The pipeline crisis: Easing the burden without sacrificing quality

There has been much discussion of late about the increasing concern regarding the pipeline crisis. As I'm certain most readers of Accounting Today are aware, records from the National Association of State Boards of Accountancy show that the number of CPA exam takers plummeted between 1990 and 2021, going from 143,000 to less than 73,000 annually. Other statistics demonstrate similarly dismal figures — both in regards to students choosing to study accounting in university and those that choose to study accounting, but opt not to pursue licensing.

There have been a plethora of attempts to both diagnose and treat the problem. Liz Koller does a nice job of highlighting many of these in her article from Sept. 30, 2022. The profession is seen as too boring, too challenging, too cumbersome, not lucrative enough, and on and on. Solutions range from providing exposure and education about the field to teenagers, to eliminating or altering the 150-hour rule, to working with firms to increase starting salary and benefits. Most, if not all, of these have ignited conversation and have both their supporters and detractors.

The 150-hour rule has drawn particular attention and debate, and understandably so. Of course, it does add extra work, time, and financial burden to those aspiring to enter the field. As was highlighted by Juliette Gaudemer in her article, "The pipeline problem," "Many argue that the rule is discriminatory and that students from underrepresented backgrounds can't afford the cost of the exam or a master's degree." She also cites a study conducted by the Illinois CPA Society in which 62% of respondents indicated it's the time commitment and workload accompanying the exam that discourages them.

Yet, many would argue that the 150-hour rule both lends credibility to the field and ensures simple national mobility. As NASBA chair Rick Reisig, who has done an excellent job navigating and driving solutions to the crisis, points out, similar debates, studies and conversations were conducted in 1990. It was similar circumstances causing the concern, but the ultimate decision — based on the studies done at the time — was, as we know, to increase the educational requirements, providing CPAs with "a broad array of skills and knowledge."

Reisig makes clear that, "This educational requirement is one of the cornerstones of substantial equivalency recognition and CPA mobility to practice across jurisdictional boundaries without necessitating additional licensure." He adds that "targeting the 150-credit hour requirement as the key contributor for the decline is not supported by the numbers … nor by the responses of most accounting students when asked about their perception of the challenges they face in entering the profession."

Gaudemer cites Tracey Niemotko, an accounting professor at Marist College, who, while acknowledging the crisis, also doesn't believe the 150-hour rule should change. Niemotko likens CPAs to doctors who also have years of required educational training and it would be implausible to consider lessening the requirement given the level of responsibility. 

Whether you agree or disagree with the arguments, the 150-hour rule is unlikely to change any time in the near future. But that doesn't mean that some of the expressed concerns can't be addressed. And, in fact, my experience over the past two-and-a-half years as the CEO of CPACredits.com has provided me with a unique perspective and understanding of how to help ease some of the burdens on aspiring CPAs while not compromising on the quality of the education.

• Cost: It is true that the cost of becoming a CPA can be prohibitive, especially when compared to entering other professions. Many colleges and universities encourage their students to stay on an additional year to pursue a masters in accounting, but this is unnecessary and, in fact, hardly increases their future earnings. Providing alternative solutions to earning the credits at a more reasonable rate would provide an immediate relief.
• Time: In order to earn the 150, many students need to spend an entire extra year in school. Aside from the financial burden, this obviously also brings with it the opportunity cost of not earning an income. Providing more options for courses — offered at nights, weekends, etc. — will also make it easier for students to take on the challenge. Options such as self-paced courses like those offered by CPACredit.com make it possible for students to better manage being able to work and earn their 150 at the same time.
• Careers: Additionally, accounting firms themselves can help ease this burden while aiding in their own recruitment and retention efforts. Big Four firm Ernst & Young offers its interns a series of virtual credit-earning courses and it has attracted over 300 students since its 2021 launch. Similarly, Big Four firm KPMG just signed an agreement with us in which it will offer its interns the opportunity to earn additional credits.

The accounting profession needs to face the reality and provide practical solutions to the problem it is facing. Many choose the field because of the stability that it provides. But at what cost? Yes, it is important to maintain the integrity of the profession and the gold standard accreditation that the CPA provides. But it's critical to make it easier and simpler for students to pursue the license — and this can be done without even moderately sacrificing the quality and standards of the requirements.