The AICPA and the National Association of State Boards of Accountancy (NASBA) have gathered extensive feedback on proposed changes to CPA licensure requirements.
In September 2024, AICPA and NASBA released two exposure drafts for comment. The first was exposure draft on the CPA Competency-Based Experience Pathway. It proposed that CPA candidates could meet initial licensing requirements by exhibiting competency in specific professional and technical areas. The comments were due Dec. 6, 2024.
The second was an exposure draft on Proposed Uniform Accountancy Act Changes. This one proposed changes to the profession’s model law. The Uniform Accountancy Act (UAA) offers a national model for state legislatures and boards of accountancy. The national model offers consistency that is vital for maintaining high professional standards that governments, businesses and individuals depend on. There deadline for comments was Dec. 30, 2024.
The first exposure draft received 153 written comments and over 600 survey responses, reflecting widespread concern from state boards, CPA firms, academic institutions and individuals. The majority opposed the competency-based pathway, citing complexity, subjectivity and administrating burdens. Concerns also arose regarding legal liability for CPA evaluators and the impact on CPA mobility across states.
Additionally, academic institutions and individual academics said that they were worried that the proposed pathway can undermine the quality of CPA candidates and their ability to pass the CPA exam. Confusion and complexity in licensure can also negatively impact enrollment in accounting programs, the AICPA and NASBA said. There ais also apprehension that the proposed pathway might not effectively deal with the problems related to the CPA pipeline and could instead make it worse it by creating new barriers and complexities.
AICPA and NASBA acknowledged these concerns and agreed to table the competency-based pathway for now. However, they plan to pursue long-term research to explore how competencies can enhance the profession. "As proposed in the exposure draft, the Competency-Based Experience Pathway was not endorsed by most stakeholders," they said. "And, based on the volume and nature of responses, the AICPA and NASBA agreed to recommend tabling the framework for the purpose intended. Although there was not support for the proposal as exposed, there is support for further exploration of competencies. The AICPA and NASBA agreed to a longer-term, collaborative, data/research-driven initiative to understand how competencies can drive the long-term health and success of the profession."
At the end of the comment period for the second exposure draft, there was a total of 194 stakeholders comments submitted. There was support for the proposed UAA from students and educators, who highlighted the considerable time constraints candidates experience, specifically in public accounting. They also noted how the new pathway wants to address the profession's increasing competitiveness and higher education's increasing demands.
Concerns from firms and CPAs, such as the NYCPA, include that the proposed UAA could dilute the profession. A typical worry is that introducing this pathway might compromise the rigor and perceived value of the CPA profession. Firms stress that maintaining the rigor and integrity of the profession should stay as a top priority. Firms such as EY are against the ongoing reliance on substantial equivalency, viewing it as a possible barrier to practice. Firms are also advocating for a future-proof approach that offers flexibility to adapt to evolving market conditions. EY and similar stakeholders think that the dependence on substantial equivalency could stop both current CPAs and those entering the profession.
According to AICPA and NASBA, the feedback reflects a divide between those wanting to modernize the licensure process to
address candidate challenges and those viewing as a top priority the preservation of the profession's rigor and
integrity. "The concerns around substantial equivalency and its impact on mobility and market
adaptability further underscore the complexity of the proposed changes," the associations said.
The AICPA and NASBA added that stakeholders have expressed significant concerns about the UAA Exposure Draft, specifically in terms of mobility, state board oversight and the need for a modernized approach to licensing and practice frameworks. "These issues will need to be addressed to gain broader support for the proposed revisions," the associations said.
In terms of the NYCPA, the Society opposed the proposed competency-based pathway in a Dec. 3 comment letter saying, "we have substantial concerns with the implementation of a pathway that is based on Competency-Based experience. At its essence, the proposed process for evaluation of candidates is highly subjective (particularly with respect to professional competencies) and would place an undue burden on both the CPA candidates and the CPA Evaluators. We anticipate that significant training would be required to permit the CPA Evaluators to develop the requisite skills to render an unbiased evaluation that meets specified criteria."
Meanwhile, In its comment letter about the UAA sent on Dec. 20 the NYCPA said that, "While the Society commends the AICPA and NASBA for their initiative in preparing the UAA Exposure Draft and shares in the desire to facilitate CPA mobility, we have significant concerns with basing the determination of an individual’s eligibility to practice as a CPA in a state on the existence of such individual’s name in a national licensee database, the administration and monitoring of which is beyond the effective oversight of the state board of accountancy of the state in which the individual is seeking to practice as a CPA."
The letter also said that "we believe that such oversight must remain with such state board of accountancy. In the absence of the development of clear guidelines concerning this that can be monitored by the applicable state board of accountancy to allow for its effective oversight, we are not prepared to support the UAA Exposure Draft at this time."