Number of accounting grads plummets further

The number of students earning accounting degrees keeps falling, according to the latest figures released Thursday by the American Institute of CPAs.

The AICPA's 2023 Trends report found 47,067 students earned a bachelor's degree in accounting in the 2021-22 school year, down 7.8% from the previous year. Meanwhile, the number of students who earned a master's degree in accounting dropped 6.4% to 18,238. In the AICPA's previous Trends report, the comparative rates of decline were 2.8% and 8.4%, respectively.

However, enrollment projections for the upcoming academic year are looking brighter. Three-fourths of the administrators at university bachelor's programs and 78% of master's programs who responded to the survey expect enrollment in 2023-24 to be the same or higher as in 2021-22. That compares to 58% for both program categories in the previous Trends report.

"We're still on a downward trajectory for accounting graduates, although it's worthwhile to note U.S. university enrollment and earned degrees collectively shrank during this period," said Jan Taylor, the AICPA's academic in residence, in a statement Thursday. "The AICPA remains focused on advocating professionwide solutions to the talent shortage, and we saw increased mobilization and coordination in these efforts over the past year."

The report also found that the gender ratio and racial-ethnic mix of accounting graduates stayed similar to the previous report, with two exceptions: Hispanic/Latino graduates grew by nearly 1 percentage point and nonresident alien graduates decreased by a similar proportion in both the 2020-21 and 2021-22 academic years.

Master's degrees earned at private institutions declined 10.9% in the 2021-22 school year, while those earned at public schools dropped 3.3%.

The number of unique CPA exam candidates fell from 72,271 in 2021 to 67,335 in 2022. On the other hand, the number of exam sections taken in 2023 is on the upswing, partly because test-takers are looking to complete their requirements before the 2024 onset of CPA Evolution, a new licensing model that focuses on building core competencies in accounting, auditing, tax and technology while developing deeper expertise in one of three disciplines: information systems and controls; tax compliance and planning; or business analysis and reporting.

However, due to a lack of responses, the report said the total number of new graduate new hires could not be projected with confidence for 2021, so new hires and firm demographics were not reported. For the accounting firms that did respond to the survey, hiring expectations were optimistic for new hires of accounting graduates, with 91% of respondents anticipating they will hire the same or more new graduates in the next year, and 60% of the firms surveyed expect they will have the same or higher number of CPAs on staff in 2023 compared to last year.

To help remedy the accounting profession's pipeline issues, the AICPA has organized a National Pipeline Advisory Group, which is looking at ways to address the talent shortage. The advisory group plans to deliver a draft national strategy plan at the AICPA Council meeting next May. The AICPA is also moving ahead with a series of Pipeline Acceleration Plan initiatives.