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.

Outlines

00:00

📉 Is the Accounting Profession in Crisis?

The CPA Journal recently published an alarming article claiming the accounting profession is in crisis. The American Institute of CPAs (AICPA) had 428,000 members in 2020, but 75% of them are at retirement age, indicating a looming shortage. Additionally, the number of accounting students and CPA exam takers is drastically declining, with 300,000 accountants leaving the profession between 2019 and 2021. The reasons cited include the 150-hour requirement to become a CPA, low pay compared to other professions, lack of diversity, and the high cost of college. The article criticizes the CPA exam's structure and points to societal issues, like the negative portrayal of the profession on social media, as contributing factors.

05:01

💼 Challenges in the Accounting Industry

The narrator reflects on their own experience as a CPA, questioning the impact of the 150-hour requirement and the broader issues affecting the profession, such as pay and quality of life. The article offers two potential solutions to the crisis: reducing the requirement to 120 hours or a mixed approach involving different exam components. The narrator believes that pay and quality of life are more critical factors than the educational requirements. They note the increasing use of offshore teams by accounting firms to reduce costs and the need for significant changes in the industry to maintain relevance.

Keywords

💡Accounting Profession

The accounting profession refers to the field of accounting, which includes the services of recording and reporting financial transactions as well as tax preparation and financial advice. In the video, the accounting profession is discussed in the context of a perceived crisis, with a focus on the challenges faced by Certified Public Accountants (CPAs) and the profession as a whole.

💡CPA Journal

The CPA Journal is a publication that serves as a voice for the accounting profession. It is mentioned in the script as the source of an article highlighting the crisis in the accounting profession. The journal is used to emphasize the severity of the situation and to provide a platform for discussing potential solutions.

💡AICPA

The AICPA, or American Institute of Certified Public Accountants, is a professional organization for CPAs in the United States. It sets ethical standards for the profession and administers the Uniform CPA Examination. In the script, the AICPA's large membership of older accountants nearing retirement is presented as part of the crisis narrative.

💡Retirement Age

Retirement age is the age at which individuals typically cease full-time employment and begin receiving retirement benefits. The script points out that 75% of AICPA members are at retirement age, suggesting a potential shortage of experienced accountants and a looming 'brain drain' in the profession.

💡Accounting Students

Accounting students are individuals studying the field of accounting at an educational institution. The script mentions a decline in the number of accounting students, which is seen as a contributing factor to the crisis in the accounting profession due to a potential future shortage of new accountants entering the workforce.

💡CPA Exam

The CPA Exam is a standardized test that aspiring CPAs must pass to become licensed. The script notes a 33% reduction in those taking the CPA exam from 2016 to 2021, indicating a decrease in interest in pursuing a career as a CPA.

💡150-Hour Requirement

The 150-hour requirement refers to the educational prerequisite for sitting for the CPA exam in many U.S. states, which mandates that candidates have at least 150 semester hours of college education. The script discusses this requirement as a potential deterrent for prospective accountants, contributing to the profession's crisis.

💡Quality of Life

Quality of life refers to the overall well-being, health, and happiness of an individual. In the context of the video, the quality of life for accountants is mentioned as a concern, with suggestions that the demanding work hours and stress may be driving potential candidates away from the profession.

💡Offshore Teams

Offshore teams are groups of workers located in different countries, often employed to perform tasks at a lower cost. The script suggests that the use of offshore teams in accounting firms may be a response to the crisis, as they can provide cost-effective alternatives to domestic accountants.

💡Public Accounting Industry

The public accounting industry encompasses accounting firms that provide services to the public, including auditing, tax preparation, and consulting. The script implies that this sector of the accounting profession needs significant change to remain relevant and address the challenges it faces.

💡Revolution

In the context of the video, a revolution refers to a significant and transformative change in the accounting profession. The script suggests that the profession is on the brink of such a change, which may involve shifts in how work is done, who does the work, and how accountants are educated and compensated.

Highlights

The accounting profession faces a crisis with a significant number of CPAs nearing retirement.

The AICPA had 428,000 members in 2020, with 75% at retirement age.

There's a shortage of accountants, with 300,000 leaving the profession between 2019 and 2021.

Accounting student numbers are dropping, with a 34% decrease in one private university's majors between 2015 and 2019.

The number of CPA exam takers has seen a 33% reduction from 2016 to 2021.

The 150-hour requirement to become a CPA is cited as a reason for the shortage of accounting majors.

Accounting is perceived as less exciting and lower paying compared to finance and tech careers.

Lack of diversity and specialization in accounting are seen as barriers.

The high cost of college education is a factor in the decline of students pursuing accounting.

The CPA Journal's article suggests that the profession needs to address its image problem.

The article proposes solutions to the crisis, including revising the 150-hour requirement.

The author of the transcript, a CPA, argues that the 150-hour requirement was not a deterrent during their education.

The author questions the economic model of accounting, with low pay and high stress.

The transcript suggests that pay and quality of life have a greater impact than educational requirements.

The use of offshore accounting teams is becoming more prevalent in the industry.

Modern accounting firms prioritize employee well-being and work-life balance.

The accounting profession may be on the brink of a significant change to stay relevant.

The public accounting industry needs transformative changes to remain competitive.

The transcript concludes with a call for the accounting profession to evolve or risk becoming obsolete.

Transcripts

is the accounting profession in crisis

the CPA journal or the self-titled voice

of the profession recently posted a

rather dramatic article on how the

accounting profession is in crisis the

aicpa which is the Professional

Organization for CPA had

428,000 members in 2020 and apparently

75% or 75% time 428,000

321,000 of those members are at

retirement age

I have so many questions why are CPA so

old or are the members of the aicpa just

really old did I bring the average age

down a couple years when I joined back

to the article which starts off by

saying the profession is facing a severe

crisis due to the shortage of

accountants not only is the number of

current accountants dwindling but the

number of accounting students is also

dropping 300,000 accountants left the

profession between 2019 and 2021 one

private University saw a 34% drop in

accounting Majors between 2015 to 2019

less accounting students means the

number of those taking the CPA exam is

dropping in fact there is a 33%

reduction in those taking the CPA exam

from 2016 to 2021 the CPA Journal gives

a list of reasons why there is a

shortage of accounting Majors the

150-hour requirement to become a CPA

we're boring we don't get paid as much

compared to finance Bros or Tech nerds

not diverse accounting is too

specialized college is too expensive

less people are going to college I'd

like to note that in a previous article

from the CPA journal the big four tweets

X account was described as part of the

reason why accountants have an image

problem so an X account that posts memes

about the accounting industry is why

we're in this crisis yeah the post can

be cynical towards the accounting

industry but here's the thing they are

holding up a mirror to the profession

reflecting what's actually happening you

Can't Blame A Storyteller for what's

happening in a story when they are just

sharing the story not writing the story

back to the original article the purpose

of the article was supposedly to talk

about the 150 hour requirement as the

reason for the accounting crisis

specifically the CPA shortage if you

didn't know I'm a CPA I know I know it

looks like I should have been a model

for Calin Klein

[Music]

but instead I got a master's in

accounting that became a

CPA from my experience I never thought

having to have 150 hours of college

credit was dumb while I was going

through the accounting program I was

just happy to be in college and not

being an adult back when I was in

college there weren't people on social

media posting about how the quality of

life of public accountants was terrible

and the pay didn't match the amount of

work they did I'm not not sure if

accountants realized at the time how

they were getting screwed that or no one

seemed to be questioning why it was that

way it wasn't until about 5 years into

my career where I started to question

the economics of it all how are we

getting paid so little compared to all

the work that we do and the stress that

we endure the article proposes two

solutions to help out the accounting

crisis caused by the 150 hour

requirement option one remove the 150

hour requirement with what I'm assuming

is just 120 hour requirement but they

didn't say option two a convoluted mix

of 120 hour requirement if you take all

four parts of the CPA exam or have to

take three parts of the exam if you have

150 hours I know the article wants to

zoom in on the 150 hour requirement but

I think that pay and quality of life has

more of an impact than having to go to

school for another year then again I was

in a master's program to get those extra

30 hours so I thought it was was

valuable to my career but those that are

taking random classes like walking

probably think the extra hours are

pointless what you do see on Reddit a

lot is people are sharing how horrible

the quality of life is so what's going

on

um I probably start crying it's

okay so I am a tax accountant

and I'm sorry okay put a lot of r on me

so busy season they want I had to work

50 60 70 hours a week uh stayed up all

night sometimes 3:4

a.m. I'd like to propose a question does

the decrease in new accountants really

matter we've been talking about us

accountants this whole time a lot of

accounting firms are utilizing offshore

teams because they are cheaper and they

can do just as good as a job as their us

counterparts I've noticed most modern

account accounting firms are using

offshore teams to help with their

accounting and tax work and most modern

firms seem to prioritize not burning out

their employees I think we're on the

cusp of an accounting profession

Revolution something is going to have to

change and change in a big way if CPAs

want to stay relevant and right now the

change looks like using accountants from

other countries I'm 100% Pro CPA but the

public accounting industry needs to

change and I can't wait to see when that

day comes if it ever

does thanks for

watching

cheers