Dive Brief:

• California’s CPA pathways bill on Monday advanced to the state’s Senate Appropriations Committee on a unanimous (11-0) vote by members of the Senate Business, Professions and Economic Development Committee, according to the California legislature’s website. The action puts California a step closer to joining the more than 20 states that have passed legislation providing alternative routes to CPA licensure that don’t require 150 college credit hours, effectively a fifth year of college.
• The move comes about five months after the bill, (AB-1175), was introduced in the legislature in February by Assemblymember Jacqui Irwin (D-Thousand Oaks), who said the legislation was critical to opening up “more opportunities for aspiring accountants across California,” according to a statement included in a March press release from the lawmaker.
• “Passing the Senate policy committee was a key step, and we remain optimistic about the bill’s progress,” Denise LeDuc Froemming, president and CEO of the California Society of CPAs, said Tuesday in an emailed response to questions. While the next legislative actions for the bill haven’t been scheduled yet, to become law this year the bill must pass the legislature by Sept. 12 and be signed by the governor by Oct. 12, she said.

Dive Insight:

The Golden State’s bill is being closely watched by many in the accounting industry due to the large number of CPAs and firms that will be impacted given the state’s population, according to Robert Pawlewicz, an assistant professor of accounting at the University of Richmond. “California will be a really big deal when they pass their legislation,” Pawlewicz told CFO Dive. California has about 65,590 active CPAs and is home to 6,611 accounting firms, according to the California Board of Accountancy. 

The total number of states that have passed bills providing new routes to CPA licensure has risen to about 22, with Pennsylvania and Delaware state legislatures passing bills last month, CFO Dive previously reported. While some states like Florida and Maine have seen their legislation foiled by opposition this year, California’s bill has drawn strong support to date. 

“AB 1175 has not received any opposition, and we do not anticipate any. It has received unanimous support throughout the legislative process,” Froemming said.  

Back on May 5, California’s bill was passed by a unanimous vote (77-0) of the state Assembly. As proposed, the new legislation establishes a new route to licensure beginning Jan. 1, 2027, enabling applicants to satisfy licensure requirements by completing a bachelor’s degree, two years of work experience and passing the CPA exam. The existing requirement structure that includes 150 semester hour credits, one year of experience and passing the CPA exam would sunset on Jan. 1, 2029, according to a July 1 analysis of the bill from the Senate. 

The bill also contains provisions tackling the process that CPAs licensed by other states would need to go through to work in California. In place of the current approach to mobility that requires the California Board of Accountancy to determine whether a prospective CPA’s education and experience meets a standard of “substantial equivalency,” the board would instead “accept a license issued in another state as authorization,” according to the analysis.

There are several caveats: accountants licensed by other states must still be employed by a firm registered by California’s board, and CPAs licensed by states deemed by the board not to have comparable licensure requirements must have a valid license for at least four of the past 10 years and have a bachelor’s degree or higher with an accounting concentration.

The provisions updating CPA interstate practice privileges aim to support licensure modernization and minimize disruption for both consumers and professionals, Froemming said. 

Keep up with CPA licensure changes with CFO Dive’s tracker on the topic here.