Significant progress was made at the July California Board of Accountancy (CBA) meeting to address key challenges affecting the CPA pipeline and the profession’s ability to meet consumer needs. These efforts are part of the CPA Next initiative, which aims to preserve a cohesive interstate licensing system and create more flexible licensure paths that better align with the profession’s current realities.

After hearing an update on various working group efforts to develop national concepts and reviewing various qualitative and quantitative data collected by CBA staff, the CBA voted to direct staff to move forward with proposed changes and begin drafting necessary legislative and regulatory language to implement them.

Modernizing CPA Mobility

The CPA Next initiative seeks to decouple the rigid licensing framework from the definitions for mobility and substantial equivalency. This will allow the profession and regulatory stakeholders to explore more adaptable licensing pathways that better reflect current realities. This change is necessary to ensure minimal disruption to the cohesive cross-border practice ecosystem as California and other states consider alternative licensure pathways.

Each option for modernizing mobility effectively achieves the objective of updating CPA mobility. This flexibility allows states to select options that best suit their specific needs while still supporting a cohesive interstate practice framework.

Of the options presented, the CBA went with Automatic Mobility, believing it offers efficiencies for licensees, staff and consumers without removing core consumer protection provisions. It also aligns with the mobility framework of several states and is similar to California’s four-in-10 mobility provision.

This approach also provides the CBA with the ability to remove no-notice mobility for licensees from states that pose a risk to California consumers. These safeguards ensure that the CBA can maintain appropriate oversight of accounting services provided to California consumers, regardless of where the CPA is licensed. The CBA intends to build on the existing consumer protection provisions to further clarify that it has the authority to revoke no-notice practice privileges for states that adopt licensure requirements posing a risk to consumer protection.

Opening Alternative Pathways

The CBA also advanced alternative paths to licensure to address the time and cost constraints many candidates face when working toward licensure:

Pathway 1:

• Bachelor’s degree with a concentration in accounting

• Two years of professional experience

• Passage of the Uniform CPA Exam

Pathway 2:

• Master’s degree in accounting or tax (or laws in taxation)

• One year of professional experience

• Passage of the Uniform CPA Exam

Additionally, the CBA directed staff to implement an expedited process for assessing candidates’ education as part of the licensure process.

This new approach refocuses licensing on the core components—education, exam and experience—while leveraging the expertise of those who oversee each component. By relying on existing systems and infrastructures, the framework becomes simplified with well-defined roles, offering candidates more clarity and flexibility for a streamlined entry into the profession. It also provides staff with a more efficient licensing process. Crucially, it maintains the necessary rigor for candidates to demonstrate minimum competency before entering the profession.

The approach also shifts education requirements from strict unit thresholds to degree conferral, ensuring long-term sustainability as higher education evolves. This empowers the academic community to develop curriculums that are current and relevant.

Next Steps

Though mobility and licensing frameworks were approved, CBA staff emphasized these actions don’t prevent the CBA from considering new national concepts that might come up. They have the rest of 2024, and possibly through the legislative process, to adjust the California language as needed.

Further, the CBA has been working with AICPA, NASBA and other states to ensure the process is transparent and that all stakeholders are well-informed. The CBA staff will be working on draft language to present to the CBA at their September meeting.

CalCPA’s Role and Feedback

Prior to the CBA meeting, CalCPA submitted a comment letter outlining feedback and support for advancing the proposed options to modernize mobility and alternative paths to licensure. During the meeting, CalCPA provided public testimony to help inform the CBA and acknowledge the CBA’s efforts, data-driven research and extensive stakeholder engagement.