Ohio sets example for other states with 120/150 hour change

Ohio sets example for other states with 120/150 hour change

By Jessica Salerno-Shumaker, OSCPA senior content manager

Meaningful change within the accounting profession does not happen overnight, but OSCPA’s continual work and investment to build Ohio’s accounting pipeline is paying dividends.

Gov. Mike DeWine in January 2021 signed into law House Bill 442, legislation that allows students to sit for the CPA exam at 120 semester hours.

It has taken years of work to get to this point. The OSCPA Executive Board in 2017 formed a task force of educators and CPA employers, and the group reached a consensus in support of sitting at 120 hours while maintaining 150 for licensure. A subsequent deep dive in 2018-2019 by OSCPA’s Young CPA Board found strong support for the changes.

Ohio State University accounting major students in February 2020 testified at the Ohio Statehouse in support of the change, citing a statewide OSCPA survey of college student members stating that 58.5% did not want to wait as long as the Ohio law requires to take the exam and 89% would be more likely to transfer their scores back to Ohio if Ohio were to become a 120 state.

During that testimony, OSCPA President & CEO Scott Wiley, CAE, told members of the House Commerce & Labor Committee that HB 442 also will help the Society’s goal of increasing diversity in the profession.

“For non-traditional students who need to work while finishing college – a scenario which disproportionately impacts minorities – supportive employers may help with tuition reimbursement or cover the costs of CPA review courses and the test itself. Other employers give a bonus when they become licensed.”

The profession – and Ohio – cannot afford to lose out on top talent or diversity. According to a 2019 AICPA Trends Report, enrollment in bachelor’s accounting programs has decreased 4%, and master’s enrollment has decreased 6%. Additionally, according to the 2020 AICPA and CIMA integrated annual report, there was a decline of almost 29% of candidates who sat for the CPA exam from 2017 to 2020.

The bill, sponsored by Reps. Bill Roemer, CPA, R-Richfield, and Thomas West, D-Canton, became effective April 7, 2021. The new law is a major legislative victory for the accounting profession and was the result of lengthy discussion and research by OSCPA members and staff.

Barbara Benton, CAE, OSCPA’s vice president of government relations, said she was grateful to the bill sponsors and supporters who worked the law through to completion.

The bill also eliminates a punitive provision in Ohio law that doubles the experience requirement for those who start the exam process sooner than 90 days before completing their education; the requirement drops to one year, down from two.

ABO’s finalized rule change in October 2021 clarifies when future CPA Exam candidates may begin the exam process. The rule, 4701-3-03 – which became effective Oct. 20 – will allow students who have completed at least 120 semester hours of education to start taking one or more parts of the CPA Exam after finishing at least 24 of the required 30 accounting hours and 24 business hours. The 24 hours must include coursework in auditing, financial accounting, management accounting or cost accounting, and taxation. All 150 semester hours, including all 30 accounting hours, still must be completed for licensure.

“This is an important move that will provide an incentive for young CPAs to stay in our state,” Wiley said. “We thank Ohio legislators and the Accountancy Board of Ohio for making this needed change a reality.”

Prior to the change, many Ohio students sent their CPA exam scores to other “120 hour” states that have lower or more flexible coursework requirements so that they can study for and take one or more parts of the exam while they are still in school, before graduating and starting a demanding job. To become licensed in Ohio, those students had to deal with paperwork hassles and pay fees to transfer scores to the Accountancy Board of Ohio, which is a disincentive to license and work in Ohio.

After Ohio passed its legislation, Indiana and Nevada have also adopted 120-hour rules for the exam.

The change in Ohio comes at a fitting time for the profession, as CPA Evolution, a joint effort of NASBA and AICPA, will transform the CPA licensure model to recognize the changing skills and competencies required by updating the CPA exam in January 2024.

To learn how you can get involved and make an impact for the profession, go to ohiocpa.com/ advocacy.