In this transcript from a video by Gale&Vallance, Andy Gale of Gale & Vallance in Orange County explains how AB 175 California CPA (also referred to as Assembly Bill 1175) is reshaping the path to becoming a Certified Public Accountant in California. This video breaks down why the long-standing 150-unit rule was eliminated, how the new education and experience requirements work, and what these changes mean for both in-state and out-of-state CPAs. The discussion also covers timelines, mobility rules, and the California Board of Accountancy’s role in implementing the law.

To learn more about how AB 175 California CPA changes CPA licensure requirements and impacts your path to becoming a CPA, check out our detailed guide on California’s CPA licensing reforms under Assembly Bill 175.

 Disclaimer: This video and transcript are provided for informational purposes only and do not constitute legal advice. CPA licensure rules can vary based on individual circumstances. We strongly recommend consulting with a qualified attorney or professional advisor about your specific situation.

Introduction: Why California CPA Licensure Is Changing

00:00:07:05 – 00:00:28:22

All right. So for decades, the path to becoming a CPA in California has been pretty much set in stone. Well, that’s all about to change. A huge new bill, AB 175, is completely shaking up the accounting profession. So let’s dive in and break down exactly what’s going on. So you might be asking yourself why now? Why overhaul these requirements after they’ve been the same for so long?

The National CPA Talent Pipeline Problem

00:00:29:00 – 00:00:54:04

The thing is, this isn’t just a California problem. This whole reform is a direct answer to a massive challenge that’s been putting pressure on the entire accounting profession all across the country. And that challenge, it’s basically a giant crack in the talent pipeline. The number of new people actually becoming CPAs has been shrinking. And California finally took a hard look in the mirror and realized its old system was, well, part of the problem.

The 150-Unit Rule as the Biggest Barrier

00:00:54:05 – 00:01:19:17

It was creating these unnecessary hurdles that were scaring away a lot of fresh, qualified talent. Now, the biggest hurdle of them all was this thing called the 150 unit rule. For years and years, if you wanted to even think about getting a CPA license in California, you had to rack up 150 semester units of college credits. And what that 150 unit rule really meant for most people was having to do a fifth year of college.

Financial Impact and the Need for Reform

00:01:19:23 – 00:01:41:10

And, you know, that’s not just extra time. It’s a huge financial barrier. It was turning away so many talented and diverse students who just couldn’t afford another full year of tuition. Okay. So the problem was crystal clear. So California came up with a solution, the Accountancy Modernization Act. It’s a bill that’s designed specifically to patch up that pipeline and drag the profession into the 21st century.

What Is Assembly Bill 1175?

00:01:41:12 – 00:02:02:20

Officially, this solution is called Assembly Bill 1175, and it’s got some serious muscle behind it. It was actually sponsored by the California Board of Accountancy. You know, the main regulatory body for CPAs. And it was authored by Assembly member Jackie Irwin. And you don’t have to take my word for it. This quote from the Board of Accountancy really nails the two main goals of the bill.

Two Main Goals of AB 1175

00:02:02:22 – 00:02:27:21

First, to enhance the requirements for new CPAs. And second, to modernize the rules for CPAs from other states who want to come and practice in California. So what does this new path actually look like in practice? Let’s start with the big changes for all the aspiring CPAs right here in California, because this bill totally reimagines what education and experience are going to mean from now on.

Elimination of the 150-Unit Requirement

00:02:27:23 – 00:02:51:18

All right. This is the single biggest game changer. That 150 unit fifth year requirement. It’s gone. Poof. The new path is way more direct. It’s going back to a 120 unit model, which means a standard bachelor’s degree with a concentration in accounting. Now the experience requirement is changing too. It’s going from one year up to two. But and this is a huge but there’s a major trade off here.

Expanded Experience Flexibility

00:02:51:23 – 00:03:15:05

Flexibility. The old system was super rigid about what counted. The new two year rule, though, allows for a much, much broader range of experience, including work in government or private industry. So let’s boil it all down. Here’s the new pathway, simplified into three basic steps. First, get your bachelor’s degree with that accounting focus. Second, you still have to pass the uniform CPA exam.

The New CPA Pathway Explained

00:03:15:05 – 00:03:37:13

That’s not going anywhere. And third, you complete two years of general accounting experience. Oh, and the law also says that if you get an advanced degree in something related to accounting that can count as one of those two years of experience. Pretty neat. Okay. Now for the second major part of this whole reform, it’s all about breaking down the borders for CPAs who are already licensed in other states.

CPA License Mobility and Practice Privilege

00:03:37:15 – 00:04:01:15

I mean, let’s be real. Business today doesn’t just stop at the state line. The core idea behind this part of the law is super simple and really powerful. CPA equals CPA. The goal is to treat a CPA license from another state as valid here in California. Getting rid of a ton of unnecessary red tape for qualified professionals. And the way they’re doing this is with a concept called practice privilege.

How Practice Privilege Works

00:04:01:21 – 00:04:19:15

Honestly, the best way to think about it is like your driver’s license, right? Your license from one state lets you drive in another. It’s the same idea a CPA license from a state with similar standards. Well, let a professional practice in California without having to get a whole separate license. But hold on. This doesn’t mean it’s a total free for all.

Consumer Protection and Oversight

00:04:19:15 – 00:04:44:12

Not at all. Protecting consumers is still the number one priority. The California Board of Accountancy, or CBA, is keeping a really tight grip on oversight. They’re going to be monitoring other state standards, and they have the power to kick a state out of this mobility program. If they’re not doing enough to protect consumers. Okay. So with these new paths for both California’s own CPAs and those from out of state, what does this all really mean for the future?

Implementation Timeline

00:04:44:14 – 00:05:10:13

And maybe more importantly, when do these changes actually happen? So this timeline is super important for anyone who’s in the process right now. The bill officially becomes effective at the start of 2026. Then those new licensure rules we just talked about, they kick in for new applicants on January 1st, 2027. And to give everyone time to adjust the old rules won’t be completely gone until 2029.

Long-Term Goals of the Reform

00:05:10:15 – 00:05:32:16

So what’s the end game here? Well, the main goals are to finally strengthen that pipeline of new accountants, make the profession way more accessible to diverse candidates by getting rid of that fifth year financial barrier, and just generally expand the workforce to meet California’s huge demand. It’s all about making sure the public continues to have access to plenty of competent, ethical CPAs.

Next Steps: Rulemaking and Regulation

00:05:32:18 – 00:05:52:16

Now, just because the bill is law doesn’t mean the work is over. The next huge step is for the California Board of Accountancy to actually sit down and create all the specific regulations, you know, the nitty gritty details that will put all these new rules into practice. And, you know, that really brings us to the final big question that this whole reform brings up.

Conclusion: AB 175 California CPA and the Future of Licensure

California’s passage of AB 175 California CPA represents a major shift toward modernizing CPA licensure by removing outdated barriers and expanding access to the profession. By eliminating the 150-unit rule, increasing experience flexibility, and introducing practice privilege, the state aims to strengthen the CPA pipeline while maintaining consumer protection. As the California Board of Accountancy finalizes regulations, aspiring CPAs and licensed professionals alike should stay informed and seek professional guidance. For advice tailored to your specific circumstances, consult a qualified attorney or CPA licensing professional.