Building a Stronger CPA Pipeline

Ask a CPA what the credential means to them and most will tell you it’s a sign—a sign of competence, trust, and credibility. However, despite the CPA credential’s perceived value from those that have already earned it, a growing number of accounting students and young professionals are foregoing the path to CPA licensure. What was once seen as the accounting and finance profession’s “gold standard” has seemingly lost some of its luster.

For many years, the Illinois CPA Society (ICPAS) has warned of this troubling trend and has been on a quest to determine its root cause. To do just that, in 2021, ICPAS conducted a national survey to gauge accounting students’ and young professionals’ perceptions of the CPA credential. The findings were published in the Insight Special Feature, “A CPA Pipeline Report: Decoding the Decline.” As a profession known for its busy season and long hours, it’s not surprising that one of the most common barriers faced by survey respondents was the time commitment to study for and pass the CPA exam—63% noting workload time commitment and 41% noting personal time commitment as barriers to licensure.

Recognizing the value of time and its significant influence on an individual’s decision to pursue CPA licensure, ICPAS, along with the Illinois Board of Examiners (ILBOE), advocated to reduce the credit-hour requirement for CPA exam testing eligibility in Illinois from 150 credit hours to 120. In 2021, the Illinois House and Senate unanimously passed ICPAS-sponsored legislation amending the Illinois Public Accounting Act with this change, which became effective as of Jan. 1, 2023.

To be clear, individuals passing the CPA exam in Illinois will still need 150 credit hours to become licensed CPAs. And while ICPAS is hopeful this legislative victory will help address one of the more prevalent barriers to licensure (i.e., time), there’s no denying that other barriers still exist, including misconceptions about the credential’s value, employer demands, and overall confusion on the licensure process.

The Public Accounting Perception

According to ICPAS’ 2021 report, today’s accounting students and young professionals seem to have a narrow view of what value the CPA credential offers, often believing it only applies to individuals pursuing careers in public accounting, tax, and audit. In fact, among the survey respondents who said they had no plans to earn the CPA credential, 32% specifically said they didn’t see the value or relevance the credential has in their careers.

Martrice Caldwell, CPA, controller for the Chicago Fire Football Club, can empathize. “I don’t think I fully understood the CPA credential’s value when I first sat for the exam. I see it more now as a working professional,” she emphasizes. As a longtime ICPAS member and board member of both the CPA Endowment Fund of Illinois and ILBOE, Caldwell has seen in her career and others’ that having the CPA credential—even outside of public accounting—opens many doorways.

“A lot of it goes unspoken, but the CPA credential carries so much weight and value in the marketplace,” she says.

Even though the CPA credential may not be listed as a requirement in many job descriptions, particularly in corporate finance, Caldwell notes recruiters and hiring managers still often hold the credential at a higher level. Caldwell wishes more accounting students were aware of this because, as she puts it, “I know I’ve been looked at for roles because of my CPA credential.”

Joshua Herbold, CPA, Ph.D., teaching professor of accountancy and associate head of the Gies College of Business at the University of Illinois (U of I), shares similar feelings. “I’ve never worked for a Big Four firm. Most of my career has been in academia, but I still maintain my CPA license because I see the value in it. It’s a sign to others that I have some additional knowledge that might be relevant and useful.”

Herbold also stresses that the CPA credential opens opportunities for professionals to specialize in certain niches more easily. He notes that serving the cannabis or entertainment industries, for instance, becomes more accessible: “Without a license it’s doable, but tougher to break into.” “

By having the expertise the CPA credential brings you, you don’t just have to live in public accounting or even stop at the CFO level, and I think that’s what a lot of students and young professionals mistakenly think,” Caldwell adds.

The Employer Effect

Beyond misconceptions about the CPA credential’s value or relevance, outside influence has been linked to the CPA credential’s decline. For some, that outside influence comes from their employers. ICPAS found that 39% of its survey respondents indicated their employers or prospective employers influenced their decisions of whether to pursue the CPA credential or not. Additionally, for individuals with no plans to earn the CPA credential, 28% said that their employers or prospective employers didn’t require or support it.

Another notable finding—accounting students and young professionals ages 22 and over are less likely to pursue the CPA credential, which typically coincides with their entry into the workplace (i.e., as they begin full-time careers, their focus and time for studies dwindle as employer demands grow).

Herbold believes there are two things employers can do to better support the CPA pipeline and encourage more students and young professionals to earn their licenses: 1) make it worth their time, and 2) give them time to study, test, and complete the licensing process.

“The overarching message I hear from students is, ‘I’ll do the work, but you’ve got to make it worth my while.’ That means either pay them more, give them more opportunities, or set them up for a better future career,” Herbold stresses. “But if they can find all that from an employer without the CPA credential, they won’t see the point in earning it like they did years ago.”

Beyond the value proposition of potentially better pay and opportunities, young professionals simply need the time and support to complete the licensure process. “A lot of students have the best intentions to finish the CPA exam once they start working, but work comes first, and work tends to consume everything. As a new person at work, you’re likely not going to be comfortable saying no,” Herbold cautions. “You want to make everyone happy, and then the CPA exam becomes a lower priority.”

Herbold suggests that employers, specifically those who mandate billable hours, review their requirements or build time into their work structures to allow their CPA candidates to complete their studies. “If you’re telling your junior accountants they need to have 1,800 billable hours, that’s probably too much,” he says.

Caldwell adds that flexibility can go a long way in supporting staff interested in pursuing the CPA credential. Working with staff to adjust schedules or establish remote work options that allow them to pursue the career path they want with your organization can be a key to unlocking greater employee development, satisfaction, and retention.

“People are looking for individual career plans. We know there isn’t only one plan or roadmap that everyone can or should follow. Being an influential employer today means learning what your employees need and helping them pursue their individual goals,” Caldwell encourages.

Notably, some of these concerns do appear to be resonating with Illinois’ CPA firms. According to ICPAS’ 2022 Firm Staffing and Benefits Survey, 58.3% of Illinois firms provide time off to study for the exam, which is up by nearly 10 percentage points since 2021. However, that number varies widely by firm size. For example, just 43.5% of small firms (those with one to 20 full-time employees) provide time off to study for the exam, compared to 75% of mid-size firms (those with 21 to 50 full-time employees) and 69.2% of large firms (those with 51 to 199 full-time employees).

ICPAS’ findings also show that more CPA firms are responding to demands for better pay. For example, 75% of firms pay their staff a bonus for passing the CPA exam, which is up by 8.3 percentage points from 2021. Broken down by firm type, however, only 60.9% of small firms pay their staff a bonus for passing the CPA exam, compared to 75% of mid-size firms and 100% of large firms.

Other forms of financial assistance can also help bolster the CPA pipeline. Implementing exam fee reimbursement policies or allowing candidates to expense the fees for CPA exam review courses can help ease the financial burdens associated with becoming a CPA—and help differentiate the firm.

ICPAS’ 2022 Firm Staffing and Benefits Survey found that not all firms are providing financial assistance for the CPA exam. Among small firms, 56.5% pay for a CPA exam preparation class, compared to just 41.7% of mid-size firms and 69.2% of large firms. Further, 47.8% of small firms pay for the CPA exam fee, compared to only 41.7% of mid-size firms and 69.2% of large firms.

In addition to carving out time for staff to study and financial incentives, employers can also provide internal support by connecting CPA candidates with a go-to staff member that’s recently passed the exam and/or an internal sponsor that can champion their success.

“Knowing who to reach out to and ask for advice and support is key,” Caldwell says. In fact, Caldwell was recently able to step up and support a staff member pursuing the CPA credential who was just shy of a business communications class: “Through my involvement with the ILBOE, I knew there were course templates available that could help determine which classes would qualify for the education requirement.”

Of course, ultimately sharing staff success stories internally and on social media can offer some extra encouragement and inspiration, while also supporting awareness and appreciation for the CPA credential.

The Path to Licensure

As previously stated, prospective CPAs in Illinois now only need 120 eligible credit hours and a bachelor’s degree to apply to sit for the CPA exam. However, individuals passing the CPA exam will still need 150 eligible credit hours to become licensed CPAs in the state.

“This change should ultimately help more candidates sit for the exam earlier,” says Elizabeth Brown, ICPAS’ assistant director of student and diversity initiatives. “We believe a key to growing the CPA pipeline is getting more accounting students to begin planning their pathways to becoming CPAs before starting full-time work—and even before they’ve considered how they’re going to pursue their additional 30 hours of coursework.”

The fact is, with so many different pathways available to obtain the 150 credit hours required for licensure, the process can often leave students feeling confused on where to begin—it even deters them.

“The most common question I get from students when I present them with some available paths is which one they should choose,” Herbold says. “That’s a tough question to answer because it depends on the student. Some students test well and can jump right in and do great on the CPA exam, while others could really benefit from one more class or one more semester before starting.”

Ultimately, there isn’t a right answer for how students should obtain the 150 credit hours required for licensure. However, one of the more streamlined routes is pursuing a master’s program in accountancy. “It provides all the additional hours, coursework, and rigor of materials,” Brown explains. “There are also a lot of financial resources available to support students pursuing these programs.” She also suggests these alternate paths:

• Obtaining a Master of Business Administration (MBA) degree. Many MBA programs offer a concentration in accounting, providing an opportunity to learn skills in both general business and accounting.
• Double majoring or obtaining a minor of study. This option allows students to earn additional credit hours and learn another field of study that complements their accounting education while avoiding paying graduate school tuition rates.
• Attending community college. “Students often start their college careers at a community college before transferring to a four-year institution. However, even after they’ve started or finished at a four-year institution, they can still supplement that experience with classes at a community college,” Brown suggests. “Planned accordingly, the credits earned will count toward the 150 credit-hour requirement.”
• Completing certificate programs. One example of this is U of I’s CPA Pathways Graduate Certificate. “It’s designed to help students who may have more than 120 credit hours and need to get to 150,” Herbold says. The fully online program helps it fit into the schedules of working professionals while including live classes, office hours with faculty, self-paced and downloadable coursework, group discussions and projects, and applicable graduate-level coursework.

While there won’t ever be a one-size-fits-all pathway to obtaining the 150 credit hours required for CPA licensure, it’s clear that it’s in the profession’s best interest to support prospective CPAs in all the ways they can. By doing so, we might just be able to map out better pathways into the profession and, ultimately, replenish the CPA pipeline.

Amy Sanchez is the manager of communications and publications and assistant editor of Insight for the Illinois CPA Society.

Related Content:

• Evaluating the CPA License: What’s the True Value? While taking and passing the CPA exam is a major challenge, the work that goes into the license offers rewards for a lifetime.
• CPA 2027: The CPA Population Stalls: CPA numbers are dwindling as CPAs face increased competition for the public accounting and corporate finance roles they held in the past. What’s next for the profession?