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Court suspends BOI reporting requirements

lot of movement lately on the “P” word related to the future of accounting—pipeline. Along with the 

 releasing final recommendations to tackle the accounting talent shortage, the California Board of Accountancy also has 

put forward alternative paths to licensure

 to make the journey toward licensure more accessible and affordable. 

With the backdrop, CalCPA President & CEO Denise LeDuc Froemming recently sat down with CBA Executive Officer Dominic Franzella in an episode of the CBA’s 

 to discuss the legislative proposals approved by the CBA aimed at enhancing CPA licensure requirements and modernizing mobility within California, and how they fit in with the Exposure Drafts released by NASBA & AICPA.

The accounting profession faces a critical talent shortage, both nationally and in California. Froemming points to two primary factors driving this trend: retirement among seasoned CPAs and a declining number of accounting graduates.

"Seventy-five percent of current CPAs are expected to retire within the next 15 years," she noted. Compounding the problem, between 2016 and 2022, the number of new accounting graduates fell by 133 percent, and the number of candidates taking the CPA exam dropped by 37 percent. This decline in new talent creates a pressing need to adjust licensure pathways and requirements to make the CPA profession more accessible while upholding standards for public protection. 

To address these challenges, the CBA’s recently proposed updates focus on enhancing flexibility in CPA licensure through its 

, an initiative aimed at creating a streamlined and adaptable framework. Traditionally, the CPA pathway has required a stringent 150 semester units and extensive experience requirements, which may not align with evolving educational and career trends. In response, the CBA’s new proposal redefines educational requirements, prioritizing a bachelor's or master’s degree in accounting rather than focusing strictly on semester units.

Franzella explained that the proposal aims to create two distinct educational pathways: one allowing for a master’s degree in accounting, and the other a focused bachelor’s degree in the field. The proposal also adjusts experience requirements. For example, candidates with a bachelor’s degree in accounting would need to complete two years of relevant experience, whereas master’s degree holders could substitute a year and meet the experience requirement within one year.

This approach, he noted, “emphasizes competency and practical knowledge over traditional academic benchmarks,” a shift that aligns with national discussions on alternative licensure pathways.

Another focal point of the discussion was the importance of mobility for CPAs. As businesses increasingly operate across state lines, California aims to adapt its CPA licensing to support professionals who move frequently or work in multiple states.

Franzella explained that these updates will help align California’s licensure requirements with national mobility standards while maintaining robust consumer protection measures. “This approach allows us to be more dynamic, responsive, and relevant to the changing business environment,” he stated.

Supporting Public Protection and Professional Standards

Both Franzella and Froemming emphasized that public protection remains a priority, even as the state modernizes CPA requirements. To that end, the CPA Exam will continue to serve as a rigorous standard that all candidates must meet, regardless of the new pathways.

According to Froemming, maintaining high standards is crucial for public trust and for the profession’s integrity, especially as technology transforms how CPAs provide services. “We need that professional skepticism and high-level training in the marketplace,” she said, adding that CalCPA fully supports CBA’s efforts to create a balanced framework that meets both industry and public expectations.

This initiative has involved extensive collaboration and feedback from a range of stakeholders, including the National Association of State Boards of Accountancy (NASBA), AICPA, CalCPA and other state boards of accountancy. Town halls and outreach efforts provided insight from current professionals and helped guide CBA toward reforms that balance educational rigor with market demands.

Franzella underscored that adaptability is key, noting, “Our goal is to build a foundation that allows us to be responsive to industry changes without compromising consumer protection.” For instance, the legislative proposal includes provisions for potential future adjustments, which will allow CBA to make necessary modifications without requiring continual legislative approval. “This flexibility will enable us to keep pace with a rapidly evolving profession,” he said.

CBA’s proposed changes reflect a forward-thinking approach to a profession facing significant transformation. As new educational and licensure pathways become available, the CBA and CalCPA aim to address the profession’s talent shortage and make the CPA profession more accessible to a wider range of candidates. While these changes signal a shift, they also underscore the continued importance of public protection and adherence to rigorous standards.

In the coming months, CBA will work closely with legislative bodies, academic institutions, CalCPA and other stakeholders to finalize and implement these reforms. For aspiring CPAs and the firms that employ them, this modernization represents a crucial step toward a more adaptable, inclusive, and resilient accounting workforce.

To learn more about these developments and listen to the full conversation, tune in to the 

California Moves to Modernize CPA Requirements Amid Talent Shortage

CPA Competency-Based Experience Pathway (CBE Pathway)

While we commend the AICPA and NASBA for their efforts to address pipeline challenges and pursue alternative paths to CPA licensure, we believe the proposed changes fall short and do not adequately meet the current and future needs of the profession and the public it serves.

Our comment letter urges the AICPA and NASBA to reconsider the CBE Pathway and avoid incorporating a complex model into the UAA framework that fails to adequately modernize the interstate practice framework.

CalCPA recommends a comprehensive approach that prioritizes:

This approach aligns with California's current efforts, where CalCPA is collaborating with the California Board of Accountancy on a legislative proposal to modernize and simplify licensing and mobility provisions. You can learn more about the CBA’s proposed changes in the latest episode of the 

 featuring CBA Executive Officer Dominic Franzella and CalCPA President and CEO Denise LeDuc Froemming.

We encourage member leaders and firms to submit their own comments. To support this effort, we have outlined 

 to help guide your review of the proposal and the development of your feedback.

CalCPA will continue to monitor this important issue and keep you up to date with any further developments.

CalCPA Submits Comments on Exposure Draft on CPA Licensure 

CalCPA has submitted comments urging the AICPA and NASBA to reconsider the CBE Pathway and avoid incorporating a complex model into the UAA framework that fails to adequately modernize the interstate practice framework.

CalCPA Submits Comments on Exposure Draft on CPA

CalCPA Staff

 that suspended the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership information reporting requirements, FinCEN has provided the following guidance: Reporting companies are not currently required to file BOI with FinCEN and are not subject to liability if they fail to do so while the order remains in force.

However, reporting companies may continue to voluntarily submit beneficial ownership information reports through FinCEN’s 

Also, the Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on Dec. 5.

 for CPA firms engaged to assist clients to report BOI or have previously advised clients about the CTA and BOI reporting requirements, and has set up a BOI 

The CTA and its implementing regulations, which require U.S. business entities to report stakeholder information to the Treasury Department, required that an estimated 32.6 million existing business entities disclose their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network before 2025.

The government argued that the law’s function—to crack down on anonymous shell companies and deter money laundering, terrorism financing and other illicit economic activity—falls within Congress’s regulatory duties.

 that Congress exceeded its authority in enacting the CTA, resulting in an unconstitutional infringement on states’ rights to regulate businesses. The court granted a nationwide injunction prohibiting FinCEN from enforcing the Jan.1, 2025, reporting deadline for all reporting companies.

CalCPA, along with all state societies and the AICPA, has urged the government to push back the initial filing deadline by at least one year, to no earlier than Jan. 1, 2026. 

CalCPA continues to work with the AICPA and other state societies on this important issue and will keep you up to date with any further developments.

Please note that legislation, regulations, tax announcements, and court rulings can be complex and wide-ranging. Before making any determinations for yourself or your client, be sure to review the provisions in detail and consult with experts as appropriate.

BOI reporting update: CTA reports are voluntary following court decision

In light of a Dec. 3 federal district court order that suspended the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership information reporting requirements, FinCEN has said reporting companies are not currently required to file BOI and are not subject to liability if they fail to do so while the order remains in force. Reporting companies may continue to voluntarily submit beneficial ownership information reports.