Research

The 150-Hour Requirement and the Number of CPA Exam Candidates, Pass Rates, and the Number Passing

This study examines the association of the 150-hour education requirement with the number of CPA exam candidates, pass rates, and the number passing. Proponents of the 150-hour requirement argue that additional education produces higher quality students who are better prepared for the CPA exam and accounting careers. Opponents argue it imposes opportunity costs on students and costly barriers to entry into public accounting. On average we find a large drop (36%) in the number of candidates in each state taking each exam, a small increase in pass rates for first-time candidates only (3%), and a large drop (31.5%) in the number passing the CPA exam after the 150-hour requirement. Our results may be useful to accounting educators evaluating the success of their 150-hour programs, state boards considering revisions of their 150-hour requirements, and public accounting firms setting strategies to achieve audit quality.

Publication Information
Article Title: The 150-Hour Requirement and the Number of CPA Exam Candidates, Pass Rates, and the Number Passing
Journal: Issues in Accounting Education (Aug, 2006)
Vol. 21, No. 3
Author(s): Allen, Arthur C;  Woodland, Angela M
Researcher Information
    
Allen, Arthur C
Allen, Arthur C
Associate Professor
Expertise:
  • Financial Accounting
  • Governmental and Nonprofit Accounting
Accountancy
HLH 445 J
P.O. Box 880488
University of Nebraska-Lincoln
Lincoln, NE 68588-0488, USA
Phone: (402) 472-3275
Fax: (402) 472-4100
aallen1@unl.edu