Accounting Profession CRISIS?

Logan Graf
8 Dec 202305:51

Summary

TLDRThe 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.

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Related Tags
Accounting CrisisCPA ProfessionRetirement AgeAccountant ShortageEducational Requirements150-Hour RuleCareer QualityPay DisparityOffshoringIndustry RevolutionProfessional Relevance