Modernizing New Jersey’s Accountancy Act

On Jan. 8, 2025, Ohio Governor Mike DeWine signed into law a bill that provides more flexibility for obtaining a CPA license in the Buckeye State. Like Ohio, the NJCPA has been working on ways to ease the path to becoming a CPA without lowering the bar for licensure or compromising mobility. 

The shortage of accountants and CPAs is becoming everyone’s responsibility. The problem will continue to grow unless critical changes are made. It has already had a negative impact on all sectors of society that rely on the advice and services provided by accountants: the business community (small businesses in particular), individual taxpayers, governmental entities and the people who rely on CPAs for financial advice. 

What’s the situation in New Jersey? There has been a dramatic drop in the number of New Jerseyans graduating college with a degree in accounting, with a 25% decrease in the past five years. Although this has not received as much media attention as the shortage in other professions (e.g., teachers, nurses), it is just as alarming.

Currently, candidates must earn at least 150 credits (a bachelor’s degree plus 30 extra credits, or a master’s degree), gain one year of experience and pass the CPA Exam. While this option would remain, our proposal would offer an additional pathway, where candidates could replace the extra 30 credits by gaining two years of general work experience instead of one. This was the requirement until 2001 when New Jersey, and eventually all the other states, changed to the 150-hour rule, a well-intentioned but ultimately unnecessary barrier to entering the CPA profession. This is why, to date, 23 state CPA societies have stated their intention to pursue changes to their states’ licensing laws to allow the two-years-of-experience alternative pathway. More are expected to do so over the coming year. 

This change will encourage more accounting and business students to become CPAs by reducing the time and cost associated with obtaining initial licensure, all without compromising standards. Additionally, it could promote greater diversity within the profession. A study by MIT Sloan found that the 150-hour requirement for licensure led to a 14% decline in the number of new CPAs, including a 26% reduction in the number of minority candidates. 

The law affects existing interstate mobility laws by evaluating candidates on their individual professional status rather than what state they are licensed in. It’s important to note that the New Jersey State Board of Accountancy has endorsed the alternative pathway outlined above and has asked the Division of Consumer Affairs for their approval to move it forward. Other states’ accounting boards have done the same.

We are engaging with lawmakers who can help us pass legislation as soon as possible — before this crisis gets any worse.

The legislation will tackle real challenges head-on, paving the way for a stronger, more diverse CPA workforce while safeguarding the high standards that define New Jersey CPAs. 

As always, we’d like to hear from you at feedback@njcpa.org.