestions include revamping the profession’s image and retooling accounting practices to provide more flexible schedules and more balanced workloads.

Charting Next Steps

Members of the pipeline task force have teamed up with the National Association of State Boards of Accountancy to develop the model language and to spell out what skills and abilities credentialed accountants should have.

A broader group of industry leaders is set to meet in September to sketch out a roadmap for how various stakeholders will advance the report’s recommendations and develop a scorecard to measure progress, Coffey said.

“We have to execute,” she said. “We don’t want this to be a report that sits on the shelf.”

States however aren’t waiting for those national efforts to take root and have begun looking to provide more flexible education requirements, pressuring top accounting leaders to address the market headwinds. Proposed solutions vary from South Carolina legislation that would accept apprenticeships and other forms of instruction to draft rule changes in Arkansas that would accept a four-year degree plus two years of experience.

Any licensing reforms should make room for state solutions while “upholding the rigor” of the license, Coffey said.