To tackle the shortage of accountants, KPMG, Deloitte and their colleagues at PricewaterhouseCoopers (PwC) and EY have embraced the development of alternative pathways to CPA licensure. To become a certified public accountant (CPA), candidates would no longer need to present 150 college credit hours. They would only have to show 120 college credit hours. The remaining 30 hours, now gained through a fifth year at school, would be replaced by work experience. The American Institute of CPAs first suggested this simpler and less expensive approach to certification in September. It is the institute’s way to tackle the accounting talent shortage. Older baby boomers are preparing for retirement, and younger generations are reluctant to replace them. Only 67,000 candidates sat for the CPA exam in 2022, 5,000 fewer than the year before. Students opt out of accounting majors in favor of investment banking or management consulting.
According to the American Institute of Certified Public Accountants, there are 340,000 fewer CPAs than five years ago. It is becoming increasingly difficult to do the job expected. Some companies, such as Advanced Auto Parts and Tupperware, failed to file financial reports on time simply because they didn’t have enough accountants.
“We have a brewing crisis,” says Paul Knopp, KPMG US chair, one of the most vocal advocates for change. PwC and EY recently admitted in CFO Dive’s newsletter that they also supported “alternative pathways.”
The Big Four are cautious. They fear states could create a patchwork of varied new rules that would prevent their accountants from working across state lines. Right now, the AICPA’s proposal is out and open to comments. The finalized framework should be ready by February 2025 and help state boards with possible regulation changes. Several states, such as California, are already pressing ahead. Their board of accountancy is drafting legislation permitting work experience to replace one year of expensive schooling. The new law would also preserve serving clients in other states. The board just needs to find a state senator to champion its initiative.
