At the time of this writing, 41 of the 54 jurisdictions that license CPAs in the USA have passed laws or regulations that will require future CPAs to have at least 150 semester hours of university education, and more states are passing this requirement each year. However, relatively few of these laws are yet in effect, and chances are good that as a current student, you will not be required to meet this requirement to get your CPA certification. (The laws in most states are scheduled to take effect in or soon after the year 2000.)

Should you get 150 hours? It depends on when you will graduate, where you want to live, and most importantly, what types of jobs you are interested in.

Public Accounting

If you are planning a career in public accounting and live in a state with an effective 150-hour requirement, the decision has been made for you: you will need to meet the requirement in order to become certified.

However, if you live in a state that has not yet passed a 150-hour law -- or a state whose 150-hour law is not yet effective -- the issues are less clear. Although you will not be locked out of the public accounting profession with only a four-year degree, you should still seriously consider obtaining five years of study and preferably a Masters' degree, for several reasons:

First, the broader set of competencies needed to succeed in your career will probably take more than four years to acquire. The extra year will likely pay for itself by increasing your competencies in the broad range of skills and knowledge you will need to compete in today's market.

Second, as time goes on, a greater number of your "competitors" in the job market will have Masters' degrees. You don't want to become a "second-class citizen" in the accounting profession, competing against people who have more education than you do. In an increasingly competitive job market, that would not be a good long-term strategy.

Third, even if you live in a state with no 150-hour law, you will still need to meet the requirement in order to join the AICPA after the year 2000. The AICPA's by-laws state that, starting in the year 2001, all new CPAs applying for membership in the institute will need to meet the 150-hour requirement, regardless of where they obtained their CPA certifications. (What if it takes you several tries to pass the CPA exam? With only a 4-year degree, you won't be able to join the AICPA if you receive your certification after the year 2000.)

Finally, your career may in the future take you to a state with a 150-hour requirement, and there is no certainty that your CPA license from the 4-year state will be transferrable to that 5-year state. Thus, a 4-year degree may, in the future, become a limitation to your career.

Industry and Government

If you are planning on pursuing a career in corporate or governmental accounting, there is no requirement that you obtain 150 semester hours of education. In fact, a 1994 study by the Institute of Management Accountants made clear that corporate accountants do not favor such a requirement for their entry-level accountants. This does not mean, however, that you should not consider a fifth year of college, for three reasons:

First, although you may not now have plans to work for a CPA firm, your plans might change in the future. Each year, CPA firms are hiring more experienced accountants with specific industry expertise, and this trend is likely to continue. Were you ever to make such a career move in the future, it would be greatly facilitated if you already met the requirements for CPA certification.

Second, a fifth year (especially if it leads to a Masters' degree) will never be a disadvantage to you in job-hunting, and it can sometimes be a significant advantage. In today's competitive job market, recruiters look for distinguishing characteristics that can "set you apart from the crowd." For example, in my accounting career, I had one job in public accounting and three jobs in industry. While my Masters' degree was not required for any of those jobs, it was an advantage to me in "beating out the competition" and getting the job offer at all four of these organizations.

Third, the IMA study referred to above also reports that corporate America's specifications for communication, interpersonal, and higher-order thinking skills in entry-level accountants parallel those of public accounting firms remarkably closely. Thus, although the corporate controllers do not want a formal requirement for 150 hours, they do want the expanded skill sets that the fifth year is intended to develop.

Content of the Fifth Year

The laws of most states allow for significant flexibility in the content of the fifth year. The AICPA's model statue does not require a masters' degree; a five-year baccalaureate is equally acceptable. Nor does the model statute require that any of the additional 30 hours of study be in accounting. In fact, the intent of the sponsors of the 150-hour requirement is to broaden accountants' university education, not to further narrow it with more accounting courses. Bearing this in mind, if you decide to go to school for an additional year, what should you study during that year?

In past issues of New Accountant, I have described some significant changes in the way the accounting profession is defining itself and also some trends in the accounting job market. The "New CPA" and "New Finance Professional" require a much broader skill set than that of the "green-eyeshaded beancounter" of past decades.

Thus, if you decide to pursue the extra year of college education, it is very important to select a course of study that will help you build the skills you will need in this new job market. An extra year of debits and credits might not be the answer. If you have a bachelors' degree in accounting and decide to pursue a masters' degree, it may be wise to consider an MBA as an alternative to a masters' in accounting, in order to broaden yourself. A solid understanding of accounting is still important, but remember that the knowledge required for this new job environment is different from that needed in the past. Memorizing every SFAS and SAS may be less useful than additional study in, say, systems or finance.

The fact that accounting students need more hours in systems and business, not in accounting, is lost on most accounting professors. As soon as the 150-hour law passes, their typical response is to design a Master of Accountancy program, which is basically a year of additional accounting courses added on top of a completely unmodified, traditional undergraduate accounting curriculum. Be sure that your program of study fits your needs, not those of your professors. If they seem out of touch with the recent developments in the accounting job market, don't hesitate to transfer to another university for your graduate studies.

Find a program that will develop the specific skills you will need in this new age of accounting. If you are weak in writing or public speaking skills, make sure the program you select has significant writing and speaking components. If you are not state-of-the-art in computer skills and knowledge, take a course of study that will strengthen this area. If your undergraduate program was narrow because you "CLEP'd out" of much of your general education and spent most of your undergraduate class time in business and accounting, make sure you take plenty of liberal arts and sciences in your graduate program. On the other hand, if you had a broad undergraduate program (perhaps you have a degree in liberal arts or humanities), you might enroll in an intensive, accounting-only graduate program.

Should I Get a Masters'?

Be sure to check on the specific licensing requirements in your state. Although most states do not require a masters' degree, a few do. If your state does not require a masters' degree, should you still pursue a masters' degree, or will a 5-year bachelors' degree do the job?

Although an extra year of study at the undergraduate level may meet the requirement, it will not add any letters after your name on your resume. If you are going to incur the cost of a fifth year of study, it only makes sense to get the most mileage you can out of it. For most students, this would suggest that a graduate program would be advantageous over an extra year at the undergraduate level. Remember, a primary strategic advantage of a masters' degree is that it will differentiate you from job applicants who have only a bachelors' degree.

On the other hand, some students who switched to accounting from other majors may meet the 150-hour requirement without any extra courses beyond the requirements for their B.S. in accounting. For these students, the cost of another year might exceed its benefit.

In the end, it's your call. There are plenty of job opportunities and career paths for both those who choose to meet the 150-hour education requirement and for those who don't.

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