Accounting Profession CRISIS?

Summary

The CPA journal has highlighted a crisis in the accounting profession due to an aging workforce and a decline in new accountants and students. With 75% of AICPA members nearing retirement and a significant drop in CPA exam takers, the profession faces a shortage. Reasons cited include the 150-hour requirement, low pay, and a lack of diversity. Proposed solutions involve revising educational requirements, but the discussion also points to broader issues like work-life balance and the increasing use of offshore teams, hinting at an impending revolution in the industry.

Takeaways

• 📈 The accounting profession is facing a crisis with a significant shortage of accountants.
• 👨‍💼 The AICPA had 428,000 members in 2020, with 75% nearing retirement age, indicating an aging workforce.
• 📉 There was a 34% drop in accounting majors at one private university between 2015 and 2019, reflecting a decline in interest.
• 📊 A 33% reduction in CPA exam takers from 2016 to 2021 suggests fewer new accountants entering the field.
• ⏳ The 150-hour requirement to become a CPA is cited as a potential deterrent for prospective accounting students.
• 💼 The perception of accountants having a lower pay and less exciting work compared to finance or tech industries could be discouraging new talent.
• 🏫 The high cost of college education and the perception that accounting is too specialized may be contributing to the decline in students.
• 🌐 Offshoring is becoming more prevalent in accounting firms, potentially reducing the need for new domestic accountants.
• 💡 The article suggests removing or adjusting the 150-hour requirement as a solution to the accounting crisis.
• 🌟 The speaker proposes that improving pay and quality of life could be more impactful than altering educational requirements.

Q & A

What does the CPA Journal article suggest is the current crisis facing the accounting profession?

The CPA Journal article suggests that the accounting profession is in crisis due to a severe shortage of accountants, with a dwindling number of current accountants and a decrease in accounting students.

How many members does the AICPA have, and what percentage of them are at retirement age according to the article?

The AICPA had 428,000 members in 2020, and 75% of those members, which is approximately 321,000, are at retirement age.

What is the significance of the 150-hour requirement to become a CPA, as mentioned in the article?

The 150-hour requirement is significant because it is one of the reasons cited for the shortage of accounting majors and CPAs, potentially deterring students from pursuing accounting degrees.

What is the impact of the 33% reduction in those taking the CPA exam from 2016 to 2021?

The 33% reduction in those taking the CPA exam indicates a decline in interest in the accounting profession, which could exacerbate the shortage of accountants.

What are some of the reasons listed by the CPA Journal for the shortage of accounting majors?

The CPA Journal lists several reasons for the shortage of accounting majors, including the 150-hour requirement to become a CPA, low pay compared to other fields, lack of diversity, specialization, high cost of college, and a general decline in college attendance.

How does the article address the image problem of accountants?

The article mentions that a previous CPA Journal article pointed to the 'big four tweets' X account as part of the reason for the image problem in the accounting industry.

What solutions does the article propose to address the accounting crisis caused by the 150-hour requirement?

The article proposes two solutions: one is to remove the 150-hour requirement, and the other is a mixed approach where a 120-hour requirement is suggested if one takes all four parts of the CPA exam, or three parts if one has 150 hours.

What role does the use of offshore teams play in the accounting industry according to the script?

The script suggests that the use of offshore teams is becoming more prevalent in accounting firms as a cost-effective alternative to local accountants, potentially impacting the demand for new accountants.

What changes does the speaker anticipate for the accounting profession in the future?

The speaker anticipates a revolution in the accounting profession, with significant changes needed for CPAs to stay relevant, possibly including a shift towards utilizing accountants from other countries.

How does the speaker reflect on their own experience with the 150-hour requirement for CPAs?

The speaker personally did not find the 150-hour requirement for CPAs to be a deterrent during their college years, but acknowledges that others might view the additional hours as unnecessary.