Achieving certification as a Certified Public Accountant (CPA) is a significant accomplishment for accounting professionals across the globe. It elevates your professional standing and opens doors to numerous career opportunities.
One essential prerequisite to sit for the CPA exam is completing 150 semester hours of college education. This often involves a foreign transcript evaluation for CPA eligibility for international candidates.
Understanding the 150-hour requirement, its rules, and any recent updates is crucial for a smooth journey toward becoming a CPA. This blog aims to demystify the 150-hour provision and associated regulations and provide updates that may affect your certification path.
Table of Contents
Why 150 Credit Hours?
The 150 credit hour requirement has a historical background rooted in a desire to enhance the quality and consistency of the accounting profession.
- Initial Requirement: In the past, a bachelor’s degree, typically amounting to 120 semester hours, was sufficient to take the CPA exam.
- Need for Change: Over time, it became apparent that the complexity and scope of the accounting profession were expanding.
To address this, two key organizations, the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA), recommended increasing the educational requirements.
- Institution of the 150 Credit Hour Rule: Consequently, the 150 credit hour rule was instituted to ensure that candidates have a broad and deep knowledge base that aligns with international standards and adequately prepares them for the challenges faced in today’s accounting profession.
This change in the CPA exam requirements was essential to equip future CPAs with the necessary skills and knowledge to navigate the evolving accounting and finance landscape.
Understanding the 150 Credit Hour Requirement
Meeting the 150 credit hour requirement is one of the crucial prerequisites for the CPA exam. It entails obtaining a bachelor’s degree, which usually accounts for 120 semester hours, and completing an additional 30 semester hours.
These additional hours can be achieved through various means, such as:
- Taking extra coursework during undergraduate studies
- Enrolling in a master’s program
- Completing relevant online courses
Generally, the acceptable courses and credits include business courses (e.g., finance, management, economics) and accounting courses (e.g., auditing, taxation, financial accounting). However, the specific CPA exam requirements may vary by state.
Each state has its own Board of Accountancy. It may have specific course requirements or allow credits from community colleges or other non-traditional sources. For example, some states may require certain hours in upper-level accounting courses. In contrast, others may have more flexible rules.
It’s crucial to check the state requirements where you plan to become licensed to ensure that all your credits meet the criteria. Understanding the nuances of the 150 credit hour requirement and the variations by state is essential to plan your education and complete the requirements to take the CPA exam.
How to Meet the 150 Credit Hour Requirement?
Meeting the 150 credit hour requirement is crucial in fulfilling the CPA exam requirements. Here are some strategies to achieve this milestone:
- Taking Additional Courses During Undergraduate Studies: This is a cost-effective way to accumulate more credits while pursuing your bachelor’s degree.
- Enrolling in a Master’s Program: This not only helps in meeting the credit hour requirement but also in gaining specialized knowledge.
- Taking Online Courses: Online platforms offer flexibility and a wide range of courses to help you meet the requirements.
Pros and Cons of Different Approaches:
- Cost: Enrolling in a master’s program or taking additional courses at a university can be expensive compared to online courses.
- Time Commitment: Balancing work, studies, and personal life can be challenging, especially for full-time working professionals.
Tips for Planning and Tracking Progress:
- Plan Ahead: Start planning early in your undergraduate studies to ensure you can fit the additional courses into your schedule.
- Track Your Progress: Regularly update a tracking sheet with the courses completed, credits earned, and credits remaining to meet the CPA exam requirements.
Remember, becoming a CPA requires careful planning and a strategic approach to meet all the requirements efficiently.
Recent Updates and Future Trends of the US CPA Exam
The CPA exam requirements are evolving, with significant changes anticipated as we approach 2024. The CPA Evolution, a joint initiative by the AICPA and NASBA, aims to redesign the CPA Exam to reflect better the skills and knowledge CPAs need in a technology-driven business environment.
Key Updates:
- NASBA Gateway System Update: If you plan on taking the BEC (Business Environment and Concepts) section in the latter part of 2023, it’s important to note that the NASBA Gateway system will no longer process Authorizations to Test (ATT). Notices to Schedule (NTS) for BEC after November 15, 2023.
- BEC Application Deadlines: For candidates with applications processed by a “CPA Examination Services (CPAES) jurisdiction,” the tentative deadlines for BEC applications are as follows:
- First Time Candidates: Must apply for their BEC Exam before October 1, 2023.
- Re-exam Candidates: Must apply for a BEC NTS before November 12, 2023.
- Boards of Accountancy Deadlines: If a Board of Accountancy does not use CPA Examination Services, the final application deadlines for first-time and re-exam BEC sections may differ slightly. NASBA’s website will provide information on these deadlines once they are available.
- Testing Blackouts: The final day to take any of the current CPA Exam sections (AUD, BEC, FAR, and REG) is December 15, 2023. No CPA Exam sections can be scheduled from December 16, 2023, until January 9, 2024. This ensures that the IT systems can be converted to accommodate the 2024 CPA Exam sections.
However, AUD, FAR, and REG applications can be continually submitted and processed as the codes will be used for the core sections starting in 2024.
Future Trends:
CPA Exam Evolution: Starting January 1, 2024, the CPA Exam will undergo significant changes as part of the CPA Evolution Initiative. This initiative ensures that CPAs are updated and competent in the technology-driven business.
The new model proposed will follow a Core + Discipline model with 3 Core Sections and 3 Discipline Sections.
CPA students must study all three core sections:
- Financial Auditing and Reporting (FAR)
- Auditing and Attestation (AUD)
- Taxation and Regulation (REG)
CPA students can choose one discipline section out of the three:
- Business Analysis and Reporting (BAR)
- Information Systems and Controls (ISC)
- Tax Compliance and Planning (TCP)
Irrespective of the chosen discipline section, a CPA candidate can also practice in other areas. The choice of discipline section will not affect CPA licensure.
Final Words
Planning and seeking guidance, especially when it involves foreign transcript evaluation for CPA, is crucial for success.
The road to becoming a CPA involves meeting several requirements. With the recent changes, being well-prepared and informed is more important than ever.
Remember, the journey may be challenging, but you can become a CPA with the right plan and support.