Dive Brief:

• New Jersey Gov. Phil Murphy on Monday signed legislation into law aimed at lowering what critics have called a costly barrier to becoming a certified public accountant, by offering an alternative licensing path enabling CPA candidates to qualify by completing a bachelor’s degree, two years of work experience and passing the CPA exam, according to the New Jersey Society of Certified Public Accountants. 
• Previously CPA candidates in the Garden State and many others had only one route to the career’s certification, which was to earn at least 150 college credit hours, typically 30 credits more than a bachelor’s, or a master’s, complete one year of work experience and pass the exam.
• Murphy’s action marks a milestone for a CPA licensing reform initiative widely backed in the accounting industry that aims to address an accounting talent shortage and draw a greater and more diverse number of younger professionals into the field. Including New Jersey, now half of all states have made the change. “We are the 25th state,” Kathleen Hoffelder, senior content editor for NJCPA, said in an email Tuesday. 

Dive Insight:

The licensing initiative’s momentum appears for now to be on a faster pace than that seen back in the 1980s when a reverse push led by the state of Florida to increase the educational requirements to 150 hours took over a decade to win support. 

“Looking at the number of states that have passed it just in a year’s time, I still think it is pretty monumental for getting consistency on licensure,” Mark Koziel, CEO of the American Institute of CPAs and the Association of International Certified Professional Accountants, said in an interview Tuesday.

While some states are eliminating or phasing out the existing 150-hour pathway, New Jersey has opted to keep it. The law will be effective Feb. 11, according to the release. The new rules will also allow CPAs licensed in other states to practice in New Jersey as long as they have a bachelor’s or higher degree, have passed the CPA exam and have at least one year of experience working as a licensed CPA. 

“We could not be more pleased with Governor Murphy’s signing of the additional CPA pathway bill,” Aiysha (AJ) Johnson, CEO and executive director of the NJCPA, said in a statement in a release shared with CFO Dive. “We are grateful for the support of the Governor, significant support from Assemblyman [Sterley] Stanley, Senator [Anthony] Bucco and the entire New Jersey Legislature as well as our knowledgeable members and the business community that understands the challenges faced if we lack the pipeline for future talent.” 

The total tally of 25 states that have to date signed laws or completed the CPA rule changes was confirmed by Robert Pawlewicz, an assistant professor of accounting at the Robins School of Business at the University of Richmond, as well as by Corey Butler, a spokesperson for the Minnesota Society of CPAs. Both are closely tracking the initiative. 

Keep up with CPA licensure changes by accessing CFO Dive’s tracker on the topic here.