Update: The 120-Credit Hours to Sit for the CPA Exam and Exam changes rule is now effective. To learn more visit incpas.org/120. – 11/2/22
The 120-to-sit for the CPA Exam rule
is entering the final stages of its process toward approval, meaning this eagerly anticipated change could come into fruition by the end of 2022.
As a CPA, what does this change mean for you, your firm and future CPAs? Here are four of the biggest impacts.
It will make Indiana more competitive
Allowing students to sit at 120 hours enables Indiana to be on the same playing field as 47 other jurisdictions, especially in the Midwest.
“When students consider employment offers, they often talk with their peers. As more and more of their classmates mention getting offers outside of Indiana and that they can sit early in another state, it becomes really enticing to look beyond Indiana,” said Ali Paul, CAE, INCPAS Vice President-Pipeline & Outreach.
Paul notes students have long been savvy in finding faster paths to sitting for the Exam. When weighing the options of being able to immediately sit in another state or wait through another one to two years of education, many look to the quicker pathway to sit.
And once they leave, they may not come back.
It will increase the talent pipeline
In addition to the opportunity for more prospective CPAs to stay in the state after college, 120-to-sit opens the door to more CPA talent in general. Indiana can be competitive when recruiting out-of-state candidates or those who left the state for college and are interested in returning.
Further, organizations will have access to more CPA talent faster. “Ideally, some of these students would be sitting for the Exam and have at least a few sections done before they're even finished with school,” Paul said.
It will alleviate the initial cost to students
“That 30 hours is often an extra year of education,” Paul said. With rising tuition costs, that can easily cost $20k+, especially if pursuing a traditional master’s program.
While Paul said students are known to be creative for how they meet that additional 30-hour requirement to sit, removing this barrier means they’re able to sit earlier, which helps them start working earlier, bringing in money and softening the upfront cost of the additional 30 hours for licensing.
It will potentially create more CPAs
Students who complete at least part of the CPA Exam before they graduate or in-between school and their work start date are far more likely to complete the Exam cycle.
“Taking sections of the Exam while they are still in school is helpful for two reasons,” said Diane L. Sturek, CPA, Macc, INCPAS Board Chair and senior lecturer at Kelley School of Business Indianapolis.
“First, they can take a section of the Exam just after studying the material intensely during their coursework. Second, if a candidate is working toward a master’s degree or completing the 150 hours as an undergraduate, it is easier to make studying for the Exam a part of their schedule before they start working full time.”
Paul reiterates the significance of this, noting that it can be particularly challenging for new hires to balance their new workload with studying for the CPA Exam.
“When they automatically get thrown into work, they are learning how to be a professional, they’re adjusting to everything that comes with being a new hire, and studying for the CPA Exam can easily get pushed to the backburner.”
If they’re a public accounting hire with a September 1 start date and put off taking the Exam, they may only have through the end of December to complete Exam sections before busy season begins—a time when there is low likelihood they’ll study and take a portion of the Exam.
“We lose more time, and then they’re starting to get more responsibilities,” said Paul. “My hope is if they can get a couple sections completed before they graduate, then when they do graduate, maybe they have one or two sections left and can hit the ground running versus this living in limbo.”