Magazine article The CPA Journal

The 150-Hour Requirement: Perceived Impact on Quality and Image of the Profession

Magazine article The CPA Journal

The 150-Hour Requirement: Perceived Impact on Quality and Image of the Profession

Article excerpt

The 150-hour requirement remains one of the most studied and discussed topics in accounting education. Papers calling for an advanced degree in accountancy can be traced back to the 1880s, but only within the past 20 years have most states legislated such a requirement, and many requirements remain to be implemented. Yet the question remains: Is the additional education having the positive impact on the profession that was predicted?

The authors conducted a survey regarding the 150-hour requirement's effects on the quality of education, the image of the profession, and the value of the fifth year to firms and the profession. The results suggest that the jury is still out on whether some of the anticipated effects of the requirement have been achieved. Whether the 150-hour requirement is a net positive or a net negative may never be completely settled. But the requirement continues to demand more from potential CPA candidates, and it remains among the most important developments in the profession during the past 50 years.

Survey Instrument and Sample

A questionnaire was sent to a random sample of CPAs, composed of AICPA members in nine states (Alabama, Kansas, Louisiana, Mississippi, Montana, South Carolina, Tennessee, Texas, and Utah) that began requiring a 150-hour degree between 1993 and 1997. This time period was chosen because the 150-hour law was still new, but respondents would have had enough time to form opinions on it. (A different portion of the results of this survey was reported in "The Effectiveness of the 150-Hour Requirement," published in the April 2005 CPA Journal.)

Respondents came from CPA firms (40%), industry (40%), and other categories (not-for-profit, education, government, and retirees: 20%). There were no statistically significant differences between the three sets of respondents, so they will be discussed as a group.

Analysis and Findings

The survey results indicate, perhaps not surprisingly, that many CPAs' opinions about the 150-hour requirements are different from what was anticipated when the requirement was initially developed and proposed.

Exhibit 1 presents the results of a series of questions regarding educational benefits of the requirement. The data suggest that respondents did not generally find benefits in educational quality from the 150-hour requirement. Only about one-quarter to one-third agreed or strongly agreed with the statements asserting significant improvements in the depth or breadth of education from the requirement. Generally, 35% to 45% of respondents disagreed or strongly disagreed that the requirements had significantly improved accounting education. The remaining one-quarter to onethird were neutral. As a whole, the data suggest that practitioners are not seeing significant benefits from the additional year of education in terms of both accounting and nonaccounting topics.

Exhibit 2 examines the effects the requirement may have had on individuals pursuing accounting careers. The most positive response was that 57% of respondents agreed or strongly agreed that the 150-hour requirement will result in their commanding significantly higher salaries. At the other extreme, only 17.5% agreed or strongly agreed that the requirement resulted in enhanced and improved career opportunities. Together, this suggests that new practitioners can be paid more for doing the same level of work. …

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