Bloomberg Tax
Aug. 16, 2021, 8:45 AM

CPA Exam Makeover Risks Raising Hurdles for Black Accountants

Amanda Iacone
Amanda Iacone

As a Black accountant with a CPA license, Nikki Winston is part of a profession that she—and the Big Four accounting firms—have been striving for years to make less exclusive, and more diverse.

Winston tells her clients—primarily Black, first-generation accounting graduates and seasoned professionals she counsels to follow her path—that the pricey slog of 150 college credit hours required to earn a CPA license is worth the sacrifice, opening up a potentially lucrative corporate or public accounting career.

That CPA license playbook, however, is about to get rewritten and potentially tougher. Even as some leaders, including the Big Four, lament the education requirement as an obstacle to minority recruitment, the profession is raising the bar further to enter public accounting. The CPA exam is undergoing a major overhaul, triggering changes in what colleges teach, all to prepare students for an increasingly automated and complex field.

The looming changes are stirring a debate over how to maintain high standards for the accounting profession while increasing opportunities for Black candidates, combating a woeful statistic that just 1% of all CPAs are Black.

“These candidates are struggling. Why is this not a grander conversation?” Winston said.

Dismal on Diversity

Fewer than 7,000 CPAs nationwide are Black, according to estimates cited by the National Society of Black Certified Public Accountants. The 1% estimate has barely budged in decades. Within the narrower pool of public accounting firms, just 2% of CPAs are Black.

Reasons for the disparity are well known: lack of exposure to the profession, education inequities, competition with trendier careers, and a lack of diversity among leaders and professors. Another has been controlled access through a rigorous state-issued credential that barred Black accountants from joining the profession in meaningful numbers until the 1960s.

The legacy of segregation lingers today with the 30 extra hours of college credits layered on as a further hurdle. “It’s not the only barrier, but it is a significant barrier,” Darryl Matthews, president and CEO of the National Society of Black Certified Public Accountants, said of the education requirements. The group formed in 2020 with the sole mission to help more Black accountants earn their credential.

“We have some successes within our community. The question is are there enough successes, and can we eliminate obstacles to progress,” Matthews said.

The famously grueling CPA exam and the 150 credit hours pose hurdles for any hopeful. But candidates like Winston’s clients often face additional obstacles, including family obligations, work, and especially money, she said.

Winston’s clients tell her: “I just want to get out of school, get my degree, go to work and make some money. Is the certification even worth me staying in school for this extra amount of time,” she said.

It’s an all too common debate. First-generation college students, especially Black and Hispanic students, often pay their way through school, and they want to start earning right away to pay off debt and support their families. Others are trying to squeeze in school or exam prep on top of a day job.

Some students struggle to imagine what more they could accomplish when graduation from college is itself a major achievement, said Theresa Hammond, who teaches at San Francisco State University and is a scholar on race in accounting.

“So to actually put themselves through the extra stress of the accounting major,” Hammond said, “and then also to have the fifth year, that’s a bridge too far.”

Bridging the Gap

The largest U.S. accounting firms have launched initiatives to support underrepresented CPA candidates—efforts that have escalated in the months since the 2020 murder of George Floyd spurred nationwide demands for racial justice and equality.

Since then, Deloitte LLP and PwC LLP each described the extra 30 hours as a barrier that disproportionately affects minority CPA candidates and stymies the firms’ efforts to broaden the pipeline of recruits and hit new diversity hiring goals.

Each of the Big Four is taking steps to change the equation.

PwC will pay for 40 Black and Hispanic students to take part in a fellowship program at Northeastern University that launches this year. The students will ultimately earn a master’s in management, worth 30 credit hours, and a salary.

A paid job and free tuition is a win-win for students, but also for the firm, said Leah Houde, PwC’s chief learning officer. It is part of a broader $125 million effort to support Black and Hispanic students and boost the firm’s minority hiring.

“We would like our staff to look the same as the graduating classes of universities, which is 35% underrepresented minorities. We are not there yet,” Houde said.

Deloitte launched a $30 million scholarship fund with the goal of paying for 800 underrepresented students to complete their master’s degree, another bid to help students meet the 150-hour requirement.

Ernst & Young LLP created a $1 million scholarship to support students from underserved schools, and KPMG LLP designed an internship program for underrepresented students, among the steps it has taken to boost its Black and Hispanic workforce by 50% by 2025.

The largest firms are making important strides, but a concerted profession-wide effort is needed to make systemic changes to the pipeline of future CPAs and boost opportunities for more minority accountants to join its ranks, said Scott Wiley, CEO of the Ohio State Society of CPAs.

“We’re on the line as a profession to say we recognize how bad our numbers are. Let’s not sugarcoat that,” Wiley said. “If we can’t demonstrate evidence of improvement, I don’t know that any of us can say today that a serious conversation about 150 won’t be occurring in roughly five to 10 years.”

New Skills

The planned overhaul of the CPA exam, part of a project called CPA Evolution, will test candidates starting in 2024 on data analytics, technology skills, and their chosen specialties.

Reconsidering the 150-hour requirement was discussed briefly but ultimately wasn’t part of the CPA Evolution project, said Sue Coffey, CEO of public accounting for the Association of International Certified Professional Accountants, a sister organization to the American Institute of CPAs.

“We are a learned profession, and we have a public protection mandate. And we are really not interested in lowering the bar, nor can we lower the bar,“ said Coffey, who acknowledged the work facing the profession to make it more attractive to diverse candidates. In her view, research hasn’t found the 30 extra hours to be among the top deterrents for minority candidates.

The complex skills required of accountants are mounting, and the exam overhaul aims to prepare students for an increasingly automated field. Those changing test and career expectations will also trigger updates in what colleges should teach.

The AICPA and the National Association of State Boards of Accountancy introduced a model curriculum in June that preserves the flexible path to reach 150 hours, which can include advanced placement credits, community college, undergraduate work, graduate classes, and internships.

To Matthews, explanations for the revised CPA requirements ring hollow. He said the 150-hour rule was disheartening when it was first added more than 20 years ago, and he considers the latest exam changes as moving the goal posts again, making what many consider the toughest professional exam even harder.

Academics and those who support CPA candidates worry that it will increase the pressure on students to consider graduate school with its even higher tuition costs.

“CPA Evolution is creating yet another barrier that’s going to impact that 1% ever being 1.5% or ever being 2%,” said Kelly Richmond Pope, an accounting professor at DePaul University.

The expertise required to become a CPA is warranted, Guylaine Saint Juste, CEO of the National Association of Black Accountants, said in a statement. But there are other pathways to earning the 30 extra hours the profession could consider, she said—internships, for example, as well as work-based experience and even service on boards.

Winston, the CPA exam coach, welcomes the curriculum and testing changes, which she believes will prepare accountants better with skills relevant in business today.

“It’s a barrier to the extent that you allow it to be,” Winston said of the extra 30 hours. “Speaking for Black and Brown people, we’re already behind the eight ball. And we’re already used to climbing up the hill to get to where we want to go.”

To contact the reporter on this story: Amanda Iacone in Washington at

To contact the editors responsible for this story: Jeff Harrington at; Kathy Larsen at