US accountancy exam takers fall to lowest level in 17 years

Accountancy firms in the US are being urged to revamp their business models to attract more young people after the number of people taking the exam to enter the profession fell to the lowest level in at least 17 years. Used to be.

New data from the American Institute of Certified Public Accountants shows the dearth of CPA candidates that has plagued the profession in recent years has dashed hopes of an early return from the pandemic in 2022.

The shortage of new entrants comes at the same time as a wave of baby boomer retirements threatens to undermine the ability of firms to perform accounting, tax and auditing work that companies and individual clients rely on.

According to a note in the AICPA’s annual report published this month, the number of CPA exam takers in 2022 was down from 72,000 in 2021 and more than 67,000, down from the institute’s forecast of 74,000. This was the lowest level since the introduction of modern exam records in 2006.

Details shared among the Governing Council of AICPA show that candidates from abroad also preferred that figure. The number of CPA exam modules sat by US candidates declined by more than 10 percent year-on-year.

The Institute of Management Accountants, which runs an alternative certification for those heading into corporate finance departments, told the Financial Times that it had seen an overall 5 per cent drop in candidates in the US last year.

“This is becoming a crisis, and not just for accounting firms but for companies as well,” said Dennis Whitney, IMA senior vice president. “Accountants are the backbone of companies not only for financial reporting purposes but also to help them make decisions.”

The AICPA said it had seen a surge in new candidates in the early months of 2023 and was predicting a 10 percent increase overall this year, partly due to upcoming changes to the exam. But this would mean the numbers are running 20 per cent below the average of the last decade.

Wayne Berson, head of BDO USA, told the FT earlier this month that his firm planned to double its overseas workforce and move more work offshore in the face of shortages.

The pipeline of new candidates has thinned as university accounting courses have become less popular in the US. Graduates’ starting salaries can also be at least one-fifth as high as those in finance or technology, and those careers may not require such expensive professional qualifications.

Alan Whitman, who runs the accounting firm Baker Tilly, said, “The financial model of CPA firms is antiquated, given the amount of time it takes to become a partner and the amount of time it takes to achieve financial success.” ,

“Companies need to work to improve the attractiveness of the profession in a variety of ways, the most important being a reimagining of operating models and career progression,” he added.

AICPA said it is increasing scholarships to help candidates and encouraging firms to offer competitive salaries. “You have a generation that is looking for a low ROI,” said Mike Decker, vice president of the AICPA.

Accountancy firms in the US are being urged to revamp their business models to attract more young people after the number of people taking the exam to enter the profession fell to the lowest level in at least 17 years. Used to be.

New data from the American Institute of Certified Public Accountants shows the dearth of CPA candidates that has plagued the profession in recent years has dashed hopes of an early return from the pandemic in 2022.

The shortage of new entrants comes at the same time as a wave of baby boomer retirements threatens to undermine the ability of firms to perform accounting, tax and auditing work that companies and individual clients rely on.

According to a note in the AICPA’s annual report published this month, the number of CPA exam takers in 2022 was down from 72,000 in 2021 and more than 67,000, down from the institute’s forecast of 74,000. This was the lowest level since the introduction of modern exam records in 2006.

Details shared among the Governing Council of AICPA show that candidates from abroad also preferred that figure. The number of CPA exam modules sat by US candidates declined by more than 10 percent year-on-year.

The Institute of Management Accountants, which runs an alternative certification for those heading into corporate finance departments, told the Financial Times that it had seen an overall 5 per cent drop in candidates in the US last year.

“This is becoming a crisis, and not just for accounting firms but for companies as well,” said Dennis Whitney, IMA senior vice president. “Accountants are the backbone of companies not only for financial reporting purposes but also to help them make decisions.”

The AICPA said it had seen a surge in new candidates in the early months of 2023 and was predicting a 10 percent increase overall this year, partly due to upcoming changes to the exam. But this would mean the numbers are running 20 per cent below the average of the last decade.

Wayne Berson, head of BDO USA, told the FT earlier this month that his firm planned to double its overseas workforce and move more work offshore in the face of shortages.

The pipeline of new candidates has thinned as university accounting courses have become less popular in the US. Graduates’ starting salaries can also be at least one-fifth as high as those in finance or technology, and those careers may not require such expensive professional qualifications.

Alan Whitman, who runs the accounting firm Baker Tilly, said, “The financial model of CPA firms is antiquated, given the amount of time it takes to become a partner and the amount of time it takes to achieve financial success.” ,

“Companies need to work to improve the attractiveness of the profession in a variety of ways, the most important being a reimagining of operating models and career progression,” he added.

AICPA said it is increasing scholarships to help candidates and encouraging firms to offer competitive salaries. “You have a generation that is looking for a low ROI,” said Mike Decker, vice president of the AICPA.