Misguided on the 150-hour rule
In theIr “SpIrIt of AccountIng” column, “Déjà vu all over again” (Accounting
Today, Feb. 15-March 14, 2010, page 14), professors paul Miller and paul Bahnson were
misguided about the 150-hour rule and its
purported effects on the supply of accounting
graduates and the numbers of people sitting
for the cpA exam.
the cpA profession has advocated 150
hours of education for examination and licensure for more than 50 years, and the American
Institute of cpAs board of directors recently
re-affirmed its support. The guiding principle
is to ensure that prospective members of the
profession have the skills to support life-long
careers in accounting, create well-rounded
business professionals, promote intellectual
curiosity, and develop critical-thinking and
decision-making faculties that support professional judgment.
The 150-hour rule simply means a four-year
college degree and 30 additional credit hours.
The American Accounting Association, which
represents 8,000 college professors, fully supports 150 hours. out of 55 licensing bodies, 53
require 150 hours of education for licensure as
a cpA. There’s a good reason: They all believe,
correctly, that more education strengthens
the cpA’s singular responsibility to protect
the public interest. It bolsters the competence
of the cpA as a professional and the quality
of the cpA’s work for clients and employers.
reducing the number of educational hours is
emphatically the wrong answer.
The 150-hour rule isn’t an impediment.
More people are entering accounting than
ever before. The AIcpA’s 2009 Trends report,
which surveyed accounting programs at colleges and universities, reported 66,000 people
graduating with Bachelor’s and Master’s degrees in accounting in the 2007-2008 school
year. That is the largest number of graduates
since 1972, the year the AIcpA began tracking the data.
As for the cpA exam, 93,000 candidates
sat for it in 2009, another historic number.
Moreover, last year marked 1 million admin-
istrations of the computerized exam. Interest-
ingly, the volume of exam-takers is highest in
the states that require 150 hours for examina-
tion and licensure.
are integral to audit
I’M eMBArrASSeD. I just finished an article
about the $31 million fraud case at Koss corp.
Its auditor, grant Thornton, said, “The com-
pany did not engage grant Thornton to con-
duct an audit of internal controls over finan-
cial reporting. establishing and maintaining
effective internal controls is management’s
and the board’s responsibility.”
Way back when I was an auditor for a Big
eight firm, I learned that evaluating a com-
pany’s internal controls was a critical com-
ponent of establishing the scope of the audit
work. Whether the Sarbanes-oxley require-
ments were operative or not, the auditor has
an obligation to evaluate the internal controls
as a normal part of their financial statement
audit. The fraud exceeds 15 percent of com-
pany sales. It’s hard to imagine anyone who
would not find that anything over 15 per-
cent is not “material.” There is no way those
amounts should have slipped by the auditor
for five years!
grant Thornton does the profession a grave
disservice by not admitting that just maybe
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Not all pracs accept
move to IFRS
not sprinting to IFRS,” Feb. 15-March 14,
2010, page 4), in which you stated that, “u.S.
firms and practitioners have accepted the
when, not if, scenario, regarding IfrS con-
I couldn’t disagree more strongly. While
you are likely preaching to the choir of big
cpA firms who have much to gain (as they did
from Sarbanes-oxley), I am just as confident
that many or most smaller firms would state
that they are at the other end of a tug-of-war
rope and pulling back.
professors Miller & Bahnson followed
with a great article (“Déjá vu all over again:
IFRS convergence and the 150-hour require-
ment,” page 14) that articulated the position
they missed something. oh, I know, the liabil-
ity of admitting we are human can be painful,
but if we as a profession want to hide behind
SoX, we lower ourselves to the level of the
politicians and we deserve the same level of
approval as they get.
I WoulD Beg to DIffer with your opening supposition this month (“Firms jogging,