Non-accountants comprise 31% of new hires in firms: AICPA
Non-accounting college graduates comprised 31 percent of new hires across public accounting firms in the U.S. last year — an 11 percentage point increase from 2016 to 2018 — according to the AICPA's report, “2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits," released Tuesday.
The biennial report, first published in 1971, is based on university responses from the 2017-2018 academic year and U.S. accounting firm responses from the 2018 calendar year.
The report found that firms hired approximately 11 percent fewer accounting graduates in 2018 than in 2016, and nearly 30 percent fewer than in 2014. While the notion of non-CPAs entering the profession isn't new, the latest numbers in the AICPA's report signify a growing reliance on technology and technologists to help firms succeed moving forward.
“Increased demand for technology skills is shifting the accounting firm hiring model," AICPA president and CEO Barry Melancon said in a statement. "This is leading to more non-accounting graduates being hired, particularly in the audit function. CPAs have an unmatched reputation for trust and integrity, earned through decades of working in the public interest. However, to play this vital role in the future will require an increased focus on technology. It is incumbent upon the profession to ensure accounting graduates and newly licensed CPAs have these skills and expertise needed to support the evolution of the audit.”
The number of accounting graduates hired for audit-related work was also found to be rising in recent years — 56 percent of accounting new hires were found to be assigned to audit-related work in 2018, up four percentage points from 2016 and nine percentage points from 2014.
"The marketplace continues to demand different competencies and, while accounting graduates are still being hired, firms are seeking other skill sets to expand services," wrote Yvonne Hinson, AICPA academic-in-residence for academic and student engagement, in the report. "We are seeing that the gap in skills required in the profession, especially as it relates to technology needs, is being met with non-accounting graduates. There is also anecdotal evidence to suggest that some of this technology-specific hiring is occurring at the experienced hire level."
In academia, the 2019 "Trends" report found that undergraduate accounting program enrollment currently stands at the second-highest level on record (from an all-time high in 2015-2016). Nearly 208,000 students were enrolled in undergraduate accounting programs during the 2017-2018 school year, with more than 33,000 students enrolled in master’s programs in 2017-2018 (reflecting a six percentage point decline from 2015-2016.)
The number of CPA candidates and newly licensed CPAs in 2018 also dipped to the lowest level in 10 years, falling 7 percent to 36,827, while newly licensed CPAs fell 6 percent to 23,941. This follows highs of CPA candidates of 49,597 and 48,004 in 2010 and 2016, respectively.
Notably, diversity in accounting graduates was found to be at an all-time high for non-white students. Sixteen percent of accounting bachelor's and master's graduates in the 2017-18 academic year were Hispanic/Latino, with Asian graduates comprising 13 percent and Black/African-American graduates comprising 6 percent of graduates. Male and female bachelor's/master's graduates remained near-even at 51 percent male and 49 percent female.
Other notable findings from the report include:
- Forty-three percent of new hires at U.S. accounting firms in 2018 had a bachelor's degree in accounting; 25 percent had a master's degree. Thirty-one percent of new hires had non-accounting degrees, representing an all-time high in the "Trends" report.
- Forty-three percent of polled firms said they expect to hire the same amount of accounting graduates this year. Fifteen percent expect to hire more, and 16 percent expect to hire fewer.
- Thirty-two percent of polled firms plan on hiring the same amount of non-accounting business graduates as last year. Five percent plan on hiring more, while 24 percent plan on hiring fewer non-accounting graduates.
- Eighty-four percent of CPAs in polled firms were found to be white. Ten percent of CPAs were found to be Asian, 2 percent African-American, 4 percent Hispanic/Latino, and 1 percent multiethnic.
- Seventy-seven percent of partners in polled firms were found to be male, while 91 percent of all partners were white. Twenty-three percent of partners were female, with approximately 9 percent of all partners ethnic minorities.
For the full report, head to the AICPA's site here.