150-hour Requirement Update

January 30, 2006

In the November 2005 issue of Advisor, the newsletter of the Virginia Board of Accountancy (BOA), the BOA explained their policies during the transition to the 150-hour requirement to sit for the CPA Exam. One policy involves an exception for students who have completed their coursework prior to the 150-hour deadline.

To alleviate any confusion, the Virginia Society of CPAs (VSCPA) wants to make sure you are aware of exactly what the exception policy entails.

According to the new requirement, starting July 1, 2006, accounting students must complete 150 hours of accounting education before sitting for the CPA Exam in Virginia. May 2006 graduates, however, will have great difficulty scheduling to sit for an Exam before the July 1 deadline. Therefore, students who complete coursework and the necessary credits for a baccalaureate degree in the spring 2006 semester will most likely need to attain 150 hours of education before sitting for the Exam.

As mentioned in its newsletter, the BOA is allowing an exception for students who have completed their coursework prior to the deadline, and are simply waiting for their degree to be conferred. The best way to articulate this scenario is through an example:

Jane Doe is a senior at a college in Virginia. At the end of the December 2005 semester, Jane had completed 120 hours of education and completed all coursework necessary for her accounting concentration. However, since Jane is carrying a minor in Spanish, she is completing courses to satisfy that minor in the spring 2006 semester and her degree will be conferred on July 2, 2006.

In this circumstance, where the student has completed all necessary coursework for the accounting concentration and the baccalaureate degree, the BOA will accept a letter from the college or university's accounting department chair or dean stating that the student has satisfied the requirements in the Code of Virginia as follows:

• The student has completed all requirements for the baccalaureate degree but will not graduate prior to July 1, 2006;
• The student has completed at least 24 semester hours of accounting, including courses covering the subjects of financial accounting, auditing, taxation and management accounting; and
• The student has completed at least 18 hours of business courses (other than the accounting courses described above).

Upon receiving this letter no later than April 1, 2006, the BOA will allow Jane Doe to apply and sit for at least one part of the Exam before the July 1, 2006 deadline under the 120-hour requirement. Remember that June 2006 is a blackout month, and no examinations are administered —so Jane Doe must schedule and sit on or before May 31, 2006.

This is NOT an exemption for all spring 2006 graduates. Any spring graduate still completing coursework in the spring of 2006 to satisfy his or her accounting degree requirements is NOT eligible to qualify under the 120-hour requirement with a university chair's letter. This exception only applies to those students who finished all requirements prior to 2006.

The VSCPA has been communicating with the BOA on this issue. According to BOA Executive Director Nancy Feldman, the chair's letter must state that a.) the student has completed all requirements for the baccalaureate degree and b.) the degree will not be conferred until after July 1, 2006. The BOA will continue to allow an individual who completes all coursework requirements for the baccalaureate degree, and who can confirm that with an official letter, to apply and sit for one part of the Exam prior to July 1, 2006.

The VSCPA is providing this information to Virginia educators to clarify the requirements and ensure your students will not erroneously believe they can sit for the Exam after July 1, 2006 with only 120 hours of education. Please review this information carefully and convey it to your colleagues and students.

Visit the VSCPA's student and educator Web site, CPA Student Zone, for the most up-to-date information about CPA Exam requirements in Virginia and a downloadable brochure titled "What You Need to Know About the 150-Hour Rule" (.PDF).

If you have any questions, please contact the BOA at www.boa.state.va.us or (804) 367-8505 or VSCPA Government Affairs Director Erin Collins at (800) 733-8272.