@Going Concern “Are New Graduates Getting Squeezed By The 150 Hour CPA Requirements?”
My new post is up @Going Concern.
The Big 4 firms are delaying new hire start dates. What’s the best use of that time? Will passing the CPA exam quickly give you an advantage if some offers are rescinded or the firm continues to cut experienced staff? How can an undergrad with a <150 hour degree get the extra hours once you start working eighty hour weeks? Accounting is still touted in the media as a safe career. How does a career-changer with a non-business undergraduate, or an undergraduate without the currently required number of hours of eligibility for the CPA, meet the requirements cost effectively?
Go here for more.
Excellent advice for students and recent graduates on how too approach and take the CPA is provided in an article You will pass – The Keys to the C.P.A. ( as well as a proposed time line for taking the exam) by Marc Cangemi CPA at the Cangemi Company LLC web site http://www.canco.us and at
http://www.canco.us/documents/YouWillPass1.pdf
FM – I think the biggest effect hinges around the Big 4 only want new hires who are CPA or Bar Exam eligible (for audit and tax), since they expect you to be a CPA or pass the bar for advancement around mgr (in general). The 150 hr rule hurts the firms that use this approach.
The problem is that this requirement drastically reduces the amount of eligible candidates and Big 4 thus misses out on a huge number of very smart, very capable, very trainable graduates.
This affects the profession as a whole because talent can’t get in easily without picking up more units which is a PITA quite frankly. And even if you do pick up the units later you fall into the “already graduated” category which puts you at a huge recruiting disadvantage.
Also, if someone decides they want to be a big 4 accountant in their jr year – oops, too late to finish your degree and get your accounting units in time. LAME!
I recruit “Big 4” candidates on a constant basis. The recurring theme when pressed why the candidates have no certifications is that their firm does not put any value in it, does not pressure them to obtain certifications, and does not provide the support to obtain and maintain the certifications. Generally speaking, their position is consistent so I can see why it doesn’t make a difference so long as your three competitors take the exact same approach.
As a current Big-4ite I read this article and I’m not real sure what the hoopla is all about honestly. I initially entered school on a pre-law track majoring in finance/economics with a minor in political science. Eventually I decided that after sleeping through most of my consistutional law class, I could not justify spending an additional 3 years of my life studying law for a career that would bore me (I’m sure you are thinking “so you went with accounting????”). After changing my path, to a minor in accounting (since it fit so well with finance) I had decided to pursue investment banking since I saw Chicago or New York as my potential destination after school anyways. However, I was recruited by two of the Big 4 firms for audit even though I was not even an accounting major at the time. I had also certainly not intended on getting 150 credit hours. However, after taking a semester off from school to do an internship I found that this accounting stuff was for me and I switched my major to accounting. This change which came late in the college game led to me having to take 2 summer classes and stay ONE WHOLE EXTRA SEMESTER!!!! The problem is that if you want a job with a “professional services firm” you need to be certified in whatever path you take be it the CPA exam or the Bar Exam. As much punishment as the Big 4 takes on these blogs (much of which is well deserved) people who want to villianize the Big 4 for only recruiting certification eligible people is ridiculous. Maybe that is fine for Mom and Pop, CPA who is doing tax returns for all of the old ladies in the nursing home, but when you have Fortune 500 clients and they are paying you absurd amounts of money (which is another conversation in and of itself) they expect certified individuals working their account. Not some schmo who did the minimum to get a degree, those are the people they hire to be their A/P clerks.
Give me a break.
Chris – are these experienced hires? From what I remember, Big4 picks up the entire tab for study materials, application fees, and usually have their own in-house CPE. Smaller firms usually subsidize CPE credits.
While researching MACC programs, I discovered that some schools are making a concerted effort to offer very innovative MACC curricula. For instance Portland State University, the University of Akron, the University of Baltimore, and the College of William & Mary all offer a MACC curriculum that emphasizes financial analysis. In other words the curriculum is based on advanced courses primarily in accounting and finance. Some other schools are offering MACC programs with a focus on Forensic Accounting i.e Duquesne University and Georgia Southern University. If and when all these programs achieve notoriety and success, you will see many other schools follow their path. It’s fair to say that most MACC programs are really not worth paying for. I do not have a Master’s degree, however it doesn’t take a genius to realize that most of the MACC programs currently available are just cash cows! Because the job market is very competitive, I do recommend people to go for a MACC if they can afford it. Money can be an issue but there is a number of schools out there that will give out assistantships provided that you have an undergrad GPA over 2.75
and a GMAT score over 500. What this means is you might have to go to school out of state. No pain no gain! An alternative to getting a MACC is to get a dual undergraduate degree in Accounting and Finance/Economics/MIS/Management… your choice.
If students start choosing innovative MACC programs over the vanilla type ones, universities around the country will work proactively to ensure that they are offering a good value proposition to their students!
@Narcisse Dansou
Thanks, Narcisse, for your detailed comments. Very helpful. Anyone interested n more on the subject should follow Narcisse on Twitter @thestudentCPA or read his blog, http://thestudentcpa.wordpress.com
Francine
@Francine
Thank you for your “endorsement”. Your article on the issue of the 150 credit hours pre-CPA requirement has inspired me to write about post-secondary accounting education (i.e masters) in my upcoming post. I believe quite a number of people might benefit from learning about the range of curriculum options available to them. You are doing a fine job with this blog.
It may be helpful to look into certificate programs as a more cost effective way to achieve the 150-hour requirement and be eligible to sit for the CPA exam. Take a look at the University of California at Berkeley Extension program http://extension.berkeley.edu/. UC Berkeley offers a ton of certificate programs and many of the courses are online. Therefore, you can save some money, obtain a certificate from an outstanding university and qualify to sit for the CPA exam. I do not think it is fair to say the MACCT programs are cash cows. There is value-added in MACCT programs and oftentimes it is important for the students to gain some additional work experience (an internship) to appreciate the value that it can offer. At DePaul, we stress research skills in our MACCT program. This is definitely valuable if you are planning to pursue a career in public accounting.
I know that money can always be an issue, so a certificate program may be just the answer. The estimate cost is around $8,000 for the entire program. Take a look at this paragraph from the website:
UC Berkeley Extension’s Certificate Program in Accounting is designed to provide students with a broad and thorough understanding of accounting principles and financial reporting practices, to keep students abreast of innovations in the field, and to enhance proficiency in accounting-related functions such as financial analysis and data interpretation. This professional certificate employs materials and techniques that are consistent with modern principles and best practices, providing knowledge and skills that can be used immediately. It offers the advantage of a curriculum that is overseen by an advisory board of business and education leaders; approved by the University of California, Berkeley’s Haas School of Business; and taught by working professionals with many years of practical business experience.This professional certificate is ideal if you wish to enter the accounting field or if you are a current accounting professional who wants to update your skills and gain a credential. With this certificate, you can complete coursework toward the educational requirements to take the CPA and CMA exams, boost your marketability with a certificate from a widely respected institution, prepare for a career change or advancement in the accounting field, and demonstrate a commitment to professional development.
Feel free to contact me at kpope2@depaul.edu if you have questions.
As a current employee of a big four firm, I understand entirely the desire to start recruiting only those candidates who have either completed 150 hours or plan to complete 150 credit hours. I think that it makes sense from a bottom line perspective because the business won’t be paying lots of money every year for tuition assistance and time off over the summer to those associates finishing their hours, but who’ve already started with the firm. Also, while those associates could be working on billable engagements or engaging in internal projects with the firm, their peers who’ve come in the door with 150 hours will be experiencing more and tend to progress faster come annual review time. I think it also makes sense from a committment perspective for the firms. Why do they want to keep making significant investments in new audit associates who are trying public accounting without any definite sense of working towards their CPA licensure? That’s not to say that every new associate walking in the door knows that this is what they want to do for the rest of their working lives, or that some with the intent to be a CPA find that it’s not right for them, however candidates who are on the path to CPA licensure would appear to be a more solid investment.
From a former student perspective however, it bites. When I started with my current firm, I received tuition assistance and I was incredibly thankful to get it. It saved me from having to take out more student loans, and even though it was a taxable benefit, it saved me a lot of money and relieved a concern walking in the door.
To all the students who are put off by the recent change in recruiting standards, think about it this way…in my short experience in public accounting, the expectations of each and every associate has grown exponentially. The amount of responsibility that is given (most of the time to those who earn it) to relatively young adults with little previous applicable experience can be overwhelming, but when viewed as a challenge to rise up to meet, can be incredibly empowering. This is the firm’s way of saving themselves some time and money while their new hires are back in school rather than contributing to the company coffers, but also making sure that the people who they are giving this responsibility to, know their stuff and have the additional mental resources at their disposal when they are tested daily at work.
Lastly students, the firms are still providing assistance with study materials for the CPA exam (at least mine is). So even if you aren’t sure yet that being a CPA is for you, but you want to try working in public accounting to be sure…then get your 150 hours, and at the very least, take the test. If you fail, no money out of your pocket and you’ve hopefully gotten some more knowledge kicking around in your head. However if you pass and then decide it’s still not for you, having a CPA credential on your resume will only help you.