NASBA adds new 120-hour CPA pathway with experience requirement

KPMG could recruit more candidates, and deploy them differently, now that NASBA has recognized a new 120-hour CPA route that pairs a bachelor's degree with two years of professional experience and passage of the CPA Exam. The change gives firms a second way to build the audit and tax pipeline, while also shifting the conversation inside KPMG from how many credits a hire has collected to how quickly that person can get real experience and become fully usable on client work.

The December 2025 NASBA update said the Uniform Accountancy Act now recognizes three model pathways to CPA licensure: a graduate-degree pathway, the traditional 150-hour route, and the new 120-hour option. The same update also reframed mobility around an individual CPA's qualifications, rather than only whether the home state has substantial equivalency with the destination state. For KPMG, that matters because hiring is never just about filling a class of new associates. It is also about where those people can work, how soon they can move across state lines, and whether a new hire can be staffed on an engagement without getting caught in licensure friction.

This was not a sudden policy swing. On May 14, 2025, the AICPA and NASBA boards approved model legislation adding the bachelor's-degree path with two years of professional experience and CPA Exam passage. NASBA then said the Ninth Edition of the Uniform Accountancy Act, released in August 2025, introduced the extra optional pathway for states to adopt, and later noted that some jurisdictions' new pathways became effective in 2025. That patchwork means KPMG recruiters and managers still have to track state-by-state rules, especially for graduates who may start in one office and later move to another market.

KPMG has already argued for this direction. In October 2024, it said it was the first Big Four firm to publicly back alternative licensure pathways that emphasize experience after a bachelor's degree, and it said the profession needed a simpler and less expensive route. The firm also has described the CPA as "table stakes" for audit work, because clients expect audit professionals to be CPAs. For staff, that turns licensure into a timing question as much as a credential question: when to spend on extra credits, when to bank experience, and how to sequence exams, busy season, and the next promotion cycle.

The exam itself remains a hard gate. AICPA & CIMA says the updated CPA Exam is still a four-section, 16-hour test, with Auditing and Attestation, Financial Accounting and Reporting, Taxation and Regulation, plus one Discipline section. More than 74,000 people sat for the exam in 2024, and only 11 earned the Elijah Watt Sells Award by averaging above 95.50, passing all four sections on the first try, and finishing testing that year. The new pathway lowers one barrier to entry, but it does not lower the bar once candidates are in.

That tension is why the reform matters inside KPMG. AICPA reported that fall 2025 accounting undergraduate enrollment rose 7.4 percent to 204,283 students, the third straight annual increase, which helps the recruiting pool. But KPMG has also pointed to a talent shortage driven by a declining CPA pipeline, shifting workforce expectations, and technological disruption. The new route broadens access to the profession, yet it also puts more weight on how firms like KPMG turn students into staff, staff into CPAs, and CPAs into long-term leaders.