We all know that the 150-hour rule is one of the top reasons accountants don't become CPAs. But the AICPA seems to be in denial about it.
We discussed this critical issue on a recent episode of the Cloud Accounting Podcast. Watch the segment below, or keep scrolling for a summary.
At a recent AICPA Town Hall, Sue Coffey, the AICPA’s CEO of Public Accounting, said that the 150-hour requirement isn't a significant factor when accountants decide not to pursue a CPA license. In her opinion, "It's not even really close."
As Coffey points out, the 150 requirement doesn't even make the top five reasons why accountants don't pursue the CPA. But that's because their survey is flawed. The AICPA only sampled accountants who have already decided to become CPAs.
Who isn't represented in this survey? All those potential future accountants who decided against majoring in accounting in the first place because they didn't want to spend the extra time and money on the fifth year of education — an education that has become outrageously expensive over the past few decades. The survey also doesn't include those who have left public accounting for greener pastures.
The fact is, the 150-hour rule was a mistake. It adds a high cost to becoming a CPA without increasing CPA quality. There needs to be evidence that the requirement produces more competent CPAs. There is none.
The Association is partially correct. They're aware of the problem in accounting education. They point out that fewer students are attending college due to rising costs, the surprising stat that 50% of teenagers are open to something other than a four-year degree, and the increased desire of current students for a more immediate return on investment. They need help connecting the dots to the 150-hour rule.
According to the AICPA's data, 75% of current CPAs are at or near retirement age. What is going to happen when they retire? It's no joke to say that the worst-case scenario could be a failure of capital markets. Without enough accountants and auditors to put together the numbers, the foundation of capitalism might collapse.
While the AICPA can encourage firms to work their staff fewer hours or promote accounting as a profession to students, these strategies amount to words, not action. The one significant change it can advocate is reducing costs and making the CPA path a better investment by eliminating the 150-hour education requirement.
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