I'm catching up on my reading and lo and behold, here's another CHANGE IN ACCOUNTING IS SO FAST article. It's only been [counts fingers] a few weeks since we last touched on the topic, but we can't waste a good crisis, can we? No, we cannot.
This particular piece is based on a speech by Joanne Barry, the Executive Director of the New York Society of CPAs gave at the Accountants Club of America last week. It touches on all the talent/change/succession scary stuff, even dress code:
She noted that 71 percent of CPA firms in New York now have a “business casual” dress code, while only 6 percent require traditional business attire such as a jacket and tie all the time.
I've been out of the game awhile, but that 71% strikes me as a bit low and the 6% strikes me as a bit high. It's not all that important, although I'm sure there are more than a few people out there who believe that allowing denim of any kind at the office will bring on the apocalypse.
Where the piece actually gets interesting is the discussion of the plateauing CPA numbers:
More students than ever before in New York State are studying accounting, and there is not enough space to accommodate all of them. “However those students are not sitting for the CPA Exam,” Barry added. “The number of exam takers has been flat for two and a half years now. Why? We don’t know for sure.”
The American Institute of CPAs and the American Accounting Association are doing research to find out why. “One thing we did find out is that the messaging from the managing partners and the senior partners in the firm is directly connected to the number of candidates who have the ability to sit for the exam and have the motivation to do so,” she said.
In other words, if a firm makes it known that your career prospects will be limited without a CPA, then their people are still taking the CPA exam. Call it a hunch, but I think most accounting firms work this way, however, it sounds like some are taking a different approach:
Many firms are even hiring students who choose not to sit for the CPA Exam and bringing them into the firm anyway. “Another trend we’re seeing is that firms are moving away from the attest area and more and more into consulting work, so they’re using the best and brightest non-exam takers to build on their non-attest services.” Many of those who get hired end up working in technology consulting.
It's fascinating to watch this shift away from work that does not require the oversight of a CPA. Auditing has been a cornerstone of the profession for so long, but its plunge in value as a service is forcing firms to accommodate accounting students who don't want to become auditors. It's also a bit surprising that the CPA exam involves a choice. When I came out of school more than 10 years ago, no one in my grad program thought of deciding whether or not we would sitting for the CPA; it was a foregone conclusion. Both of the firms I worked at didn't consider it a choice, either.
But now, according to person who probably knows what's going on, some firms are all, "No CPA? No problem!"
Stats like these makes the AICPA and CPA exam review companies that aren't Becker uneasy, but it could pose a problem for accounting grads, too:
Between 2007 and 2014, there was a jump from 13 percent to 26 percent in non-accounting graduates hired by CPA firms, Barry pointed out. “That’s the kind of recruiting that’s happening on campus now, in addition to recruiting for CPA candidates,” she said.
Okay, I'm going to repeat this for effect: then in seven years, the number of hires by firms that were not accounting majors went from 1 in 8 to 1 in 4! That's not a small change! And the number of people studying accounting keeps going up!
Maybe, all this time, the problem with CPA firms was all the CPAs? I know the profession has been desperate for diversity, but I'm not sure this is what they had in mind.
Anyway, I could go on, but this seems like a good place to rest. Over to you: will firms always push the CPA? Or is this part of the predicted destruction?