With the multitude of challenges confronting accounting firms over the last several years, the No. 1 issue remains stubbornly constant – the difficulties recruiting and retaining talent. Although it’s a multifaceted conundrum, much of the discussion has centered on whether the current mandate of 150 hours of education for prospective CPAs acts as a roadblock for college students who might otherwise consider an accounting career.
It’s a concern that Robert Cedergren has heard vehemently and repeatedly from his fellow members in the Minnesota Society of CPAs (MNCPA), which is why he’s chosen to tackle the issue right off the bat as he steps into his new role as chairman of the organization. Based on what Cedergren characterized as overwhelming feedback from a recent member survey, the MNCPA has introduced legislation to broaden the pathway to CPA licensure by including an option for individuals to complete 120 hours of college education and two years of work experience. An additional option calls for 120 hours plus one year of work experience and 120 CPE credits (earned concurrently).
“The talent shortage issue has risen to the top of the list for us as a board to try and do something about, which is why we came up with this idea to explore alternate paths to licensure for CPAs in Minnesota,” Cedergren said in a recent interview with INSIDE Public Accounting. “The idea is not to take away the existing path of 150 credits and one year of experience, but rather to determine if there are other avenues that will allow us to increase the number of people who become CPAs without lowering the bar to becoming a CPA.”
Cedergren
The MNCPA’s take on the current educational requirement is not a new one, nor one that is confined to the Gopher State. For instance, a March 2022 IPA survey of more than 150 managing partners found that more than 80% believe the 150-hour requirement stands as a hindrance to their firms’ ability to recruit accounting graduates. And close to MNCPA’s home, the society’s proposal recently received the public approval of Jen Leary, CEO of IPA 100 firm CLA. “There is no empirical evidence to suggest that the 150-hour requirement has elevated our profession,” Leary wrote in a recent post on LinkedIn. “Minnesota’s proposal marks tremendous progress in attempting to remove a barrier to entry by broadening the pathways and increasing accessibility to the accounting profession.” In other words, plenty of leaders across the profession believe something needs to be done.
“We applaud the students who come out of school with those 150 credits, but we also know there are many students for whom that fifth year is difficult,” Cedergren explains. “We’re not looking to take away the 150-credit option – there are still students who want to go that route, and we applaud and encourage that. But there are a whole lot of other students who get done with the 120 credits, don’t take the additional 30 and then leave the pipeline. If we were to allow 120 credits plus a couple of years of experience, that many more candidates will suddenly be eligible.”
Forging that broader path means going through the legislative process in Minnesota, which Cedergren admits will be a long journey. But as that process unfolds, he and the board hope that the proposal at least sparks dialogue with other state societies and national associations to begin removing any impediments that may be clogging the pipeline of bright young CPA candidates.
But not everybody shares the MNCPA’s take on the topic. While the society’s leadership met with representatives from both AICPA and NASBA either prior to or just after introducing the legislation, so far neither group supports the proposal.
“It was expected – we anticipated it,” Cedergren says of the pushback. “But our belief is that there’s room for dialogue and discussion here. Did [AICPA] hope we wouldn’t take this step? Probably. But we’ve had very healthy conversations to this point.”
For its part, NASBA “opposes any legislation that would prohibit a state or jurisdiction to be substantially equivalent with the Uniform Accountancy Act (UAA) and would disrupt mobility,” president and CEO Ken Bishop wrote in emailed comments to IPA. Noting that the organization certainly understands concerns about the talent shortage, it believes there are better ways for the profession to address the situation than what the MNCPA is offering – a proposal, he adds, that would create a whole separate issue for CPAs in the state.
“The new pathways proposed in the Minnesota Society bill would not be substantially equivalent to the UAA and would cause Minnesota to no longer be deemed a substantially equivalent state, causing Minnesota licensees to lose automatic mobility practice privileges,” Bishop writes. “Newly licensed CPAs using these new pathways would be ineligible for reciprocal licenses in other states.”
This notion of mobility is one that Cedergren and the MNCPA board are certainly keeping an eye on as their legislation progresses.
“It’s an issue that we’re aware of, but there’s enough support from other states that I think there’s room for dialogue on this point as well,” he notes. “That said, we’re not taking it lightly – it is definitely a topic we’ll need to address in this process. We do not want to put anyone at a disadvantage to practice public accounting outside of the state of Minnesota in any way, shape or form.”
What the MNCPA most wants to do, Cedergren reiterates, is to get people around the profession talking seriously about the issue. “The 150 hours is one of the barriers we see to opening that pipeline, so if we can create an avenue that increases that pipeline, that’s what we want to do. That said, we don’t believe that we have the silver bullet here. Maybe there’s another state that comes up with an alternate pathway to licensure that’s better than what we’ve proposed. But by getting this dialogue going, we can see where things go.”
