Academic journal article Journal of Accountancy

The 150-Hour Requirement: Good or Bad for African Americans?

Academic journal article Journal of Accountancy

The 150-Hour Requirement: Good or Bad for African Americans?

Article excerpt

Despite the proliferation of accounting pronouncements, the impact of technology on the business community and the evolution of global economics, the accounting profession has not changed its entry-level education requirements. To become a CPA, one need complete only four years of education beyond high school with minimal emphasis on a broad liberal arts base. With entry-level CPAS ill-prepared to meet the increased challenges of public practice, the larger CPA firms and some smaller firms have to supplement academic training with in-house training for new recruits to ensure their professional advancement and the delivery of quality service to clients.

For 30 years the accounting profession's leaders have supported increasing the education requirement. The 150-hour requirement was accepted in 1988 when 84% of the American Institute of CPAs voting membership mandated that all new members complete 150 semester hours of college education by the year 2000. See the sidebar, page 101, for what are generally considered the requirement's benefits.

To date, 30 states have adopted regulations or legislation to require 150 hour education as a condition for certification. However, the requirement's dissenters point to the potential negative impact on African Americans as a reason for rejecting it. Specifically, they believe

* African Americans with high academic potential may be encouraged to select other professions.

* The financial burdens of historically black colleges (HBCs) and their students may increase.

* Qualified African Americans' access to the profession may be even more limited.


The American Council on Education conducts an annual survey of college freshmen to, among other things, assess their goals, career choices and education expectations. In comparing all freshmen to freshmen attending HBCs, the fall 1990 survey revealed that a larger percentage of all freshmen showed an interest in pursuing a career in accounting than in medicine or law whereas a majority of HBC freshmen selected accounting over medicine and an approximately equal number chose law. When asked about their academic goals, 40.7% of all freshmen and 39.5% of HBC freshmen expected to earn master's degrees. The most striking difference came in the reason to go to college. "Preparation for graduate/professional school" was given as a reason by 53% of all freshmen and 73% of HBC freshmen. The willingness of African Americans to pursue additional education is further documented by the 40% of African-American CPAs who currently hold advanced degrees.

If one considers these data as an indication of the education aspirations of African Americans, it might help to explain why African Americans represent 3% of doctors, 2% of lawyers and only 1% of CPAS. The current four-year education requirement for CPAS compared with the eight-year requirement for doctors and seven years for lawyers has not encouraged more African Americans to select accounting over other professions (for Bureau of Labor statistics, see JofA, Aug.90, page 61). Quite the contrary, the education demands of the other professions apparently attract the brighter students to what may appear to be more intellectually stimulating careers. Since few African-American accounting graduates become CPAs, perhaps accounting attracts a larger number of students inclined toward a profession that requires less demanding academic preparation. The increased education demands of the 150-hour requirement may, in fact, attract higher caliber students and therefore a greater number of African-American accounting students who become CPAs.



The higher costs that will be incurred as a result of the 150-hour requirement are a real concern for all schools and students. Some opponents point specifically to the negative impact on HBCs. To gain insight into HBCs' perceptions, I recently surveyed the institutions most likely to be affected by the new requirement. …

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