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The leaders of the US accounting profession have signalled they could cut the education requirements for becoming an accountant, amid growing alarm about a shortage of new recruits.
The American Institute of Certified Public Accountants on Tuesday dropped its opposition to calls to reduce the amount of university education needed to qualify as a CPA. That is currently set at the equivalent of five years, one year longer than a typical bachelors degree in the US.
The declaration is a watershed moment in what had become an increasingly tense struggle between the professional body and reformers.
Calls for reform have been growing louder as the number of US students taking accounting courses and going on to sit professional exams has fallen, leaving some accounting firms struggling to hire replacements for the baby boomers who are retiring.
An AICPA advisory group that included representatives from large and small firms said on Tuesday that the profession needed to “address the cost and time of education” as a priority for fixing the shortage.
It called for “a competency-based licensure model not tied to university credit hours”, among other reforms. The AICPA, in turn, expressed “directional support” for the group’s recommendations.
“While expanding approaches to CPA licensure alone will not solve the accounting talent problem, we believe our licensure process does need to acknowledge changing market conditions,” the AICPA said.
Accounting groups in Minnesota are among those lobbying to change state laws to cut the educational requirements for a licence, a movement that the AICPA says threatens long-established reciprocal agreements enabling accountants to practice across state lines.
Sue Coffey, chief executive for public accounting at the AICPA, said it aimed to propose an alternative to the current requirements by this time next year, but getting state accountancy boards or state legislatures to embrace the changes could take significantly longer.
The currently mandated fifth year of education would need to be replaced with skills requirements, she said, including technical knowledge and communication and strategic thinking skills.
“I really hope Minnesota and others talking about this see value in working with the rest of the country,” Coffey said. “This is our attempt to bring everybody together.”
With three-quarters of US accountants at or near retirement age, the number of AICPA members has fallen from 430,000 in 2017 to 400,000 last year, according to its latest annual report, missing its membership target for the fifth year out of the past six.
The number of people taking the CPA exam fell from a peak of more than 100,000 in 2016 to a 17-year low of just above 67,000 in 2022. An uptick in 2023 was the result of students rushing to take the exam before the introduction of a new curriculum and numbers were set to resume their decline in the short term, the AICPA said.
The AICPA’s advisory group also called for accounting firms to raise starting salaries for new recruits and improve work-life balance, as well as for a revamp of accounting degrees to emphasise why the job is important.
Lexy Kessler, mid-Atlantic regional leader for the accounting firm Aprio, who chaired the group, said a shortage of accountants threatened the functioning of capital markets and business. “If we don’t have trust in our financial markets it could bring chaos,” she said.
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