Earmark Podcast | Earn Free Accounting CPE

Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Blake Oliver: [00:00:00] If you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. Download the app. Take a short quiz and get your CPE certificate. Continuing education has never been so easy. And now on to the episode.

Blake Oliver: [00:00:18] Hello everyone, and welcome to earmark. I'm Blake Oliver. It's great to see so many of you joining us live today. Whether you are students or candidates or CPAs interested in how our profession is evolving, I think you're going to like today's discussion. We are talking about the future of CPA licensure and how those evolving rules could impact your career. This is a really important discussion because the accounting profession is facing a significant talent shortage. The Bureau of Labor Statistics projects 136,000 openings for accountants and auditors each year over the next decade, but we're graduating less than half of that number annually. This gap represents both a challenge and an opportunity for a profession to rethink how we bring new talent into the field. We're already seeing states take action. Ohio became the first state to implement alternative pathways to CPA licensure, with a bill signed on January 8th of this year.

Blake Oliver: [00:01:13] Virginia has also signed legislation introducing a new pathway. How will these changing rules affect your career path? What timeline should you expect in your state, and how will they impact your ability to work as a CPA across state lines? To help answer these questions, I'm joined today by leaders from six state CPA societies covering a huge percentage of CPAs in this country. We've got Jeff Brown from the Illinois CPA society, Calvin Harris from the New York State Society of CPAs, Denise Froemming from the California Society of CPAs, Jodi Ann Ray from the Texas Society, Shelley Weir from the Florida. And Jennifer Kreider of Pennsylvania. Throughout our discussion, we invite you to submit your questions in the comments, and we will address as many of those as possible. Let's begin by exploring how licensure pathways are changing across the country. I'm going to turn it over to Jody Anne to give us that big picture. Overview. Jody Anne, welcome. Thank you for joining me. What is going on in? What is going on with the States? What's going on with CPA licensure?

Jodi Ann Ray : [00:02:17] Like thank you so much for having us. We're thrilled to be here with you today. We thought this was a great opportunity to really talk about what's really happening. And there's a little bit of misinformation out there, so we thought we could address that. Today is a great time for our conversation, because there was a updated draft released today of a UA Uniform Accountancy Act exposure draft by both AICPA and Nasba, and hopefully everyone has seen that. I'm sure we'll post it on our sites. Um, what you'll note in that is that it really does mirror the work that states, state societies and state boards of accountancy have been working on over the last few months, as you know, because you focused on it on your podcast many times. Um, this has been an ongoing conversation for many years, so really wanting to address the time and cost of education as an important component of what licensure looks like in the future. So I just wanted to take a second to tell you what exactly, in general the new pathway looks like. So just as a reminder, I'm sure all your listeners know this, but it's a state based license, so there will likely be some small modifications or changes state by state, some nuances. But in general, what we're looking at for that third pathway to licensure is completion of a bachelor's degree with an accounting concentration. And I say that specifically because it's not an accounting degree. It's an accounting concentration. Two years of relevant work experience and passage of the uniform CPA exam. So in this exposure draft it's an additional pathway, um, not taking any of the two existing pathways away in the exposure draft, you're also going to see a shift to individual mobility and some safe harbor language to make sure that CPAs who meet existing licensure requirements preserve their practice privileges and mobility.

Blake Oliver: [00:04:18] So we've got bachelor's degree, we've got, uh, an accounting accounting concentration and two years of experience. That broadly is what is similar among all of the states that have introduced legislation, passed it or are considering it. Is that right?

Jodi Ann Ray : [00:04:38] That's correct. And I do say when I'm talking about the pathway, we all try to say the CPA exam as well, because we have had a couple of questions through the exposure period where someone said, does that mean we're getting rid of the CPA exam? No. Um, the uniform CPA exam is part of the three E's of licensure and will continue.

Blake Oliver: [00:04:58] And those three E's are education exam and experience. Right. So we're keeping all those. Got it. Okay great. So that broadly is what is happening. There are slight differences among what the states are doing and and different timelines. So let's go around the table and hear from leaders in each society what is going on over there. So I'm going to start with you, Jeff Brown from Illinois, uh, where I went to school. Great to see you. What's going on in Illinois? I think you have some legislation that was introduced. Is that right?

Geof Brown : [00:05:36] We do, we do. Thanks for having us, Blake. So our bill is working its way through the legislative process. We look forward to its passage. So, uh, the only major difference for us is our effective dates are January 1st, 2026, for the mobility fix, uh, and 2027 for the additional pathways. Uh, you know, right now we're really focused on communicating elements of our legislation to various stakeholders because we're getting a ton of questions. Should I stop the process? Should I start the process? And we just want to make sure that we're supporting everyone as they're going through this journey and that reaches students, educators, firms. You know, we just think this is a big change for the profession. And we want to make sure that everyone navigates it successfully. The only other thing I would add is we had a rule change that took effect on January 1st to allow individuals to achieve that extra 30 and this bridge period through work experience. So that's a really big change that we're working with our board of examiners to communicate effectively.

Blake Oliver: [00:06:26] Got it. So during this transition time, if I haven't yet gotten the extra 30 hours to get the 150 semester, I could get it through work experience in Illinois, correct?

Geof Brown : [00:06:37] That's correct. The only change it couldn't be duplicative of the one year of experience that you need for licensure. So we're just satisfied that educational requirement.

Blake Oliver: [00:06:45] And you mentioned a fix for mobility. What's that about.

Geof Brown : [00:06:48] Oh that's the piece that Jody Ann mentioned around the individual based mobility. So we do have language that's consistent with the UAA exposure draft.

Blake Oliver: [00:06:55] Okay I'm going to turn to Calvin Harris now from New York. Calvin welcome. Thanks for joining me. Uh, what's going on in New York?

Calvin Harris Jr.: [00:07:05] Yeah. Well, uh, I'll say this will be very consistent. I think you'll hear, uh, New York has not yet introduced legislation. We're looking through what the best pathway, pun intended, will be for us. But I can tell you with the especially with the release of UAA just today. Just this morning. What we do in New York will undoubtedly be in alignment with that as well. Uh, whether we use 120 versus the word bachelors. I mean, those are, you know, fine, you know, fine tuning points. But I think it's very safe to say that New York will end up going in that same sort of direction. Um, one thing I did want to mention, I saw a comment there, um, because and I'm sure my colleagues will may emphasize this as well. It's important if there's one thing to remember is that this is all in addition to 150 has not gone anywhere if there's one bit of misinformation that admittedly gets me a little frustrated is when I hear anyone make some sort of suggestion we're talking about in addition to. We're not talking instead of. If a person still wants to go down that 150 pathway, you can do that if you're already in the pipeline, pun intended, and you're going through. 150 you're you're still on the path. And even for the things that are being discussed, including here in New York, New York will not be behind. I've seen people watch New York. New York will be there, but it doesn't change what you can do right now. What the way you became a CPA yesterday is the same way you can become a CPA today. What we're talking about is an additional pathway. But New York hasn't hasn't filed legislation yet. But but it's but I can assure everyone listening. And beyond that we will be making sure that we're consistent with the rest of the profession.

Blake Oliver: [00:08:41] That is an important point that. 150 is not going away. It is still an option. I have been guilty of that on my show. We talk about the end of the 150 hour rule. But really, what that means is just that an alternative has been created that ends the rule of the 150 hour rule. It's not the only rule anymore, I suppose, is the way we can put it. Right. Um, well, as New York goes, much of the country goes. And we could say that about California. Denise Froemming from California is here from the California Society, um, to share updates from California. And I'm very excited to hear what's going on in California, because that's where I was initially licensed. Denise, welcome.

Denise LeDuc Froemming: [00:09:23] Excellent. Well, thanks. Glad to be here with all of you today. Um, California. Same position. I mean, we all aligned around the flexibility, the time and cost of education that was important to all of us and the mobility piece. And I will say to the legislation, if we could do it quicker, many of us probably would. But we were bound by our legislation and by the process. So that's just what it is for each of the states. For us, we. The bill was introduced by the California Board of Accountancy. They're carrying the bill. Um, well, Assembly Member Irwin is carrying the bill, but the CBA sponsoring it, and we dropped the bill on February 21st. Excuse me. The process goes through October um, 12th, and then open mobility will come in. If the bill passes, which we believe it will, will come into place on January 1st of 2026. And then the pathway piece will come into place July 1st. So we have that six month overlap July 1st of 2026. And then we do have that legacy pathway, the 150 through 2028. And this is of course the framework is in legislation. And the regulations have more of the details to it. So it's much easier to change down the road. We're trying to build a very flexible model. Excuse me, I have a cold or trying to build a more flexible model so that we can future proof it. It's very important to us. Um, and again, it's the pathway, the three requirements and an entrance point with the bachelors and the two years and the accounting concentration with then an opportunity with your masters to offset a year of year of the experience. So very flexible in the whole framework.

Blake Oliver: [00:11:05] Thank you, Denise, and thanks for joining us. Even with the cold I was there last month, so I understand. Yeah.

Denise LeDuc Froemming: [00:11:13] It's going around.

Blake Oliver: [00:11:15] We've also got Shelly. We're from the Florida Institute of CPAs. Shelly, welcome. Florida was the first state to implement a 150 semester hour requirement. So I'm very curious.

Shelly Weir : [00:11:28] I heard that before, Blake.

Blake Oliver: [00:11:30] Every time it gets mentioned, right, that's Florida gets called out for it. Yes, yes, I lived in Florida. I was not a CPA when I lived there. So, you know, I but I've got some skin in the game, I suppose. Uh, I'm curious to know what is going on in Florida. I did not expect that Florida would be in this Vanguard group making changes.

Shelly Weir : [00:11:51] Yeah, no, not a day that goes by that I'm not reminded that Florida was the the first 150 state. All joking aside. So we also have legislation that we have filed today is actually the very first day of legislative session in Florida. So our fun really begins now. We filed our bill in early January. We were one of the first bills to be filed ahead of legislative session. Importantly, we were also one of only 36 bills across the entire state of all 2000 bills that will be heard this session that actually had a committee hearing and passed our first committee stop before session even began. So it just really speaks to the power of our lobbying efforts and the effort that we've been putting in to kind of get ready for this moment, if you will, here in Florida and with my peers across the country, as well, as well as in partnership with our Board of Accountancy, but very similar to my peers on the phone, we have really three primary components of our bill. The first one is introducing new pathways. As Calvin mentioned, we are not doing away with 150 in Florida. We certainly see that as very much a viable path for those that it makes sense for. We're introducing three new pathways where students can get licensed by either having 150, as we currently have a mac degree, plus one year of work experience, a bachelor's degree in accounting, plus two years of work experience.

Shelly Weir : [00:13:20] Or they can do a bachelor's degree in something other than accounting, like data analytics, for example, and get two years of work experience. The common thread amongst all four is that they have to have that minimum accounting concentration. We are also introducing automatic mobility in Florida with the guardrail of. If you've passed the CPA exam and you have at least a bachelor's degree. You have the right to have practice privileges here in Florida, and we haven't touched on this yet, but I know my peers on the phone can also jump in. But licensure by endorsement or reciprocity is also a really important component of our bill. So if someone is already licensed in another state around the country, we want to make it a more seamless and streamlined process for them to get a license in Florida. And so we have set our licensure by endorsement process to mirror that of automatic mobility. Meaning if you have a license that's in good standing from another state, you have at least a bachelor's degree and have passed the CPA exam, you go right to the front of the line. Your application gets approved for licensure in Florida. And our implementation date similar to Jeff, is January 1st of 2026. So we have 60 days between now and May 2nd to get our bill passed. And so we'll keep you guys posted on our progress. Thanks for having me Blake.

Blake Oliver: [00:14:42] Thanks for joining me. And I look forward to hearing more about that. And finally, we have Jen Kreider from the Pennsylvania Society of CPAs. Welcome, Jen.

Jen Cryder: [00:14:54] Yeah. Hi, Blake. Thanks so much for having all of us. I'm thrilled to be here, especially with this esteemed group of colleagues. Um, I am really proud to work with each of these folks. Uh, I almost not a day goes by that, uh, we're not talking. Um, and that's because there's so much happening in the profession. And, um, you know, I feel like it's this kind of little known fact that there's this network of state societies, certainly the six of us, but that extends far beyond the six of us to all of our colleagues, uh, working on behalf of the profession. So licensure has been a great chance to highlight that. But there's so many other places, too. Pennsylvania has not yet introduced licensure legislation, but we will do that soon. Um, we've got our bill drafted, and I think it'll be introduced in maybe the next two weeks. We've got a full time legislature in Pennsylvania. Um, but these first couple of weeks of session were about organizational committee stuff. So we were kind of waiting until it was the right time to introduce the bill. We're just about there. Um, we are optimistic about getting it through this year.

Jen Cryder: [00:16:00] And so we're going to write in effective dates for both the licensure pathway and the mobility fix of January 1st, 2026. So stay tuned. I think we can probably do that. Just like all of my colleagues. We're going to do each of the pathways to licensure 150 credits, masters or bachelors. Any of those will work in PA. Um, we're also putting automatic mobility in. I think it's important to note with the mobility fix, it's a pretty big shift. Candidates care a lot about the pathways, but firms really care about the mobility fix. Over the last two years I've heard that from practitioners on a daily basis. So this automatic mobility fix really takes, um, mobility from a state level concept. So like as long as states are the same state to state, it works and making individual mobility track with the individual. And so that is actually a really big shift that I don't know that we're talking enough about, but I think is, um, positive for the profession. So we've got our sponsors lined up. Our bill will be introduced soon. Um, and it's, you know, it's exciting to see the profession moving together on this.

Blake Oliver: [00:17:09] And thank you, Jen, for helping to set this up. I really appreciate you bringing everyone together for this event. Um, this is it's really helpful. Um, and so okay, so what I'm hearing is right, we've got the pathways, we've got multiple pathways now, bachelors, masters, 150 hours. It's it's actually very flexible. And it's been done that way. It seems to to make it to make the transition An easy for folks. Um, let's address now some of the common concerns, maybe the small differences that are happening and that could, you know, potentially create some issues. At least people have been talking about them. Let's address them head on. So let's talk about, first, the number one objection I hear to these changes. The number one concern I hear from folks, which is, uh, this change is lowering the standard to become a CPA. That's a bad thing. We should not be lowering the standard for the profession. I'm going to go to you, Calvin Harris. How do you respond to that?

Calvin Harris Jr.: [00:18:22] Yeah, I, I respond with a smile so that it it masks my, my anger at the comment first. Um, that's just wrong. I love to say that there's nuance that's just wrong. Um, on many on many levels. Let's start with the basic part that we're essentially reestablishing a pathway that existed for many people. I would happen to be one of them when I was licensed in 1997. Yes, I'm that old. Just don't look it, um, I was licensed under a 120 plus two pathway. That's essentially what I did. And I think my career has done pretty okay because of that. So I think that's just noise, quite honestly. You can look at it a lot of different ways, but I think the most important part is it's reestablishing a pathway that we've had success with in the profession. And if you want to think about it on average, and I see some some comments on there in terms of how differences can exist on the education piece. Essentially, we've been looking at six years of your professional life and exam, plus six years under a 120 plus two, 120 on average.

Calvin Harris Jr.: [00:19:27] Not always, but on average, a bachelor's would be four years of your life. There's a question right up there in there in terms of three international, I get that. But on average it's four years plus two years of your life that equals Six. If we're talking about 150 that before Masters on average, that'll be five years. Yes. There are lots of ways you can accelerate it. Take classes in the summer, accelerate it in high school. But on average, for most people it'll be five years plus one. That's six. That part hasn't changed. Six years, six years. It's how do you want to break it down? How do you want to break it out? How much of it education as Jeff mentioned. And Jeff, please correct me if I'm misstating it. In their case, they're saying that you could have those four years plus one of those years could be from work experience, but then there's an additional one year. We're still talking about six. There's not a lowering of a standard. It's it's really an adjustment and a different pathway pun intended to get to to CPA.

Blake Oliver: [00:20:20] So I love that it is rebalancing education and experience. But we're not taking away any years. It's just the total number of years still adds up. Right. That makes sense to me. Jeff Brown the second main concern. Well, the secondary concern, I guess after that primary concern is mobility. Maintaining mobility, the ability of CPAs to practice across state lines. So for me as an Arizona CPA, to perhaps serve a client in Illinois without having to then get licensed in Illinois, what are we doing to address that in the changes that are being made in Illinois and in the other states that are making this change?

Geof Brown : [00:21:11] Yeah. Blake, I think Jen teed it up appropriately. You know, we're taking individual mobility and putting it on the individual so it makes it more flexible, more accessible. You know, I always like to think of mobility as something that's leveraged by all but not well understood by most. And I think this is a good opportunity for us to kind of reset expectations. And more than anything, we know that CPAs need to retain the ability to work across state lines without extra compliance and complication. You know, honestly, that was the number one concern that we heard from firms. They were like, great work on the pathways, we like it. But what about my practice mobility. And so the fact that we recognize that and answered it in this language, I'm really excited about it. It's really an enhancement to the current practice mobility model and should serve the profession well into the future.

Blake Oliver: [00:21:53] So how does the the language address the mobility issue? Because I think in the past, if I didn't have the same education done, like I might have to submit transcripts, I might have to go and get cleared in order to serve clients in that state.

Geof Brown : [00:22:13] Yeah, in our bill, it takes some of that away. Basically, if you are licensed in another jurisdiction and you had the same educational requirements, the same exam requirements, the same experience, you can come work in Illinois. And I think that's consistent across all the jurisdictions that are moving forward with this.

Blake Oliver: [00:22:27] Got it. So there's is it a requirement for like like because some states have like when it comes to this accounting concentration. Um, you know, some states have a specific list of courses. You have to take a number of credit hours you have to take, and that may not line up exactly with what I've done. So how is that being addressed? Is it is it is the requirement for the accounting concentration more broad now is that.

Geof Brown : [00:22:54] Yeah, it's not for our legislation. It's not diving directly into the concentrations, but it's saying, you know what, Jenn Crider got licensed in Pennsylvania. We're going to assume that they're consistent with ours. And because she's licensed there, she's going to be eligible to work in Illinois. It's that simple.

Blake Oliver: [00:23:07] Got it. So you have a valid go ahead, Jen.

Jen Cryder: [00:23:11] I was just going to say it's essentially decoupling the two concepts. Right. So the way that you got licensed right now is linked to your ability to practice across state lines. We're decoupling the two and saying okay here's the way to get licensed. But mobility, as long as you've got that valid license with the guardrails in place, we're sort of separating the two so that we don't run into the issues that you're talking about there.

Blake Oliver: [00:23:32] Got it, got it. Well, and that takes us to this idea of the accounting concentration versus the accounting major. Shelley, back to you on this topic. What is the difference? And, you know, how are you all addressing this that states have different definitions of what an accounting concentration is?

Shelly Weir : [00:23:57] Well, and you just teed it up so beautifully Blake. You know right now this exists now, right. You don't have to have an accounting major to become a CPA because we all have these required. You know, in Florida, you have to have 36 hours and 30 hours of general business and accounting. And that's different than Jody. And in Texas. And it's different than Jen in Pennsylvania. And while there might be some similarities of what, you know, individually, course wise or content wise is required, it does differ amongst states. And we currently have that under 150. Um, you know, you can become a CPA without being an accounting major, but having that that minimum concentration. And so as we think about introducing these new pathways, we're really not doing anything different than we're currently doing. We're simply saying, you know, in most states and again, there's some nuances amongst the states, but no matter which pathway you choose, the common thread is you have to have this minimum concentration. Now this gets a little bit into the weeds. And so I'll try not to go too deep Blake.

Shelly Weir : [00:25:00] But in Florida for example, what we have introduced in our bill is changing the law to allow these additional pathways. And we have said that the accounting concentration will be defined in rule, which in simple terms means that we can work with the Board of Accountancy to make that determination after the legislation passes. In addition to Denise's point earlier, it allows us to be nimble so that if two years from now or five years from now, we want to change what that concentration requirement is. We don't have to go and reopen our statute and repass another bill. We can just do it in rule with the Board of Accountancy. So that's really, really important. And there's some nuances there amongst the states. But generally speaking that's you know, that's the idea. And the idea is just to have that foundational knowledge that best prepares them to be able to pass the exam and enter the workforce. So I always like to use the data analytics majors, if they major in data analytics or some other non accounting major, they can still have a pathway to licensure.

Blake Oliver: [00:26:07] I love that as a career changer myself. Um, and I love the flexibility you're building with that. It's like um, it's like when you're building an Excel sheet, you don't want to hard code the values into the formulas, right? You want to give yourself flexibility. And I suppose like the law is basically seriously hard coded, it's very difficult to get legislation through even something that you would think would not be particularly controversial. Yeah. It sounded like something. Go. Go for it, Denise.

Denise LeDuc Froemming: [00:26:41] Yeah. I was just going to add that, you know, we are seeing, I think, all of us and we've had this conversation, a number of second career individuals that want to come into the profession. And for me, this for all of us, this new opportunity and being much more flexible, um, allows more to come in. And so that's a real plus. And that's something that we've been seeing a trend over the last couple of years. Sorry, I shouldn't be using my hands like that so much.

Blake Oliver: [00:27:09] No, it.

Denise LeDuc Froemming: [00:27:09] Is a.

Blake Oliver: [00:27:10] Trend. I do too. Yeah. I mean, we're passionate.

Denise LeDuc Froemming: [00:27:13] Passionate.

Blake Oliver: [00:27:14] The other benefit that I see of of allowing the accounting concentration to be flexible or determined by the Board of Accountancy, is that it can adapt. We don't know what skills or classes are necessarily going to be most relevant to CPAs in the future, and this allows that to change without having to go change the law.

Shelly Weir : [00:27:34] So which is exactly how we thought about it, Blake. You know, especially with AI and automation right now, there's very likely going to be class content or things that we really think that CPAs should understand and know that hasn't even been developed yet in academia. So we just want to be nimble and be able to be adaptable along the way.

Blake Oliver: [00:27:53] So going back to Calvin Harris here, um, on the complete other side of this debate about the 150 hour rule and CPA licensure, are the folks like me who have suggested that we aren't moving fast enough when it comes to this, given the scale of the talent shortage. What would you say to those who feel that the changes are not happening quickly enough?

Calvin Harris Jr.: [00:28:20] Yeah, I certainly can understand that frustration. Um, and I will admit before before being in this role as CEO in New York, I would have been as loud as anyone on it. And there's just a lot of things that happen. I had put in the comments earlier, it's always remember with our state based license, you're talking about 55 different jurisdictions, 50 states, plus five other locations. Don't ask me to name them, although I can, but I. But but in some cases we just can't make up for, for for past wrongs. I understand that or past frustrations. I absolutely understand the frustration, uh, in terms of how it is and how it can be. But once you start naming the many, many stakeholders, we're six fairly decent sized states. You've got a, you know, absolutely a majority of most CPAs in the in the profession just on on this call. That's not patting us on the back, but we're still just six. There's still 49 other areas you have to worry about that are involved that actually do licensure plus the AICPA plus Naspa. I saw someone talk about triple A. They they serve an important role. You think about accreditation. You start thinking about Aacsb. You can just start rattling off the alphabet and come up with so many different stakeholders involved to do anything in a consistent way. So even though even those of us that are involved want it to happen as fast as possible, because I don't want there to ever be a barrier for anyone coming to practice in the state of New York.

Calvin Harris Jr.: [00:29:44] We're we're we're like all of our states, but we're very important to the global economy. So anything that prevents that is actually bad, bad for it. So in some cases, we have no reason to not want these things to move forward as fast as possible. But it's also worth noting, even in this environment, maybe it's even more clear in environment like now that moves that are done too quickly can sometimes be worse than not moving at all. So we are we are absolutely hearing it in terms of how fast we're moving or how fast we can move. We're absolutely cognizant of it, but it's also but where I would hope people would also remember is that as we move forward, we also have to be willing to let some of the the older things go. We can't. We can't change what did or did not happen before. But I can tell you that with the stakeholders that are involved now and it may not feel like it, but the the amount of activity that's even happened over the last six months is light speed in the accounting profession. It may not feel like it, and it certainly may not look like it from the outside, but the amount of change that's happening is generational level, because we haven't had these conversations in a generation and we're and and all of a sudden you've got states moving forward faster than we've ever done. So I get it. It's a fair criticism, but it's absolutely not being unheard.

Blake Oliver: [00:31:06] Well, Calvin, I can tell you, as the host of the accounting podcast, having done nothing but read accounting news for the past 7 or 8 years. This is light speed in the profession like it is fast. I couldn't believe it when I when I when I heard it. So congrats to all of you on making this happen. And it is only well, we say only six states that we're talking about right here. And like you said, there's 40 something more jurisdictions. But it altogether you all represent. I asked perplexity this perplexity I how many CPAs collectively are in your in your states? And it said 40% of all CPAs licensed in the US, and that might be a low number. I think it might.

Calvin Harris Jr.: [00:31:52] Be low, because you have people like myself who are licensed in more than one location. My first license was Maryland. I'm also licensed here in New York. I have a ton of members in New York who also licensed in Florida. You know, we're somehow we just leap over five other states, and New York and Florida seem to be bordered to each other. And so but, you know, you have a lot of dual and overlap that way, too.

Blake Oliver: [00:32:17] Thank you. Calvin. Turning back to you, Jody and Rae, let's put this in context of the overall talent shortage, the need to create more accountants meant more CPAs. One of the criticisms of this change has been it's not going to make a big enough difference. It's not enough. And the research that's been done indicates to me that it will make a change, but not it's not going to solve the problem all by itself. I think MIT Sloan participated in a research study that found that when the 150 hour rule was implemented, when the education was increased to five years, that we had a drop of 14% when it came to new CPAs. And if we look at how many CPAs we need versus how many are retiring, it's going to need to be more than 14%. So what's your take on this? Right. What is is this too little, too late? Is it not enough? Is it going to solve the problem? What else do we need to do?

Jodi Ann Ray : [00:33:31] Well, thank you for the question, because it's a really fair point. And this is not enough. This is a critical component to addressing a really important challenge that we have, and that is reducing barriers and addressing time of cost of education. But there's a lot more we need to do. And so let me just hit on a couple of those really quickly. Um, the first thing that I want to note is that we have come a long way in this process. And, you know, we're all working very hard, but I want to give a shout out to our state boards of accountancy. Um, and they're partnering with us because none of us can do this alone, and none of us have done this alone. We have worked in concert and listened to the feedback that we've gotten the profession to pursue these changes. So one thing I want to say is that the UAA process is very important. And the reason it's important is because it provides model language and model law. And so that is a guide that states can use to implement changes. And that means we don't get tripped up with some of the nuances between state that might in fact impact someone's license or impact mobility. Um, that's a really important point.

Jodi Ann Ray : [00:34:42] The second point that I want to make is basically this is not a once every 20 year discussion. One of the things that we've been advocating for very strongly is a regular cadence to a practice analysis that looks at all the requirements of licensure. And so that's something that isn't in place now that other professions do have, that we think is critically important as we move forward, because the way the environment is changing is very fast and so it's difficult to keep up. The last thing that I want to say is Shelley and I had the great honor of serving on the National Pipeline Advisory Group, or unpack. And, you know, that's one of the things that we spoke about. There are six key themes that came out of N.pag, and all of them need to be addressed. This addressing cost of time of education is one. We also have to make the academic experience more engaging. We have to make sure we're growing the support that we have for CPA candidates. We have to expand access to underrepresented groups. We have to enhance the employee experience. And that includes everything, including salaries. And we have to tell a more compelling story. So is it enough? No. Is it critical? Yes.

Blake Oliver: [00:35:57] Is it enough? No. Is it critical? Yes. I think that's a great way to put it. Thank you, Jody and Jen Crider turning back to you. Now where do we go from here? What are you doing in Pennsylvania? What what you know what what is next? Um, I mean, we haven't quite wrapped this up in a bow, but given the pace at which you all are moving. It seems like, hey, by next year we're going to have this this done. And if you add in Ohio and Virginia, that's like probably that's more than half the CPAs will now be in an alternative pathway situation.

Jen Cryder: [00:36:32] Yeah. Yeah. Lots of states have bills introduced at this point with more coming. So you're right. It's a fair point. Um, making the change legislatively is the first step. And in many states that's a really difficult step to take for all the reasons we've talked about. But I do think that a lot of the hard work comes after that point, because what's happening is we're introducing a lot of uncertainty into a process here that's already pretty confusing for candidates. So as each state change their changes, their model has different effective dates. There's a lot of nuance that comes out of it. For better or worse. This process is complicated, and we're making it a little bit more complicated as we shift to the to adding the extra licensure pathway. So all of I know I can speak for my colleagues when I say all of us, as state societies are working really hard to communicate really clearly with candidates and students about what's changing and when and what to expect. We're also thinking a lot about how to minimize the pain for firms. That goes back to the mobility issue, because in these periods of transition, it is possible that there could be more confusion and more pain. So we've always been that resource for the profession, regardless of the issue. And we'll continue to do that on licensure. Um, but the communication and clearing up all the confusion here in some ways is harder than convincing a bunch of legislators to pass the bill, because I think you said this a minute ago. It's not a controversial change politically. We see support on both sides of the aisle. Um, so we just have to get the profession there and bring all of our stakeholder groups with us.

Geof Brown : [00:38:12] Um.

Blake Oliver: [00:38:13] One thing that I was not aware of Thereof until this whole discussion began really in earnest. A few years ago was some of the unintended consequences of opening up CPA licensure laws in the different states. And I see you all are nodding your heads. There have been attempts in the past to deregulate our profession. And Shelly, I'm going to turn to you for this one. Um, you know, what are the unintended consequences of making this change? What are the the threats we may not be aware of as CPAs when we start changing our licensure rules?

Shelly Weir : [00:38:51] Yeah, it's a great question. My my colleagues and peers that are listening around the country are probably chuckling knowing that you were going to toss this to me because I'm always the one that's like, okay, like we got to be careful, guys. Um, you know, in in certain political climates, um, and it really is a bipartisan issue, but it's especially prominent in the what I call the deep red states like Florida. Um, and so my peers around the South, Jordan as well. You know, there is kind of this broader to your point, Blake, deregulation and licensure environment. And it's rooted in in it being a pro-business and being business friendly, meaning the Republican Party by and large, wants to take away red tape and bureaucratic barriers that might exist for people to become licensed and get to work in various states. And a lot of times, they may not be targeting our profession specifically for these efforts that they're that they're putting forth. However, we get kind of coupled into it together because of the broader occupational licensing reform. So when you open up your statute, it comes with inherent risk, because once you have your statute open, anybody can start introducing language or amendments or changes during your legislative process. And they might do it at the 11th hour. Like what, my dear friend Ron in Louisiana experienced a couple of years ago. And so the value of the state CPA societies, and both the offensive and defensive posturing that we do to protect and promote the license in our respective states is incredibly important, because in many of these situations, there are these unintended consequences where we get roped into something that we may not be the target of specifically, but is a larger deregulation movement.

Shelly Weir : [00:40:45] There are some very scary bills that have already been filed in several states this legislative session that could cripple our regulatory infrastructure if we're not careful. And the other thing I would mention, Blake, and this gets a little bit in the weeds again, but it's important for especially the students and the candidates on the phone to understand. I think Jen said this a minute ago. You know, you're dealing with 55 different jurisdictions who have different timing on both their legislative session or what their particular process is for rules. So, for example, Ohio has a year long legislative session, Michigan has a year long legislative session, Jodi Ann has a 60 day session every other year. So our window and sort of the timing of when the societies and the state boards can both introduce and pass legislation is very dependent on what's happening in our states. So I know Calvin's hot button question is the lowering of the standards. My little nitpicky thing is I get really irritated when I see things online about, oh, such and such state is following this state or following that. It's like, no, no, no. There's been 30 plus states working together for the better part of the year on all of these concepts, all of our peers around the country who I'm giving a giant hug to right now that aren't on the phone to advance this together and do it with as minimal pain as possible. We just have to do it within the time frames of when our state legislative session or our rulemaking process allows.

Blake Oliver: [00:42:19] What happened in Louisiana? Can you tell me more about that?

Shelly Weir : [00:42:23] Yeah, and I wish Ron was on because he could speak more eloquently than I. But, you know, in Florida, for example, we've seen similar bills where they just come in and they want to either eliminate an occupational license or eliminate a particular regulatory board altogether, or in some instances, they might be targeting the entire division that regulates occupational licensing. And so you see it come in a couple of different formats. Or Blake, I always think of it like an onion layer. It's a layering of power from the regulatory boards. And it might show up in something like, okay, well these occupations, um, if one person gets licensed here and the board wants to deny their license, we're not going to allow that. They're going to automatically get to the front of the line. And it doesn't matter what their qualifications are, and it just continues to take away power from the regulatory board until you delayer it enough where there is no point to be regulated anymore. And then we all lose those three letters behind our name, which we all worked hard to get.

Blake Oliver: [00:43:25] There's some irony there that by trying to streamline the licensure, we actually can open ourselves up to too much streamlining of the licensure. Um, doesn't seem fair after all this effort to then have somebody try to sneak in a change to then take away the power of the Board of Accountancy to actually regulate, um, when you're trying to do a good thing.

Shelly Weir : [00:43:54] Yeah, it's very tricky. But again, that's why we exist, right? At our core. We're all lobbyists, we're all advocates for the profession, and it's our job to protect the license and our given state.

Blake Oliver: [00:44:06] Yep. Denise, Over to you. Um, California has a huge amount of influence on what happens in the profession, given the sheer number of CPAs licensed there. The people who live there, the size of the economy. Why is it necessary for California to coordinate with all the other states? You can just do your own thing, right?

Denise LeDuc Froemming: [00:44:31] No we can't. Although what people think we cannot, we need to work with everyone else. Um, so. And that's never lost on me. I will tell you. I, um, really appreciate this group and all the states that we worked on. You know, with all this, um, the regulation and legislation and just we all had to work together on the common tenants, right? Because we were looking at what are those items and pieces that we have to coalesce around flexibility, the timing, cost of education to make sure that we're all moving in the same direction and it shouldn't be lost that this is many years in the making. It's not that we just said, oh, this is happening and we're going to all start working together now. We have been talking and having conversations for years, just looking at where we need to move, where can we work together. And even with the California Board of Accountancy, that's another piece, as Jodi Ann said, that we have to make sure that we are all linked together and moving forward. So one of us, but one of us does impacts the other. And even as Shelly had said, when you're looking at deregulation, we talk about that and where we have to make sure that we have conversations and are moving in in the same direction. So although we'd like to think that one of us can make a decision and not impact the others, we are all connected in some way, and our CPAs are working across all the state lines, especially after Covid, and they need practice privileges. And so that has to be something that we take into consideration. So even though the wind may blow west to east, we still have to make sure we are collaborating with everyone.

Blake Oliver: [00:46:13] Great question.

Denise LeDuc Froemming: [00:46:14] Thank you for bringing it up.

Blake Oliver: [00:46:15] Yeah, and you know, I was grateful that when I, when I moved to Arizona, I was able to, through reciprocity, get my license in Arizona and and not be stuck with mine in California. Although I love California. Don't get me wrong, I am a Californian. I was born there. But, you know, it's nice to have the license in the state that you're living in. I mean, you're supposed to. Right? And I didn't have to maintain two. Absolutely. Jen, I'm going to let you close out this section of the panel. Um, you know, give us sort of take us bigger picture. Right. Um, what does this change mean to you, to your society members? Your institute members? Where do you see us headed?

Jen Cryder: [00:46:59] Um, I think I want to pick up where Denise left off and say we are at the point that we are as a profession with this change, specifically because of the relationships that all of us have built for a lot of years. I would say that the six of us and our other state society colleagues have been working on this, including ACPa, Naspa, and the state boards for more than two years. So it feels like it's very accelerated right now, which is true, but it's because of a lot of work and collaboration for a long period of time. I think it's brought us to a once in a generational conversation. Calvin, you've started looking at that, and I've picked it up and started using it. Um, this conversation around licensure started with some acute pain 3 or 4 years ago around talent. Um, and from my vantage point, some really positive things have come out of it because everybody got engaged in the conversation around talent, and it turned into this almost existential question about how are we going to build the CPA of the future to serve families around the kitchen table businesses on Main Street in the community, the capital markets.

Jen Cryder: [00:48:08] That's what CPAs do. They they power, trust, growth and opportunity in each of those different spaces. And so what I have seen and observed is the profession coming together to really think about what are the ingredients necessary for CPAs to be successful in that future environment. Um, I'm a fan of a little bit of healthy debate and conflict in that process, and we've all seen that, and all of us have taken part in it. And I, I appreciate the role that you've played in that. I think it is getting us to better answers, and I'm really proud of how the profession has really come together to make this change. As I look into the future, there are no shortage of both challenges and opportunities on the horizon for the profession. And if we can all do that here with licensure, I can't wait to see what we can all do with, you know, make your list of the ten next things that we're going to tackle together.

Geof Brown : [00:49:01] Awesome.

Blake Oliver: [00:49:02] Well, one of those things is working conditions in accounting, the hours and the pay. Um, when I talk to accountants who have left the profession, that is often what they cite as the issue. I was asked to work too many hours and I could get paid better in doing something else. And that is the question from one of our attendees here today. Is anyone leading the effort to improve conditions in accounting? Computer science careers? Have a $30,000 plus greater salary, don't work 60 plus hours a week, and have no four part testing requirements. So I'm going to open that up to anyone who wants to take that question.

Denise LeDuc Froemming: [00:49:52] I can I'll kick it off and get my colleagues to help me.

Blake Oliver: [00:49:56] So awesome.

Denise LeDuc Froemming: [00:49:57] I would I hear from and I hear the question it's fair, totally fair. I hear from a number of firms. I can't name them right now, but there are a number of firms out there within California, and I know many of the other states who are working on how can they have better, more balanced working conditions, some during busy season. Even veterans that we have in California during busy season are working 40 hours. So there is that effort out there to have a more balanced lifestyle, and also to allow for individuals to work where they want to work and have opportunities to find additional work in a topical area that makes sense to them. So there is that is happening out there. I will tell you that I don't think we and I'm going to say Cal CPA probably doesn't do a good enough job showcasing those. We do have firm crawls that we do, and they do go to firms that and they aren't pub crawls. So no alcohol there. Firm crawls. But they do go to firms that do have more of that balance. Um, work life balance. Right. So there is that out there. I just don't think we do a good enough job showcasing it.

Shelly Weir : [00:51:12] Shelley, I want to shout out that I didn't want to interrupt anybody. Sorry.

Blake Oliver: [00:51:18] We'll go to, I think, Shelley and then Jody.

Shelly Weir : [00:51:21] Awesome. I was just going to mention, you know, what I always think of, like when I think of the salaries and the work life balance is we have to address the root cause. And a lot of that comes with business model transformation and firm transformation. Right. And so, you know, I know a lot of us CPA societies around the country, AICPA, also with PwC and Jen Wilson, has done a lot in this space as well, really trying to get there and educate our firms and help them strategize on how they can change the particular business model that they are operating within, so that they can pay more and have a better work life balance. And it's hard it's hard to do that. And and you're dealing with decades old in some cases, infrastructures that are not easily changed overnight. But all of us have to do our part. You have a role, Blake. You have to continue to influence that conversation. We at the state level have to continue to educate our members. Aicpa nationally has to continue to do their part. And if we can all work together, I do think we can start to move the needle a bit, but we got to address the root cause.

Geof Brown : [00:52:26] Yeah.

Blake Oliver: [00:52:28] Jodi, an.

Jodi Ann Ray : [00:52:28] Really great point. Very similar comments. I do want to thank the AICPA because, you know, we've been talking about these issues for a long time, and they heard our concerns. Aicpa Council introduced that resolution to establish the National Pipeline Advisory Group. And, you know, they didn't do a cursory review. It was a deep dive looking at all the research that was out there and all the components that needed to be addressed, not just one. And so this is a really important area. I think when we think about it, we need to be thinking about two things not only the business model transformation, which Shelly was spot on about, but also what is that support look like for CPAs in an industry? Because, you know, the model of how people entered the profession has changing greatly. And so we need to make sure that we have that balance and providing more tools for firms. You know, AICPA has also done some work around looking at, you know, how to really eliminate that crunch around busy season for those in public. I think that's really important work. But also, you know, getting more tools in front of them to assist them with some of their key challenges is something that we're all really focused on.

Blake Oliver: [00:53:40] My hope is that technology, and specifically artificial intelligence will make a big difference when it comes to ours, because when I entered the profession, I remember going into the office and on my first day I went into the storage closet to get my supplies, and there was a giant bin of calculators with tape, ten keys just stacked on top of each other, upside down, every which way. It was a pile of them, and nobody had them on their desk anymore. And that change had actually, you know, not long ago happened because they hadn't yet thrown out the calculators just in case. And I feel like that made a big difference in the profession. Right. We actually literally are no longer crunching numbers. And so my hope is that I will allow us to do more in less time, and that will assist with this transformation of the business model. Calvin.

Calvin Harris Jr.: [00:54:44] Yeah. I want to just kind of lean into what you're saying there. And I see a question that seems to be on that as well, that we see all the time where the profession changes. And I think it's worth noting, particularly with this, with this group, that we're leaning more and more into technology. Hopefully that also helps on the front end in terms of making the profession more appealing. I think it's also worth noting it wasn't one of our misconceptions related to licensing, but just the misconception in general that, you know, technology or AI will eliminate accounting. I think that's I think that's just a bit myopic in thinking, you know, because I like history. You can you can see a, um, an abacus on my, on my desk. But that was at one time the, the height of technology.

Blake Oliver: [00:55:25] Yeah. I think Calvin froze up a little bit. There. There we go.

Calvin Harris Jr.: [00:55:31] And you don't do any of that anymore? Yeah. Oh, thank. Thank you. You know.

Blake Oliver: [00:55:35] You're.

Calvin Harris Jr.: [00:55:35] At that point, the abacus was the height of technology. And at one point, the abacus was the height of technology. Um, and the profession changed. It adjusted. At one point, we were writing on paper. You don't need that whole room. Things will continue to change. Um, with that as well. But I think where that also presents the opportunity is for people as they're entering accounting. This is what I say to students all the time. If you've been considering it. You know, oddly enough, you don't have to be good at math anymore. As long as you're a great problem solver and you have the ability to leverage technology very well, you will have a place in the accounting profession. It's going to be there for you.

Blake Oliver: [00:56:08] I think that is a great way to wrap up that topic. I want to turn to Jeff Brown of Illinois. For those who have joined us today, who are listening on the podcast, who are watching on YouTube or LinkedIn, what are the next steps for them? What can they do to help move the profession forward, to help you in what you're doing to assist their state society? What is next?

Geof Brown : [00:56:33] There's a couple of things that are top of mind for us, Blake. You know, one of the things that's really, really important is that changing these pathways isn't going to cause aspiring CPAs to fall from the sky. There's still a lot of work that we have to do to focus on working conditions, relevancy, salary, all those things to make sure this change sticks and ultimately makes the profession better. You know, if you're a candidate or anyone out there that's confused, you have questions on the additional pathways or anything else. Reach out to us. You know, state societies are here to help students, candidates and professionals alike. So leverage us to your benefit. You know, I think we also need to take stock of the fact that everyone in the profession has a responsibility to get the right information to aspiring CPAs. So we need to use our respective platforms to help steward the next generation into the profession. I take that responsibility seriously, and it's a message that we share with firms and corporate entities all the time. We also see state societies as a force multiplier on what each individual CPA does, which is a great thing for us. So there are a lot of tools like those put out by the MPG with great suggestions if you're unsure where to begin, and if you want to engage in a conversation like this about the future of the profession, get involved with your state society. That's the best way to get a seat at the table and really have an impact for the future.

Blake Oliver: [00:57:43] Thank you Jeff. Thank you Denise, Jody, Ann, Calvin, Shelly and Jen, it has been such a pleasure to chat with all of you today. Thank you for sharing your knowledge, your information, your news. Uh, I think this was really helpful. It was helpful for me, and I hope it was helpful for our listeners. Stay tuned for a brief message about how to earn CPE credit for having joined us today, and I hope to see you all around soon on another earmark event. Thanks, everyone! Thanks for listening. I hope you enjoyed this episode and that you learned something new. And if you did, wouldn't it be nice to get some CPE credit for it? Well, I've got great news. My new app, earmark CPE, offers free Naspa approved CPE credits for listening to podcasts, including this one. Visit earmark Cpcomm to download the app, take a short quiz, and get your CPE certificate. That's earmark Cpcomm.