Certified Public Accountants, like many other professionals, are subject to licensure by the state in which they practice. Accordingly, the requirements for entry into this field have traditionally varied by geography. With the advent of more federal regulations, however, and the ease with which interstate transactions are now facilitated by technology, pressure to standardize credentials nationally is growing. At the forefront of this thrust is the American Institute of Certified Public Accountants (AICPA), the largest association of CPAs in the world. Among its recommendations to states is an increase in hours of academic preparation before a candidate is permitted to sit for a licensing examination.
Until the 21st century, most states were content to accept a bachelor’s degree in accounting or related field as adequate preparation for professional practice. Several watershed events have changed that reality. AICPA itself has increased the number of published pronouncements on auditing, attestation and quality control. These pronouncements are designed to ensure integrity in the profession and promote greater competence. Consequently, accountants will need more knowledge and sharper skills to comply with these new norms. New tax laws and Internal Revenue Service procedures also make augmented education more urgent for the CPA. Obligation to clients mandates comprehensive knowledge of these changes.
Regulations of accounting standards at the federal, state and local tiers are proliferating. Doing business with governments on behalf of clients presumes conformity to their guidelines. New auditing software technology also calls for thorough training. Technological advances have another repercussion: they impose efficiencies that call for lower levels of staffing. Fewer people will soon be doing more, making the increased hours of education all the more crucial. Grounding in information systems, technological troubleshooting and program design may soon be more than just optional for the CPA. Because of the changing nature of the workplace, CPAs do well to gain a wider body of professional knowledge.
How are 150 Hours Distributed?
Although varying slightly by institution, a bachelor’s degree ordinarily requires 120 to 130 hours of undergraduate coursework. While an accounting major is not necessary, students looking forward to licensure do well to study core subjects like federal taxation, accounting information systems, cost accounting and internal auditing. These classes serve as early immersion into increasingly complex subject matter. Such courses can also be taken independently of a degree program, but will not be factored into the required hours in those cases. As the undergraduate degree falls at least 20 hours shy of the AICPA recommendation, it is a necessary—though insufficient—step toward licensing.
Meeting the remainder of the academic stipulations leaves the prospective CPA with a few paths from which to choose. One option is to enroll in graduate classes without matriculating. This way, the student would take only the bare minimum of classes necessary to fulfill the 150-hour requirement. On the other hand, many—if not most—institutions of higher education place a cap on the number of un-matriculated credits a student may accrue without applying for the degree. Licensing candidates are advised to obtain a clear policy from their college or university. Otherwise, students can pursue a Master of Accountancy, a Master of Science in Accounting or a Master of Business Administration degree with an accounting concentration.
Master of Accountancy
Master of Accountancy (or Accounting) programs favor those who majored in accounting as undergraduates. They aim to serve as a smooth transition from academic study to professional practice. In many instances, as with Rutgers University, the program will offer flexible scheduling of classes for students already in the workplace. Stressed in a Master of Accountancy (M.Acc.) program are methods of communicating complex information with clients; the concepts and problems intrinsic to financial accounting; the critical thinking skill sets involved in solving accounting problems; and the ethical principles governing professional conduct.
Curricula in Master of Accounting programs now include advanced methods in accounting research, digital applications relevant to financial transactions, advanced auditing systems and contemporary ethical boundaries for accountants. Some of the courses are lecture based and others give the student more room for independent study. All are geared toward teaching the prospective CPA to de-code, analyze and manage the financial statements of individuals and businesses. Master of Accountancy programs generally consist of 30 hours, a perfect addendum to a bachelor’s degree when pursuing licensure.
Master of Science in Accounting
Also known as Master of Science in Accountancy (MSA), this degree diverges modestly from the M.Acc. program in that it tends toward specialization. Whereas the M.Acc. is geared toward state exam preparation, the MSA looks forward to the student’s career goals and objectives. For this reason, schools like Wake Forest University offer career tracks in selected specialties like transaction services and forensic accounting. Graduates can then use their focused educations to negotiate with prospective employers. Due to the narrower subject matter covered under this kind of curriculum, the MSA is likewise better-suited to those with undergraduate accounting backgrounds.
As with the M.Acc., ethics, communication, analysis and problem-solving all figure into MSA course objectives. They are achieved through advanced study in tax policy, mergers and acquisitions, and business valuation, among other topics. The MSA is also a 30-hour commitment.
Master of Business Administration
Leadership is the aim of a Master of Business Administration (MBA) degree. Educating students to assume executive authority in corporations and enterprises of every size, MBA programs nevertheless consistently offer concentrations in accounting. The good news is that these programs are open to qualified bachelor’s degree holders from a broad range of majors. The downside, on the other hand, is that many programs require up to 45 credit hours. The core curricula, furthermore, center primarily on business analysis and management, leaving accounting courses for the electives.
The MBA is a degree that carries considerable heft with employers and the public. Applicants must consider whether the additional investment of time and money will further their vocational goals. If qualifying for and passing the state exam is paramount, the MBA makes many demands unrelated to this aim. Still, it offers career flexibility and prestige apart from licensure. Such advantages and drawbacks must be weighed carefully.
Do You Need Graduate School?
The answer to this question is yes and no. Ten states in the union have not adopted the 150-hour rule, so technically no. However, for all practical purposes, some graduate-level study is necessary in most of the United States and the 10 stragglers may not be far behind. Those seeking to sit for their respective state’s CPA examinations do well to prepare for graduate school sooner rather than later.