Accounting
New paths to CPA licensure
The ongoing staffing shortage is forcing the accounting profession to do some soul searching. Numerous factors contribute to the pipeline problem, including declining birth rates, a decreasing emphasis on college education, and fewer students majoring in accounting, to say nothing of entry-level salaries that can’t compete with those on offer in a number of other careers.
But of all the factors, the 150-credit hour requirement for CPA licensure has become something of a flashpoint, and has come to be emphasized as particularly prohibitive, which is now raising questions regarding what it takes and means to be a CPA today.
Three primary issues arise with the 150-hour rule: cost, time and lack of structure.
For starters, the cost of the extra year of education isn’t worth the starting salary into which accounting students are graduating. Young accountants are effectively paying more to make less.
According to a 2023 study by the Center for Audit Quality, 61% of nonaccounting majors cited higher starting salaries with other majors as a reason for not choosing to study accounting. Additionally, 57% said they did not want to pursue the fifth year of education required for CPA licensure, and 52% said they could not afford 150 hours and needed to start earning immediately after graduation.
Accounting starting salaries have not kept pace with neighboring professions and industries, like finance and technology. Students can graduate into higher-paying jobs with the same level or education, or less, than is required to start a career in accounting.
“If you just took [the Consumer Price Index] and applied it to the starting salary back in 1982, you’re very close to the starting salary of what the fifth-year students were a year ago, so the profession really hasn’t caught up,” said Edward Wilkins, an accounting professor and former audit partner at a Big Four firm. “Did they ever really get credit for that fifth year if it was just a CPI adjustment?”
The second issue is time. Accounting students and young professionals say the top hurdles to becoming a CPA are the time commitments to study for and take the exam, according to a survey by the Illinois CPA Society. Not to mention the fact that the professions’ spring and fall busy seasons coincide with the busiest parts of college semesters.
Thirdly, within the current framework, the requirements for the final 30 credit hours are not standardized. While some states have specific (and sometimes confusing) credit requirements, others do not even require those credits to consist of accounting courses.
“States, at the end of the day, get to make the call about how they’re going to license people,” said Jennifer Wilson, partner and co-founder of ConvergenceCoaching, and facilitator of the National Pipeline Advisory Group. “That creates an inherent set of nuances and inconsistencies in the 150-hour program.”
And firms aren’t the only ones feeling the effects of the decreasingly popular fifth year.
“What was a boondoggle beginning for the schools has flipped around because the customer goes elsewhere,” said Stan Veliotis, associate professor and chair of accounting and tax at Fordham University. “At the beginning, the customer had to come to you because you were the only one selling this product. Then they realized, ‘You know what, I could just substitute this with something else,’ and that’s what’s happening.”
Alternatives to the 150-hour rule
As the pipeline problem has grown worse and worse, many solutions and initiatives have emerged to reduce the cost and time of education. These programs alone do not fill the pipeline; however, they do provide immediate relief to students, especially those from traditionally underrepresented populations.
One such program is the Experience Learn and Earn program from the American Institute of CPAs and the National Association of State Boards of Accountancy, which is designed to be cost-effective and flexible, and to offer transcript credits, according to Liz Burkhalter, associate director of CPA pipeline at the AICPA and head of the ELE.
The program lets students with four years of college start working at participating CPA firms while taking low-cost online courses from Tulane University to get the the extra credits they need to qualify for CPA licensure. Earning all 30 hours cost approximately $5,000 for the more than 100 students who participated in its pilot year in 2024, with 25 graduating the program.
A private company called CPA Credits provides another cost-effective route to 150 hours. Founded by Jeffrey Chesner in 2020, it offers around 80 self-paced courses costing $675 each. Students taking 10 courses receive a discount, meaning a student could pay around $6,000 to earn all 30 credits through CPA Credits.
“Students just really don’t know exactly what they need or how to fulfill the 150 credit requirements. There are certain state boards which are very difficult to understand,” Chesner explained, noting that the bureaucracy of state boards sometimes makes it hard for students to get their questions answered quickly.
For this reason, CPA Credits also offers free transcript evaluations to help students determine exactly what credits they need. The company provides about 50 evaluations per day, according to Chesner.
Some states have also developed similar initiatives. The Florida Institute of CPAs, in partnership with Nova Southeastern University and three accounting firms, launched the Bridge to CPA pilot program in May 2024.
Meanwhile, the New Jersey Society of CPAs offers numerous initiatives, including The CPA Pathway Apprenticeship with Withum and Seton Hall University, and a work-for-credit program with Saint Peter’s University and PwC.
NJCPA is hoping to draft legislation by spring and pass a bill by the summer to create alternatives to the 150 rule, according to its CEO and executive director, Aiysha Johnson.
“We’re not looking to get rid of 150 because we want to be additive — we want to add to the current framework,” Johnson said. “What we want to do is include an option where a student can graduate with 120 hours plus two years of experience, or a master’s plus one year of experience. That would lend three distinct pathways.”
“Work-for-credit could still be an option within this framework,” she added. But the main priority is “to ensure continued practice mobility, and we think the way to do that is through automobility with specific guard rails, which we would put in our legislation.”
New Jersey isn’t the only state on this wave. The Ohio Society of CPAs announced Jan. 9 that its state governor signed a bill that creates a second pathway to licensure, effective Jan. 1, 2026. The bill requires a bachelor’s degree, two years of work experience, and passing the CPA exam.
The Minnesota Society of CPAs introduced a similar bill in February 2023 that creates two additional pathways: 120 credits and two years of work experience, or 120 credits and both one year of work experience and 120 CPE credits earned concurrently.
Arkansas, California, Indiana, Iowa, New Hampshire, South Carolina and Utah are also at various stages of considering developing and proposing alternative licensure requirements.
However, the profession has mixed opinions on changing licensure requirements. Sixty-nine percent of stakeholders, responding to a survey by NPAG, said that they agreed that changes should be made to components for CPA licensure, while 60% said they were concerned about changes negatively affecting the profession’s reputation.
An image to maintain?
When the AICPA raised the education requirement from 120 to 150 credit hours in 1998, the thinking was that the extra year of education would boost the credibility of the profession and make for a more well-rounded accountant. Now, with talks of changing licensure requirements again, a major concern among some experts is maintaining the prestige of the CPA. Some critics argue that experience-based education may liken accounting to that of a trade apprenticeship.
“The question is, if we allow experience to count, does it make it less professional? And my answer is this: It doesn’t have to,” Wilson said. “Experiential learning delivered under the supervision or by university professionals through an employer is not really cutting corners. That’s different. You’re still getting transcript college credits. That’s not a corner-cutter — it just moves the cost of that education to the employer.”
She says the key is for states to prescribe consistent competencies — skills and abilities that can be demonstrated in measurable ways.
“The reality is that many of our experienced, talented, smart CPAs across the country were graduates when there was the requirement of 120 hours, so a bachelor’s plus two years of experience,” added New Jersey’s Johnson. “I think it’s hard to question the rigor when we have so many professionals out here, so many executives, doing great work to say that that’s something that we should not consider.”
The priority in making changes to CPA licensure is maintaining mobility. The 150-hour rule has been uniform across states for more than two decades, but the mobility and ease of interstate practice starts to fissure here: Inconsistencies are a challenge for employers to manage, especially when employing people in multiple states or serving clients in multiple states. Changes to licensure requirements at the state level mean employers will have to keep track of those differences, similar to how they track differences in CPE, Wilson said.
“We’re going to have some increased complexity back on the service providers and the employers and the CPAs themselves to figure out: What are the rules to practice in this state?” Wilson said.
New reasons to CPA
Beyond making the CPA less prohibitive, the profession also needs new ways to make the CPA appeal to the next generation of talent if it wants to boost the candidate pool. The old arguments just aren’t cutting it anymore.
“The old story was, ‘The fifth year is mandatory, starting salaries are fine, you’re going to make more than all those other business majors midcareer and above, so just wait till then, kid.’ But people don’t want to hear about midcareer,” Wilson said. “No, they want to be able to move out of their parents’ house. They want to be able to afford a car payment and housing and whatever loan payments they may have on college, immediately, and still have a good quality of life.”
But one aspect that has always pulled talent, and still does, is the stability and career mobility the profession offers. The skills an accountant learns are highly transferable and ultra-employable.
“You can gain deep expertise across industries. You can work for startups, government corporations, public accounting. There are so many opportunities that you can make your own,” Johnson said.
And the CPA remains a highly respected credential that displays discipline, rigor and trust. The credential is the third-most valued certification or degree considered when hiring chief financial officers, according to a study by the Pennsylvania Institute of CPAs.
“It’s almost like buying a piece of meat in the supermarket: It’s got the USDA stamp on it, versus a piece of meat that doesn’t have the stamp on it,” Veliotis said. “Maybe it’s still OK, but it doesn’t have the stamp, whereas if it does, it’s more likely that it’s reliable.”
“I don’t think that it’s all about the year-one or year-two experience,” Johnson said. “I think it’s really about the foundation that they can create for themselves, the success that they can have in their communities, and the legacy that they can build within their families.”
It’s important for the profession to communicate a strong message because the consequences of an accounting shortage don’t just impact one accounting firm or industry, she added: “We’re talking about overall threats to corporate governance and financial reporting. And we see that with government agencies and not being able to submit their filings on time. There’s a lot of risk associated.”
By any other name; poor Service; a saga continues; and other highlights of recent tax cases.
Rockford, Illinois: Tax preparer Gretchen Alvarez, 49, has pleaded guilty to preparing and filing false income tax returns.
She operated the tax prep business Sick Credit Repair Tax and Legal Services and represented herself as an income tax preparer. Alvarez did not have a PTIN and admitted that in 2019 and 2020 she misrepresented taxpayers’ eligibility for education credits and deducted fictitious business expenses from their taxable income to reduce tax liabilities and inflate refunds.
The tax loss totaled $356,881.
Sentencing is Sept. 17. Alvarez faces a maximum of three years in prison and a fine of up to $100,000.
Bangor, Maine: Paul Archer, a Florida resident formerly of Hampden and Orrington, Maine, has pleaded guilty to attempting to evade federal taxes and engaging in fraudulent transfers and concealment in a bankruptcy proceeding.
He operated an online marketing business for software installation, earning several million dollars from 2013 through 2015. After an IRS audit in 2016 assessed a federal tax debt totaling some $1 million, Archer concealed and transferred assets through two LLCs he controlled and began using third-party bank accounts to evade paying the tax debt. From April 2018 through November 2019, he transferred and concealed assets and income by using a series of bank accounts held in the names of Max Tune Up LLC; Stealth Kit LLC; his father; and his spouse.
In March 2019, Archer filed for Chapter 7. In his paperwork and court statements, he falsely claimed less than $50,000 in assets; a single checking account; no other assets or property interests; no recent asset transfers; and no connections to any businesses or memberships in any LLCs.
He faces up to five years in prison and a fine up to $250,000 on each of the two charges to which he pleaded guilty. Any sentence will be followed by up to three years of supervised release.
Fort Wayne, Indiana: Rakita Davis, 45, a former IRS employee, has been sentenced to two years of probation and ordered to pay $55,213.61 in restitution to the Small Business Administration after pleading guilty to wire fraud associated with pandemic relief.
Davis falsely claimed gross income for a business that did not exist when she applied for two Paycheck Protection Program loans in 2021. Employed by the IRS when she applied for the loans, Davis lied that she was the sole proprietor of a catering business when no such business existed. She received PPP funds that she spent on such personal items as jewelry, airfare, luxury car rentals and vacations.
Charleston, West Virginia: Business owner Luther A. Hanson has been sentenced to three years of probation and fined $5,000 for willful failure to pay over taxes.
From at least 2015 to September 2020, Hanson, who
Hanson admitted that prior to June 30, 2015, he and the two employees agreed that he would begin treating them as independent contractors. He also admitted that he knew this arrangement would relieve him of paying the employer portion of the employment taxes and of the employees’ withholdings. Neither employee changed their job duties.
He admitted that he knew that neither was an independent contractor while he paid each by check throughout their employment. Hanson further admitted that he did not pay the trust fund taxes to the IRS nor the employer’s share of employment taxes for the two employees each quarter during the arrangement.
The court previously determined that Hanson owed $146,771.37 to the U.S. after his scheme; Hanson paid that amount before sentencing. One of the employees paid a portion of the taxes owed, resulting in the adjusted figure of restitution Hanson owed.
Oakland, New Jersey: Business owner Walter Hass, of Hewitt, New Jersey, has been sentenced to four years in prison for his role in a $3.5 million payroll tax scheme.
Hass owned and operated a shipping and logistics company and since 2014 has operated the company under three different names. He failed to collect, account for and pay over payroll taxes to the IRS on behalf of each of these companies from 2014 to 2022, a total of at least $3.5 million.
Hass used company money to fund his personal lifestyle, including the purchase of luxury vehicles, high-end watches and jewelry, designer clothing, tickets to sporting events, home renovations, vacations, water sports vehicles and extravagant meals.
After signing his guilty plea in October 2023, he embarked on a campaign to avoid responsibility for his conduct. He lied to the court, to the U.S. Probation Office and to the government about a purported cancer diagnosis to delay the entry of his guilty plea and his sentencing. Hass fabricated three letters from physicians asserting that he had medical conditions, including kidney cancer, that prevented him from attending court proceedings. Hass did not have cancer and attempted to travel throughout the country and around the world during this time.
Hass was also sentenced to three years of supervised release and ordered to pay $3,527,645 in restitution.
Atlanta: Attorney Vi Bui has been sentenced to 16 months in prison for obstructing the IRS in connection with his participation in the promotion of abusive syndicated conservation easement tax shelters.
Bui, who
The scheme entailed creating partnerships that bought land and land-owning companies and donated easements over that land or the land itself. Appraisers generated fraudulent and inflated appraisals of the easements, and the partnerships then claimed a charitable contribution deduction based on the inflated value. Bui knew that to make it appear that the participants had timely purchased their units in the shelters, Fisher, Sinnott and others backdated and instructed others to backdate documents, including subscription agreements and checks.
Bui anticipated that the transactions would be audited. He and others created and disseminated lengthy documents disguising the true nature of the transaction, instituted sham “votes” for what to do with the land that the partnership owned despite knowing that outcome was predetermined, and falsified paperwork such as appraisals and subscription agreements. Bui earned substantial income for his role in the scheme.
He also used the fraudulent shelters to evade his own taxes, filing personal returns from 2013 through 2018 that claimed false deductions from the shelters.
He was also ordered to serve a year of supervised release and to pay $8,250,244 in total restitution to the IRS.
The International Financial Reporting Standards Foundation has posted profiles of 17 of the 36 jurisdictions around the world that have either adopted or used International Sustainability Standards Board disclosures or are in the process of finalizing steps to introduce the IFRS Sustainability Disclosure Standards in their regulatory frameworks.
The
“Why is the IFRS Foundation publishing these jurisdictional profiles, which set out by country or jurisdiction their approach to sustainability reporting. It’s really because we see this as part of our commitment to provide transparency to the market,” said ISSB vice chair Sue Lloyd during a press briefing. “It’s all very well talking about the use of our standards, but we know that different jurisdictions have made different decisions. They’re adopting the standards at a different pace, and by providing these profiles, we want to provide clarity, particularly for investors who are going to be relying on understanding the comparability of information between jurisdictions, to alert them to the similarities and differences in approach and to describe the extent to which we are achieving the global comparability that we have been working toward with the ISSB standards.”
She noted that the ISSB’s sister board, the International Accounting Standards Board, has also been publishing
The profiles are accompanied by 16 snapshots that provide a high-level overview of other jurisdictions’ regulatory approaches that are still subject to finalization. Of the 17 jurisdictions profiled, 14 have set a target of “fully adopting” ISSB standards, two have set a target of ‘adopting the climate requirements’ of ISSB standards, and one targets “partially incorporating” ISSB Standards. The profiled jurisdictions cover Australia, Bangladesh, Brazil, Chile, Ghana, Hong Kong, Jordan, Kenya, Malaysia, Mexico, Nigeria, Pakistan, Sri Lanka, Chinese Taipei, Tanzania, Türkiye and Zambia.
Accounting Today asked Lloyd about the United States, where the Securities and Exchange Commission’s
“What we are seeing continue to be the case in the U.S. is very strong investor interest in sustainability information, including from the use of the ISSB standards,” Lloyd said. “We also have interest from companies who can choose to provide the information using our standards. Of course, many companies in the U.S. in the past have chosen to use the Sustainability Accounting Standards Board standards voluntarily, so that sort of voluntary adoption momentum is something we still see from the company and the investor side.”
“I think it’s also important to remember that the SEC just recently reconfirmed that if information on things like climate is material, there’s already a requirement to provide material information in accordance with existing requirements in place,” she continued. “And the last thing I’d note on the U.S. front is that while the SEC has indeed moved away from their proposed rule, we do see action at a state level, including, for example, in California, where the CARB [California Air Resources Board] is looking at climate disclosures, including the potential to allow the use of the ISSB standards to meet those requirements, so we see progress, but in different ways perhaps.”
The
Of the 16 jurisdictional snapshots published by the IFRS Foundation, 12 propose or have published standards (or requirements) that are fully aligned with ISSB standards (such as Canada) or are designed to deliver outcomes functionally aligned with those resulting from the application of ISSB standards (such as Japan). Three propose standards (or requirements) that incorporate a significant portion of disclosures required by ISSB standards, and one is considering allowing the use of ISSB standards. For these jurisdictions, their target approach to adoption is yet to be finalized. Once jurisdictions have finalized their decisions on adoption or other use of ISSB standards, the IFRS Foundation plans to publish a profile for these jurisdictions.
“The ISSB standards are bringing clarity to investors on the risks and opportunities lying in value chains across time horizons in a rapidly changing world,” said ISSB chair Emmanuel Faber in a statement Thursday. “A year ago, we committed to publishing detailed jurisdictional profiles describing adoption of our standards to complement our Inaugural Jurisdictional Guide. The profiles provide a detailed current state-of-play to investors, banks, and insurers who continue to struggle with the lack of appropriate, comparable and reliable information on these critical factors affecting business prospects. We have seen new jurisdictions joining the initial cohort of ISSB adopters every month, with a total of 36 today.”
The Treasury Department and the Internal Revenue Service are giving cryptocurrency brokers additional time to comply with requirements to report on digital asset sales and withhold taxes.
In
In 2024, Treasury and IRS
The IRS said it has received and carefully considered comments from the public about the transition relief provided in Notice 2024-56 indicating that brokers needed more time to comply with the reporting requirements; today’s notice addresses those comments.
In the new Notice 2025-33, the Treasury and the IRS extended the transition relief from backup withholding tax liability and associated penalties for any broker that fails to withhold and pay the backup withholding tax for any digital asset sale or exchange transaction effected during calendar year 2026.
The Trump administration has been notably more supportive of the crypto industry since taking office,
The notice also extends the limited transition relief from backup withholding tax liability for an extra year. That means brokers won’t be required to backup withhold for any digital asset sale or exchange transactions effected in 2027 for a customer (payee), if the broker submits that payee’s name and tax identification number to the IRS’s TIN Matching Program and receives a response that the name and TIN combination matches IRS records. They’re also granting relief to brokers that fail to withhold and pay the full backup withholding tax due, if the failure is due to a decrease in the value of withheld digital assets in a sale of digital assets in return for different digital assets in 2027, and the broker immediately liquidates the withheld digital assets for cash.
This notice also includes more transition relief for brokers for sales of digital assets effected during calendar year 2027 for certain customers that haven’t been previously classified by the broker as U.S. persons.
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