bootleggers, baptists, & cpas: rethinking licensure | arc

the accounting profession faces a reckoning as leaders debate whether cpa licensure protects the public—or stifles innovation and diversity.

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accounting arc

baker begins with a history lesson, tracing professions back to ancient babylon and the code of hammurabi. a profession, he explains, rests on three pillars: a common body of expertise, autonomy with exclusion, and a duty of service to the public. by that definition, he argues, not all licensed occupations—such as florists or interior decorators—qualify.

in the u.s., states—not the federal government—control licensure. today, as many as 30% of u.s. workers require a license, up from just 5% in the 1950s. “the best predictor of licensure isn’t public safety—it’s political organization,” baker says.

the consequences, he argues, are profound. “occupational licensure was designed to keep people out so prices could be kept high,” baker says. he points to president obama’s 2015 council of economic advisors report, which criticized licensing for disproportionately harming women, minorities, and low-income workers by raising barriers to entry.

this, baker believes, connects directly to the cpa pipeline problem. “we can talk about dei all day, but if licensure excludes people from even entering, the problem is built in,” he says.

shimamoto, founder and managing director for intraprisetechknowlogies and founder and inspiration architect for the center for accounting transformation, agrees that the pipeline needs urgent attention but points to different root causes. research conducted with the illinois cpa society, he notes, found the greatest barrier wasn’t cost—it was time. candidates struggled to balance study hours with work and family responsibilities.

he also criticizes the trend of pushing additional cpa credits into master’s programs, driving up tuition. “we need to bring this back to the undergraduate level,” shimamoto says, applauding states reconsidering the 150-hour requirement.

patrick, ceo of verifyiq and co-founder and educator of tb academy, pushes on the core dilemma: public protection. “if you’re an engineer building a bridge, there’s clear risk without regulation,” he says. “so how do we balance protecting the public with opening doors for others?”

baker argues certification, not licensure, should be the safeguard. like board-certified doctors or certified auto mechanics, accountants could rely on voluntary certifications, reinforced by tort law and reputation. “airlines don’t want to kill their customers—it’s not a good business model,” he quips.

baker’s solution is radical: repeal cpa licensure entirely. let state societies or the aicpa administer certifications. allow anyone to sit for the exam. drop rigid cpe requirements. “monopolies don’t innovate,” he warns, citing nyu professor baruch lev’s the end of accounting, which argues that audits have been stagnant for a century.

shimamoto and patrick acknowledge the boldness of the idea, noting it would require rethinking attestation. baker suggests exchanges or insurers could assume oversight. patrick, meanwhile, highlights the public’s confusion. “bankers ask my fiancée—who isn’t a cpa—to sign financials. if bankers don’t understand the difference, how can we expect the public to?”

the discussion often circles back to equity. shimamoto shares stories of immigrants who pursue other credentials, such as enrolled agent status, when language barriers made the cpa exam out of reach. baker notes that actuarial and mechanic certifications don’t suffer the same pipeline issues.

according to baker, the lesson is clear: certification models are thriving while licensing struggles. “we’d be more innovative, more diverse, and more valuable as a profession if we moved away from licensure,” he says.

baker closes with an analogy: “in economics, there’s the bootlegger-baptist theory. bootleggers support sunday bans on alcohol because it raises demand for their product. politicians say it’s to protect the public. that’s exactly how licensure works—professions run to state capitols asking for laws under the guise of public safety, but really to protect their monopoly.”

shimamoto laughs, “i never thought of cpas as bootleggers, but maybe we are.”

suggested additional insights:

• occupational licensing: a framework for policymakers https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf
• the right to earn a living
  https://amzn.to/454njlr
• in license to work
  https://amzn.to/3uzlazn
• bottleneckers
  https://amzn.to/3jjpsgh

10 key takeaways:

1. professions historically rest on expertise, autonomy, and service to the public.
2. licensure has expanded dramatically, often without clear public safety benefits.
3. occupational licensing disproportionately harms minorities and low-income groups.
4. time, not cost, is the main barrier to cpa completion.
5. certification could protect the public through tort law, insurance, and reputation.
6. monopolies like licensure may stifle innovation in auditing and accounting.
7. the public often misunderstands cpa vs. non-cpa roles.
8. certification models in other fields show strong participation without pipeline issues.
9. radical reform could position state societies and the aicpa as certifiers.
10. the debate challenges the core identity of the accounting profession.

posted on september 4, 2025