Why New Jersey Should Require More Accounting Credits to Sit for the CPA Exam
The most recent change in New Jersey law requiring that those seeking to become CPAs must obtain 24 college semester credits in accounting instead of 30 is likely to result in a reduced CPA Exam pass rate. This reduction in the number of credits is unfortunate because the knowledge of accounting that CPAs must have to be successful in the accounting profession is not decreasing but increasing.
In the January/February 2020 issue of the New Jersey CPA magazine, author Kenneth A. Heaslip, CPA, CGMA, MBA, MS, director at Cullari Carrico LLC, visiting professor at Mercy College and a discussion leader for The Loscalzo Institute, describes the most recent changes to the requirements to become a CPA in New Jersey. “Previously, the requirement included 30 credits in accounting and 30 in other business courses,” says Professor Heaslip in this well-written article. “Ironically, the additional 30-credit requirement comes with a reduced accounting and business requirement.”
The irony that this article points out is that whereas previously the law required candidates to have 30 credits in accounting to become a CPA, this has now been reduced to just 24 credits in accounting — and colleges were encouraged to tailor educational programs toward individual and professional needs to make up for it. But New Jersey colleges and universities have responded differently to this changing environment. For example, Rutgers Business School’s undergraduate program both in Newark and New Brunswick recently increased the number of required credits in accounting to major in accounting by three credits. The total is now 30 credits in accounting — the same number of credits previously required under New Jersey law.
Why did Rutgers do this? It was because Rutgers had heard from those in the business world that accountants who wanted to become auditors, whether in public accounting or private accounting, needed a course in audit analytics if they were to be competent auditors in a world where technology is playing an increasingly important role. While historically the audit section of the CPA Exam has not tested much in regards to audit analytics, this clearly is changing as indicated in the AICPA Blueprint for the CPA Exam.
Similarly, while our curriculum at Rutgers requires a three-credit tax class (as do most other New Jersey undergraduate schools) in which we heavily cover individual tax, we urge students to take a second tax course, one which emphasizes partnerships and other unincorporated entities. As the AICPA’s Blueprint for the CPA Exam indicates, this is more heavily covered on the Regulation section of the CPA Exam than it ever has been in the past. The CPA Exam, which is increasingly oriented towards CPAs in practice, recognizes that CPAs who perform tax work need to know more about entity taxation. While there is no telling what the future has in store, there is no doubt that CPAs will need to know more about such important topics as they specifically relate to accounting and auditing. Cybersecurity, forensic accounting and blockchain are good examples. To the extent to which CPA Exam educational requirements in New Jersey are modified to require more accounting courses, we can assume we will have more students taking the Exam who have learned these topics if these applicants are required to take more credits in accounting.
What we hope to see in the future is a New Jersey in which our glorious state is among those that have the highest CPA Exam pass rates. Thus, we are hoping the law in New Jersey will be changed again so that those taking the CPA Exam in New Jersey will be required to take more credits in accounting rather than less.
Leonard Goodman, CPA, Ph.D., is a professor and director of the undergraduate accounting program at the Rutgers Business School’s New Brunswick campus and vice chair of the Department of Accounting and Information Systems at the Rutgers Business School-Newark and New Brunswick. He is a member of the NJCPA.
Sarah L. O'Rourke
Sarah O’Rourke, CPA, MSPA, is an instructor of professional practice in the Department of Accounting and Information at the Rutgers Business School-Newark and New Brunswick. She is a member of the NJCPA.