More accountants are leaving the field than joining. What’s going on? | Kelly Richmond Pope

Summary

The video script discusses the critical role of accountants in establishing trust in the business world, akin to the 'Wild, Wild West' without them. It highlights the alarming departure of 300,000 accountants in two years and the declining interest in accounting as a profession, due to factors like the 150-hour requirement for CPA exams. The script suggests that adapting educational requirements and recognizing internships as credit hours could encourage more students to pursue CPA certification, ensuring a future where financial integrity is maintained and not left to those unversed in accounting.

Takeaways

• 🌐 The absence of accountants would lead to a chaotic business environment, as they provide trust and assurance in financial matters.
• 📉 There has been a significant drop in the number of accountants, with 300,000 leaving the field in the past two years, indicating a potential crisis in the profession.
• 📚 A decline in students choosing accounting as a major and sitting for CPA exams suggests a dwindling interest in the profession among the younger generation.
• 👴 An aging workforce in accounting is retiring faster than new professionals are entering, creating a gap in the industry.
• 🔑 The '150-hour requirement' for CPA certification is a barrier, making education longer and more expensive, potentially discouraging new entrants.
• 🎓 The pursuit of an MBA alongside a master's in accounting is becoming a common path, adding to the complexity and cost of entering the field.
• 🚀 The rise of other fields like social media, ESG, and cybersecurity has drawn professionals away from traditional accounting roles.
• 💼 Organizations are beginning to offer financial support for the additional education required to become a CPA, in an effort to attract and retain talent.
• 🏫 There is a push to recognize internships as credit hours towards the 150-hour requirement to encourage more students to pursue CPA certification.
• 📈 The profession needs to adapt to appeal to Gen-Z learners who prefer different working conditions and educational paths.
• 🚨 The speaker expresses concern about a potential future where a lack of qualified accountants could lead to non-specialists making critical financial decisions.

Q & A

What would the world be like without accountants according to the speaker?

The speaker suggests that without accountants, the business world would resemble the 'Wild, Wild West,' implying a lack of regulation and trust.

What role do accountants, CPAs, and auditors play in the business world?

Accountants, CPAs, and auditors provide assurance and trustworthiness, signaling to investors and lenders that a business is reliable and its financial statements are accurate.

Why is there a concern about the future of the accounting profession as mentioned in the script?

The concern arises from the significant number of accountants leaving the field—300,000 in the past two years—and fewer students choosing accounting as a major or sitting for CPA exams.

What are some of the emerging fields that have attracted professionals who might have otherwise pursued accounting?

Emerging fields such as social media, ESG (Environmental, Social, and Governance), cybersecurity, and various IT jobs have drawn professionals away from traditional accounting.

What is the '150-hour requirement' and why is it considered a hindrance in the accounting profession?

The '150-hour requirement' is a regulation stating that accounting majors must complete 150 credit hours before they can sit for the CPA exam, which extends the duration and cost of education.

How are organizations trying to support students in completing the 150-hour requirement and CPA exam?

Organizations are offering to pay for the fifth year of college, providing scholarships, covering CPA exam fees, and study materials to encourage students to complete their accounting education.

What is the speaker's approach when talking to high school students about accounting?

The speaker focuses on presenting accounting as a versatile skill set that can be applied in various career paths, including entrepreneurship, public accounting, private companies, large organizations, or starting one's own business.

What is the best-case scenario proposed by the speaker to encourage more students to become CPAs?

The best-case scenario involves crediting internships as credit hours towards the 150-hour requirement, thereby making the path to becoming a CPA more accessible and attractive to students.

What does the speaker consider as the worst-case scenario for the accounting profession?

The worst-case scenario is the retirement of all accountants, leading to individuals without accounting backgrounds being forced to provide opinions on financial statements, which could result in inaccuracies and mismanagement.

Why is the speaker 'scared' about the potential future of the accounting profession?

The speaker is scared because the current trends indicate a possible decline in the number of qualified accountants, which could lead to a lack of trust and reliability in financial reporting.

What changes does the speaker suggest to make the accounting profession more appealing to Gen-Z learners?

The speaker suggests changes such as offering financial support for the additional years of education, emphasizing the flexibility and diverse applications of accounting skills, and potentially reevaluating the 150-hour requirement.

Outlines

00:00

🤔 The Importance of Accountants in Trust and Assurance

This paragraph discusses the critical role accountants play in the business world, emphasizing their function as trust builders and assurance providers. It raises concerns about the significant decline in the number of accountants over the past two years, with 300,000 leaving the profession. The speaker highlights the impact this could have on trust in business transactions and the potential consequences for the future of the field. The paragraph also touches on the changing landscape of the workforce, with professionals moving to other emerging fields such as social media, ESG, and cybersecurity, which were not anticipated as major areas of growth. The speaker suggests that the accounting profession may have been overlooked in the midst of these changes.

📚 The Challenges of the 150-Hour Requirement and Education in Accounting

The speaker addresses the '150-hour requirement' for accounting majors, which is a barrier to entry for the CPA exam and has resulted in longer and more expensive education. This requirement is identified as a potential hindrance to attracting new talent to the field. The paragraph also mentions the shift in educational focus, with fewer students majoring in accounting and more retiring from the profession than entering it. To combat this, organizations are starting to offer financial support for the additional year of education needed to meet the 150-hour requirement, including scholarships and study materials. The speaker advocates for a change in the approach to education to appeal to Gen-Z learners who prefer different working conditions.

💼 The Versatility of Accounting as a Skill Set and Career Path

The paragraph highlights the versatility of accounting as a skill set that can be applied in various career paths, including entrepreneurship, public accounting, private companies, large organizations, or starting one's own business. The speaker emphasizes the importance of presenting accounting as a valuable skill set to high school students to attract them to the profession. The paragraph also discusses the potential worst-case scenario where a lack of accountants could lead to individuals without a proper understanding of accounting making decisions on financial statements, which could be problematic. The speaker expresses concern about this possibility and hopes to avoid it by encouraging more students to pursue accounting through internships and credit hours that count towards the CPA exam.

Keywords

💡Accountants

Accountants are professionals who specialize in the measurement, processing, and communication of financial information. In the video, they are portrayed as the backbone of trust in business, ensuring that financial transactions are reliable and trustworthy. The script mentions the significant drop in the number of accountants, which raises concerns about the integrity of financial systems without their expertise.

💡CPA (Certified Public Accountant)

A Certified Public Accountant is a designation for accounting professionals who have met specific educational and experience requirements and have passed the CPA exam. The script discusses the importance of CPAs in providing assurance and trust in financial matters, and the challenges faced in attracting new talent to meet the 150-hour requirement to sit for the CPA exam.

💡Auditor

An auditor is a professional who examines financial statements and accounting records to ensure accuracy and compliance with laws and regulations. The script highlights auditors as the assurance providers in business, and the potential risks of a lack of auditors in the market, which could lead to a decrease in financial transparency and reliability.

💡Trust

Trust is a fundamental concept in business, referring to the confidence that investors and lenders have in the financial integrity of a company. The script emphasizes the role of accountants and auditors in establishing and maintaining this trust, and the potential consequences of a decline in their numbers for the business environment.

💡Wild, Wild West

The term 'Wild, Wild West' is used metaphorically in the script to describe a business environment without the regulatory and trust-building functions of accountants, suggesting a lawless and chaotic scenario where financial dealings could be fraught with uncertainty and risk.

💡150-hour Requirement

The 150-hour requirement refers to the educational credit hours needed for accounting majors before they can sit for the CPA exam in the United States. The script points out this requirement as a potential barrier to entry for aspiring accountants, making education longer and more expensive, and contributing to the decline in the number of accountants.

💡Gen-Z Learners

Gen-Z learners represent the newest generation of students entering the workforce, known for their preference for flexible and innovative work environments. The script suggests that the traditional path to becoming an accountant may not appeal to this demographic, and changes are needed to attract them to the profession.

💡ESG (Environmental, Social, and Governance)

ESG refers to the criteria used to measure a company's commitment to environmental, social, and governance factors. The script mentions ESG as one of the emerging fields that have attracted professionals who might have otherwise pursued accounting, indicating a shift in career preferences away from traditional accounting roles.

💡Cybersecurity

Cybersecurity is the practice of protecting systems, networks, and programs from digital attacks. The script notes the growth of cybersecurity as a major field, drawing professionals away from traditional accounting roles, reflecting the evolving landscape of job opportunities.

💡Scholarships

Scholarships are financial aids awarded to students to support their education. In the context of the script, organizations are offering scholarships to cover the fifth year of college for accounting students, aiming to alleviate the financial burden and encourage more students to pursue a CPA designation.

💡Internships

Internships provide practical work experience for students in their field of study. The script suggests that crediting internships towards the 150-hour requirement could encourage more students to become CPAs, by offering a more integrated approach to education and work experience.

💡Financial Statements

Financial statements are formal records of a company's financial activities, including balance sheets, income statements, and cash flow statements. The script warns of the potential dangers of having individuals without a proper understanding of accounting opining on these statements, which could lead to misinformation and financial instability.

Highlights

The world without accountants would resemble the 'Wild, Wild West' in business, lacking trust and assurance.

Accountants and auditors provide assurance to investors and lenders, establishing trust in financial dealings.

In the past two years, 300,000 accountants have left the field, indicating a significant decline in the profession.

Fewer students are choosing accounting as a major, and fewer are sitting for CPA exams, leading to a shrinking workforce.

The profession faces a retirement wave with more accountants leaving than entering the field.

The absence of CPAs and accountants raises the question of who will handle tax returns in the future.

The growth in other fields such as social media, ESG, and cybersecurity has drawn professionals away from accounting.

The '150-hour requirement' for CPA exams makes education longer and more expensive, deterring potential accountants.

The pursuit of an MBA now requires additional education beyond a standard accounting degree.

Organizations are starting to pay for the fifth year of college to encourage students to become CPAs.

Scholarships are being offered to support students in obtaining their CPA credentials.

Accounting is being presented as a versatile skill set that can lead to various career paths, including entrepreneurship.

The profession needs to adapt to appeal to Gen-Z learners who prefer different working conditions.

There is a proposal to credit internships towards the 150-hour requirement to encourage CPA certification.

A worst-case scenario involves a lack of qualified accountants leading to uninformed opinions on financial statements.

The speaker expresses concern about the potential negative impacts of a significant decline in the accounting profession.

Transcripts

- What would the world without accountants look like?

I think, it would be the Wild, Wild West in business.

When you think about what an accountant does,

a CPA does, what an auditor does:

They're the ones that are telling you,

"You can trust me,

you can invest with me, you can lend to me."

An auditor gives me assurance.

If they go away, who can you trust?

This is really not a far-off question

because when you look at the data,

just in the past two years,

300,000 accountants have left the field.

That's a huge, huge number.

There are less students choosing accounting as a major,

there are less students sitting

for the Certified Public Accounting exams,

there are more people retiring out of the field

than are coming into the field.

Who's gonna do your tax returns

if you don't have any CPAs or accountants?

I think what's changed is the way we work.

We didn't predict the growth in other areas.

So many professionals

that might have once majored in accounting

have gravitated to these other fields.

We would've never known that social media would be a major,

that ESG would be a major, cybersecurity would be a major;

a lot of the IT jobs would be what they are today.

We probably took our eye off the ball a little bit,

and now we're playing catch up.

One of our hindrances,

we have something called the "150-hour requirement."

If you major in accounting,

you have to have 150-credit hours

before you can sit for the CPA exam-

and so that has made college longer and more expensive.

There's a lot of kids that go to graduate school

and they wanna get their MBA,

but now what you're having to do

is you have to go to graduate school,

get a master's in accounting,

and if you wanna go get an MBA,

you gotta go back to graduate school to get that.

Things are gonna have to change

in order to appeal to a group of Gen-Z learners

that want to work differently.

So what we've seen is organizations really starting to pay

for that fifth year of college,

offering scholarship dollars for students to go back.

"Stay in school, we'll pay for your fifth year.

We'll pay for you to sit for the CPA exam.

We'll pay for your study materials.

We just wanna get you through."

So you're starting to see organizations push

to help students in a way that you didn't see in the past.

I spend a lot of time talking to high school students,

and what I really try to focus on

is speaking about accounting as a skill set-

and it's a skill set that allows you to be entrepreneurial

if you want to be.

You can go work in a public accounting firm,

you can go into a privately held company,

you can go into a large organization,

or you can start your own business.

The best-case scenario is we start to credit internships

as credit hours

that count towards that 150-hour requirement,

encouraging more students

to become Certified Public Accountants.

Worst-case scenario,

we have everybody retire out of the field

and we are now going to majors

that don't understand accounting

and try to force-feed accounting into people

that never really understood it or wanted to understand it;

but they are gonna start opining on financial statements,

which could be a little tricky.

I'm scared to think about worst-case scenario

because I really, really, really hope we don't get there-

but we're getting close.