Although licensure requirements to become a certified public accountant (CPA) differ from one state board of accountancy to the next, one constant remains among all jurisdictions: a comprehensive education.
The 150-Hour CPA Education Requirement
To hone the knowledge needed to become a CPA in today’s complex business and financial environment, effective July 2014 all state accountancy boards now require applicants to earn at least 150 semester hours of education from an accredited college or university to qualify for licensure. (Colorado is the one outlier as of 2014, but will adopt the 150-hour requirement in July of 2015.)
The American Institute of Certified Public Accountants (AICPA) recognizes a number of reasons why a traditional, four-year program alone is no longer adequate for becoming a CPA:
- New tax laws and an increase in official accounting and auditing pronouncements have expanded the knowledge base requirement for today’s CPAs working in public accounting.
- Today’s CPAs must have the knowledge to comply with the large number of new and existing federal, state, and local regulations.
- Today’s CPAs must be able to understand the newest technologies and how they influence information systems design, auditing methods, and internal control procedures.
- Accounting firms and employers are focusing on more sophisticated approaches to auditing and highly technical accounting services, thereby increasing the need for CPAs that can demonstrate effective professional practice skills.
How to Meet CPA Educational Requirements
The 150-semester hour requirement may be obtained through the completion of an undergraduate (bachelor’s) degree before going on to take additional graduate courses. However, many of today’s CPAs opt for five-year professional accounting programs or simply chose to complete a graduate degree to fulfill the 150-semester hour education requirement.
Just a few of the ways applicants can meet the educational requirements include:
- An undergraduate degree in accounting, finance or business and a master’s degree from the same institution or a different one
- An undergraduate degree in a related discipline with a master’s degree in accounting
- An undergraduate degree in a related discipline and an MBA with a concentration in accounting
- A five-year professional accounting program that culminates in a master’s degree in accounting
The AICPA notes that the best way to acquire the technical competence needed to work as a CPA is through the completion of a graduate-level program, which also serves as a means by which to develop skills related to communication, interpersonal relations, and presentation.
The AICPA also reports that:
- Studies have shown that students who complete a graduate degree have a higher rate of success on the Uniform CPA Examination.
- CPAs with master’s degrees receive starting salaries that are 10 to 20 percent higher than CPAs with bachelor’s degrees alone.
- There is evidence that promotional opportunities for CPAs (such as firm partnerships and managerial positions) frequently go to CPAs with master’s degrees.
Degree, Credit Hour and Course Requirements
Even though the 150-semester hour requirement is now an accepted standard among all 55 U.S. jurisdictions, each state accountancy board has its own criteria regarding the curriculum for pre-licensure education. Specifically, each jurisdiction requires applicants to complete specific courses and meet specific coursework requirements. For example:
- Iowa requires candidates to complete at least 24 semester hours in accounting above elementary level accounting or principles of accounting.
- Florida requires candidates for CPA licensure to complete at least 36 semester hours in upper level accounting, which must include: financial, accounting information systems, taxations, and auditing.
- Candidates in Mississippi must complete at least 24 semester hours in upper level or graduate-level accounting, with at least 3 hours in each of the following: taxation, auditing, financial accounting, management/cost accounting, and government/not-for-profit accounting.
- Candidates for CPA licensure in North Carolina must possess at least 30 semester hours of undergraduate accounting (which includes no more than 6 hours of accounting principles), 20 semester hours of graduate accounting courses, or a combination of undergraduate and graduate courses.
- Candidates in Puerto Rico must complete at least 58 hours in the study of accountancy, economics, finance, and business law, with at least 32 hours in the study of accountancy.
Education Requirements to Sit for the CPA Exam and for State Licensure
Not all states require applicants to meet the 150-semester hour requirement to be eligible to sit for the Uniform CPA Examination. In fact, 28 states now allow applicants to sit for the Uniform CPA Examination if they have completed between 120 and 150 semester hours of education or if they are due to achieve their 150-hour requirement within a specific time frame.
- Pennsylvania allows applicants to sit for the Uniform CPA Examination after the completion of their undergraduate degree (120 hours).
- Wisconsin allows applicants to sit for the CPA exam if they are within 60 days of completing the state’s 150-semester hour education requirement.
- Indiana allows applicants to sit for the CPA exam if they have completed at least 24 semester hours in undergraduate accounting, 15 semester hours in graduate-level accounting, or an equivalent combination of both.
Although some states allow applicants to sit for the Uniform CPA Examination ahead of the completion of their educational requirements, licensure is always dependent upon the completion of all education requirements.
Twenty-seven jurisdictions, such as Ohio, Utah, Nebraska, and Arkansas, still require applicants to complete their educational requirements before they can qualify to sit for the CPA exam.