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The 150-hour requirement: good or bad for African Americans?

Despite the proliferation of accounting pronouncements, the impact of technology on the business community and the evolution of global economics, the accounting profession has not changed its entry-level education requirements. To become a CPA, one need complete only four years of education beyond high school with minimal emphasis on a broad liberal arts base. With entry-level CPAS ill-prepared to meet the increased challenges of public practice, the larger CPA firms and some smaller firms have to supplement academic training with in-house training for new recruits to ensure their professional advancement and the delivery of quality service to clients.

For 30 years the accounting profession's leaders have supported increasing the education requirement. The 150-hour requirement was accepted in 1988 when 84% of the American Institute of CPAs voting membership mandated that all new members complete 150 semester hours of college education by the year 2000. See the sidebar, page 101, for what are generally considered the requirement's benefits.

To date, 30 states have adopted regulations or legislation to require 150 hour education as a condition for certification. However, the requirement's dissenters point to the potential negative impact on African Americans as a reason for rejecting it. Specifically, they believe

* African Americans with high academic potential may be encouraged to select other professions.

* The financial burdens of historically black colleges (HBCs) and their students may increase.

* Qualified African Americans' access to the profession may be even more limited.


The American Council on Education conducts an annual survey of college freshmen to, among other things, assess their goals, career choices and education expectations. In comparing all freshmen to freshmen attending HBCs, the fall 1990 survey revealed that a larger percentage of all freshmen showed an interest in pursuing a career in accounting than in medicine or law whereas a majority of HBC freshmen selected accounting over medicine and an approximately equal number chose law. When asked about their academic goals, 40.7% of all freshmen and 39.5% of HBC freshmen expected to earn master's degrees. The most striking difference came in the reason to go to college. "Preparation for graduate/professional school" was given as a reason by 53% of all freshmen and 73% of HBC freshmen. The willingness of African Americans to pursue additional education is further documented by the 40% of African-American CPAs who currently hold advanced degrees.

If one considers these data as an indication of the education aspirations of African Americans, it might help to explain why African Americans represent 3% of doctors, 2% of lawyers and only 1% of CPAS. The current four-year education requirement for CPAS compared with the eight-year requirement for doctors and seven years for lawyers has not encouraged more African Americans to select accounting over other professions (for Bureau of Labor statistics, see JofA, Aug.90, page 61). Quite the contrary, the education demands of the other professions apparently attract the brighter students to what may appear to be more intellectually stimulating careers. Since few African-American accounting graduates become CPAs, perhaps accounting attracts a larger number of students inclined toward a profession that requires less demanding academic preparation. The increased education demands of the 150-hour requirement may, in fact, attract higher caliber students and therefore a greater number of African-American accounting students who become CPAs.



The higher costs that will be incurred as a result of the 150-hour requirement are a real concern for all schools and students. Some opponents point specifically to the negative impact on HBCs. To gain insight into HBCs' perceptions, I recently surveyed the institutions most likely to be affected by the new requirement. The 43 respondents represented 14 states and the District of Columbia.

My survey questioned respondents, primarily department chairpersons, about the 150-hour requirement's potential impact on minority students and institutions. There was general agreement about the need for more financial support and apprehension that the requirement might dissuade some students from selecting accounting. This might be a consequence but not a result of the increased costs alone. The additional financial burden and delayed employment seem to be inconsequential to those preparing to enter medicine or law, possibly because brighter students may expect to invest more time in professional preparation. If fewer students select accounting as a major because of the 150-hour requirement, it could be that students attracted to accounting because it appears less demanding might choose another career with a shorter academic path.

The respondents' concern regarding the anticipated strain on already limited academic budgets suggests there is some confusion about what the new requirement entails. Some assumed they would be forced to add accounting faculty, increase the requirements for graduation or add a graduate program. A small number demonstrated a clearer understanding of the requirement and expected their students to pursue graduate school or take additional courses in other departments. The profession should consider making a more concerted effort to assist schools by clarifying the options available to them in preparing their students to meet the new requirement.


The New York State Society of CPAs (NYSSCPA) sponsored a task force to assess the status of African-American CPAs in public accounting. It conducted and published in 1990 the results of national surveys of African-American CPAs, the largest U.S. CPA firms, African-American owned firms and HBCs on African Americans' participation in the accounting profession. The respondents were asked for their opinions on what had occurred and their views on what would move the profession closer to equality. The survey revealed that despite 20 years of commitment to increasing minority representation in public accounting, only 1% of all CPAs were African Americans. Further, they numbered only 16 out of 5,000 partners reported by the largest CPA firms, and over the previous decade the number employed by those firms had declined by 25%. The profession's commitment to increase African-American participation is further called into question by the reality of recruitment efforts. Of the 40 large firm respondents, only 7 actively recruited at HBCs. Surprisingly, the minority firms surveyed were equally inattentive in their recruitment initiatives.

Those who point to a limitation of minority access as a reason to reject the 150-hour requirement should consider the current status of African Americans in the accounting profession. If the firms responding to the 1990 NYSSCPA survey are representative, one can conclude that many firms make little or no effort to recruit entry-level professionals from HBCs or to retain African Americans once they are hired. The firms say their lack of African-American professionals results from a "limited supply of qualified" minority applicants. Yet the AICPA and others have devoted millions of scholarship dollars to increasing "minority access." If there truly is a shortage of qualified African-American applicants, it is possible the increased academic demand of the 150-hour requirement might increase the supply of applicants who are prepared for the rigors of the Uniform CPA Examination. Whether the short supply is real or convenient, the opponents of the 150-hour requirement should acknowledge that minority access is limited with or without it.


Since 1969 the profession has expressed a commitment to increasing minority access. Although the AICPA established several programs - scholarships, career development seminars, summer internships, faculty summer seminars, faculty fellowships, visiting professorships, etc. - the centerpiece was the scholarship program, which has awarded over $5 million (see the sidebar, page 100, for current AICPA programs). HBCs received one-third of these scholarship dollars, and, according to the 1990 NYSSCPA task force report, HBCs graduated one-third of the African-American CPAs. The scholarship program has been an obvious success in increasing the number of African Americans who study accounting but not in increasing the number who actually become CPAs. Little emphasis has been placed on implementing the other strategies to assist HBCs in strengthening their accounting programs or other measures that might allow HBC students to make informed decisions about public accounting careers. As concluded in the NYSSCPA report, merely providing access to higher education in the form of scholarships without the firms' sincere commitment to recruit, train and retain African Americans is a nonproductive investment.

The debate surrounding the 150-hour requirement offers the accounting community an opportunity to discuss real solutions to the access problem. Aside from the obvious benefit of attracting more able African-American students, the additional course credits will improve preparation for professional practice. More important, those truly committed to increasing minority participation in the profession should support the 150-hour requirement only if the profession moves aggressively to implement the other programs that will ensure increased access while easing the possible negative impact of the new requirement: for example,

* Cooperative arrangements with larger universities.

* Increased financial support for HBCs and students.

* HBC faculty fellowships.

* HBC student internships.

* Visiting professorships at HBCS.

* BC summer faculty seminars.

* Increased recruitment efforts at HBCs.


This discussion of the 150-hour requirement's potential impact on African Americans challenges those who conclude the impact will be negative. Since the lengthy academic preparation period necessary for the practice of law or medicine has not dissuaded African Americans from pursuing those careers, it is unlikely an average of 22 additional credit hours will deter them from majoring in accounting. Since the majority of HBC freshmen anticipate acquiring a graduate degree and since a large number of African-American CPAs hold advanced degrees, the additional education requirement is consistent with African-American students' expectations. A more demanding academic path may even attract, rather than detract, qualified African Americans.

The argument that the new requirement will limit minority access should fall on deaf ears if one considers the profession's progress in increasing minority participation. The evidence shows that African-American participation has remained relatively constant for 20 years. Although a great deal of energy and money have been devoted to scholarships, with the exception of a small number of firms the profession has not attempted to recruit and retain those in whom they have invested. Minority access has been, and continues to be, limited.

If the HBCs do not support the 150-hour requirement, they may limit the career options of their accounting graduates who aspire to become CPAs or may limit their supply of accounting students. The HBCs in states that have not yet adopted the 150-hour requirement need to make known their support and take advantage of the climate to get the assistance needed for their institutions and students. Since the new requirement does not necessarily require additional technical courses, the HBCs already may have the resources in other departments to provide students with the course options to meet the new requirement.

The AICPA and the state societies, as leaders of the profession, must join with the HBCs to explore ways in which the profession's efforts to increase African-American access can be synchronized with the support of the 150-hour program. What looms on the horizon is an opportunity for those sincerely committed to increasing the African-American representation in professional accounting to close ranks and make a real difference.
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Title Annotation:accounting profession
Author:Flintall, Virginia L.
Publication:Journal of Accountancy
Date:Oct 1, 1993
Previous Article:AICPA incoming chairman prepares the profession for rapid change.
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