Pennsylvania Poised to Join 47 CPA Jurisdictions with 150-Hour Rules

The 150-hour rule, hotly debated a few years ago, is gaining new attention in Pennsylvania where a bill winding its way through the Legislature would place that state with the other 47 CPA jurisdictions that require candidates to complete 150 hours of undergraduate study to qualify for the CPA license.


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The Pennsylvania bill, in the state Assembly after being passed by the state Senate last summer, would replace the state’s existing practice of licensing candidates with 120 hours, if they also have at least two years of practical work experience, and licensing 150-hour graduates who have at least one year of experience. One hundred and fifty hours of study would be required regardless of work experience.

The Pennsylvania Institute of CPAs supports the bill as a way to bring the state up to speed with other jurisdictions without hurting accounting school enrollments. It gives both students and firms more flexibility,” says the institute’s president Bob Krebs, a partner with Goff Backa Alfera & Co. in the greater Pittsburgh area.

He says the flexibility is there because while candidates would need 150 hours of study to get licensed, students could complete undergraduate studies and start work with just 120 hours of study. That, he says, is a vast improvement over some states that require 150 hours of study just to graduate.

As Krebs sees it, students would graduate with 120 hours of study, get jobs and then make arrangements with their employers to compete the additional 30 hours of study. Theoretically a firm, eager to attract talent, would offer to pay part or all of the costs of the additional education in exchange for a commitment from their newly hired graduate.

The graduate could use his experience in the firm to better decide what discipline to study with the extra 30 hours. The Pennsylvania legislation, which would take effect in 2010, does not specify what course work students must take during the extra 30 hours.

Pennsylvania’s neighbor, New Jersey, last summer passed legislation making permanent a similar 150-hour rule that lets students graduate with 120 hours of study and join the workforce before obtaining the added 30 studies required for licensure.

New Jersey State CPA Society Executive Director Ralph E. Thomas agrees that the “120-30 approach” gives graduates some work experience to help them decide what they want to study while not hampering the flow of graduates that firms need to meet increasing workloads. “Accounting enrollment is on the uptick, this 120-30 approach underpins that trend because it gets accounting grads in the job market,” he says.

One of the strongest arguments against the 150-hour rule in debates in 1999 and 2000, was that it discouraged students from the accounting profession during an era when accounting enrollments were already declining. But those declines have since reversed themselves. An American Institute of CPAs study found that enrollments in accounting programs and the number of graduates nationwide each increased by 19 percent from 2000 to 2004, and that the number of grads hired by firms increased by 17 percent from 2003 to 2004.

To be sure, states have different 150-hour rules, but Thomas and Krebs say it appears that most flatly require 150 hours for graduation and for licensing. A separate AICPA report completed with the National Association of State Boards of Accountancy identifies the following as the only ones lacking 150-hour mandates: California, Colorado, Delaware, New Hampshire, Vermont, the U.S. Virgin Islands and the Commonwealth of the Northern Marianna Islands.

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