6/13/2025

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• Many U.S. states are amending CPA licensing laws, allowing candidates to use work experience instead of a fifth year of school.

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• The legislative changes aim to make accounting more appealing amid accountant shortages and departures for less stressful jobs.

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Recent changes to CPA licensing laws in many U.S. states mean one thing for some prospective accountants: School’s out early.

After a year of networking with graduate school representatives, Bryan Flannery, a rising senior at Otterbein University in Westerville, Ohio, was dead set on continuing his education. Now, he is considering skipping his plan to start applying to master’s programs after the state this year passed legislation allowing prospective CPAs to bypass a fifth year of school.

“[The Ohio law] presents a great opportunity where I can start doing the job that I want to do,” he said.

Nearly 20 U.S. states have amended CPA licensing laws since January, in what may become a precursor for the entire country. Several professional groups say they expect close to or all 50 U.S. states to offer alternatives to the 150-hour rule by 2027. 

Bryan Flannery, a rising senior at Otterbein University in Westerville, Ohio. Photo: Melissa McCrady

The changes permit CPA candidates like Flannery to use an additional year of work experience instead of schoolwork to qualify as a certified public accountant. Prospects would still have to hold a bachelor’s degree, pass a qualifying exam and work another year to achieve two years of on-the-job experience. CPAs generally still have to fulfill continuing education requirements to renew their license, usually every one to three years depending on the state.

The legislative groundswell is part of a move by states to make the accounting profession more appealing to students as more accountants retire or quit for higher paying, less stressful jobs without an adequate pipeline of new entrants obtaining accounting degrees and filling the gap.

Professional groups say they expect CPA law changes to help combat the shortage of accountants, but more outreach to high-schoolers, higher salaries and other measures are needed.

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“The whole profession is on the same page, whereas last year, everybody was in different places,” said Jen Cryder, chief executive of the Pennsylvania Institute of CPAs. “We’re all driving to the same destination.”

Before the recent changes, CPAs were required to take 150 credit hours of schooling. Now, they can just earn a bachelor’s degree, typically 120 credit hours, on top of other requirements.

Before the 150-hour rule was instituted in 1983 in Florida, CPA licensure generally required a bachelor’s degree and the passing of the exam. Following Florida’s lead, all other states adopted the 150-hour rule over the next few decades in initiatives aimed at keeping up with evolving regulations.

CPA Licensing State of Play

Nearly 20 U.S. states have amended CPA licensing laws since January, in what may become a precursor for the entire country. Several professional groups say they expect close to or all 50 U.S. states to offer alternatives to the 150-hour rule by 2027.

 

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2025 Implementation

2027 Implementation

2026 Implementation

Note: Pathways bills were passed in Alaska, Connecticut and Illinois, but they need signatures from their respective governors to become law. All are expected to be signed.
Source: Corey Butler/MNCPA

Defenders of the 150-hour rule say it is a purposeful hurdle for meeting a standard needed to service clients around the U.S. 

During the transition toward a new rule, students say some accounting firms have been advising them to still pursue the 150 credit hours to be able to practice in other states that haven’t yet passed legislation. 

Hurdles remain in some states. In Florida, a bill allowing alternative CPA paths passed the Senate. Although a separate measure passed the House, neither bill passed through both chambers. The Senate proposal last month was indefinitely postponed and withdrawn from consideration after being added to the broader deregulation bill in the House. Both chambers last week agreed to withdraw all legislation not related to the state budget for the remainder of this year’s session. 

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The American Institute of CPAs, an advocacy group, and the National Association of State Boards of Accountancy, which represents 55 U.S. boards, in May approved model legislation for alternative CPA pathways. Some state groups waited for the completed framework before drafting their own language to ensure uniformity. 

“Always, our concern has been mobility and consistency so that CPAs can go from state to state and practice,” AICPA CEO Mark Koziel said. “We’re trying to create consistency.” 

The AICPA and NASBA previously stripped from their proposal a more intensive process for evaluating CPA candidates than currently exists, including the requirement to demonstrate so-called “core competencies” in areas such as ethical behavior and critical thinking amid industry concerns over feasibility. If state legislatures pass a new CPA law, the accountancy board would implement it by granting licenses, regulating those who have them and setting broad criteria for the approval of work experience.

An easier path

Virginia, like Ohio and several other states, will implement its new law at the start of 2026. Kameron Samuel, a rising senior at Virginia Commonwealth University in Richmond, Va., is setting aside plans to try to reach the 150-credit threshold in favor of applying for jobs once he graduates next May. 

“Not only will I be able to save more money by not paying for additional schooling and possibly having to take out more loans, I could get more experience as well,” Samuel said. “It was very appealing.”

Kameron Samuel, a rising senior at Virginia Commonwealth University in Richmond, Va. Photo: Shameka Samuel

Samuel turned to federal financial aid to help fund his VCU tuition. He would have needed to seek out grants or scholarships to afford obtaining the additional credits at a community college or master’s program elsewhere, he said.

Foreign aspiring CPAs see the cost benefit, too. Rachel Sian Hung, who recently completed her first year studying accounting at Austin Community College in Texas, plans to transfer to a four-year program at a different university in the fall of 2026, graduate with a bachelor’s degree and start a full-time job. For Hung, who is on a visa from the Czech Republic, this is appealing because international tuition fees are sometimes as much as triple that of in-state tuition, making a fifth year of school an extra burden.

Texas’ new CPA legislation allows her to skip the extra schooling. “As an international student, it’s a huge financial relief for me, more than anyone can imagine,” Hung said. 

Some finance executives applaud the law changes. Pascal Desroches, chief financial officer at Dallas-based AT&T, said the additional work experience now allowed under some state legislation is particularly important to becoming a CPA.

“You work with people, they give you feedback,” said Desroches, who is a CPA. “Sometimes it’s tough feedback, but over time you get better, and I think that’s really what’s most valuable as opposed to that extra year of school, which costs a lot of money.”

The future

Accounting students choosing work over a master’s poses a threat to the popularity of graduate programs, for which demand has been rising. Nearly three-quarters of U.S. accounting master’s programs reported increased levels of applications in 2024, up from 43% the previous year, according to the Graduate Management Admission Council, an association of graduate business schools.

Even with strong growth in master’s applications, it isn’t enough to replace the larger numbers of departing and retiring accountants. Over the next three or four years, universities could see an average 10% drop in enrollment in graduate accounting programs due to the law change, said Mohan Kuruvilla, director of the Master of Science in accountancy program at University of Houston. 

“Let’s accept that the impact on the master’s will vary depending on the type of school and the brand name,” said Kuruvilla, who also serves as chair of the Texas Society of CPAs. “On the flip side, all these schools are going to see an increase at the undergraduate level because you’ve opened up the space to more people by creating an alternative pathway.”

The accountant shortage has shown signs of lessening. For example, undergraduate accounting enrollment at four-year colleges rose 11% in the spring 2025 semester compared with a year earlier, according to the National Student Clearinghouse Research Center. 

“It’s not going to be overnight, but I think in the coming years we’ll see an increase in interest in accounting” because of the law changes, said Bob Doyle, CEO of the Michigan Association of CPAs, adding that Michigan lawmakers plan to introduce a CPA bill soon. 

Accountants who just missed out on the alternative CPA path are sticking it out despite frustration over the timing.

Angel Traber, who graduated last year with a master’s in accounting from Kennesaw State University in Georgia, was disappointed to have missed out on the new option, which is set to go into effect in the state in 2026. Traber, who is now sitting for the CPA exam, said prospective CPAs who have completed 150 credit hours should have to take only three of the exam’s four required sections to compensate for missing the new alternative. 

“Honestly, I was upset at first,” Traber said. “It’s an expense I wish I didn’t have to go through.”