ABSTRACT
Do the increased educational requirements for certified public accountants effected in 2000 protect the public interest by creating more ethical professionals – or are they simply a barrier to entry to employment at the largest global audit firms and a mechanism for extracting additional economic rents?
This chapter explores how the increase in the number of required college credit-hours to become a professional accountant in the United States – from 120 to 150 – came about, provides context about the laws, industry organizations, global audit firms, and regulators that comprise the industry, and discusses recent litigation and investigations directed at the Big Four global audit firms and their employees related to insider trading, auditor independence violations, theft of regulator data, tax fraud, test cheating, and overtime pay policies.
The author concludes that the 150-hour rule has not improved the ethical culture of the public accounting profession, nor has it cultivated an increased focus on the professional obligations of public accounting – a public duty to capital markets and service to shareholders mandated by statute.
