Introduction: The master’s of accounting degree for auditors and the illusion of more ethical professionals

In July 2008, at the beginning of the last major financial crisis, the Pre-Certification Education Executive Committee of the Association of International Certified Professional Accountants, or AICPA, told authors of a paper promoting increased educational requirements for accountants that it was time to put in place even higher hurdles to joining the profession

In its comment on the draft paper prepared by the National Association of State Boards of Accountancy, “Education and Licensure Requirements for Certified Public Accountants: A Discussion Regarding Degreed Candidates Sitting for the Uniform CPA Examination with a Minimum of 120 Credit Hours (120-Hour Candidate) and becoming eligible for Licensure with a Minimum of 150 Credit Hours (150-Hour Candidate)," the AICPA's PcEEC wrote, “The accounting profession needs strong not weak requirements for licensure and high quality accounting education and auditing standards" (NASBA 2008).

The paper expressed support for a 120/150 model, but the PcEEC advocated the 150/150 model that required an equal number of credit hours of education a prerequisite for licensure. The PcEEC commenters wrote that, “although certain thoughtful accounting practitioners and educators favor the 120/150 model, continued reliance on the 150/150 model offers greater promise for protecting the public interest."

Specific licensing requirements of state boards still vary, but now all of the 55 states and territories that regulate CPA licensing, except Washington, DC, and the US Virgin Islands, require 150-hours of college credit to take the qualifying licensure exam (DCOPLA n.d.).

The drive to increase educational requirements for licensure has effectively made the graduate degree in accounting the minimum requirement for entry into the profession in the United States and licensure as a public accountant.

The dream of graduate schools of auditing described by the draft paper’s authors, including now the retired director of research for the Corporate Governance Center at the University of Tennessee, Joseph V. Carcello, has been realized via the nationwide implementation of the

150-hour requirement. This is accomplished most often at this point by an additional year of graduate study, culminating in a masters of accounting degree.

A traditional four-year undergraduate program, the AICPA says, is no longer “adequate” for obtaining the “requisite knowledge and skills to become a CPA,” given that so many new official accounting and auditing pronouncements and tax laws expand the knowledge that “professional practice in accounting” requires.

This chapter argues that this requirement to become a professional accountant in the United States, a graduate degree, has not improved the ethical culture of its public accounting profession, nor has it increased the focus on the professional obligations of public accounting — a public duty to capital markets and service to shareholders.

Rather, the additional educational requirement is emblematic of the industry 's focus on the economic growth of the largest firms and their clients rather than, as Professor Carcello and those who originally supported the proposals may have hoped, an educational experience that imbues the profession with the spirit of ethical public service and increases its prestige in the eyes of the public.

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