150 credit hours CPA: A tale of courses and creative counting

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The journey to becoming a Certified Public Accountant (CPA) is challenging, requiring you to test your knowledge through the four-section CPA exam, gain at least a year of work experience, and, of course, the quest for 150 credit hours of education. 

While most bachelor's degrees require 120 credit hours, CPA licensure demands more. But why? And, more importantly, how do you get there? We’re looking at the 150 credit hour CPA rule and some of your options for the best path forward.

Why do CPAs need 150 credit hours?

Before 1988, most states only required an undergraduate degree as a prerequisite for CPA licensure. However, in 1988, the American Institute of Certified Public Accountants (AICPA) recommended that state accounting boards raise that requirement to 150 credit hours. 

Most states do not mandate these additional credit hours in a specific field of study, though some require additional accounting or business-specific classes. For the most part, adding this requirement came from the idea that extra education before licensure would make for more well-rounded CPAs. 

Today, every state, jurisdiction, and the District of Columbia has adopted the 150-hour rule.

State-specific requirements

While all states require 150 credit hours for a CPA license, the specific coursework and requirements to sit for the CPA Exam vary widely. 

Some states allow candidates to sit for the exam after earning 120 credit hours. Some states also require a minimum number of accounting or business courses. For example, Texas requires candidates to have 150 hours to sit for the CPA exam, and those hours must include 30 semester hours of accounting, with at least two credit hours in accounting or taxation research analysis. The Lone Star State also requires at least 24 semester hours in upper-level related business courses. 

On the other hand, Alabama allows candidates to sit for the exam as long as they have a bachelor's degree with a minimum of 24 semester hours in accounting courses and 24 credits in upper-level business courses other than accounting. 

Though all candidates must complete 150 semester hours, we recommend you check our guide to CPA Exam requirements by state to decode the exact requirements for a CPA license.

Pushback against the 150 credit hours requirement

Now, let's address the elephant in the room. There's a mounting pushback against the 150-hour requirement, especially given the profession’s talent shortage. Critics argue that the 150-hour rule has become a structural barrier that makes attracting skilled talent to the profession difficult. 

For example, a recent report from the Center for Audit Quality noted a decline in the number of accounting graduates. The 150-hour rule was among the top five reasons keeping students from majoring in accounting1

Critics also believe the 150-hour rule is partly to blame for the profession's lack of diversity. Writing for Fortune, Guylaine Saint Juste, president and CEO of the National Association of Black Accountants (NABA), noted that "only 2% of CPAs are Black—and this number has remained stagnant for the past 25 years.2" Saint Juste believes the 150-hour rule is partly to blame for this problem, as requiring an additional year of college often requires Black students to take on more student loan debt to get their degrees. 

Despite growing demand for change, the National Association of State Boards of Accountancy (NASBA) reaffirmed its support of the standard by a unanimous vote in 2023. In an interview with the Journal of Accountancy, NASBA President and CEO Ken Bishop said that if any state lowered its requirements to 120 hours, its CPAs would no longer have mobility and CPA reciprocity privileges.

How to get 150 credit hours for CPA licensure

For now, the 150-hour rule stands. However, several paths exist to earning the credit hours needed to qualify for a CPA license. 

  1. Go to grad school. The most straightforward option is to get a master’s degree, such as an MBA or a Master's of Science in Taxation. Just ensure that the additional coursework provides the required accounting and business courses your state requires for licensure. 
  2. Take community college classes. For budget-conscious candidates, community colleges offer a variety of affordable in-person and online classes. If you have all the required accounting and business administration education hours, those extra classes can be anything offering college credit. If you’re interested in art history, creative writing, history, or learning a foreign language, now's your opportunity. 
  3. Experience, Learn, and Earn (ELE). The AICPA and NASBA partnered with Tulane University to create the ELE program, allowing aspiring CPAs working for sponsoring firms to earn 30 credit hours via online self-study courses. You can find more information and download a one-pager to share with your firm at 
  4. CLEP exams. College Level Examination Program (CLEP) exams are standardized tests that allow you to receive college credit by passing an exam instead of taking a course. While you may be able to use these exams to meet the 150-hour requirement, you usually can’t use them in place of required accounting and business courses. Also, avoid duplicates of courses you've already completed at your college or university. 

The road to CPA licensure might seem fraught with unnecessary hurdles, but it's also filled with opportunities to expand your knowledge and specialize your skills. 

Remember, there's no right or wrong way to earn the additional credits needed to meet the 150-hour education requirement if it meets your state board’s requirements. So, choose courses that will make you a more knowledgeable and well-rounded professional.

Get our Free CPA Exam Guide

If you're ready to start your journey toward becoming a CPA, we're sharing everything you need to know about the CPA Exam. From the exam format to study tips and practice questions, this comprehensive guide helps you hit the ground running toward licensure. 

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CAQ, “Increasing Diversity in the Accounting Profession Pipeline,” published July 2023, accessed March 20, 2024.

Guylaine Saint Juste, “Why the CPA Qualification’s 150-Hour College Credit Rule is Outdated—And Inequitable,” Fortune, published July 14, 2023, accessed March 20, 2024.

Bryan Strickland, “NASBA Upholds 150-Hour Education Requirement for CPA Licensure,” Journal of Accountancy, published February 10, 2023, accessed March 20, 2024.

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