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Candidate Performance in Florida, New York, and Texas
In 1989, the AICPA membership voted to recommend that states require candidates to complete 150 hours credit hours to sit for the CPA exam. Florida was the first state to adopt the 150-hour requirement, in 1983, before the AICPA's recommendation. Today, according to the AICPA, 47 out of 54 jurisdictions have adopted the requirement and another state, New York, is slated to do so in 2009. The adoption of the 150-hour requirement appears largely complete, with the significant exception of California.
The analysis below of the effects of the 150-hour requirement focuses on three states: Florida (which has required 150 hours the longest), Texas (which implemented the rule in 1998, about the same time as many other states), and New York (where the requirement takes effect in 2009). As indicated in Exhibit 1, the general effect of the change appears to be a decrease in those sitting for the exam, coupled with a marked increase in the pass rate. Indeed, one argument for the 150-hour requirement is that the complexity of the exam justifies an increase in the educational requirement.
Exhibit 1 shows the number of candidates who sat for the exam between 1990 and 2003 in Florida, New York, and Texas, with the percentage of those who passed all of the exam on the first try, as well as those who passed either all or some parts of the exam in one sitting. Due to the length and complexity of the exam, it is asserted that the combination of those passing all or some of the exam is a good measure of candidate performance. The data are taken from annual reports by the National Association of State Boards of Accountancy (NASBA). As of this writing, 2005 is the most current data available.
Effect on the...