Today's CPA | Fall 2021
Has Destination CPA Lost Its Appeal?
It used to be that if you earned an accounting degree, earning your CPA credential was your next destination. Here’s how we get the CPA credential back on candidates’ maps.
ICPAS President & CEO
One of the things we’re constantly monitoring at the Illinois CPA Society is the new CPA pipeline, which has become more important than ever given the aging of our profession. To put it in perspective, 44 percent of ICPAS members are over age 55—with 30 percent over age 60—and, as such, we expect to see significantly more retirements in the upcoming years. In fact, during his ICPAS SUMMIT21 keynote, BMO Global Asset Management Senior Investment Strategist Derek Sasveld, CFA, pointed out that the ongoing pandemic and strong equity market returns during the last 18 months have led many workers in their 50s and older to choose to leave the workforce even earlier than expected.
So, it should go without saying that attracting new CPAs will be critical to replenishing the pipeline—but therein lies a disturbing trend. The AICPA issues a Trends report every two years, the last in 2019, in which they track first-time CPA exam takers. After steadily increasing during the early 2000s and then flattening out from 2012-2015, there was a steep decline of first-time exam takers in 2017 and again in 2018, reaching levels not seen in a decade or more. Coupled with this data point are increasing concerns as to the CPA credential’s relevance. According to the 2019 Trends report, U.S. CPA firm hiring of accounting graduates fell almost 30 percent from 2014 to 2018, while hiring of non-CPAs increased to 31 percent of total hires (up from 20 percent in 2016). Expanded use of technology, which is replacing tasks previously performed by people, is driving this decline. As a result of the declining demand, accountants’ starting salaries have been flat and lagging other careers for years.
To better understand the other factors driving the above trends, we launched a research project and issued our findings in the Insight Special Feature, “A CPA Pipeline Report: Decoding the Decline.” We felt it was important to get hard data by surveying students and young professionals and dispensing with supposition. After all, everyone has their own theories about the pipeline’s decline, the most often given reason being the 150-credit hour requirement to become a CPA.
What did we learn? The top reason for not pursuing the CPA credential was the time commitment. Other leading reasons for not sitting for the CPA exam included a lack of relevance for the work respondents were doing or intended to do, employers aren’t requiring or supporting it and, overall, credentials weren’t viewed as desirable. The 150-credit hour requirement didn’t even make the top four reasons, which shouldn’t be a surprise since it’s been in place for more than 20 years (and we saw increasing or steady first-time exam takers during most of that period).
We also asked who most influenced one’s decision to pursue the credential or not. Historically, we always thought that one’s employer was the most influential. What we heard in the survey was “self” was the top influencer, and “self” incorporated many factors, including a lack of desire to work in public accounting for most of one’s career. Survey respondents also told us that audit, accounting, and tax are the words most associated with the CPA credential.
So, how do we reverse this trend? I think we need to become more employee-centric and focus on work that appeals to a socially conscious generation that values society and work-life balance like no generation before. I also think we need to make the work more engaging and personally fulfilling. The adoption of artificial intelligence and automation solutions—which has only accelerated during the pandemic—is already changing the way work is done in most large firms, eliminating task-based compliance activities. By empowering employees to become the “most trusted and strategic business advisors,” we can give them purpose and allow them to help make the world a better place by helping our clients and Main Street businesses be successful, which ultimately leads to more job opportunities and a positive economic impact on the communities we serve and live in.
I have hope that we can turn the trend of declining new CPAs, but it won’t happen by itself or through osmosis. It will take us looking at the world, not through our lens but through the lens of those who work for us. We must embrace the oncoming technological revolution, but instead of using the newfound efficiency to add another audit or tax return, we must start to think proactively about how we can help our clients and companies be successful and ensure our employees can have both balance and career advancement. We can make becoming a CPA a desired destination again.