Definition
The 150-hour rule refers to the education requirement for CPA licensure in most states: 150 semester hours of college credit, usually including a bachelor's degree and a set number of accounting and business credits. The exam itself can often be taken with fewer hours, commonly 120, but the license requires the full total. Many states now also offer an alternative path that pairs a bachelor's degree with additional work experience. State boards set the details.
Why it matters in an audit or review
The rule affects hiring and recruiting because new graduates may be several credits short of a license. Firms often support master's programs or credit completion. The requirement also affects where candidates choose to be licensed, since states differ. Rules differ by board, and many states have changed them recently.
Example
Illustrative: a graduate has 128 credits and wants a license in a state that requires 150. The graduate takes the exam after 120 hours where allowed, then finishes the credits through a part-time program before applying.
Common mistakes
Relying on an out-of-date list of state requirements.
FAQ
Is the rule the same in every state?
No. Education and experience paths differ by board.
Sources
- NASBA, CPA licensure requirements by jurisdiction (nasba.org)
- AICPA and NASBA, Uniform Accountancy Act (model law), education and experience requirements for licensure
- State boards of accountancy, individual state accountancy statutes and rules
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error