The number of students majoring in accounting has declined since 2016, as has the number of students reaching CPA licensure. The pandemic has not helped the accounting profession's talent issues, as many students decided during COVID to take a gap year or not attend college at all.
Leaders across the accounting profession are working hard to address the pipeline challenge. This includes looking at the three Es of the CPA licensure path — education, experience, and exam requirements — to determine where the biggest impact can be made.
In the area of experience, the American Institute of CPAs and the National Association of State Boards of Accountancy are working to pilot a program this fall that would combine paid work experience at a CPA firm with access to affordable college credit hours for students who have completed between 120 and 150 college credit hours and core accounting courses. The emphasis is on affordable credits, with the goal of keeping the cost of the learning at or below the average cost per credit of community college. The new staff hires — employees, not interns — would earn a salary as well as time to complete online courses to reach the 150-credit hour requirement. Firms of various sizes would benefit from dedicated new recruits whose coursework would focus on skills and competencies needed by first year staff.
Meanwhile the CPA Exam is undergoing a transformation set in motion several years ago to ensure that the licensure and education process adequately prepares those entering the profession for work in the public interest. Technology is changing the services CPAs provide and how CPAs work. The new exam will launch in January 2024. It will include three required core sections — Auditing and Attestation, Financial Accounting and Reporting, and Taxation and Regulation. Students sitting for the exam will choose one of three discipline sections best matched to their career goals — Business Analysis and Reporting, Information Systems and Controls, and Tax Compliance and Planning.
For the third E of the licensure path — education — the easiest answer to the decline in the pipeline may appear to be removing the 150-credit hour requirement, but I don't think the additional educational requirement is the most pressing concern for students. There is no question that the requirement to achieve 150 hours has an impact and could be a deterrent to some students who are contemplating becoming a CPA. The additional time and money needed to attend an additional year are personal factors that absolutely must be considered. It is important to always consider these factors and pay attention to the feedback.
Yet, when speaking with students, I most often hear concerns or questions about the pay, hours, and culture of the firms. Hence, my focus on solving the real pipeline issue. Fundamentally, I believe it is a question of value. Is it worth it? It is valid to discuss and debate the requirements for entry into our profession, but I submit that the uncomfortable but key question is whether there are easier ways to make more competitive compensation and to reach the top levels of an organization with flexibility when needed.
To be even more direct, why pursue the fifth year, if you can make more money in four? Shouldn't there be a premium for those who earn the CPA license? Shouldn't CPAs earn a greater return on investment starting earlier in their career? This question isn't answered by changing the 150-hour requirement, but it is more a question for employers and decision-makers in the profession.
What matters to students
Let's talk about 150 hours, but let's address the factors that may carry more weight for the students themselves. Recent surveys of students conducted by the
In my direct interactions with students, I find it interesting that it's the employers who are more vocal about the 150 hours, while students often discuss values, leadership, diversity, inclusion, flexibility, pay, culture, hours and how hard the exam is before the 150 hours comes up. And on a side note, I will say that our war stories are not about the 150 hours; they're more about how much we studied and how long it took us to pass the exam.
In discussing the pipeline, some colleagues suggest that more minorities would become CPAs if it weren't for the 150-hour education requirement. That's a possibility, but a good point was recently made by a leader in the profession who noted that we didn't have more minorities majoring in accounting when the requirement was only 120 hours.
When I speak with minority students, I spend most of my time trying to dispel the myth that we are not as financially successful as other professions, are not inclusive and are boring. And without resolving other concerns, I think the effort of changing the education threshold would be in vain. In many communities of people of color, careers in medicine, law and technology are key ambitions. The additional education needed to enter those fields is well known, yet the ambitions remain. Like many leaders, I have asked myself why. I think it comes back to perceived value and the myths of our profession.
Retention of talent is an area that warrants more attention across all segments of our profession but absolutely in public accounting. What happens when the students show up in the firms? How long do they stay? Why do they leave? What are the hours? Is there flexibility? Is their immediate manager well versed on how to lead, inspire and motivate others? Is the pay competitive?
Initiatives to improve team member experience, growth, and advancement would go a long way to making a difference in the pipeline. It would also help if we highlighted the options and opportunities in the profession. At the risk of being asked tax questions, if we haven't done it already, I think we need to make sure our CPA status is known in our various networks. Many doctors and lawyers are sure to let you know their credential — great idea! It reinforces their brand in the marketplace. I like to volunteer in elementary schools and when I talk to students, careers in medicine and law more immediately come to their minds, rather than accounting.
Simon Sinek is credited with saying that customers will never love the company until the employees do first. I couldn't agree more. Existing team members are the best ambassadors of the profession.
So we as CPAs need to ask ourselves, what is our brand? What do students think of when they think of the accounting profession? Do they see people that look like them in leadership? Do they know all the options available in an accounting career?
Changing the 150-hour requirement isn't going to change the perception of the profession. First, I believe we must address the uncomfortable perceptions and "truths" of our profession. This effort is not just for the AICPA. It will take all of us working together to showcase the value and premium of being CPAs in an ever-changing environment where we are needed now more than ever.
I am all in to increase the pipeline. But first we must focus on the real problem.
