Kendall Jones Neukomm (00:00)
Hello everyone and welcome to Whitley Penn Talks, where we give you valuable insights to help you make confident, informed decisions and move your business forward. My name is Kendall Jones Neukomm and I’m really excited to be here today. A few weeks back, we began to dive into Texas Senate Bill 262 with Brooks Landgraf from the Texas Legislature, and we gained a little bit of insight into what the policymakers were thinking when they were putting together Texas Senate Bill 262 and some perspective on that topic. We were joined by Katherine Kirk and it was a really great conversation. If you have not already listened to that episode, you can find that on our channel and it has been linked down below.

But today we are coming back to the same topic. So Senate Bill 262, but this time we’re gaining a little bit of insight on the educator’s perspective. So today myself and Valerie King are joined by Kirsten Cook, the Director of Lyons School of Accounting at Texas Tech University here in Texas. Val is our Associate Director of Early Talent and we’re really excited to get into this episode today. So how are you both doing it? And welcome to the podcast.

Valerie King (01:12)
Thanks for having us.

Kirsten Cook (01:13)
Wonderful, yeah, thank you for having us.

Kendall Jones Neukomm (01:16)
Well, before we get into more of the detail around this bill, I’d love to have each of you introduce yourselves since this is both your first experience on Whitley Penn Talks. So Kirsten, let’s start with you. Tell us a little bit more about your background, your story, and how you got to where you are today.

Kirsten Cook (01:34)
Well, again, thank you for the opportunity to be here. Whitley Penn is a hugely valued partner that we have here in the Lyons School of Accounting at Texas Tech. You hire a large number of our students to come and work for you. So for that, we’re extremely grateful. Our distinguished alumni this past year, distinguished alumnus, was your former CEO, Larry Autry.

And your current CEO, Nathan McEown, is a member of our Accounting Advisory Council. So have a really close relationship with you guys and so really appreciate this opportunity. I am a native Texan, so I grew up in the Waco area. I started college at the local community college there, so McClennan Community College, and then transferred to Baylor and stayed at Baylor to finish up my bachelor’s degree in accounting and also my master’s degree. I worked at a large local firm in Waco called James Ritmeyer Boyd and Therrell, and then decided that I wanted to get into the education game. And so I applied to PhD programs and ultimately went to Texas A &M and that’s where I earned my PhD. I came to Texas Tech in 2013. So I’m now starting my, gosh, 13th year here as a faculty member and became the director of the Lyons School of Accounting. I’m starting my fourth year in this role.

Kendall Jones Neukomm (03:04)
Awesome, awesome. Fellow Baylor Bear. So I also went to Baylor, which is very exciting. Love to see it. And Valerie, why don’t you share a little bit more about yourself as well?

Valerie King (03:16)
Yeah, absolutely. So I am Valerie King. I’m based out of our Houston office, but actually grew up in the Dallas area and a proud graduate of Texas Tech University. And that’s where I met my husband. Actually, we’ve got two kids. One is two and the other is eight. ⁓ And I’ve been in the early talent space now for about nine years, working across Big Four in industry and now in middle market. so honestly, it’s just been a fun journey just helping students navigate their career paths and figuring out what’s the right opportunity for them.

Kendall Jones Neukomm (03:49)
Yeah, awesome. Well, thank you both again. Very excited to dive in. To start, Kirsten, why don’t you remind listeners what Senate Bill 262 entails? I know many have listened to that first episode, but for those that didn’t click the link below, what does that bill entail? And just to remind our listeners out there.

Kirsten Cook (04:11)
Yeah, I think SB 262 is probably the thing that I’ve spent the most time thinking about in the past 12 months or so. So Texas Senate Bill 262 establishes this alternative pathway to becoming a CPA in Texas. It will take effect next year, so on August 1st of 2026, and the new pathway, the alternative pathway allows individuals who have a bachelor’s degree with a concentration in accounting to become CPAs by passing the uniform CPA exam and then by completing two years of relevant work experience. So this pathway is an additional option for licensure alongside the traditional 150-hour education requirement that has been on the books for many, many years now.

Kendall Jones Neukomm (05:02)
Awesome. Thanks for breaking that down and reminding our listeners out there. So when you think about your role in leading the accounting program at Texas Tech, how has the introduction of this bill and now the passing of the bill influenced the ways that you’re thinking about curriculum and CPA pathways and how you’re educating students and preparing them?

Kirsten Cook (05:25)
Yeah, so honestly right now we’re in a little bit of a holding pattern. And the reason for that is that ⁓ so the Texas Legislature passed SB 262 and Governor Abbott signed it into law. But now the Texas State Board of Public Accountancy is charged with how to implement this this new law. So that means that the TSBPA has to revisit its educational requirements, both to sit for the CPA exam and then subsequently to be licensed as a CPA.

So the TSBPA has to decide whether to modify the number of upper level accounting hours, the number of upper level business hours that are required, as well as specific courses like communications, research, and ethics that are all currently required under the traditional pathway. So the TSBPA has released proposed rule changes, but during the public period that just ended at the end of August, the Texas Society of CPAs expressed some concerns with those proposed changes, and so now that the comment period is ended, we’re kind of waiting to see how things will shake out and how the concerns that were raised by the Texas Society will impact those final rules when they get released by the state board.

I think specifically with respect to Texas Tech, what we have to decide is whether to shift some of our courses from our Master of Science in Accounting program down to the undergraduate level as part of our Bachelor of Business Administration, our BBA program. And this is tricky because that undergraduate curriculum is already full. So adding additional accounting classes will require some cuts in other places. And there are only certain places where we’re able to cut because we have to conform to the core curriculum that is required by the state of Texas, as well as the general business curriculum that our Rawls College of Business requires.

That’s also important for students to meet those upper level business requirements for CPA certification. And we don’t want to dissuade students from enrolling in our master’s program by pushing graduate classes down to the undergrad level, because that program is designed to do so much more for them than just preparing them for the CPA exam. It’s really designed to prepare them for success in the profession.

Kendall Jones Neukomm (07:49)
For sure. For those listening, you have a kind of a quick synopsis of the primary comments that have been submitted back?

Kirsten Cook (07:57)
So essentially the the I only know the letter from the Texas Society because they have publicized it. I’m not sure that other comments have been released. Their concerns were that that it would be very difficult for schools, including us, to be able to meet all of those requirements, even with those proposed changes in 120 hour bachelors program.

Kendall Jones Neukomm (08:06)
Great.

Kirsten Cook (08:26)
And so I think that the Texas Society was a little concerned that even though the letter of the law is that, know, 120 hours, that students might still be required to take more than 120 hours in order to meet all of those requirements that the state board has listed. So, you know, things like the required ethics class, the required communications class, they were planning to decrease the number of upper level business hours from 24 to 21, but also proposing to increase the number of upper level accounting hours from 21 to 24. And so just a trade off there.

Kendall Jones Neukomm (09:05)
Yeah, definitely. ⁓ It’ll be very interesting. mean, just like you said before, we are truly in that holding pattern where this is what the law says, but this is how ⁓ it needs to be applied and is that possible at this time. So yeah, definitely an interesting current environment there for sure. Valerie, I know that you and your team have been out on college campuses already so far this fall. Have you received questions about the bill? What has that conversation looked like from your perspective?

Valerie King (09:34)
Yeah, I mean, we’ve received questions mostly from students asking whether or not we would recommend that they take the master’s option or not. And so I think for our team, we really encourage students to do their research first, right, of what that looks like for them and does that option make sense, right?

So, everyone has a different path. Everyone has different financial situations. And while we highly recommend that you do go the master’s route and get that 150 to be best prepared to take the CPA exam, you know, that might just not be the option for some people. So yeah, that’s kind of that’s what we’ve been seeing mostly on campus so far.

Kendall Jones Neukomm (10:20)
Yeah, definitely. And still pretty early there again with that kind of holding pattern and not knowing what will come in about a year. Super interesting, I’m sure. And do you anticipate a shift in the types of candidates you’ll be targeting from an early talent perspective that a master’s degree is no longer going to be technically required with that 120 hours requirement? How has that changed for you, Valerie?

Valerie King (10:24)
Yeah, that’s a good question because honestly, at this point, we’re still kind of in a holding pattern too and it’s a little too early to tell, but I don’t anticipate a huge shift in the types of candidates we’re targeting because for most of our internship roles, we’re still looking for students who are planning to pursue their CPA license, right? And that’s whether or not they’re gonna get a master’s degree to do that.

That being said, I do think it is gonna be increasingly important for students to really read the job descriptions when they are applying and making sure that they understand what a firm or company is asking for, right? There’s some firms that they may still prefer for you to get a master’s degree or they may still require it. And then there’s others that might be a little bit more flexible with that. So it’s understanding what each employer is looking for that’s going to be key. And then taking it a step further, understanding where do you want to end up long term.

So if you are going to be starting in an entry-level role, the requirements for Texas are different from the requirements for New York and for, you know, each state is different. So you kind of have to do your research on that end to understand what’s required and where do I want to be long-term. you know.

Kendall Jones Neukomm (12:08)
Yeah, definitely. mean, that goes with any career path, though. It’s just you’ve got to ask yourself some of those questions. Like, where do I want to be? And am I doing what’s right in front of me now to set me up for that future? Or what is that day to day really looking like? So that’s a good point to bring up for those listening out there. Make sure that you’re preparing yourself for not just what tomorrow will hold, but trying to plan for the future just the same. So I definitely agree with you there. So open kind of open conversation here from both of your perspectives, what do we feel like is the advantage of SB262 for firms and for students and where do you guys see that going?

Valerie King (12:49)
I think from a firm perspective, you know, it’s been a game changer, right? We, the past several years, we’ve been facing a talent shortage in the accounting industry. And so I think, you know, this bill is going to help widen the pool of eligible candidates. So that’s a huge win. And then on the student side of it, it just opens up more pathways to get that license, which is, that was one of the main goals for the legislation.

And then it’s going to be helpful for those who might not be in a position financially to get the master’s degree. And so now there’ll, it’ll be a little bit more ⁓ flexibility for those students.

Kendall Jones Neukomm (13:29)
Did you have anything to add there?

Kirsten Cook (13:29)
Yeah, I mean, if you follow me on LinkedIn, you probably think that I have absolutely nothing good to say about SB 262. And that’s not entirely true. ⁓ Actually, Katherine Kirk and I, one of the things that we do agree on is that ⁓I think that for working professionals who graduated with a bachelor’s degree in accounting, you’ve been working in accounting for a number of years.

If the only reason that you’re not a CPA is that you just don’t have those extra 30 hours required currently for licensure, I think that the alternative pathway may allow these folks to finally reach that professional goal. And I think that that’s wonderful. I also understand for various reasons that some students are just unable to pursue a master’s degree. They may not have the means to afford the tuition and fees.

They may need to work to support their families. And so the alternative pathway will give them an opportunity to become CPAs without that extra 30 hours. And then, you know, some prospective accounting majors do view the 150-hour rule as a barrier to entry. When they come into college and specifically when they come into the business school and they look at the different majors that are available to them, you know, they see that, well, to become a CPA, it’s required 150 hours.

Every other major in the business school is 120. And so I am certain that there are some folks who walk in the door and say, oh gosh, not accounting for me. I’m going to pursue finance, management, marketing, whatever the case may be, because I don’t want to be in school for five years. Four is enough for me. So I do think that there could be an influx of new students. And I do think that the shortage of accountants is very real.

Kirsten Cook (15:23)
I don’t think that the 150 hour rule is the primary reason for the shortage of students. I think that the primary reason is that salaries lagged for many, many years. And as we saw competitor fields increasing their starting salaries while accounting salaries stagnant, that’s where we saw the shift away. And I will actually say at Texas Tech, from last year to this year, we’ve seen a 40 % increase in our undergraduate accounting majors. And that’s before SB262 has even come out into the world. And I think that the reason for that is primarily that firms, including Whitley Penn, have increased what you are paying for starting salaries. And that’s been really attractive to our students, that they feel like, yes, I’m going to have to work hard, but I’m going to be paid fairly for the work that I’m going to do.

Kendall Jones Neukomm (15:54)
Wow.

Valerie King (15:58)
Amazing.

Kendall Jones Neukomm (16:18)
Yeah, absolutely. It’s so interesting how formulaic it can all be and how those trends over time do become trends just because of some levers that are getting pulled here and there. And it’s interesting to watch that. Now I’m on our marketing and growth strategy team, but it’s been interesting from my perspective for the last six years to be a little bit more embedded in the accounting space and get to know the industry a little bit more closely. So it’s definitely interesting.

Valerie, did you have anything to add there?

Valerie King (16:51)
So Kirsten, I’m curious, are there any concerns about the rigor of the quality of the CPA preparation under this new legislation?

Kirsten Cook (17:02)
Yeah, definitely. I think my colleagues and I really fear that too many students will choose the alternative pathway and leave school without the education that they need to pass the CPA exam. What we’re terrified of is that our students are going to graduate with that bachelor’s degree, they’re going to go to work, and then they’re going to be forced to study at night and on weekends to try and learn the material for the CPA exam.

The response that I hear to this is, well, you know, that’s why CPA review courses exist. Well, CPA review courses are called review for a reason. They assume that students have learned that material in class, and those review courses are designed as a refresher. So for students who never had that material in class,we worry that learning it on their own may prove to be really, really difficult, if not impossible.

Also, the CPA exam underwent a major overhaul in 2024 with CPA evolution. So now instead of there being four common parts of the exam that everyone takes, the BEC section of the exam has gone away and now students choose a specialty discipline from among business analysis and reporting, information systems and controls, and tax compliance and planning. And to my knowledge, and I’m a member of organizations of department heads across the state and across the country, all schools that have a master’s program teach the material for those new specialty disciplines at the graduate level. In fact, we all redesigned our graduate programs two years ago specifically for that reason. So students who are graduating with only a bachelor’s degree are not going to have learned any of the material for those specialty disciplines while they were in their undergraduate programs.

And I think the last thing that I’ll say is just some empirical evidence is that looking at actual data that’s collected by the state board of public accountancy and shared with schools via their website, there are vast differences in pass rates for our Texas Tech students who graduate with a master of science in accounting versus those who leave with only a bachelor’s degree. So that differential is 15 % for the audit section of the exam.

It’s actually 30 % for the rec section and it’s a whopping 40% for the financial accounting and reporting section. So these stats demonstrate to us that our master’s program really does add a lot of value and that undergrad students are really likely to struggle to pass the CPA exam if they don’t get additional education beyond that 120 hours.

Valerie King (19:40)
Yeah, I’m curious kind of along those same lines on your opinion on this. Just because from a long term perspective, I’m curious to see how things shake out because you know, we as employers are going to be looking at, know, how do they perform, right? From if they have a bachelor’s versus if they have a master’s, like is there a difference there? Right now it’s a little bit hard to make that a requirement when we don’t know if there’s a difference in how they’re performing in the workforce. So I’m curious in your opinion on how we might see that shift a little bit more long term.

Kirsten Cook (20:20)
Yeah, I mean, when I’ve heard a question like this in the past, it makes me think about, because I’m a tax person. So I teach on the tax track in our master’s program, as well as our undergrad tax class. And I think about, you know, a student who graduates Texas Tech with a bachelor’s degree in accounting has had one undergraduate tax class that is an individual tax class. 

If you go into our MSA program and you follow the tax track in that program, you’re going to have additional coursework in ⁓ corporate accounting, in partnership accounting, in ⁓ a state and gift taxation, in ⁓ data and analytics for tax, and also the tax research and planning class that I teach.

And so I just have to think that from an employer perspective, if you’re hiring a student who’s either coming out of a bachelor’s degree program with literally just enough knowledge to be dangerous versus somebody who’s coming out from a master’s program and certainly doesn’t have the work experience, but at least has the technical knowledge from their classes to hit the ground running on all the different types of clients whose tax compliance and planning work you do that there just has to be a preference for that student with a master’s degree, because my feeling is that you’re going to be able to give them higher level work much more quickly than you’d be able to do with someone with just a bachelor’s degree. And I think that this is true on the audit side as well. It’s just I don’t teach on that side, so I’m just not as familiar with what that looks like.

Kendall Jones Neukomm (22:03)
Definitely. In general, I think we’ve kind of talked around this throughout this episode, but how do you see the legislation and the bill impacting the long-term pipeline of accounting professionals in Texas? I know that we talked about salaries impacting that number of total accounting students, but how do you see this bill changing that in the future?

Kirsten Cook (22:30)
Valerie, do you have thoughts?

Valerie King (22:32)
Yeah, I can I can kick it off. think it’s always so hard to tell with the accounting industry, honestly, because the past few years, especially within recruitment, it’s just been very up and down. Right. And we’re constantly having to shift in. You know, I think we will see an increase in professionals or at least I’m hoping and honestly right now from what we’re seeing so far, we’ve been polling students and trying to collect some initial data. And so far, most students are still opting to get the master’s degree, even though it’s not necessarily required for them to get that 150. So that’s a good thing, But you never know how things are gonna shift within the next year or two, three years down the road. So that’s something that we’ll just have to keep, you know, being flexible with and adjusting to.

Kirsten Cook (23:28)
Yeah, I think, you know, as I listen to Valerie’s response, it kind of makes me think that this is almost two separate questions. So I think, you know, one question is how will this change impact the number of accounting majors? But then I also think that how will it impact the number of CPAs is a different issue. So I do believe that we’re going to see an influx in new accounting majors.

I do think that people are gonna come into the business school and say, accounting is a 120 hour major now too, just like the others. And so I’m more likely to choose accounting. And I think that that’s great. What I’m, I guess, a little bit afraid of is that for students who choose that alternative pathway and then graduate with only those 120 hours, I really do question whether most of them will ever become CPAs.

Just given the difficulty of the exam and not just how difficult the exam is, but how difficult it is to study for the exam while you’re working a full-time job, full-time accounting hours, I wonder how many people are going to struggle with this and ultimately are just going to give up.

And that’s really one of the strongest benefits of the master’s program is that because Texas in 2023 became a 120 to test state, now students who are in our master’s program, as soon as they hit 120 hours, they can start sitting for parts of the CPA exam before they graduate with that 150 hours. And so in our program, as soon as you have finished the relevant coursework for a particular part of the exam, you can sit for that exam while that material is still fresh in your mind. And we actually have had a quarter of our students, more than a quarter of our students who graduated so far in 2025, who have already passed all four parts of the exam because they were taking parts while they were students in the master’s program.

Some of them have knocked out the final part since they graduated this past summer, and now they’ve been able to hit the ground running at work this fall with the CPA exam and the rear view mirror. And so now they’re just working to accrue that one year of work experience to get licensed. And I really think that that’s the path of least resistance. That’s the path that’s gonna create the best work-life balance for students and really give them the best opportunities going forward to be successful in their careers.

Kendall Jones Neukomm (25:28)
Yeah, definitely. Well, thank you, Kirsten, so much for sharing and Valerie, always great to have you. It sounds like we need to go ahead and schedule an episode for this time next year and then the following to just kind of see how this change continues to make an impact. So again, thank you both for your time and for those listening out there. What’s the best way to get in contact with each of you?

Valerie King (25:56)
Yeah, just connect with me on LinkedIn, just Valerie King on there.

Kendall Jones Neukomm (26:13)
Awesome, and Kirsten, LinkedIn for you as well.

Kirsten Cook (26:15)
Yeah, I love the LinkedIn and folks are also welcome to shoot me an email. It’s kirsten.cook@ttu.edu. Would love to hear from you and continue this conversation. We definitely know that we don’t have all the answers at this point. We’re kind of wandering in the woods, just like the firms are in terms of what this is going to look like going forward. And so any advice or thoughts that you have, we welcome them. So thank you.

Kendall Jones Neukomm (26:41)
Awesome, definitely. Well for those listening, if you enjoyed today’s episode, be sure to subscribe on YouTube, Spotify, Apple, or listen right on our website at WhitleyPenn.com slash podcasts. If you are interested in receiving future episodes, write to your inbox, check the link in the description to sign up for our email list. Again, thank you so much, Valerie and Kirsten for your time. Until next time.