Amanda Iacone at Bloomberg Tax has written the accounting niche’s 1,735th article about the accountant shortage and this time, as is often the case, the focus is 150 hours. Rather, how dueling factions within the profession are fighting for and against keeping it as the only option to CPA licensure. Let’s note here quickly that many of the “anti-150” folks aren’t lobbying to abolish it completely but to offer alternative pathways such as Minnesota’s proposal to create a second pathway to licensure that would require 120 units of education and two years of experience. Apparently South Carolina has joined them.
To summarize most of the article: barrier to entry, US workforce hemorrhaged 334,000 accountants and auditors in two years, pipeline pipeline pipeline, blah blah. Scrolling down we get to the important bit:
First-year audit associates can expect to earn $59,000 on average this year, up from previous years, while entry-level corporate accountants can bring in $65,500 on average, according to Robert Half salary data.
Wages rose quickly in the last two years, although growth has slowed this year, Britton said.
Companies, not just CPA firms, are struggling to fill senior accountant roles and jobs for accountants with three to five years of experience. The staffing shortage has driven up market rates, pushing typical salaries for senior accountants to $100,000, said Frances Moreno, managing partner of staffing firm Vaco’s Los Angeles office.
Despite recent pay increases, salaries haven’t kept up with the high cost of college tuition and wages for roles in competing fields such as finance, data analysis, or computer science.
Surgent’s Castonguay dismissed the recent raises, calling them a “temporary blip, not a correction.”
“How you improve the brand is by improving the work experience,” he said. “That’s getting rid of the 150 hours so people come into the profession, and paying them more.”
Professor Castonguay isn’t getting invited to any AICPA dinners any time soon.
Over at Financial Times, Stephen Foley delivered his own article on the pipeline topic, this one packed with juicy quotes from various Chicken Littles* warning that the sky is falling. Except it actually is and by the time the king does something about it, it will probably be too late.
Here’s Bob Cedergren, chair of the Minnesota Society of CPAs:
“The Deloittes and PwCs of the world have the masses, they have offices everywhere and the ability to draw on overseas talent,” he said. “We needed to take some action.”
And Julie Blaha, Minnesota state auditor:
“This is now a severe shortage, and it is causing a tsunami of problems. It’s a shallow pool, and we have to do something about the leak.”
And some Big 4 people who didn’t want to be named:
“The 150-hour rule has prevented many talented folks from joining the profession,” said one Big Four audit executive. “The cost of an extra year of school is prohibitive and isn’t necessary to succeed in public accounting, or business in general.”
At another Big Four firm, one executive pointed out that many states do not require that courses taken in the fifth year of education have anything to do with accounting. A senior partner involved in recruiting there asked: “Is there an alternative, such as learning on the job, which is as good as or better than learning in the classroom?”
Representing the king is longtime Going Concern favorite Sue Coffey (hey Sue, I know you are reading this 😘) of the AICPA:
[She] said having the equivalent of five years of higher education remains a good idea, and removing the requirement is no silver bullet for dealing with a talent shortage. It took about two decades of work to align all 50 US states around the current standards and get agreement to recognise each other’s licences, and trying to repeat the feat looks daunting.
“What exists is a very delicate system of agreement and trust,” she said. “This has been my challenge with Minnesota. It just takes one to upset the applecart and that could upend mobility across the country.”
Alright so if the profession can’t agree on 150 that leaves salaries as the next problem in need of solving. That one should be easy.
*I did not intend to imply any of the people quoted in this article are “yo-yo wielding simpletons“