Your Multi-State Firm Now Has Staff Licensed Under Two Different Frameworks — And Your Supervision Model Was Built for One

The accounting profession's licensure overhaul was sold as a pipeline fix. More than 30 jurisdictions have enacted alternative pathways to the CPA credential, allowing candidates to qualify with a bachelor's degree and two years of experience rather than 150 credit hours and one year. What received almost no attention in that rollout: the moment two differently licensed CPAs sit on the same engagement inside a multi-state firm, the supervision model most firms built over the past two decades stops working.

The AICPA and NASBA updated the Uniform Accountancy Act in July 2025 to codify three licensure pathways and shift the mobility framework from a state-based to an individual-based model. Under the old system, a CPA's ability to practice across state lines rested on whether their home state had "substantially equivalent" requirements to the destination state. Under the new model, mobility travels with the individual, based on that person's specific education, experience, and exam credentials. For a profession that long outsourced credential complexity to state-to-state equivalency agreements, this shift transfers a material compliance function directly to the firm.

The Shift to Individual Mobility Means Your Firm, Not the State Boards, Now Owns the Credential Complexity

Under the prior mobility framework, a firm could reasonably assume that a licensed CPA from any substantially equivalent state met the practice requirements of any other. The state boards handled that determination. Firms benefited from a kind of regulatory inference: if the license was active and the state was on the right list, the staff member could be assigned to the engagement.

That inference is no longer reliable. The updated UAA, as NASBA described in December 2025, makes a CPA's mobility contingent on their individual qualifications rather than their home state's framework. A CPA licensed under the 120-hour pathway in Ohio completed two years of supervised experience. A CPA licensed under the 150-hour pathway in the same state completed one. Both hold valid Ohio CPA licenses. But in states that have not adopted the alternate pathway — Michigan, Florida, Massachusetts, and Missouri among those still at varying legislative stages as of May 2026 — the 120-hour licensee's individual qualifications may not satisfy the destination state's mobility prerequisites.

The firm now needs to track which pathway each staff member used, which states their individual qualifications authorize them to practice in, and how those authorizations interact with the specific services on any given engagement. Most multi-state firms are not equipped for this. According to a Michigan CPA Society analysis from late 2025, many firms still rely on spreadsheets and calendar reminders to track licensing compliance — a system inadequate for a workforce that now arrives through two separate credentialing doors.

When a 120-Credit CPA and a 150-Hour CPA Are on the Same Engagement, Who Has Authority to Sign?

Both pathway holders obtain the same CPA license designation. The credential on the business card is identical. The difference is structural: the 120-hour licensee arrived with deeper work experience (two years versus one), while the 150-hour licensee arrived with broader academic preparation. Neither pathway produces a restricted license or a limited-scope credential.

For attest engagements, signing authority turns on accumulated attest experience hours, generally 500 hours as defined in most state board rules, rather than on the licensure pathway itself. A 120-hour CPA who logged 500 attest hours during their two years of supervised experience can sign an audit report with the same legal authority as a 150-hour peer. The operational problem is verification, not legal capacity.

Firms rarely document attest experience hours with the precision needed to distinguish between a 120-hour CPA with genuine attest depth and one who spent two years in tax or advisory work. That documentation gap was manageable when a single pathway produced all new CPAs. With two pathways now active, the verification question expands significantly: firms need to know which pathway was used and how the underlying experience was structured. The MICPA compliance framework is direct about the consequences: missteps can produce disciplinary action, fines, and the invalidation of audit reports.

The Engagement Assignment Problem That Isn't in Anyone's Policy Manual Yet

Supervision chains inside multi-state firms are largely informal. Senior associates supervise staff, managers review senior work, partners sign. The assumption embedded in that chain is that everyone in it holds equivalent practice authority in the jurisdiction where the work product lands. That assumption now requires explicit verification before each engagement, not just at onboarding.

Consider a firm with offices in Ohio (alternate pathway adopted, effective January 1, 2026), New Jersey (adopted, effective February 11, 2026), and Florida (pending as of May 2026). A staff associate licensed under Ohio's 120-hour pathway supports an audit of a Florida-registered entity, performed remotely from the Ohio office. The engagement partner holds a Florida license under the 150-hour pathway. Whether the associate's work product can be reviewed and signed in that configuration — and whether the associate is practicing in Florida for mobility purposes — is not resolved by any current state board guidance. It falls to the firm to determine, document, and defend.

This is not a theoretical edge case. As AICPA state policy analysis published in early 2026 notes, 25 states have adopted individual-based mobility, with at least 10 more planning 2026 legislation. The engagement assignment problem scales with every new adoption, because each one produces a new cohort of 120-hour-pathway licensees whose mobility rights in non-adopting states remain untested and uncodified.

How Malpractice Carriers Are Starting to Ask Questions Your HR Team Can't Answer

Professional liability underwriters have begun adding credential verification questions to their renewal questionnaires. The AICPA's professional liability program, underwritten by CNA and administered through Aon, is among the products that will face pressure to refine how it underwrites firms carrying mixed-pathway workforces on multi-state engagements.

The exposure logic is straightforward. If a claim arises from an engagement where a 120-hour-pathway CPA performed work in a state that had not recognized that pathway, and the firm cannot demonstrate that it verified the individual's mobility authorization before assignment, the carrier has grounds to contest coverage on the basis of unauthorized practice. The MICPA framework treats unauthorized practice as a concrete risk category. Firms that cannot produce pathway-aware credential records for each staff member on each engagement are carrying an undocumented liability that current coverage terms may not protect — and that their engagement partners almost certainly have not disclosed to clients.

The State-by-State Adoption Gap Creates a Short-Term Recruiting Arbitrage and a Long-Term Liability Window

The adoption map as of May 2026 is genuinely fragmented. More than 30 jurisdictions have enacted alternate pathway legislation, but Florida, Michigan, Massachusetts, Missouri, Louisiana, Montana, North Dakota, Rhode Island, Vermont, and Washington D.C. remain at various stages of pending consideration, according to MNCPA's national legislative tracking. California passed its own version in 2025 with a January 2027 effective date and distinct experience requirements that differ from the NASBA model.

Firms with offices exclusively in adopting states can recruit from the expanded 120-hour candidate pool immediately and deploy those staff on in-state engagements without mobility concerns. Firms straddling the adoption gap face a different situation. A candidate licensed under Ohio's 120-hour pathway cannot assume practice privileges in Michigan until Michigan adopts, and a firm that hires that candidate for a Cleveland role and then expands their responsibilities to a Detroit client engagement has created an unauthorized practice exposure it likely has not priced into its risk model or disclosed in its malpractice application.

What a Dual-Pathway Supervision Framework Needs to Cover Before Your First Disputed Engagement

Firms that want to manage this coherently face four concrete operational requirements. HR systems need to capture pathway data at onboarding: license number, expiration date, the specific pathway used, state of issuance, and the experience documentation that backs it. Engagement assignment workflows need a mobility check at the staff level, applied before scheduling, not just a partner-level license review at sign-off. The standing assumption that any licensed CPA can work on any engagement in any office needs a state-by-state pathway filter.

Supervision policies need to define who can provide qualifying oversight for 120-hour-pathway candidates still accumulating their required two years of experience. Most state board rules allow any active CPA to supervise, but firms should establish internal standards ensuring supervisors understand which pathway their reports are on and what experience documentation those staff will need for future mobility applications in non-adopting states. Finally, malpractice documentation needs engagement-level credential logs rather than firm-wide license rosters. A roster confirming all staff hold active licenses is no longer sufficient evidence that a specific engagement was properly authorized in its jurisdiction.

The profession spent two years debating whether the alternate pathway is sound policy. Firms with offices in Ohio, New Jersey, and Mississippi are past that debate. Their staff are already arriving through two doors. The supervision model that greets them was designed for one, and no state board is going to close that gap on the firm's behalf.