THE ACCOUNTING PIPELINE
The CPA Supply: What’s Behind the Downward Trend? BY NATALIE ROONEY
In June 2021, the Illinois CPA Society (ICPAS) released the findings of its groundbreaking research about the decreasing supply of new CPAs. The report, Decoding the Decline, took a deep dive into the responses from more than 3,100 accounting students, graduates, and professionals to reveal the top challenges, perceptions, and who impacts an individual’s decision to pursue the CPA designation. Now that we have the results, where do we go from here? DIGGING INTO THE DATA The fact that the number of accounting students is declining isn’t new information. The most recent AICPA Trends Report from 2019, showed projected bachelor’s, master’s, and Ph.D. accounting enrollments were down 4 percent, 6 percent, and 23 percent in 2018, respectively. And the number of new CPA Exam candidates hit a 10-year low. At the time, the AICPA suggested the continued declines were being driven by “both economic conditions and an expansion of the alternatives available” to potential accounting students who are “opting to enter or remain in the workforce in lieu of pursuing an advanced accounting degree or to pursue other avenues for advanced education.” What is new information, however, comes from the ICPAS report that reveals the underlying reason behind the declining trends: young professionals who do not plan on becoming CPAs said they aren’t doing so because “they feel they can be successful in their anticipated or chosen careers without it and ultimately believe any value the CPA credential holds is outweighed by its lack of relevance to their personal endeavors and the time commitment necessary to obtain it.” Additional key findings from the ICPAS report: • The costs associated either with obtaining the additional credit hours to meet the educational/licensing requirements or preparing for and taking the CPA exam were not the top barriers cited by any respondent category. 14
NewsAccount | Summer 2022
• The likelihood of becoming a CPA drops dramatically after age 22.
2021 SPECIA L F E AT U R E
A CPA Pipeline Rep
Decoding the Decline ort
Data details the challe nges in attracting accounting students and young profession als to the CPA credential.
• Many respondents do not have an interest in pursuing a credential at all. • Accounting, auditing, and tax preparation are the words most associated with the CPA credential, further narrowing the credential’s scope and attractiveness. • Respondents do not see their employers or prospective employers supporting or requiring the CPA designation. YEARS IN THE MAKING ICPAS President and CEO Todd Shapiro says the profession’s pipeline has been a topic of discussion for a good part of the last decade. “If you look at the AICPA Trends report over the past seven or eight years, we see an increasing number of accounting majors but a flattening in the number of first-time exam takers. That is a leading indicator of what the pipeline will look like. That flattening means you have a lower percentage of your accounting graduates sitting for the exam. That piqued our interest.” In 2016, it was announced that there would be significant changes made to the CPA exam for 2017. The number of first-time exam takers spiked. “That spike was 100 percent driven by the change coming for the 2017 exam,” Shapiro says. The spike lulled some into a false sense of security, but when the numbers dropped again in 2018, it got everyone’s attention. Shapiro says two successive drops had not occurred in at least the last fifteen years. “It really got us thinking about what was going on. Why is this number continuing to fall?”
Kari Natale, CAE, ICPAS senior director of planning and governance, led the survey team, and set out to answer that question. “We saw a gap in terms of the knowledge, and we wanted to learn from it. We knew if we wanted to do something, we had to uncover what young accounting professionals were thinking so we could change our strategies. We wanted to hear from those young professionals themselves.” THE POWER OF ME Natale says when the ICPAS team began sharing the report’s data with educators and practitioners, they received a surprising amount of pushback. Historically, there has been a rote answer to the declining number of CPA exam takers: the 150-hour requirement. It turns out, that reason didn’t rise to the top at all. Natale says one of the biggest surprises in the results came from asking who influences an individual’s decision to pursue the CPA. It wasn’t employers or educators, which would have been true in prior years. “They said those opinions were helpful, but it was just one factor.” Who is the number one influencer? Respondents said: Myself, and if I don’t personally see the value to me, I’ll walk away. “So, we can no longer tell them they need the designation to get a promotion,” Natale
