Is Accounting an Obsolete Major?

a street sign that says "end"

Is accounting an obsolete major? That’s the question posed by John “Jack” Castonguay, PhD, CPA, in the August/September 2021 CPA Journal. He writes:

Accounting — at least as an independent field of study — is becoming obsolete in today’s technology- and analytics-focused world. Its value lies in its interdisciplinary applicability and position as a foundational business curriculum. In recognition of that reality — and to maintain a pipeline of candidates open to CPA licensure, increase the number of engaged accounting students, and keep the profession relevant to the next generation — this author believes that colleges and universities should eliminate the accounting department as a stand-alone department and reorganize accounting under finance and information systems departments.

It’s long been established — and we here at Going Concern have nearly 13 years of evidence littered throughout our archives to prove it — that the accounting profession has a recruitment problem. A decade ago, the profession’s efforts were honed in on increasing diversity, but nowadays it’s about getting people in the door.

The most recent AICPA Trends report [PDF] — published in 2019 — tells us that accounting enrollments are down overall, though it does look like there’s some positive movement on the diversity side:

Total projected accounting enrollments are down 4% from the highs of 2016, but are still among the highest on record. Master’s enrollments are down 6% from 2016. Racial/ethnic diversity has increased in the 2017-18 academic year. Universities have reported increases in Hispanic or Latino enrollees of 3 and 8 percentage points at the bachelor’s and master’s levels, respectively. Seventy-two percent of bachelor’s of accounting programs and 65% of master’s of accounting programs expect to have the same or higher enrollment in 2019.

We are anxiously awaiting the newest AICPA Trends report, which is published every two years and therefore should show up anyday now. Until then, we can only guess on what the next batch of numbers will look like and hand-wring over the data we do have.

The Bureau of Labor Statistics forecast employment of accountants and auditors to grow 13.1% from 2012 to 2022; current BLS data projects 7% growth for this segment from 2020 to 2030, about as fast as the average for all occupations.

About 135,000 openings for accountants and auditors are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Let’s talk about retirements while we’re on the topic. A few years back, the AICPA estimated that a whopping 75% of its members (read: CPAs) would be eligible for retirement in 2020. When you combine this figure with waning interest in accounting as a major, more and more accounting graduates foregoing the CPA exam, an accounting professor shortage, and the pressures of a traditionally reactionary profession to take proactive steps to adapt to new technology, well, it doesn’t look pretty.

The CPA Evolution project aims to address that last issue, and the AICPA and NASBA recently released a revised CPA Evolution Model Curriculum upon which university accounting programs can build their curricula but are by no means required to. I’m hearing grumblings from deep within the bowels of academia that some professors are less than thrilled about this project, but no one is willing to go on record, so if you’re an accounting professor with an opinion on CPA Evolution good or bad and willing to put your name on it, please do reach out.

The problem with this approach, writes Castonguay, is that the new curriculum fails to address the “jack-of-all-trades” problem; early-career accountants in particular are expected to know a little bit about a lot of stuff, essentially.

Even though the CPA Evolution Project is aligning the credential with practice, it is also underscoring that the value in the license lays not within the accounting curriculum that has existed for decades; the new value is the technology, the analytics, the systems, and the tax research. But I believe the curriculum realignment anticipated by the CPA Evolution Project will only lead to an even faster decline in enrollments if accounting remains siloed as a stand-alone major.

As the profession gets more specialized, the accounting curriculum is expanding to include more information, more courses, more skills, and more tracks—but students are less skilled at each one. It’s a cycle that can’t be fixed by repackaging existing courses. It can only be fixed by eliminating the accounting major and unlocking accounting’s interdisciplinary value and specialization within finance, information systems, or other departments.

In order to better recruit future accountants (or should we start calling them accounting analysts?), Castonguay suggests a total rehaul of accounting education, rolling existing accounting curriculum into other departments. This, he says, is preferable to trying to cram technology content into existing accounting programs instead, which seems to be the current plan.

[T]he accounting department itself should be eliminated and reorganized predominately under finance and information systems departments. In the author’s opinion, this approach will unlock the value in the fast-evolving accounting roles that accounting firms and future employers seek from graduating students.

So what do we think? Is accounting a dead major? Is the solution to the profession’s pipeline problem as easy as parasitically latching onto other business majors hoping to snag a couple future CPAs with the captivating glitter of accounting fundamentals?

I’ll say this: the next few years are going to be very, very interesting.

Photo by Ana Arantes from Pexels

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8 Comments

  1. Is accounting a dead major?

    I don’t know, but it seems like every company in America has accountants at all levels from CFO/Controller to Junior Staff Accountant. And while there may be a shortage of accounting talent now, that may be do to the sustained strong economy we have. If you go back to the last long recession, accountants were getting laid off and couldn’t find jobs. So perhaps this is cyclical.

    As for eliminating accounting schools and merging the study of accounting into finance and info systems, all I can say is that one of those majors is complete bullshit and the other is for wannabe (but not good enough to be) programmers.

    So is accounting a dead profession? Maybe when companies don’t need to track their expenditures, prepare budgets, pay vendors, invoice customers, and report financial results anymore. But as of now, it seems like every company on the planet still needs to do all those things.

  2. I have been hearing about the dire shortage of accounting professors for decades, yet somehow things have never collapsed. I remember one of those articles drew a letter to the editor (yes a long time ago) stated that the dean or department head prepares a memo saying there is a dire need for 4 new professors knowing they will be lucky to get one. The crisis numbers are heavily built on vaperware openings.

    I actually looked into the phd route based on the sanguine demand reports. I was older than straight through academic applicants and to compensate I touted my years of actual experience. The prof said that people with experience in accounting did not make good academic researchers because they tended to be too realistic and practical.

  3. Accounting isn’t dead but with the digitization of the new era we’ll either sink or swim.
    Why take accounting when you can do an economics + compSCI or finance + IT degree?
    Accounting doesn’t have the value addition other commerce majors have.
    Too rigid and too many difficult qualifications [CA/CPA/CMA/ETC] vs learning a programming language [6 months at most] is whats sinking this ship.
    Either accounting gets quicker and better certification’s or we’re boned.

  4. As a former Big 4 Accountant, former Fortune 200 Accountant, former private industry accountant, and current PhD student, I have a few thoughts on the matter. First, I don’t really give Castonguay any credit here, and you’re welcome to take that how you want it but it is what it is. While he’s a PhD graduate of an R1 institution (Tennessee), he’s teaching at Hofstra which does not have a research focus (they aren’t even ranked on the R1/R2 scale), his research is minimal and relegated to mostly blockchain and he has no publications in any major journal. So from an Academic perspective, meh. What this tells me is that he’s not really in the position to make any determinations about how academic departments, hierarchies, or degree programs work. In this instance, simply having “PhD” after his name isn’t sufficient enough to call him an expert on the subject matter.

    So what are his failings? First, there is an overwhelming bandwagon effect of big data, analytics, and accountants being left in the dirt. I don’t understand how these people don’t realize there is more to accounting that just performing big data processes. Basically, analyzing big data is effectively replacing the work previously performed by staff accountants (at the company level) and first year auditors (at the, obviously, auditor level). This isn’t rocket science that’s being created here. It’s more effective AP and AR analysis. OooooOOOOoooo, sales are trending in the Southwest. Big freaking deal, that’s not the game changer everyone pretends it is. There is only so much inference that can be made with this data. What we need are decision makers, individuals who understand accounting, it’s impacts on the firm, and who can make a professional, experience driven determination of what needs to happen next. You get that from accounting majors and from those individuals who’ve spent time as accountants starting at the junior levels. If suddenly you’re trying to force individuals with Finance or IS backgrounds, smattered with a small helping of accounting topics, into doing accounting work you’re in for a big surprise. They can’t and don’t want to do it. They didn’t go into accounting for a reason. Burying accounting under these other groups is simply nonsensical.

    Frankly, I blame a large part of the woes on accounting majors on the AICPA, NASBA, etc. who, in trying to modernize their organizations, have actually ended up marginalizing their member base. Who gives a shit about the Association of International Certified Professional Accountants? I know who doesn’t – their members. And don’t get me started on the CPA Evolution junk. Oh, you’re going to be an audit specialist, wow. Oh, you must really be good at taxes because you tested on it TWICE. I can’t believe the people who came up with this still have jobs.

    So no, accounting majors aren’t going anywhere. They will continue to be the crux of financial management going forward. The AICPA and NASBA need to pull their heads out of their respective asses and get back to serving the members without whom they would cease to exist. And Castonguay’s opinion on the matter is irrelevant.

    1. I like alot of what you say here. I’m of the opinion (and decades of experience) that the road of a career in accounting requires allowing someone else to own your time too strictly for too long. The “Industry” has done this by their use of tax season as an excuse to “force” people to work too long in a compressed time with no break. I.e. minimum 60 hour or more billable hours from Mid Jan till mid April. Usually they’ll want that over 6 days – so you’ll get 1 day off a week if you’re lucky for 3 months & that’s if everything goes as planned & we all know it’s likely that things will never go as planned. It does take a special breed & the experience is paramount in dealing with more complex issues on an advisory level.

      Then there could also be the desire of some (many?) to “make the news” rather than reporting it. There is also the lure of getting in with a hedge fund (in name only) or proprietary trading firm & get the imm.ediate 30 + or more bump in salary/comp.

      Lastly there is the view in many corporations that the “accounting” function is not a P & L generator & thus not considered important (until they can’t figure out why they have no working capital).

  5. Sure – we can replace them with majors in hip-hop and Internet Influencers.

    We can either dumb down the world we live in or get our priorities in order – can’t have both….

  6. There are a number of things happening in large and small organizations impacting accounting and finance.

    Large organizations are trying to transform into digital first organizations, not just embracing technology but also agile mindsets and practices to focus on faster, iterative delivery of value. They are moving from annual budgets and funding projects to iterative budgeting and funding value streams that are facilitated by non-CFO personnel (Lean Portfolio Management). CFO organizations are falling behind as the organizations move away from traditional approaches.

    Analysis was a part of accounting and finance but has been moved to Data Science which sometimes falls under a Chief Data Officer. Many functions that were housed in a CFO’s organization have been pulled out and moved to other areas or new organizations were created. If this continues then CFO organizations are left with recording activity and creating financial statements for the team that puts together reporting packages for mahogany row.

    Smaller businesses are getting guidance from SBA funded groups and “industry consultants” that they do not need help with their finances. This results in “industry specific” actions like recording owners draw on the PnL. Throw in accounting software firms making claims that the software magically does the work and saves “80 hours” when it doesn’t, it’s not hard to see that the accounting industry is getting hit from all sides.

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