Jen Cryder, CEO of the Pennsylvania Institute of CPAs, shares the innovative ways the profession in her state is dealing with the pipeline problem.
Transcription:
Mike Cohn (00:03):
Hi, welcome to On the Air with Accounting Today. This is Mike Cohn of Accounting Today, we're joined today by Jen Cryder, CEO of the Pennsylvania Institute of CPAs. Welcome, Jen.
Jen Cryder (00:13):
Hi, Mike. Thanks so much for having me.
Mike Cohn (00:15):
Oh, sure. It's great to have you with us today. Thanks a lot for joining us. Well, a major topic of discussion lately has been the accounting pipeline and the shortage of young accountants. You and I spoke recently for an article about some of the innovative programs that the PICPA has been organizing to ease the way for young people to get into accounting. Could you tell us about this work in Learn model?
Jen Cryder (00:39):
Yeah, absolutely. I'd be excited to. I think as we look at the pipeline challenges that the profession is facing, I tend to take a long term view of it because our profession has ups and downs. I'm a CPA and I was in practice for a long time and I know that there are kind of different highs and lows in the pipeline cycle. We're certainly at a pain point right now. And so when I think about solutions, I want to make sure that there are long-term solutions that support the profession and not only what we're going to need today, but tomorrow. I think work and learn models present one opportunity to do just that. Because when I look at this, I want to figure out how do we provide access to this profession to more people. I know that being a CPA changed my life and my family's life in ways that I never could have imagined.
(01:28)
So I'm personally grateful that I was given access to this profession. And so in my role as CEO of PICPA, I really want to make sure we can provide access to more people. I think work and learn models are a way to provide the required education for licensure that could be scalable for firms of all sizes, cost effective for both the firm and the student while maintaining the academic rigor that's required for licensure. So here in Pennsylvania, we started by taking a look at our CPA law to make sure that any of these ideas fit within that framework. And then at PICPA, we're working to be the convener and bringing together colleges and universities with firms that have the interest to say, how can we build some of these models to provide more access to students into the profession? So I think there's a lot of shapes that could take. Fortunately here in Pennsylvania, we've got a lot of lot in our CPA loan, whether it is self-study or internship or credit for actual work, experiential learning, or whether it is sort of balancing work and classes asynchronously at the same time. We're really interested right now in the middle of those discussions to see what could come out of it, because I think we need a well-trained, well-educated profession to serve the public and the public trust.
Mike Cohn (02:56):
Yes, and there's certainly been a lot of talk about, so some of these different arrangements, like a lot of talk about the 150 hour requirement for getting a CPA license. What are some of the challenges you see with that and should more state societies be willing to adjust that longstanding requirement or provide more flexibility about when to sit for the exam?
Jen Cryder (03:18):
There's a lot of challenges when we talk about this. I think that if I had to list them in order, the number would challenge would be the complexity of it. I think that it's really easy to perhaps point to one thing that could solve the problem, but as I have looked at this really closely over the last couple of years, I'm seeing that there are so many things we need to solve for. There's not one simple easy answer above everything. We have to maintain mobility. That's something that our profession has that no other profession has. And we're so fortunate to have that we have mobility because every state's requirements for licensure are substantially equivalent. So it took our profession, I'm told more than 30 years to get to that point. We don't have 30 years to solve the pipeline problem right now. We have to move more quickly than that.
(04:06)
And certainly the hot topic of conversation is do you change the 150 hours of education to 120? While I think it's a really important conversation to have, we just have to balance that conversation with the risk of opening up all the state statutes. So here's where some of that complexity comes into play. If we want to talk about changing to one 20, that would require every single state to change their law. So that's not something that as a state society I can change or even the state board of accountancy can change. That would be the legislature in my state and every other licensing jurisdiction. It's really, really high risk. And so I think we have to balance that with the need for rapid and impactful solutions here in Pennsylvania. We're looking at some other things that I think can provide access to the profession much more quickly without the level of risk of opening up the statute.
(05:02)
So work and learn is one that we're looking at, and I'm optimistic that we're going to have some great pilots in the fall starting to play out between universities and firms. We can learn from those and scale them more broadly across the state. We're actually also launching a program with an organization called Outlier where we're able to get into high schools across Pennsylvania, a financial accounting class for high school students and outliers able to issue the college credit. So it's sort of like those dual enrollment programs where high school students can get credit college credit for an accounting class. They've got financial already. I'm told that next year they're going to have merit managerial. So there can be kind of a two-step process there. So whether it's work and learn models or whether it is getting college credit within high school, I think both of those are really great effective examples of how we can work toward the one 50 without opening up a state statute and the risk that goes along with that.
Mike Cohn (06:01):
Do you think that if we lack some of the requirements, at least in terms of U.S. setting for the CPA exam, would that allow for greater diversity in hiring? A lot of firms are trying to pursue DEI initiatives. Could this increased flexibility help a little bit with some of the recruiting in that area?
Jen Cryder (06:22):
Yeah, that's a great question. I think we have to be really mindful of how do we make our profession accessible to everybody because the needs of our clients are so multifaceted today and so diverse that we've got to make sure the engagement teams that are serving them reflect that diversity. It's just a very simple kind of business case there. So I think any of these ways to provide access are good and are going to help with diversity because certainly becoming licensed as the CPA is not an easy thing. We definitely have to keep in mind that trust matters more than anything else in our profession. And so when we're looking at ways to provide access, we've got to do that. Certainly balancing both the rigor of the credential and the capacity challenges and the diversity interests that we have. It's not an easy balance to strike.
(07:20)
I think that dual credit work and learn all of those things will go a long way to help. I also think that firms have to look at their business models and really think about how do we build an organization that not only is going to attract a diverse pool of talent, and I really do mean diversity in the broadest sense there, not only in terms of race and gender, but also experience and background and skillset and all of those things. Because we're seeing the hiring of non CPAs really escalate, especially in the last couple of years. Clients are demanding all kinds of skillsets, and so we need a diverse and talented profession to serve all of those needs. So I think it's a combination of all of those things.
Mike Cohn (08:03):
Well, that's a great point, Jen. We're going to take a short break for a short message from one of our sponsors and we'll be right back after this message. Alright, right. We're back with Jen Cryder, the CEO of the PICPA. And we were just talking about the challenges with getting the CPA a license and some of the different alternatives to the one 50 hour requirement. We were just talking about diversity in hiring and some of the different technology skills that new young accountants can bring to their firms. There seems to be a lot of fear these days about some of those forms of technology like the generative AI programs. We've been hearing about ChatGPT and Bard and how they might affect a wide array of professions including accounting. Do you think there may be a fear out there from young people about entering a professional like accounting that's already starting to leverage ai or could these programs help address some of those capacity challenges?
Jen Cryder (09:11):
I actually think it's exactly the opposite. I think that there has never been a better time to be a CPA. I think that our profession has just unlimited opportunity and generative AI is one tool of so many that really highlight how interesting the work of the CPA is. So in my mind I look at that and I think that would definitely not be a reason for a student to be afraid of the profession, but just the opposite evidence of how interesting and impactful the work of a CPA is. Because in our profession we get to use really interesting tools like that. And I think what's going to happen is certainly, I do think it will help with some of the capacity challenges as firms look at business model and figure out how to leverage these tools in a more effective way. And that's hard.
(09:58)
That takes a lot of time and money investment. But I also think that it offers an incredible opportunity to somebody that's entering the profession or somebody that is early career in that they get to get to the interesting work sooner because of those tools. So when I think back to my early days as CPA, there was a little bit of a rite of passage in terms of kind of flooding a column of numbers or photocopying audit programs or whatever those things were. These tools today will do all of that and then some allowing somebody that's entering the profession more quickly to see the impact that a CPA can have on a client, on a community, on a small family business. And it's really my hope that it becomes a retention element within a firm's business model to say, we've got these really great technology tools, come learn how to use them and kind of combine them with the analytical mindset or the skillset tax, audit, consulting, whatever that is to make a real impact on your community, your clients, the businesses that you're serving.
Mike Cohn (11:03):
Oh, that's a great point. I also wanted to ask you about the CPA a evolution initiative that the AICPA and NASBA have been working on over the years and they're going to update the the CPA a exam and the curriculum to include more technology skills. And do you think that's going to help with the pipeline, making sure that new accounts have these skills that are currently in demand?
Jen Cryder (11:26):
I think anything that we as a profession can do to build future ready skills is a good thing. And so certainly CPA evolution is doing that. I think that it was great to see the window of time extended up to 30 months by NASBA recently. That was a big win. And I know the profession came together in an unprecedented way to support that. So I'm eager to continue partnering with the profession and finding great ways to develop talent.
Mike Cohn (11:54):
Oh, I also wanted to ask you about the report that the P I C P A came out with a few months ago on the state of Pennsylvania accounting firms in 2023. And we, we've already covered some of the issues in that report, like with the C P A pipeline, but I saw that also discussed in some other areas like cybersecurity, billing and new service offerings. What were some of the findings in that report?
Jen Cryder (12:19):
Yeah, so we recently surveyed CPA firms across Pennsylvania and we looked at a couple of things. We certainly looked at pipeline and talent because that's top of mind for everybody. We also were looking at business model because I think that, believe it or not, the two are pretty inextricably linked. And then finally we looked at some technology elements within firms. So when we looked at the talent landscape across Pennsylvania, certainly we saw consistent with national trends, just a real emergence of non CPAs within firms. And I think there's a supply element to that and a demand element. Certainly we're seeing less students graduate with accounting degrees, less the CPA a exam and less becoming licensed. So the supply is shrinking At the same time, clients are demanding a new and different diverse skillset, which I think firms are often finding outside of the accounting major.
(13:15)
So that came through really clearly in the report. But when you extend that and start thinking about business model, I would suggest to you that traditional pyramid business model of accounting firm is under incredible pressure in breaking at this point. Certainly the cost required to invest in capital, human capital, the people and these evolving skill sets combined with the cost of investing technology are just massive. And so that traditional kind of partnership pyramid where you would just go do a capital call with the partners to fund that sort of growth, it doesn't work when the funding requirements are at the level we're seeing today. That combined with just radical shifts in what professionals expect of their employers right now and what it takes to retain and build a diverse and talented team are really reshaping business models. So we certainly saw that play out in our report. We saw just nationally I incredible growth in advisory services as the traditional compliance audit and tax are just don't have the margins that they did before. So seeing incredible growth in advisory and that is often sourced by non CPAs. So it's really interesting when you take a step back and think about our profession and say, what are the trends that are happening here? We're seeing advisory grow at exponential rates. That is not the core kind of history of our profession. And then we're seeing the rate of non-CPA hiring grow.
(15:01)
All of these are important elements in our profession as, as PS CPA. It's our role to make sure that accounting firms are strong and successful because that's what we're a strong and successful profession. And so we're thinking here in Pennsylvania about how do we serve this new model of accounting firm, which is much more professional services firm than say the traditional compliance focused firm. And so it, it's my vision as CEO that we're leading the profession from the front here in Pennsylvania. And so we're really thinking about how do we help firms understand these changes in business model, that traditional model was pretty broken and how do we help how them see around the corner and what's coming next? I know when I was a practitioner it was so hard to pick your head up and look at what's coming around the corner cause you're so busy. So I think our state of firms report really highlights some of those trends that can meet up well.
Mike Cohn (16:00):
Oh, it sounds like a very interesting report and certainly a lot of foods for thought that in the work that you're doing over there at the PICPA. Well, I want to thank Jen Cryder of the Pennsylvania Institute of CPAs for joining us on our podcast today. This episode of On the Air was produced by Accounting Today with audio production by Kellie Malone. Please rate or review us on your favorite podcast platform and see the rest of our content on accountingtoday.com. Thanks again to our guest, Jen Cryder, CEO of the Pennsylvania Institute of CPAs, and thank you for listening.