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The CPA Credential and the Profession Are in a Race For Relevance, Says ICPAS CEO Todd Shapiro

Interest in the CPA credential has been down significantly since at least 2016, and we have discussed this issue to death so I don’t need to link you to the evidence (but here’s some anyway). The problem here is that talking about it isn’t solving it, thus we will continue talking about it and hope it all works out somehow.

Fewer people taking the CPA exam on its own isn’t a huge problem (well, the AICPA might say it is but they’re slightly biased), especially when you consider the trend toward accounting firms hiring more non-accounting graduates than they used to. We fully expect that trend to continue and it’s not the worst thing in the world since the future is upon us and said future consists of piles and piles of data in need of analyzing. But the raw CPA exam numbers aren’t the only problem. There are multiple issues hitting the profession at once from multiple fronts, like the fact that the AICPA estimates 75% of CPAs will retire in the next 15 years and that there is a serious shortage of accounting professors. Interest in accounting programs is still there, but this September 2019 CPA Journal article suggests that while accounting program enrollment data looks good on its face, there may be trouble ahead — a “current disenchantment” they called it. All of these taken together could mean a critical shortage of CPAs in the near future.

So we’ve established what pressures exist and why they should be concerning, but the profession continues to wonder out loud why people aren’t drawn to the CPA credential like they used to be. The following short video just put out by the Illinois CPA Society has some ideas:

CEO Video Series: Putting Destination CPA Back on Accounting Students’ Radar from Illinois CPA Society on Vimeo.

I know you all are very busy so in case two minutes and 26 seconds is more time than you have to spare, here are the reasons ICPAS President and CEO Todd Shapiro gives for why people might choose not to pursue the CPA credential these days based on feedback they’ve received researching this problem:

  • They feel they can take off in their anticipated or chosen careers without it.
  • They believe that 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.
  • They don’t see the personal or financial return on investment.
  • Their employers or prospective employers aren’t supporting or requiring it.
  • They see other experiences as being more valuable.

A few of these fall under the “no time” category which is something we’ve addressed before; however, as anyone who has ever camped out in line overnight on new iPhone release day will tell you, most people can make time to do something when they’re sufficiently motivated to do so. And in the case of the CPA, it seems like more and more accounting graduates are deciding that the personal investment required for licensure is too great a trade to make in exchange for the potential benefits.

This is not an argument about “is the CPA worth it” because we know it is. And we should not extrapolate any information about its value from the fact that fewer accounting graduates are taking it these days. But the profession needs to do some serious reflection on the why of this issue and what it can do to address it. What will it take to convince tomorrow’s accounting graduates that their personal and financial investment is worth it? In other words, how can the profession fully convey the credential’s value? You’d think that would be an easy question for a bunch of accountants to answer but alas, here we are.

Further reading:
A CPA Pipeline Report: Decoding the Decline [Illinois CPA Society]

Photo by Lukas Hartmann from Pexels

11 thoughts on “The CPA Credential and the Profession Are in a Race For Relevance, Says ICPAS CEO Todd Shapiro

  1. I think the guy in the video is dismissing the 150 credits as a factor way too easily. I luckily graduated 2 years before they changed it to 150 credits in NY. If I was choosing a major now, i would choose another major like finance over accounting without hesitation. One of the main draws for me in choosing accounting, along with being better job security than finance, was that unlike finance I wouldn’t have to worry about getting an MBA at some point in order to advance in my career, it was just 120 credits and then get the CPA. Now with accounting requiring 150 credits, it basically levels the playing field from the standpoint of education requirements, except in accounting you know you’re going to be working in a feudal enterprise where you make well below what a finance person makes at a big bank or private equity fund, unless you’re “lucky” enough to make partner after 12-15 years, which very few people will achieve.

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  2. Where to start?

    1) A CPA is really only “required” for audits and more specifically to sign an audit opinion. Something only a very small % of accountants will ever do. Accounting firms know their audit practices are the lowest margin with the highest risk. So pay in audit is the lowest. I would never start an audit practice due to liabilities and peer review requirements. That, along with the annual cost for CPE and license renewals, makes my constantly question why I keep my CPA license active.

    2) The IRS has the EA credential which is a lot easier to obtain for our friends on the tax side. Why get a CPA when you can get an EA?

    3) Tech, banking, and data analytic/marketing firms are hiring like crazy at salaries that are well above accounting jobs. Those jobs don’t require a masters degree (150 hours), 4 difficult exams, and 40 hours of CPE a year. Plus the hours, as an accountant, never really seem to get any better. It takes years, even decades, for a CPA to match what tech companies pay in salaries.

    4) It’s nearly impossible to be a partner unless you’re willing to move around and sell your soul to the firm. Even that may not be enough.

    5) With that, At the first hint of a slowing economy firms cut good people like crazy and rationalize that they’re never going to make it to partner anyway instead of sticking with their staff through the full economic cycle. Meanwhile tech companies lose billions a quarter and keep hiring. Partners worry they can’t afford a new Tesla and let heads roll! I’ve seen it in the financial crisis and now with COVID. Interesting that many of those people left the industry and are very successful in other careers, but somehow aren’t cut it as a partner? Then the firms moan and groan that they can’t find enough people.

    Bottom line, people don’t want a CPA because of market forces which are making the accounting firms (especially audit and tax) less appealing. The accounting firm model is seriously broken and serves only a select few (mostly white males) in the profession. So it’s not necessarily the CPA exam.

    Either pay people more and make their hours more in the 40-50 a week range during busy season or keep on the path to irrelevance as a career and industry. You can’t work people to death at below market wages and then ask why no one wants to put the effort into the CPA exam.

    I get that Partners want to keep their massive annual draws, but they can’t if no one is buying their BS that public accounting is actually a “good career” in the world of digital.

    Perhaps take a look in mirror at the next partnership retreat instead of the BMW website.

    1. Seems like all the top accounting students at my school went into internal audit or other advisory lines of service. Even those who got a master’s degree took that path. The starting salaries were 10k per year higher than audit or tax and the hours are reasonable year round. It’s an obvious decision to make.

      1. That’s an excellent good point that’s overlooked by the AICPA and state societies. I left public for Internal Audit and eventually become a Manager in the department. Several of my staff in Internal Audit were right out of college. I pushed them hard to take the CMA exam. Almost all of them are in leadership roles in FP&A or operations because their experience was so much broader than someone from the Big 4. I ended up in a leadership role in operations where I’m making way more than if I had stayed in public accounting (even as a partner). I work half the hours and don’t have the same client demands.

        Sadly, the public accounting world bashes Internal Audit as a joke and most schools go along with it. However, if you want to be a CFO or senior leadership in a company you need operational and strategy experience, which the Big 4 does not teach you. Internal Audit has more longer term opportunity than public accounting to learn operations and strategy.

        I used to think I was an anomaly that “got out” of accounting because I hated it. However, the more people I met the more I realize, a lot of people are leaving accounting. IA is a great avenue to do it too.

    2. I have been a CPA for 2years now. Worst mistake in my Life. There is no amount of pay that justifies the hours. I look up the chain of command and see only broken homes. I work for my family and am out of public as soon as possible.

  3. People talk about how already hard it is to get the CPA credentials, its even harder to get it as an international applicant.

    When I look at the older staff in my company, I find that the CPA was the best option for them when they needed a worldwide recognized credentials and be eligible for a manager role. As for now, most of my colleagues are opting out for an ACCA or a CFA (to transition away from accounting).

    As an international student, I had to get an evaluation/equivalency of my university credits. Then wait 6 months for a response from NASBA regarding my application, buy the material and wait for it to be shipped from the U.S., Pay additional 200$ on each exam attempt as an international fee. All of these make the decision to study for the CPA such a hassle. These don’t include little misc. expenses such as international postage fees, stamps and several officials transcripts I had to request and send to NASBA which can add up.

    I would say I was privileged to work at the big 4 and be reimbursed for it, but for a recent international graduate it would be very demanding financially and mentally to pursue the CPA. I’m in a spot where I’m working fulltime and have to get a master’s degree to be get the license and feel I’m stuck in limbo.

  4. I have a CPA & CMA- it is a lot of work especially when a finance that doesn’t need any credentials gets about 50k more a year.. most days I don’t think it is worth the knowledge. I know a lot but most businesses don’t care much about the accounting profession. The Monte Carlo and those buzz words are more “exciting” vs the wordy disclosures.

    I will probably migrate to tax in the future bc that is where I see more $$ opportunities

  5. First, the AICPA did a very poor job in protecting the CPA profession. The term “Accountant,” was assumed loosely from the very beginning by anybody that is casually exposed to some form of accounting. Apart from Autiding, the AICPA made it open for people to provide any of the accounting related services without the need for the CPA licensure. In certain organizations you may find CFOs and Controllers who are not CPA’s but have CPAs working under them and abusing them.

    However, it is practically not allowed for Nurses or Paralegals to offer the services of Board Certified Lawyers or Doctors. Unlike the accounting profession, the lines are clearly drawn in the legal and medical professions for Nurses and Paralegals to stay in their respective lines of services.

    The CPA is a struggling profession:
    1. The examination and regulations for the profession are challenging but the associated pay and popularity is dwindling by the day.

    2. The profession is losing respect among young accounting graduates as the relevance of the CPA license keeps waning due to service encroachment.

  6. If I were to do it all over again I wouldn’t become an accountant and I’m currently trying to change careers.

    My advice is to take personality tests in college before choosing a major.

    I would have steered clear. Accounting is a soul sucking profession that needs to be more automated than most places are currently.

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