ISCPA supported CPA licensure bill passes

Legislation passes in House and Senate

The ISCPA-backed legislation expanding CPA licensure pathways proposed during this legislative session passed by unanimous vote in the Senate today, April 8 and will now go through the certifying process on its way to the governor for her signature. The bill introduces an additional pathway to licensure in Iowa by enabling future CPA candidates to become licensed upon earning a bachelor’s degree with required accounting coursework, two years of accounting work experience, and passing the CPA Exam. If signed, the law will take effect July 1, 2026, allowing educational institutions and accounting firms a year to prepare students and staff for the new licensing pathway option.

The bill also addresses practice mobility by allowing licensed CPAs in good standing from outside the state to operate in Iowa, thereby removing state-based substantial equivalency requirements and improving Iowa’s interstate mobility law by shifting to individual-based practice privilege.

The two existing pathways to licensure in Iowa also remain as options for aspiring CPAs: a bachelor’s degree plus master’s degree in accounting and one year of accounting work experience with CPA Exam, or a bachelor's degree with required accounting coursework plus 30 additional credit hours and one year of accounting work experience with CPA Exam.

ALL OPTIONS LEAD TO CPA LICENSURE ELIGIBILITY

The additional pathway helps to remove barriers to entering the profession such as the time and cost of an extra 30 college credits while ensuring the “Four E’s” (Education, Exam, Experience and Ethics) remain essential components to the CPA designation. Attracting more to the profession is critical in the face of decreasing new licensees combined with increasing CPA retirements. The public relies on CPAs to protect their financial interests in businesses, government, charitable organizations and more.

Licensing and mobility legislation like Iowa’s bill have been introduced or signed into law in seven other states this year. We expect more will be enacted as additional states introduce similar bills or accountancy board rule changes. AICPA and NASBA have recently presented a Uniform Accountancy Act (UAA) exposure draft that adds the additional pathway to licensure and advocates for individual practice mobility.

History

ISCPA's decision to propose new licensing legislation came about after members shared their ideas and experiences surrounding the current licensing requirements. Thanks to member feedback in late 2023, the ISCPA Pathways to CPA Licensure Task Force recommended, and the Board of Directors approved, that ISCPA support alternative pathways to CPA licensure that preserve a path to mobility.

At the 2024 Iowa CPA Day at the Capitol in January, members began talking with legislators about the CPA pipeline challenges and other states’ legislative activities. The year saw other state CPA Societies also lay the groundwork for expanding pathways to licensure. By late 2024, ISCPA’s board voted to introduce draft legislation for an additional pathway to licensure in Iowa. In February, two bills were introduced, one in the House and one in the Senate. With unanimous support, the bills were eventually merged and passed by both chambers.