Alternative to the 150-Hour Rule aims to address shortage of CPAs in the US
The traditional path to becoming a Certified Public Accountant (CPA) in the U.S. requires candidates to complete 150 credit hours of education, often involving a master’s degree. However, this requirement has faced criticism for creating financial and time barriers, contributing to a decline in CPA candidates. The American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) are now proposing an alternative: the CPA Competency-Based Experience Pathway.
The 150-hour rule places a significant financial burden on candidates and delays their entry into the workforce. With fewer graduates pursuing CPA licensure, the profession has struggled to maintain a strong talent pipeline. Moreover, the current model may not fully address the evolving skill demands of the modern business environment.
The Proposed Way
The new Competency-Based Experience Pathway offers a more flexible approach. Instead of requiring additional academic credits, candidates with a bachelor’s degree can become licensed by demonstrating key professional and technical competencies through workplace experience. This model shifts the focus from classroom learning to practical, job-based skills, without compromising the rigor of the CPA designation. Candidates would still need to pass the CPA Exam and gain at least 2,000 hours of work experience.
The South African Approach
In contrast, South Africa follows a more traditional, rigorous route to certification. For example, becoming a Business Accountant in Practice (BAP SA) requires a Bachelor of Commerce in Accounting, four years of full-time practical experience, and passing two assessments in ethics and practice management. This pathway reflects South Africa's commitment to maintaining high standards in the accounting profession.
While the U.S. aims to modernise its CPA requirements to attract more diverse candidates, South Africa’s approach continues to emphasize quality and thorough preparation. Both strategies are designed to ensure the accounting profession remains strong, adaptable, and well-prepared for future challenges.
