Bored of writing and talking about the dire accountant shortage and the consequences it could have on the entire financial system as we know it, the other day I tweeted a question to find out what else folks think is plaguing accounting. Thanks to everyone who chimed in, I know sometimes Twitter feels like shouting into the void know but know that your feedback is appreciated. By me anyway.
Ignoring the talent shortage what’s the most pressing issue in the profession right now?
— Going Concern (@going_concern) February 20, 2023
Let’s begin with my favorite response of the bunch:
Ignoring the talent shortage
— Kendall Collier (@KendallCollier) February 20, 2023
And here’s one from the Illinois CPA Society based on what they’ve heard from their members:
What we hear among our members: retaining existing staff, lack of support for pursuing the CPA credential, and DEI challenges. During busy season, retaining staff will likely be #1.
— Illinois CPA Society (@IllinoisCPA) February 21, 2023
ICPAS has also done some research into why accounting graduates are choosing not to take the CPA exam if you’re interested in that. For the uninitiated, CPA exam candidate numbers have been on the decline since the second half of the ’10s, with a gap between accounting graduate numbers and anticipated CPA exam candidate numbers first appearing around 2014. The number of CPA exam candidates decreased 17 percent between 2019 and 2020 and it saw a 6 percent increase from 2020 and 2021 according to the AICPA Trends report which is basically a thorough physical examination (including blood work and squat and cough) for the profession. A modest increase in examination candidates is expected for 2023 due to the launch of CPA Evolution in 2024, just as we saw in 2010 prior to the significant exam changes ushered in with CBT-e in 2011.
Back to the question of pressing issues. In no particular order, here are the rest of the responses:
- Lack of succession planning of local firms.
- How to leverage tech to make busy season more manageable for professionals
- Pricing. There are still too many firms undervaluing themselves especially for D level clients. Appropriate pricing helps with compression and capacity issues.
- Pricing, deadline work compression, and outdated mindsets.
- Deadline compression forcing more work into q1/q2 is a pain for me.
- I think everything is at least indirectly related to the talent shortage, but I would go with (1) work life balance and (2) credibility/audit failures #ftx and wirecard, which I think are driven in part by the talent shortage
Work-life balance or rather the lack thereof is an issue that has long served as the boil on accounting’s ass and is believed by anyone who has been paying attention to be one of the main factors that has led to a shortage of accounting graduates and public accounting talent from entry level up to senior, second only to offensively low starting salaries. The two are intrinsically tied together as there is a direct correlation between the amount of shit one is willing to take and how much one is getting paid to do it. We suspect that were accounting firms to raise salaries in a significant way, talent would follow. Because salaries did not budge much over the past 15 years and because workloads became heavier and heavier as the years wore on, the perceived value of an accounting career eroded more and more with each passing year. And now we’re where we are.
The problem now is that firms can’t just hire more people to reduce the workload. There are no people. That leaves raising salaries as the big draw, and there has been some positive movement in that area, it may not be enough.
So we’re pretty much screwed there. Anyone want to talk about succession planning?