January 2001

Irreparable Harm

Grumet draws the conclusion that the conventional wisdom which holds that a 150-hour continuing education requirement deters new people from entering the profession is without documentation or substantiation. His conclusion is at variance with a report issued at the annual meeting of the American Accounting Association, which states: “Given the changes taking place in the profession, the 150-hour rule is almost universally seen as a mistake.” The National Association of State Boards of Accountancy (NASBA) has concurred with this conclusion.

The 150-hour idea was promoted by the AICPA and NASBA as part of a so-called Uniform Accountancy Act (UAA), and many state boards adopted the 150-hour requirement over a long period of time. Recently, the governor of Colorado refused to sign a renewal of the CPA statute unless the 150-hour requirement was eliminated, which it was. In New York, the 150-hour requirement becomes effective in 2009 and one may reasonably inquire if it will actually occur.

Grumet is correct in stating that the accounting profession has not promoted itself. A recent AICPA chair advocated that CPA should stand for Certified Professional Advisor. AICPA Chair Robert Elliott stated in a speech to Microsoft executives that he has a problem with the “A” in CPA. Some promotion!

One should also consider legislation recently sponsored by the NYSSCPA that, among other things, eliminates the requirement that candidates for the CPA certificate have experience with a CPA firm and would allow all manner of experience to qualify for the CPA certificate. I would prefer to engage a young man or woman with four years of diverse college accounting education plus one year of experience with a good local CPA firm than an individual with a master’s degree and no experience. A smart four-year grad with one year’s experience will soon earn at least as much as a five-year graduate. The young accountant must also consider the cost of a fifth year of college as well as the loss of earnings during that year.

While I respect Grumet’s opinion, I believe the 150-hour concept has done and would continue to do irreparable harm to the accounting profession and to students, teachers, and practitioners.

Eli Mason, CPA
Mason & Company, LLP
New York, N.Y.

Grumet Responds

I agree that the causes for the shrinking numbers entering our profession are systemic, far-reaching, and reflective of our culture and the times in which we live. I would be surprised if denial and a desire for a quick fix were not the order of the day.

Case in point: An AICPA research report from July 2000 (conducted by Taylor Research) corroborates the apprehensions that today’s students perceive the CPA credential as less valuable than several other professions. But the study also found that “[t]he licensing exam, 150 hours, and continuing education requirements are not barriers for students; students are unaware of and unconcerned about the requirements.” So I remain unpersuaded about the damage the 150-hour requirement is wreaking years before it takes effect.

Lou Grumet
lgrumet@nysscpa.org



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