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Position statement on the 150 semester hour rule.

For the record, I am opposed to the 150 semester hour rule as it is presently structured.

Let me enumerate some of my concerns: 1. The 150 semester hour rule will

increase the cost of educational

requirements to either sit for the

examination or to be licensed as

a CPA by as much as 25-30%. 2. This 25-30% increase in the cost

of a college-level education is an

obvious discrimination against

all economically disadvantaged

persons. 3. There is a tremendous potential

for a diminished quality of public

accounting services. Dr. Newton

D. Becker, BS, MBA, PhD,

CPA, writes that students are

reluctant to invest in another

year of college before they start

earning a living. Even more

disturbing, Professor Kirkland

Wilcox, Chairman, Department

of Accounting, University of

Colorado at Colorado Springs,

reports that an informal departmental

survey regarding the 150

semester hour rule shows that

most of the students who indicated

that they would have chosen

a discipline other than accountancy

were usually the better

students. 4. Dr. Samuel H. Magill, President

of Monmouth College, believes

that the customers of CPAs will

pay more for CPA services, and

society as a whole will have much

less of other products and services

where the 150 semester

hour rule is adopted. What an

indictment of the one profession

that is supposed to be dedicated

to improving the bottom line! 5. There is serious concern about

the lack of input by the business

community and the potential

reaction of the general public

when it is realized that the cost of

public accounting will be increased

by the "trickle-up" effect

of implementing the 150 semester

hour rule when at the same

time the quality of public accounting

services might well be

diminished. 6. I suspect that the 150 semester

hour rule is vaguely and ambiguously

structured in order that its

major proponent (AICPA) may

continue to encourage state

boards of accountancy dominated

by CPAs from the larger firms to

"legislate by regulation."

Having said all this let me state for the record that the D.C. Society of Independent Accountants (DCSIA) and I do, in fact, thoroughly agree with AICPA Vice President for Education Dr. Rick Elam, who reported that a dozen studies by independent organizations over the past 20 or so years concluded that more education is needed by all accountants. However, Dr. Elam also writes in his letter dated March 19, 1990, to the Executive Director of the N.J. State Board of Accountancy and to the then President of the N.J. Society of CPAs "No, it s not really necessary to increase the number of accounting hours to prepare a CPA. The real element that's missing in most CPA's education is a broad view of the world and the ability to communicate with all of the different constituents that CPAs serve."

Dr. Elam goes on to say that the CPA examination is extremely limited in what it can test and that there is absolutely no way it can test all those important aspects of an individual's preparation necessary to be a CPA. Simply stated, it seems to me that AICPA wants the several states, and by extension the taxpayer and customers of CPAs, to bear the enormous cost of culturally educating all of our CPAs.

IF the AICPA and NASBA truly want to improve the quality of public accounting services and at the same time reduce the cost of these services - there is a better solution. Mrs. Binetta Dolan, Chairperson, Department of Business Administration, Georgian Court College writes in a letter to the Executive Director of the N.J. Association of Public Accountants: "The Georgian Court College, Department of Business Administration, Accounting and Economics, supports (the N.J.) Assembly Bill A-3429 which will provide an alternative for students to obtain a license to practice public accounting without needing a CPA certificate."

This concept is further delineated by William H. Sager, Esq., who, as Legal Counsel for the National Society of Public Accountants, in testimony before the California Legislative Committee on Governmental Efficiency and Consumer Protection supported the establishing of an additional class of licensed accountants - a class of registered accountants to be licensed and regulated by the State Board of Accountancy to perform all accounting functions except the audit attest function, after each such accountant will have passed legislative qualification test.

These registered accountants will be equipped educationally and culturally to serve the small-business sector of our economy. I am referring to the "Mom and Pop" business, the thousands of gasoline serving stations, the hundreds of small associations, the corner pharmacies, the various and sundry sole proprietorships, the multitudes of small size partnerships, the unlimited number of small corporations, all of which can be served by these registered accountants without the "overkill" in cost of the highly trained master CPAs.

Further, the registered accountants presently unlicensed are at this exact moment serving the public as accountants. The problem is that being unlicensed, these accountants are not regulated. Yet, one of the basic reasons for the 150 Semester Hour Educational Rule, a reason supported by both the AICPA and Dr. Nathan T. Garrett, Vice president of the National Accountancy, is to "protect Board of Accountancy, is to "protect the public!"

I submit that if America's certified public accountants and the proposed master CPAs with all their superior education need to be regulated in order to "protect the public," the unlicensed accountants (and there are thousands of them) also need to be regulated if, indeed, we would protect the public.

I further submit that you cannot regulate these thousands of accountants without licensing them.

In conclusion, I assure the AICPA that DCSIA and I am sure all of the other associations represented here today will be most pleased to work with AICPA and with NASBA to maintain the quality of public accounting services and to help educate America's accountants so that accountancy will continue to be the honorable profession as we know it, an honorable profession of which all Americans are indeed proud.

Clyde Larmer is a former member of the DC Board of Accountancy having served for eight years. He is a longtime member of NSPA and a past president of the DC Society of Independent Accountants.
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Title Annotation:Debits & Credits; accounting education
Author:Larmer, Clyde
Publication:The National Public Accountant
Article Type:Column
Date:Apr 1, 1992
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