By almost anyone's accounting, accounting is making a comeback.
According to data from the American Institute of CPAs, the number of accounting degrees awarded nationwide in 2003 jumped 11 percent from the year before, to nearly 50,000 -making the days when the siren call of the dot-coms lured away many would-be CPAs seem like a distant memory.
The number of undergraduate accounting degrees awarded nationwide climbed 6 percent to just over 37,000 for the 2002-2003 academic year (the most recent for which data is available), while the number of graduate accounting degrees soared 30 percent, to 12,655.
Although last year's totals are still well below the peak levels of 1993 and 1994, when enrollments topped 60,000, executives at schools around the country offering accounting programs are optimistic, with many reporting significant increases for the 2004 academic year.
The AICPA numbers bode particularly well for public firms - 28 percent of undergraduates and 59 percent of graduate students took positions in public accounting firms. One-fifth of undergrads and nearly the same number (18 percent) of grad students took jobs in business and industry. (See chart, page 46.)
Leaders at accounting schools nationwide say that a number of factors - Sarbanes-Oxley, scandals such as those at Enron and WorldCom, and the economy - have all contributed to the growing ranks of future CPAs.
Four years ago, enrollment in both undergraduate and graduate accounting programs at the University of Denver's Daniels College of Business hovered around 135 to 140 students combined. That number has crept up steadily to hit 220 this year.
"We didn't expect the numbers that we got this year. They're about 25 higher than we expected," said Ron Kucic, director of the school of accounting at Daniels. In addition, he said that the school's enrollments in a recently added combined finance and accounting degree have picked up, particularly among finance students who found that employers in the finance area want candidates with a basic accounting background.
"I think it's a few things," said Kucic. "The economy certainly has helped us. We've had jobs all along in Colorado. We've had no trouble placing our students - placements have been at 95 to 100 percent consistently for a number of years. We also drew away some students from technology and finance, areas we lost them to five or six years before."
For better or worse, Kucic said, "The visibility for the profession that came along with the accounting scandals helped. High school students figured out that maybe there's something important here and maybe the profession isn't what they thought it was, and they looked at it more closely."
Sarbanes-Oxley, which Kucic referred to as "accounting's full-employment act," also has been a factor. "The large firms simply can't get enough people," he said, adding, "I'm not sure how long that will last. It could just be a three- or four-year phenomenon until everyone gets sorted out as to how they're going to handle SOX. But some states are talking about their own versions of SOX," which could keep demand steady.
It also doesn't hurt that some of the forces that would've pulled students out of accounting have dissipated.
The demise of the dot-coms, and waning demand for consulting and information technology - all of which lured students away from accounting just a few years ago - have made the stability of accounting careers attractive again, noted Ira Solomon, head of the Department of Accountancy at the University of Illinois Urbana-Champaign.
"Many students in 2000 to 2002 who might have gone into IT are finding that accountancy is a better path with good job opportunities," said Solomon. "Students are smart - they find out where the jobs are going to be and point in those directions. And public accounting firms in general, relative to their competitors in investment banking, IT and consulting, are perceived to be increasingly attractive."
And, as Solomon and others noted, some of the interest is cyclical. "Demand for accounting by students seems to rise when the economy turns down," said Solomon.
Fueled by all of those factors, the number of bachelor's degrees awarded in accounting at the University of Illinois rose from 229 in May 2001, to 379 in May 2004, up 44 percent over 2003. More than 400 students will graduate with undergraduate accounting degrees in May 2005, and the figures for Master's degrees are similarly striking. In May 1999, the school awarded 20 Master's degrees in accounting. In 2000, 22 were awarded. In May 2004, it was 148. And in May 2005, that number will hit 170.
While Solomon noted that some of the increase at the Master's level may be a function of the 150-hour rule, he added, "In talking with students, one of the things I'm hearing is that when accounting made the news, even if it wasn't for the best of reasons, they became aware of its importance. They thought, maybe it matters, maybe it's even a little sexy."
Solomon continued, "Maybe this gets filed under the heading, 'There's no such thing as bad publicity.' Maybe it's other things, but it appears that students came back to accounting with a vengeance. There's tremendous interest in accountancy as a field."
Bigger than finance
At the University of Massachusetts at Amherst, enrollment in the school's graduate accounting program went from "next to nothing to a full plate," according to Dennis Hanno, associate dean for undergraduate matters at the Eisenberg School of Management. "For us, that's about 100 students," he said.
The number of undergraduate students declaring accounting majors at UMass has been around 25 percent over the last five years. This year, however, 36 percent of eligible undergrads declared accounting majors, marking the first time accounting has had more new majors than finance.
While some of the increase at the graduate level may be due to the impact of the 150-hour rule, which took effect in Massachusetts in 2002, Hanno agreed that an abundance of jobs and the media attention have had positive effects for the profession. "It's the old adage - any news is good news. Despite the negative press about what's been going on in the industry, accounting has been on people's minds."
More states, more students
Earlier this year, the New Jersey State Society of CPAs reported that, following more than five years of sharp declines, accounting enrollments at the state's five largest accounting programs were up 9 percent from their 1999-2000 levels.
The number of accounting majors at 10 colleges and universities in Maryland climbed 17.4 percent last year, according to an analysis of data released earlier this year by the Maryland Association of CPAs. The uptick - which followed a similar increase the prior year - contrasts with a decade-long decline in enrollments that saw the number of accounting majors in the state decline 45.6 percent from 1991 to 2001.
"The consensus is - and I think you'll find a similar story everywhere - the accounting scandals have contributed enormously to a renewed interest in the profession," MACPA public relations manager Richard Rabicoff said when the numbers were reported. "The scandals put a spotlight on the CPA profession, obviously not a terribly flattering one, but they indicated that CPAs are working in a lot of industries and in a lot of different capacities at a high level. It helped get across the message that we've always emphasized - that CPAs are not always just doing taxes."
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