OSCPA Town Hall covers how 120/150 impacts potential CPA candidates, accounting pipeline issues

Written on Mar 14, 2024

By Jessica Salerno-Shumaker, OSCPA senior content manager

Recent research examines the impact the 120/150-hour rule has on the number of CPA candidates entering the profession and the correlation to CPA service quality.

“We can't just let anyone practice accounting, there have to be some requirements, but you want to see some sort of benefit to consumers,” said Dr. Andrew Sutherland, on the topic of the additional 30 hours required for CPA licensure after students complete the traditional 120 semester hours. “And in this case, you'd hope there would be a big benefit, but we didn't really find any major improvement in CPA service quality.”

Dr. Andrew Sutherland, associate professor of accounting at the MIT Sloan School of Management, joined OSCPA President & CEO Scott Wiley, CAE, on the March 14th Town Hall to discuss his paper “Occupational Licensing and Minority Participation in Professional Labor Markets.”

Sutherland’s research found that after the 120/150 rule was enacted, there was a 26% decline in entry for minority CPAs, defined as Black and Hispanic CPAs, and a 14% decline for non-minorities.

“This is a socio-economic challenge,” Sutherland said. “School is expensive in the US, and giving up an extra year of work is a costly thing. And not everyone can bear that cost equally.”

The second part of his research looked at CPA service quality and if these additional hours translated to a higher level of service quality from CPAs.

After looking at public disciplinary records for CPAs, Sutherland’s research found that both those who earned their CPA before the 120/150-hour rule went into effect, and those who earned it afterward were equally likely to face disciplinary consequences.

“Essentially, we don't find evidence that CPA service quality improves, we don't see that the pool of candidates entering the profession has been any stronger and we don't find that people are any less likely to be involved in disciplinary actions,” Sutherland said.

During the second part of the Town Hall, Wiley was joined by Marta Zaniewski, AICPA vice president of state regulatory and legislative affairs. Zaniewski spoke about AICPA’s National Pipeline Advisory Group, a task force that has been charged to formulate solutions and recommendations on CPA pipeline issues.

“Everything we talk about as a profession, and everything that we think about as next steps, it really boils down to what is the relevancy of the profession?” said Zaniewski. “This is shown throughout all the pipeline challenges that we're seeing. Do students understand what the profession does? Do students understand the opportunities that the profession presents?”

While the group works on recommendations and looks into the future of CPA licensure, she said the goal is to future-proof the profession. Wiley noted the impact that CPAs continue to have across the state and the value they bring to businesses and the economy.

“Whenever I speak with key policymakers and people around our state, they impress upon me just how valuable this profession is,” he said. “CPAs are helping Ohio advance as the state of business, and you are Ohio’s and America's most trusted advisers.”