Information about California’s Recently Introduced Legislation

The California Board of Accountancy (CBA) is sponsoring legislation as part of the 2025 legislative session to enhance the requirements for CPA licensure and modernize mobility in California. Assembly Bill 1175 was authored by Assembly Member Jacqui Irwin and introduced February 21, 2025.

The CPA licensure requirement enhancements of the bill make the pathway to licensure more flexible. The provisions seek to focus the educational requirements on the degree earned, instead of a particular number of units. Elements of the bill are:

As is displayed in the first box, the minimum educational requirements now consist of a bachelor’s degree with an accounting concentration (see the Related Regulations section for more details). The elimination of the 150 total unit requirement addresses the potential barrier to entry into the profession that a costly fifth year of school poses, especially within minority communities. Flexible licensure requirements create opportunities for a more diverse and skilled workforce to enter the profession. Having enough CPAs to meet the high demand for critical financial services in the future is paramount to ensuring consumers have access to competent and ethical CPAs they can trust.

The mobility provisions of the bill seek to create an open mobility framework instead of relying on the substantial equivalency of each state’s licensure requirements. This would allow states to alter licensure requirements to suit their needs without disrupting mobility. Should the CBA determine a state is not providing the proper consumer protection, it could remove the ability for that state’s licensees to practice with no notice in California. This is in addition to the safeguards already in place regarding practice privilege for out-of-state licensees.

BACKGROUND

The CBA approved a legislative proposal in the fall of 2024 to enhance the requirements for CPA licensure and modernize mobility in California. The proposal was the culmination of many months of collaborative discussions as part of the CBA’s Students Understanding the Requirements to be a CPA Project – or SURE CPA Project for short.

There were extensive information-gathering activities including surveys, townhall meetings, focus groups, and presentations from the American Institute of Certified Public Accountants (AICPA), National Association of State Boards of Accountancy (NASBA), and the California Society of Certified Public Accountants (CalCPA).

• Click here to read in greater detail about the CBA’s activities from 2023-2024 referenced above that led up to the proposal.

FURTHER DETAILS

The CBA began broadly discussing potential changes to the licensure model at the January 2023 CBA meeting with the announcement that studying the educational requirements would be a priority for that year. At the March meeting, a multi-year project was proposed, with the original goal being to clarify the educational requirements and make them more straightforward. The project was named Students Understanding the Requirements to be a CPA (SURE CPA) Project.

Information gathering began that spring and continued throughout the year with outreach events and an online survey where students, recent graduates, and CPAs answered questions about how well they understand the requirements, what they may not understand, and their format of preference for how they like to be informed (videos, podcasts, infographics, etc.).

The results of this information gathering were presented at the January 2024 CBA meeting. One of the initiatives under consideration was Education Review Efficiency. At CBA outreach events, students expressed anxiety in the uncertainty of not knowing which of their classes would be accepted, and in what subject area they might fit in. This aligned with the SURE CPA Project’s goal of clarifying the educational requirements, so the CBA began looking into specific ways to enhance the requirements by streamlining them and alleviating the uncertainty felt by students.

Conversations continued about the educational requirements at the March meeting, when the CBA instructed staff to contemplate possible alternatives to meet the 150-unit requirement for CPA licensure. At the May meeting, staff presented a potential Licensure Framework that included a pathway to licensure with a bachelor’s degree, two years of general accounting experience, and no total unit requirement. The CBA also invited representatives from NASBA, AICPA, and CalCPA to the meeting to give presentations about what their organizations were doing to increase the number of candidates in the CPA pipeline.

After hearing the national and state perspectives, the CBA directed staff to gather feedback about the framework and work collaboratively with a cross-section of stakeholders including other state boards of accountancy, accounting firm representatives, educators, and students.

Staff held several townhall meetings with these groups in June 2024. Executive Directors from 24 other state boards of accountancy and four NASBA Regional Director participated in the sessions. The interactive meetings provided valuable input into how other states, educators, and students felt about the proposed Licensure Framework and about the importance of taking action. The reaction to the framework was largely positive, with some states expressing they wished the potential implications to mobility also be addressed.

The CBA launched an online survey over the summer to gather additional data around an alternative licensure pathway and seek input on mobility and interstate practice. The survey was taken by nearly 8,000 individuals, the vast majority being CPAs, and the results were clear. Nearly 90% of respondents said a bachelor’s degree in accounting should fully meet the educational requirements for licensure, and 76% supported dropping the 150 total unit requirement.

The data was presented at the July meeting. At this point, the CBA instructed staff to draft a legislative proposal for consideration at the September meeting.

CBA MEETING DISCUSSIONS

• Click here to watch CBA meetings from 2023-24 where the SURE CPA Project and legislative proposal was discussed, and read the complete papers on the topics presented at the meetings. Click on the month to watch the meeting or click on the item number to read the paper.
January 2023 (begins at 2:45)
Project introduced as part of Leadership priorities for 2023

March 2023 (begins at 1:50)
(CBA Item II.J.) Proposal and foundation of SURE CPA Project – pages 104-107

May 2023 (begins at 2:10)
(CBA Item II.D.) Laying out phases of SURE CPA Project – pages 99-103
(Attachment 4) SURE CPA Survey questions – pages 113-117

January 2024 (begins at 4:43)
(CBA Item XI.B.2.) Presentation of Survey results and proposal of new SURE CPA intiatives – pages 169-176

March 2024 (begins at 11:45 and 2:34:35)
(CBA Item II.G.) California and National initiatives regarding CPA Pipeline – pages 34-36
(CBA Item XII.A.2.) History of the150-unit requirement, California’s Mobility program, and their connection – pages 172-177

May 2024 (begins at 1:27)
(CBA Item II.C.1) CPA Pipeline data – pages 34-40
(CBA Item II.C.5.) Proposal of new Licensure Framework and pathways – pages 41-54
(Attachment 3) Draft Licensure Framework – page 55

July 2024 (begins at 1:38:23)
(CBA Item II.D.2.) Overview of information gathering activities – pages 1-68
(Attachment 1) second Survey results – pages 10-44
(Attachment 2 ) Information gathered at Townhall Meetings – pages 45-47
(CBA Item II.D.3.) Mobility and Substantial Equivalency – pages 69-88
(Attachment 1) Mobility Framework – page 80 (CBA Item II.D.4.) Ideas for changing 150-unit requirement – pages 89-115

September 2024 (begins at 31:06)
(CBA Item VI.H.1.) Mobility Legislative Proposal – pages 34-64
(CBA Item VI.H.2.) Licensure Requirements Legislative Proposal – pages 65-92
(CBA Item VI.H.3.) Overview of Legislative Activities for Proposal – pages 93-102

November 2024 (begins at 20:50)
(CBA Item VIII.E.1.) Further info about Mobility Legislative Proposal
(CBA Item VIII.E.2.) Implementation Timeline options for Licensure Requirements Legislative Proposal

January 2025 (begins at 4:38)
(CBA Item 11.A.2.) Accounting Concentration subject areas and minimum unit requirements

LEGISLATIVE PROCESS

Now that the legislative proposal has been officially introduced as Assembly Bill 1175, it begins to work its way through the legislative process. The 2025 legislative session happens during the spring and summer, with the ultimate deadline of September 12 to pass bills to the Governor’s desk. The Governor has 30 days to sign or veto bills once received.

A timeline for possible implementation of the new licensure requirements and the phasing out of the current (legacy) requirements was determined at the November 2024 CBA meeting. The graphic below shows how if the law is passed in 2025, it would take effect on January 1, 2026. The mobility provisions would begin at that point, but there would be a six-month implementation window before the new licensure requirements would take effect on July 1, 2026. The legacy requirements would remain as an option until December 31, 2028.

RELATED REGULATIONS

Assembly Bill 1175 was written to allow for certain details to be established in regulations. The CBA has begun having discussions about those details, including the unit requirements for the “accounting concentration.” After engaging in stakeholder input, the CBA is considering the following to make up the accounting concentration:

• 24 semester units of accounting
• 24 semester units of business
• 3 semester units of ethics

NATIONAL PERSPECTIVE

California is by no means the only state moving forward with potential changes to the CPA licensure requirements. Approximately 10 other states currently have pending legislation that would create a new pathway similar to what California is proposing. The mobility provisions of the CBA-sponsored bill allow flexibility for other states to modify their licensure requirements without jeopardizing mobility by moving to a CPA=CPA model. No longer would California be required to recognize other states as being “substantially equivalent” when it comes to licensure requirements. An individual licensed in another state would be allowed to practice public accountancy in California without notice, much like drivers licensed in another state are allowed to drive in California.

MULTIMEDIA
National Articles About CBA Legislation

• Wall Street Journal
• Bloomberg News

Podcasts

• Accounting for California Podcast: CBA Executive Officer Dominic Franzella and CalCPA President & CEO Denise Froemming discuss the legislative proposals approved by the CBA aimed at enhancing CPA licensure requirements and modernizing mobility within California.
• Bloomberg Tax: California Explores Relaxing CPA Education Rules

California Society of Certified Public Accountants

• Read about what CalCPA is doing to inspire the next generation of accounting professionals.

Other Articles About Licensure Changes and Accounting Profession

• ‘150-hour rule’ for CPA certification causes a 26% drop in minority entrants
• The Accountant Shortage Is Showing Up in Financial Statements
• Cities’ Credit Ratings Are at Risk Because There Aren’t Enough Accountants
• Op-ed from KPMG CEO with relevant data points

FAQs