New Prerequisites for CPAs

New York and Pennsylvania up the number of courses prospective accountants must take -- leading to significant expansions at many business schools.
December 17, 2008

Business schools in New York and Pennsylvania are getting ready for a boom in accounting enrollments, following changes in state policy on the education they need.

Currently, New York and Pennsylvania require that C.P.A. candidates complete a minimum of 120 credit hours -- of which at least 24 must be in accounting-related subjects -- and have two years’ work experience in public accounting or auditing before they can earn a license.

As of August 1, 2009 in New York and January 1, 2012 in Pennsylvania, C.P.A. candidates must have completed a minimum of 150 credits hours -- of which at least 36 must be in accounting-related subjects -- and one year of work experience before they can earn a license. Though these changes do not require an advanced degree beyond the existing prerequisite of a bachelors’ degree, many students seeking a C.P.A. will have to enroll in graduate studies to meet the new minimum requirement for college credit hours. As a result, many students will earn master's degrees. Advocates of the change argue that this will boost the credibility of their C.P.A.'s and give them an increased ability to practice in other states.

Most states already have made the shift; New York and Pennsylvania are particularly significant as big states with many business programs.

To account for these forthcoming changes, colleges and universities in New York and Pennsylvania have to either expand accounting programs or identify other educational pathways for students seeking a C.P.A. license.

Baruch College of the City University of New York has a large business school, which accounts for about 80 percent of its 16,000 students. Masako Darrough, chair of the department of accountancy, said she expects more students to apply for a master’s program in order to meet the 150-credit-hour threshold. In a fifth year, qualified students at the institution can earn either a master’s degree in accounting or taxation with more than enough credits to meet the new requirement.

Still, as a third of the business school’s undergraduates major in accounting, Darrough said she is concerned that the institution will not have enough space to serve the potentially growing number of students seeking more credits.

“We will have to be more selective,” she said of the institution’s master’s programs. “We cannot expand too much because we have a hiring freeze and our classrooms are already quite full as it is. This is a big change for students as well as for us, but we’re trying to help students plan well for the future.”

The already crowded business school has had to turn away a number of students with degrees from other institutions who were seeking to take additional credits without the goal of an advanced degree, Darrough noted.

Robert Morris University, in suburban Pittsburgh, is also prepping for the change, encouraging accounting undergraduates to enroll in a program that awards an M.B.A. for an additional year of study. Frank Flanegin, head of the department of accounting and finance, said the university introduced the program as a way to help students meet the upcoming requirement change.

“There’s no mandate with this change to get another degree – an M.S. in accounting or an MBA,” Flanegin said, noting that about half of the university’s accounting majors go onto seek a C.P.A. “But why would you want to have students take additional credits without earning an additional degree? This provides our accounting majors who know what they want to do with an opportunity to fulfill the requirement.”

The first class of Pennsylvania students to be affected by the change in requirements -- the class of 2012 -- will begin at the institution next fall, giving the institution more time to prepare for the change.

There is, however, a certain amount of skepticism regarding the change’s benefits to the field.

“It’s going to hurt,” Flanegin said of the additional educational requirements on new accountants. “There’s already a shortage of Ph.D.'s in accounting. Part of me understands why they’re doing this. They’re trying to raise the education level. Accounting has become much more complicated. Just look at the auditors and the mess we have on Wall Street. A lot of that came from accountants. There are a lot of reasons to require more education of C.P.A.'s.”

Darrough echoed the ambivalent sentiment.

“Some people think this is an undue burden on students,” she said of the 150-credit-hour requirement. “It’s a costly process [to require additional education of CPA candidates] and some wonder if the benefits outweigh the cost.”


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