9 minute read
Educators on the pipeline problem
EDUCATORS
ON THE PIPELINE PROBLEM
– Kevin Rich
By Marcia Tillett-Zinzow
The struggling CPA talent pipeline is old news, but the cries for help persist. Efforts are being made to staunch the bleeding, but they need to be made faster. The patient is losing color. The decline of college students pursuing accounting majors, coupled with fewer numbers of accountants taking the CPA Exam, has been well-documented. Per the most recent national numbers available from the AICPA’s 2021 Trends Report, accounting graduates decreased by 2.8% (undergraduate) and 8.4% (master’s level) for the 2019-2020 academic year. It’s only logical that if you have fewer graduates, you will have fewer sitting for the CPA Exam. So the number of exam candidates also dropped: 17% between 2019 and 2020 and 6% from 2020 to 2021. The report notes that the pandemic inflated those numbers — a fact that was borne out by educators interviewed for this article. But the fact remains that those numbers are declining, and they have been for a while. New pathways need to be forged to get and keep students in accounting, educators say, because the old ones are no longer effective. And they agree that the single biggest answer to the pipeline problem is money.
Starting salaries and Gen X, Gen Z
“I know, the profession knows, and anyone who’s in the profession knows that the trajectory of salary for CPAs in public accounting is very steep,” said Kristen Fuhremann, CPA, MAcc, director of professional programs in accounting at UW–Madison. “But students are less focused on what their raise will be in three years; they care about where they’re going to be starting. And they know what that will be because starting salary data is very easy to find online.” Kevin Rich, CPA, PhD, chair of the Accounting Department at Marquette University, said he and his fellow accounting professors are feeling their students’ pain. “We’re finding it harder to recruit students to accounting knowing they will often have to work a lot harder and start at lower salaries than graduates from some other majors,” he said. “The firms have done a lot of really great things to create work-life balance, and public accounting opens up so many career opportunities. But we are hearing they just haven’t kept up in terms of starting salary.” Mark Bichler, an accounting educator at Port Washington High School, said he thinks the profession has lost its advantage over other professions. Entry-level salaries for accounting graduates have not kept pace with other similar industries. While they may vary by location, industry, and organization type and size, they are not the top-level starting salaries of the past. “The advantage we used to have in accounting was that the pay was pretty darn good. I’m not saying it’s not good now, but there isn’t that gap that used to be there. The gap is narrowing, and salaries for finance grads are higher than what public accounting firms are offering CPAs,” Bichler said.
Kristen Fuhremann Kevin Rich Mark Bichler
Fun and flashy
From his vantage point as a high school teacher, Bichler sees another faction playing out in addition to the salary issue: getting students to stay in accounting in the first place. “Kids want fun and flashy,” he said. “And, let’s face it, accounting is not fun and flashy. Finance seems to have the glitz and glamour that kids are seeking.” Rich said he thinks some students find it fun and flashy when debits equal credits. “Me included,” he laughed. But he
went on to say that some of the new emerging technologies can make accounting more fun than it ever used to be. “I think the idea of being able to use technology to find crafty solutions to what you’re trying to do can be pretty fun and flashy. I taught my students how to write a bot to automate some task that they needed to do, and I’ve had former students reach out to me after they’ve graduated and say, ‘I use that technology you taught me, and I created a bot that saves me three hours a month on a task that I have to do every month.’ They just click a button, and the technology does it for them,” he said. “I think that’s pretty exciting.” Wendy Potratz, CPA, MBA, CFM, CGFM, a professor in the Accounting Department at the University of Wisconsin–Oshkosh and director of the school’s Executive MBA program, agreed that students want something else these days — and, she pointed out,
Wendy Potratz they can get it. “It used to be that if you were good in math, you became an accountant or an actuary. But now there are so many other ‘sexy’ things with STEM out there that they can do; we really don’t have the forefront anymore,” she said. Potratz also noted that the accounting profession still suffers from a perception problem. Maybe it’s no longer the image of the bespectacled nerd with the green visor and the armband, sitting in the back room pushing a pencil, but there’s still the idea in students’ heads that they are going to be ground down during tax season. “Gen X and Gen Z — they just don’t want that,” she said. “I will say that when I talk to professionals, they understand this, and they are changing their way of hiring, the perks they offer and the expectations. Still, it’s going to take a while to break that stereotype. “The key is, we have to do things differently,” Potratz continued. “We can’t keep on the same path because students aren’t going to choose us.”
Those extra 30 credits
The 150-credit hour requirement was developed a couple of decades ago as a way to encourage students to learn more of the skills they would need in the workplace, such as technology and communication. While Fuhremann doesn’t see the requirement as a detractor in her program, Rich believes that the 150-hour requirement for certification is another challenge because students with other majors need only 120 credits to start their careers. “They have a lot more fun in college, get a job in industry and make more money than they would in public accounting,” he pointed out. The profession and the higher education system are working to find solutions to help students understand the value of those 30 extra credit hours. Fuhremann said the UW–Madison School of Business has created some flexibilities in their integrated master’s program, recognizing that some students do not need a full five years to earn 150-credits. “For students coming in with credits from high school, some can complete a 3+1 program to earn their undergraduate degree in three years and get their master’s in year 4,” she said. She also noted efforts some of the Big Four firms are making to help entry-level staff get the credits to become CPAs. “I know EY is supporting students to earn those 150 credits while they work,” she said. “So there are many ways
– Wendy Potratz
those in the profession are trying to remove barriers around that 150. I’m cautiously optimistic about the future.” Rich believes the CPA Evolution will bring welcome changes to college accounting curriculums. “I am excited by the changes in the CPA Exam,” he said. “We struggle in our program — and I’m sure others do, as well — because there’s a disconnect between what is currently covered on the CPA Exam and what is needed in industry. So we end up spending time talking up old-school stuff just because it’s on the quiz. We have to do it, but it’s not really helping them in their first jobs.” Rich said he and his fellow professors are trying to find ways to teach more technology because that’s the skill set that students need most. “A lot of that isn’t covered on the CPA Exam right now, and there’s only so much time that we have to try and train our students. So I like the fact that the CPA Exam is evolving, and I think that’s good.” Fuhremann summarized the whole situation. In her words, “These students have to get 150 credits — many of them are getting master’s degrees — and now we’re changing the exam to further emphasize technology and analytics and analysis, all these specialized skills. Pay them for that! We have to demonstrate that there’s value to the additional education they’re required to get,” she said.
Marcia Tillett-Zinzow is a Wisconsin freelance writer and editor. Contact her at mtzinzow@icloud.com.
What CPA Firms Can Do
1. Get into high schools and colleges consistently.
It’s easier than you might think. First of all, the WICPA is a resource for making matches between CPAs and schools. “We’re excited about some of the initiatives we’re working on, including a speaker package that members can use when they go to speak to accounting classes,” said Devin Yates, WICPA member outreach coordinator. Contact him anytime at 262-785-0445, ext. 4511, or devin@wicpa.org. Or call your local middle or high school and ask to get in touch with whomever teaches accounting or business classes. It’s that easy.
2. Support CPA Exam candidates.
Follow the lead of some of the Big Four firms, who have raised starting salaries and implemented signing bonuses. Paying for CPA Exam study materials in advance is another policy firms might consider, as well as developing cohorts of employees who can study for the exam together. Providing mentors and offering (paid) time to study and take the exam are also good tactics. The whole idea is to set future CPAs up for success in reaching their goals. Helping them track their progress with goalposts can also help candidates keep themselves accountable.
3. Have meaningful engagement with university advisory boards.
University accounting advisory boards are often amenable to meeting with college recruiters from organizations that need new accounting talent. Contact the department head at whatever school you’re looking to recruit from, and they can help.
4. Communicate the critical and honorable role of accounting.
CPAs protect the public interest through a strict code of ethics: They must maintain objectivity and integrity, remain free of conflicts of interest and never knowingly misrepresent facts or subordinate their judgment to others. In short, they establish trust that helps others make wise financial decisions. For additional insight on this, look up a recent Bloomberg Opinion article by Adrian Wooldridge titled “The Accountant Shortage Threatens Capitalism’s Future.”
