Accounting Profession-wide Solutions to the Talent Shortage

For decades, the accounting talent shortage in the United States has been a serious concern for academicians, policymakers, and the profession. One solution to what has been termed the pipeline problem may be getting the AICPA, in collaboration with state and local governments, to broaden the scope of the high school accounting curriculum.

The Accounting Talent Shortage

The primary statistical agency for the Department of Education, the National Center for Education Statistics (NCES), reported that undergraduate enrollment, regardless of the field of study, dropped 13% from 2012 to 2021 (Bryan Strickland, “Pool of Accounting Graduates Shrinks, AICPA Report Finds,” Journal of Accountancy, October 12, 2023, https://tinyurl.com/3pchxx9v). Likewise, a recent study by the AICPA revealed that the number of candidates has fallen more than 32% since 2016; (Jacob Crowley and Jill R. Cadotte, “CPA Engagement Boosts Student Interest in Exam, Public Accounting,” Journal of Accountancy, September 1, 2023, https://tinyurl.com/45nn3vct) roughly 47,070 students earned a bachelor’s degree and 18,240 students received a master’s degree in accounting in the 2021/22 academic year—down 7.8% and 6.4%, respectively, from the prior year (Mark Maurer, “Accounting Graduates Drop by Highest Percentage in Years,” Wall Street Journal, Oct. 12, 2023, https://tinyurl.com/4hdh7jr3). In addition, the report cited a 2022 Deloitte survey which found that 82.4% of hiring managers for accounting and financial roles at public companies admit to struggling with talent retention, and 68.9% of hiring managers at private companies say the same. Finally, the U.S. Bureau of Labor Statistics projects that throughout the next decade, there will be 136,400 openings for accountants and auditors each year (Controllers Council, “The Continued CPA and Accountant Shortage in 2023,” 2022, https://tinyurl.com/r9kvwadx).

Global Accounting Talent Crunch Future Projection

Will the accounting talent shortage continue beyond 2024? In the years ahead, the shrinking supply of qualified accounting candidates could be further exacerbated by the forecasted “enrollment cliff” at U.S. colleges and universities, and for which experts project an enrollment decline of up to 15% between 2025 and 2029 (C. Comunale, J. Irving, and J. Trainor, “The Accounting Pipeline Insights from Professionals and Students,” The CPA Journal, Sept/Oct 2023. https://nysscpa.org/2309-cc). Is this accounting talent shortage a global challenge or a national one? The United Kingdom’s Financial Reporting Council “Key Facts and Trends in Accountancy Profession” (https://tinyurl.com/3xzf3jp8) reported a reduction in the number of accountancy students by 3.5% in 2022 to just over 155,000 and the Institute of Chartered Accountants in England, Wales, Manchester, and Nottingham are facing a severe accountancy talent crunch (B. Johnson, “How Technology Can Help to Handle Shortage of Accountants,” 2024, https://tinyurl.com/mrxp24pj). A Korn Ferry study included a sweeping country-by-country analysis, projecting that, by 2030, there will be a looming, global human talent shortage of more than 85 million people, with the most acute constraint on growth in the accounting sector. For example, Russia and the United States could have a talent shortage of up to 6 million people, twice as large for China, and up to three times more severe for Japan, Indonesia, and Brazil (Franzino, Guarino, and Laouchez, “Future of Work, The Global Talent Crunch,” 2018, https://tinyurl.com/etcx8e4h).

The Accounting Pipeline

A dearth of new CPAs was reported by the AICPA’s 2023 Trends Report (https://nysscpa.org/2023-trends). One of the numerous factors contributing to this now-perennial phenomenon of a shortage of talented CPAs lies in the accounting pipeline, both “drying up” (fewer students electing to study accounting at the collegiate level) and “leaking” (accountants migrating from the profession) (Comunale, Irving, and Trainor 2023). Most research supports the idea that an introductory college accounting course is vital in counteracting the drying up issue. Such a course would be instrumental in helping students decide whether they want to become accounting majors. But other research points to students making career decisions earlier, even before entering college. Nearly 80% of high school students taking the American College Test (ACT) selected a major they intended to declare in college (O. Black-mon, “Majority of College-Bound Students Select the Wrong Majors,” 2013, https://tinyurl.com/4d679b4t).

High School Accounting Engagement Perspective

Could the accounting talent shortage arise because of a lack of awareness of accounting opportunities among high-school students, during the pivotal years when they make the foundational decision as to career choices? One researcher commented, “There’s not a lot of high-school students out there who say, ‘I’m going to be an accountant,’” because most young people are either unaware or have misconceptions about the accounting profession (E. Sweeney, “A Shortage of Accountants Is Pushing the Industry to Reboot its Image to Win Over Young Talent: ‘You Have to Sell Them,’” Business Insider, Feb, 2, 2023). Likewise, “Jim Proppe, managing partner at Plante Moran, believes that many high school students are unaware of the exciting and dynamic nature of the profession,” (“How Much of a Threat Is the Talent Shortage to the Accounting Profession?” AccountancyAge, 2024, https://tinyurl.com/5xrrhajb). Finally, similar sentiments were echoed by Yvonne Hinson, AICPA academic in residence, who works closely with the AICPA Accounting Program for Building the Profession (AICPA APBP), a formal process that will introduce talented high school students to the profession at an early age through the AICPA APBP course and related qualifying examination. She was quoted as stating: “A high school course that gives students a realistic picture of what the accounting profession is all about provides students with the facts they need to make an informed decision on accounting as a college major earlier. We are seeing that students want to make career decisions earlier—if they don’t have an accurate picture of what a career in accounting looks like, they may not be as likely to consider it.” (James Schiavone, “New High School Course Gives Insights Into Real Accounting Careers,” Aug. 10, 2018).

Is the marketing of accounting opportunities being left to chance, hoping current accountants will convince their children to become future accountants? Is the profession waiting too late to expose more high school students to accounting courses? Current accountants motivate their children to become future accountants by communicating that an accounting career is one of the safest paths to an upper-middle-class lifestyle and one can pivot from accounting to a variety of other careers. On the other hand, some current accountants dissuade their children from becoming future accountants due to increasing automation and globalization. This can have the effect of staff or entry-level positions becoming automated or offshored, thereby making the future stability of the profession questionable. Another reason accountants may discourage their children from following in their footsteps is a lack of work-life balance that leads to burn-out.

Frank K. Ross, one of eight visionary founders of the National Association of Black Accountants (NABA) refuted the negative effect of automation and globalization on the accounting profession. He was quoted in an interview as saying, “When I graduated in 1966 many people were saying that ‘computers’ was going to take the place of accountants and they were suggesting that we not go into accounting. However, computers opened many new doors and opportunities for accountants and the field expanded rapidly” (A. Mayse, “Exploring the Evolution of the Accounting Profession, An Interview with Frank K. Ross,” 2024, https://nysscpa.org/2401-alm). Ross also shared his view on the next 50 years of accounting, “[T]he profession will remain one that offers many opportunities—as it will be growing significantly to meet the demands that will be placed on it and the people in the profession” (Mayse, 2024).

The accounting profession has begun to recognize that the pipeline starts with attracting high school students into college accounting programs (Comunale, Irving, and Trainor 2023). One high school accounting engagement initiative is the Accounting Opportunities Initiative. Piloted in 2022, it is a collaboration among state CPA societies and the AICPA & CIMA designed to raise awareness of accounting career opportunities among high school students.. This program includes alumni sharing their joy of accounting while visiting their alma mater high school where their journey began. One participant, Victoria Shen, CPA, a graduate of MassCPA’s 2018 Accounting Careers Experience program at Quincy High School related: “Discovering accounting in high school marked the beginning of my journey, and returning to speak in the same classroom where I first found my passion for accounting felt like a full-circle moment!” (AICPA & CIMA, “CPAs Inspire the Next Generation in High School Classrooms,” 2024, https://tinyurl.com/mpcu5ydb). Another example, the Potential, Prestige & Purpose: An Introduction to the Accounting Profession (https://tinyurl.com/6xzjewvp), introduces students to the profession by simulating an introductory accounting class. This initiative was made practical by the University of Scranton Accounting Program, recently recognized (among thirteen other colleges) by the AICPA, for its outreach efforts to parents through the Business High School Scholars program, which allows qualified high school students to take reduced-cost college courses during the summer.

High school accounting engagement initiatives should be a proactive, intentional, and irresistible strategy, designed to steer talented high school students toward the profession.

A Solution to the Accounting Talent Shortage?

The current accounting talent shortage presents an opportunity for an “all hands on deck” collaboration between practitioners, public accounting firms, accounting state societies, accounting faculty, and students. One solution is to attract more high school students to the accounting pipeline, perhaps through designating accounting as a STEM field. Research reported the accounting pipeline starts with attracting high school students into college accounting programs (Comunale, Irving, and Trainor 2023), and AICPA reports, “Interest in professional careers starts with exposure and awareness,” coupled with students’ very early formed perceptions of the accounting profession, long before they enter college. As a result, it is imperative to deepen the pool of potential CPAs during high school, through programs like the AICPA’s APBP. High school accounting engagement initiatives should be a proactive, intentional, and irresistible strategy, designed to steer talented high school students toward the profession. It would be more productive than the current reactive approach of waiting until students set foot on a college campus, where 80% of high achievers have already proactively selected a major (Blackmon 2013).

As a minority accounting educator whose accounting education started during high school in the Caribbean, this author’s awareness of accounting during high school was the basis of a dynamic accounting academic foundation that propelled me towards selecting accounting as my major before attending college, I was also inspired by my high school accounting classes, and delighted to discover my accounting passion through a principled, dedicated, knowledgeable, and impactful accounting teacher. These initiatives enhanced my accounting career with a deeper depth of accounting knowledge and fortified my professional ambition.

Although certain barriers, such as financial constraints, have kept many high schools from incorporating and administering accounting courses, recent developments have pointed towards new pathways for expanding accounting in the high school curriculum. One notable example is the Accounting Stem Pursuit Act of 2023. This projected legislation was introduced on May 18, 2023, backed by the AICPA, it aligns with multiple initiatives in the AICPA Pipeline Acceleration Plan (Strickland, “AICPA Backs Legislation to Add Accounting to STEM Education,” Journal of Accountancy, Oct. 3, 2023, https://tinyurl.com/mr7cw52t). In August 2023, the AICPA and 54 state CPA societies successfully nominated six accounting-related degrees for inclusion on the U.S. Department of Homeland Security’s STEM Designated Degree Program List (AICPA & CIMA). If the Accounting STEM Pursuit Act were passed, it would allow federal grant funding to be used for K-12 accounting education. This would provide well-needed resources to implement accounting education in high schools where they do not currently exist, as well as strengthen high-quality access to existing accounting programs. This process could be undertaken in collaboration with the AICPA APBP program that trains high school educators to teach a higher-level accounting curriculum of financial and managerial concepts, comparable to what a college student would learn in an entry-level accounting course.

The accounting profession is at a pivotal moment. It is imperative to utilize high school engagement perspectives by strengthening high-school awareness and exposure to accounting careers. In so doing, the profession may pivot to a more sustainable cultivation of passionate young accounting talent with a deeper level of accounting expertise to advise global businesses.