THE 150-HOUR ACCOUNTING REQUIREMENT: MARIETTA COLLEGE'S RESPONSE

Fraser G. MacHaffie, Brachman Department of Economics, Management and Accounting
Marietta College

Abstract | The 150-Hour Requirement | Exhibit 1 | Exhibit 2 | Exhibit 3 | Endnotes

ABSTRACT

In responding to the new 150-hour education requirement, nearly all colleges and universities have adopted a 4+2 or 4+1 model which has the student complete both an undergraduate bachelors and a graduate degree, either a masters in accountancy or a modified masters in business administration with a concentration in accounting. An alternative approach is provided by the model put in place at Marietta College where an undergraduate degree of 150 hours was developed which contains a major in public accounting. The program was approved by the Accountancy Board of Ohio in April 1994.

THE 150-HOUR REQUIREMENT: MARIETTA COLLEGE'S RESPONSE

At last count, 36 states have passed 150-hour education legislation. The effective date for most of these states cluster around the year 2000. In Ohio, for example, it is January 1, 2000, and after this date Ohioans wishing to sit for the Uniform CPA examination must have completed 150 hours of university/ college education. The specific requirements vary from state to state but generally are consistent with the "Illustrative Program" advocated by the AICPA as shown in Exhibit 1. States apply different experience requirements for licensing, but in states such as Ohio with implementation dates around 2000, the freshman classes which entered as early as the Fall of 1994 will be affected by the 150-hour requirement.

How have colleges and universities responded to the new rules? This article describes a model developed by one college which will serve as an alternative to the standard approach to the new education requirements.

Current trends
The standard expectation is that students will complete both an undergraduate degree and then a masters degree, either in accountancy or business administration. But this approach takes the student beyond the required 150 hours and so many colleges and universities have approved "double dipping" with courses counting towards both the undergraduate and graduate degrees so that within the space of five years both degrees can be earned, thus converting a "4+2" model to a "4+1" model. Where the degrees are being pursued at different campuses, the arrangements are often covered by articulation agreements which specify courses in the undergraduate degree, grades and GMAT scores for admission to the graduate program, and admissions procedure.

The latest evidence on the trend of institutions adopting either a 4+2 or 4+1 model is contained in the revised 150-Hour Curriculum Development Handbook issued by the AICPA late in 1996 (Note 1). Case studies on implementation are given for eleven anonymous institutions with ten using either 4+2 or 4+1 models. Only one comes close to the model about to be described as working at Marietta College, namely a modified undergraduate degree, and this is pretty well dismissed as impractical by the reviewer who describes the institution's proposed MBA program as "a good move" (Note 2). At Marietta we beg to differ.

The Marietta Model
At Marietta College, the 4+2 and 4+1 models were given serious consideration, and although a 4+1 articulation agreement has been entered into at the request of a graduate program at a nearby university, the College's primary response to the 150-hour requirement is represented by another model. Marietta College is a private, liberal arts college in south-east Ohio which combines the traditional liberal arts with selective professional programs. Approximately 30 per cent of Marietta's students major in business subjects, including accounting, and each year the College graduates 15-20 accounting majors. The College's primary constituency is the residential undergraduate student and this shaped Marietta's response to the 150-hour requirement.

The accounting faculty at Marietta designed a response to the new requirements that was contained entirely within an undergraduate degree. The College faculty approved a new Bachelor of Arts degree of 150 hours which contained a major in Public Accounting. (The traditional accounting major within the College's standard 124-hour BA degree was left in place.) The new degree and major were approved in April 1994 by the Accountancy Board of Ohio. Actual courses constituting the 150-hour BA degree are listed in Exhibit 2 and it will be noticed that 18 of the 42 hours of business-related hours constitute courses taught in non-business departments, emphasizing the interdisciplinary nature of the degree. The use of departments of computer science, mathematics, philosophy, English, and speech is certainly consistent with the spirit of the AICPA model which sought an balance between technical and general education. This concern of the AICPA for a broad rather than narrow education for future accountants is reflected in the educational requirement being met in a manner that leaves students with almost half, 74 out of 150 hours, of their course work outside the public accounting major (Note3).

An examination of the legislation passed by other states indicates that with minor modifications the Ohio-designed degree will work in most states with a 150-hour requirement. For example, with the addition of a second semester of Business Law, the degree received the approval of the West Virginia State Board of Accountancy. Likewise, the degree is consistent with the approach recently legislated in the Commonwealth of Pennsylvania, where the 150-hour preparation is "encouraged" but not required. In the case of Pennsylvania, the experience requirement for licensing is halved for candidates who have completed 150 hours of relevant education. See Exhibit 3.

Rationale for the Model
What reasoning led Marietta to this simple solution?

1. If it ain't broke, improve it. The College was able to put in place a program that satisfied the new education requirements with the minimum of disruption. Not a single course was added to the catalog or a single faculty member to the staff. The structure of the existing accounting major meant that only four credit hours were added to the accounting requirement. Designing the new degree was straight-forward since the existing accounting major is taught within a liberal arts context at Marietta and requires a significant amount of non-accounting course work, within and beyond the business curriculum.
2. Keep it simple. Conferences with prospective students and their parents confirmed the department's suspicions that word of the new education requirements had not spread, especially the implications (for Ohioans) of a January 2000 implementation date. The model available at Marietta was reassuring to the students and parents.
3. Minimize the hassle. The 150-hour degree can be completed within the same institution and so avoids the hassle of applying to a second program or institution - and possibly failing to clear some academic, g.p.a. and/or GMAT score, or experience hurdle.
4. Maximize the flexibility. The entire program residing within the same institution also makes possible a greater flexibility of scheduling courses. Also general education courses can continue right up to graduation, which is certainly consistent with both the approach taken towards non-major courses in most liberal arts colleges and the call for broadly educated professionals made by the AICPA.
5. No more, no less. The 150-hour degree meets the requirements for the CPA examinations and does not take the student beyond the minimum requirements. There is no skimping on content but the degree does leave ample opportunity for in-depth study of nonbusiness subjects right up to graduation. This contrasts with the heavy "end loading" of a masters degree in accounting or business administration.
6. Time is a scarce resource. The new public accounting degree can easily be completed in 4 1/2 years in contrast to the five years of the shortest "double dipping" undergraduate plus graduate degree 4+1 arrangement. In fact, by taking one or possibly two courses each summer a student could complete the degree in four years.
7. Financial aid is important. Whether the source is federal, state, or college-sponsored, financial aid continues until graduation requirements are completed for the 150-hour degree. Some masters programs have scholarships, but most offer no financial assistance while usually charging a premium compared to undergraduate fees. In the current economics of higher education, private and public, this aspect of the 150-hour degree is important for many families.
8. Graduate work in due season. The business faculty at Marietta counsel our students to include graduate school in their planning: MBA or MAcc for many, PhD for some. But the students in accounting and the other business majors are graduating with employable skills and they are advised to get a few years' experience and so make their graduate work richer and not simply another year or so of undergraduate work. Also, they may have found an employer who is prepared to pick up the tab for tuition as they pursue a graduate degree on a part-time basis.

Conclusion
The 150-hour BA degree with a major in public accounting was put in place at Marietta College with the minimum of disruption. No courses were added and the College's current faculty resources are adequate to cover all courses. Students complete their CPA requirements - no more, no less, but certainly in spirit and in content - in a manner consistent with the objectives of the AICPA in advocating the increased education requirements. The new requirements are met at one institution with no headaches over applying to other programs with the financial implications that graduate programs entail, or the possibility of rejection. Once a student has acquired two or three years' experience, that is when a graduate degree makes sense - especially if an employer is prepared to pay the tuition.

The 150-hour BA degree model developed at Marietta is drawn to the attention of similar independent colleges. Institutions with graduate programs have seats to fill and there has been some aggressive marketing. But there is an alternative to an immediate graduate degree - the Marietta model described here.

EXHIBIT 1

An Illustrative Program
(AICPA)

Source: Education Requirements for Entry Into the Accounting Profession, Second Edition, Revised, 1988, AICPA

EXHIBIT 2

The Marietta College 150-hour B.A. degree with a major in public accounting

EXHIBIT 3

States' Requirements and the Marietta Model
(All references are to semester hours)

5/1/97

ENDNOTES

1. Education Requirements for Entry Into the Accounting Profession, Second Edition, Revised, AICPA, 1988, 24-25
2. Earlier indications of the trend are to be found in, for example, "Small colleges' responses to the 150-hour requirement" Pennsylvania CPA Journal, October 1994, 18, 19, 37; Robert F. Sharp and Ray G. Stephens "Implementing the 150-hour rule: 1993 survey and curricula issues" The Ohio CPA Journal, February 1994, 9-14.
3. "Case Study: Elm State University", and "A Critique of Case Study: Elm State University". 150-Hour Curriculum Development Handbook, revised edition, tab 8. AICPA Academic and Career Development Executive Committee's Curriculum and Instruction in Accounting Education Subcommittee, 1996