You know how if you’re on Tinder for a while and you’re not getting many matches because your standards are too high so you widen the net a bit and start overlooking things like “if you can’t handle me at my worst, you don’t deserve me at my best” in people’s bios? Well that’s pretty much what’s happening in accounting right now. And it’s only just begun.
In early October, local KCCI in Des Moines ran a story about a shortage at the Iowa State Auditor’s Office. Normally this is the kind of story we might bury in Footnotes among the firms-you-never-heard-of mergers and KPMG Kazakhstan fines but something about this story felt important. Perhaps it was a slow news day over at KCCI or we’ve reached a point in the talent shortage where grandmas in Iowa who still watch the evening news are finding out about it and all kinds of offices are going to start lowering their standards.
From the first KCCI story:
The Iowa State Auditor’s Office is looking at college graduates with 2-year degrees to help fill open accounting positions.
The auditor’s office reports that it’s seeing a shortage of accountants along with a shortage of accounting students with 4-year degrees.
The problem isn’t unique to the Iowa Auditor’s Office.
According to the Bureau of Labor Statistics, the number of Americans working as accountants and auditors has dropped 17% since 2019.
Yes, we know. It’s actually a bit worse than that, the 2021 AICPA Trends report shows accounting enrollments peaked in 2015-16 and have been on a downward slide since. We don’t expect KCCI to dig that deep.
Shortly after the above television report, KCCI followed up with another story about the office going forward with the plan to recruit from community colleges and waive the requirement for four-year degrees:
Accountants and auditors with the Office of Auditor of State no longer need a four-year degree.
“There’s currently a nationwide shortage of accountants and auditors, and Iowa’s no exception,” said Jennifer Bradley, Vice President of Academic Affairs for Kirkwood Community College.
The Bureau of Labor Statistics estimates there will be about 136,000 jobs in accounting and auditing every year for the next 10 years, KCRG reports.
Rob Sand, Iowa Auditor of State, added, “The auditing and the accounting industries in the United States have experienced a 17% drop in the workforce over the last three years. We are searching for bodies, we need people in our office to do the work.”
Monday, Sand visited Kirkwood Community College to announce that, to get those bodies, people with an associate’s degree in accounting can now get a job in the state auditor’s office.
“Our office historically has employed around 100 individuals, the vast majority of them being accountants. Historically, we have required those accountants to have a four-year college degree. Why?” asked Sand.
Well Rob, presumably because you need a four-year college degree to sit for the CPA exam in the state of Iowa.
Just as a little FYI on the supply side, the 2021 AICPA Trends report shows accounting degree completions by level going back to 1994-95 and associate’s completions for 2019-20 are the lowest they’ve ever been going back at least that far. So what if tapping into the [shallow] community college pool isn’t enough?
KCCI and KCRG — which also ran a story on the situation at the state auditor’s office — reached out to local firms to ask if they too would consider lowering the bar and hiring from the community college/associate’s degree pool. The firms they spoke to told both stations they were either too small to be impacted by the shortage or did not want to be interviewed.
Alright, so why should you care about some state office in Iowa? Because this is a significant shift not likely to be limited to a single state office in the Midwest. This is a widening of the net that came about because there simply weren’t any candidates for them to choose from. And as we can see from the Trends data, there isn’t exactly a robust pool of candidates available below the bachelor’s level. As the shortage worsens, firms, companies, and organizations in need of talent will also have to think outside the box (like KPMG Australia bringing on high school grads). But how? It’s not like they can bring in the National Guard to perform audit procedures. Or can they?
Do yourself a favor and watch the video of this segment. They opened it by asking one student at Kirkwood if she would consider a career in accounting to which she says “uh, definitely not!” And we wonder why the profession is having trouble finding bodies…