In the face of a talent crunch for CPAs, many states are updating CPA candidate requirements to accept additional work experience instead of the long-standing 150-hour education requirement that effectively requires a fifth year of college.
A growing number of states have passed legislation or are actively considering alternative qualification criteria for CPA licensure. While the topic is continually evolving, we’ve broken down the topic to provide the latest developments, their industry impact, and how Accounting Firm Sold supports both firm buyers and sellers amid these changes.
1. What’s Changing—and Where?
- States Leading the Charge
In early 2025, Ohio spearheaded licensing reform by approving House Bill 238, which allows licensure via (A) a master’s degree + 1 year of experience (existing 150-hour pathway) or (B) a bachelor’s degree + 2 years of work experience, alongside passing the CPA exam. - Growing Momentum Nationwide
At the time of publishing this article, over 25 states have introduced legislation to support similar changes, including California, Texas, Virginia, Minnesota, South Carolina, Oregon, New York, Pennsylvania, Utah. As time progresses, experts expect many more states to adopt alternative pathways to address the growing CPA talent shortage.
Link to –> Interactive Map of CPA Requirement Legislation
2. Industry Response
- Maintaining Quality Standards
CPA society leaders emphasize the new pathways are additive, not intended to replace the 150-hour path. They ensure continuity and flexibility for current CPA candidates while maintaining competency.
3. What it Means for CPA Firm Owners
- Talent Pipeline Boost
As more entry-level CPA candidates qualify, hiring becomes easier, helping firms scale and improve service capacity. - Valuation Upside
Enhanced attractiveness to buyers. Well-staffed practices tend to command stronger valuations. - Transition Planning Simplified
Firms in states with new pathways may experience smoother succession planning as staffing talent pools grow and bottlenecks ease.
4. What it Means for Prospective Buyers of CPA Firms
- Expanding Talent Pool
Easier pathways allow buyers to find and onboard new hires faster. This is ideal for firms aiming for growth or expanding into new services. - Reduced Recruitment Costs and Leadtime
With fewer candidates needing expensive additional schooling, staffing becomes more affordable and efficient. - Legal Savvy Advantage
Firms familiar with evolving licensure landscapes position themselves as savvy and adaptable partners—boosting competitiveness.
5. How Accounting Firm Sold Supports Your Practice
- Strategic Staffing Insights
We monitor these licensure changes to advise sellers on highlighting talent strengths and buyers on tapping into expanded pipelines. - Market Matchmaking Optimization
We inform potential buyers about their strategic advantage in states with new CPA pathways and those expected to pass, helping match practices where talent is accessible. - Consultative Advisory
Whether you’re buying or selling, AFS helps you anticipate how these reforms impact workforce readiness, valuation, and deal timing.
6. Key Takeaways of CPA Licensing Changes
| Insight Area | What It Means |
| Licensing Reform | New alternative CPA pathways are rolling out across many states. Many offer the opportunity of two paths to qualify: (A) master’s degree (existing 150-hour pathway) & 1 year of experience or (B) bachelor’s degree & 2 years of work experience, alongside passing the CPA exam. |
| Talent Access | Broader pathways create a more robust pipeline of CPA candidates, improving hiring opportunities. This is especially valuable for those currently working in accounting with bachelor’s degrees and are looking to become a CPA without having to go back to school. |
| Firm Valuation & Growth | Staffing strength boosts firm growth potential for owners. Potential buyers are interested in the promise of the growing talent pool, which can lead to smoother ownership transitions. |
| AFS Advantage | We guide both buyers and sellers by contextualizing licensure changes into staffing and valuation strategies. |
Conclusion
The CPA licensing landscape is shifting, and it’s for the better. As more states adopt alternative routes to licensure, accounting firms stand to benefit from a wider, more diverse talent pool and enhanced ability to scale operations. At Accounting Firm Sold, we’re here to help you interpret market changes and what they mean to your future as a firm owner or potential buyer.
Contact us with any questions or to review your options as someone looking to buy or sell an accounting practice.