The 150-hour requirement

Aug 15, 2011

If you want to sit for the Uniform CPA Exam in the state of Ohio, you are required to have 150 semester hours (225 quarter hours) of college education. Now while this may sound like you'll be in school forever, take heart. There are huge benefits that result from these extra credit hours.

Studies show that individuals who sit for the CPA exam with 150 hours have higher first-time pass rates than their counterparts who take the exam after only four years of school.

If passing the exam the first time around isn't incentive enough, then let's talk money. With most programs, having 150 means walking away with a master's degree. And master's degree holders receive starting salaries that are 10 - 20% higher than the starting salaries of individuals with bachelor's degrees.

You'll also increase your chances of climbing the corporate ladder more quickly. Promotions to manager and partner and to corporate managerial positions are increasingly being awarded to individuals with master's degrees.

But getting 150 hours doesn't mean just staying in school for five years. There are many ways to earn your 150 semester hours. You can complete your four-year degree and then complete your master's degree during a fifth year. You can complete a four-year degree, graduate, start working and complete your fifth year while working. There are different options available. Talk to your accounting department about what's best for you.

Here are a few answers to the most frequently asked questions about the 150-hour requirement.

Q: What exactly is the 150-Hour Requirement?

A: Signed into law in 1993, the 150-semester hour education law requires Ohioans after Jan. 1, 2000 to have 150 semester hours (225 quarter hours) of college level education as a prerequisite to sit for the Uniform CPA Exam (ABO Administrative rules 4701-3-08 and Statute 4701.06). For those people who don't complete the necessary college course work, a testing option is available (ABO Statue 4701.6(E), paragraph 3). Fulfilling the 150-hour education requirement is also necessary to become a full member of The Ohio Society of CPAs and the American Institute of CPAs.

With increased demands on CPAs to offer diversity in the business world for clients, the 150-hour requirement is necessary to be a broadly prepared CPA. Ohio institutions offer a variety of programs to meet the demands of a 150-hour education requirement. Over the past century, entry level education requirements for CPAs have risen?and is expected to continue to rise - due to the rising level of general education in the population and the demand for increasing complex, technical and judgmental activities in the practice of CPAs.

Q: Will I need 150 semester hours (225 quarter hours) of college education to become an accountant?

A: In order to sit for the Uniform CPA Examination and earn the CPA designation, traditional students will be required to have 150 semester hours (225 quarter hours) of college courses.

Q: Must the extra hours of education be at the graduate level?

A: No, an advanced degree is not required. However, since many entry-level accountants will have advanced degrees, The Ohio Society of CPAs strongly encourages graduate education. This recommendation does not draw distinctions between pursuing a Masters of Accountancy, a Masters of Tax or an MBA (either with an accounting or some other emphasis). For more on pursuing a Masters of Accountancy (MAcc), click here.

Q: Should I choose to pursue a 150-hour baccalaureate, what skills should I develop with the additional education?

A: It is now required to have 30 semester hours of accounting including principles. Additional credits can help hone communication skills (writing, speech), expand computer expertise, widen accounting knowledge, and polish professional research skills. Fulfilling requirements for a second undergraduate major might be considered (Finance or Computer Science will be particularly helpful as second majors).

Q: How do non-traditional students qualify to sit for the CPA Exam?

A: Candidates not meeting the 150-hour requirement through their education must pass a series of examinations including the GRE and/or an equivalency exam administered by the Accountancy Board of Ohio.

The procedure is the same for all CPA candidates who do not fulfill the education requirements set forth in the 150-hour requirement (ABO Statute 4701.06(D)(1)(b). Less than 1% of all licensed CPAs in Ohio opt for the testing route. It is a difficult alternative to the 150-hour requirement.

Q: Will the additional education help me expand my overall career opportunities?

A: Most definitely! Almost any chosen path for the additional credit hours would be helpful. An advanced accounting degree would develop greater technical expertise for audit or tax work. An MBA would furnish a breadth of business knowledge that could provide entry into management advisory services. The development of greater communication skills would afford superior performance in any aspect of the profession. A second major or minor, like an advanced accounting degree, would provide additional expertise potentially valuable in the marketplace.

Q: How will I pay for a fifth year of study when traditional scholarships are no longer available?

A: Educational funding issues are best addressed by each student and their campus financial aid officers. A variety of options exist and often special arrangements are available for minority or disadvantaged students. The legislature has raised approximately $300,000 annually for scholarships for students in their fifth year of accounting. The funds have been earmarked for minority and economically disadvantaged students. As always, students will continue to work part-time to pay for part-time schooling.

Public accounting firms may provide funding for their prospective employees. Some institutions of higher education are already at work raising money to be applied beyond traditional scholarship assistance.

Accounting majors will need to explore various avenues for support. However, keep in mind that the investment will provide long-term benefits because supply and demand realities will mandate that the accounting profession compensates its people for their additional sacrifice.