Accounting is facing a crisis that challenges its sustainability. Recent reports show a 17% decrease in accounting graduates and a 32% reduction in CPA exam candidates since 2016, writes Chris Miller, senior vice-president of product strategy at Netgain
Further highlighting the shortage in the profession is a drastic shift in age demographics. According to the American Institute of Certified Public Accountants (AIPCA), around 75% of its members are approaching retirement age, intensifying the urgency to attract new talent to fill the gap. It raises the question: why is the decrease happening?
Strict licensure requirements are shrinking the CPA talent pool
There are several barriers that deter potential students from pursuing the CPA and accounting profession. One of the most prominent examples is the 150-hour education requirement, which mandates an additional 30 credit hours beyond a standard 120-hour bachelor’s degree.
While intended to enhance professional readiness and high quality in the field, the requirement presents significant financial and time burdens on aspiring accountants. Many students are forced to take on extra tuition costs or delay entering the workforce to meet the requirement. In fact, many young professionals are instead opting to begin careers in other fields, such as consulting or technology.
A recent 2024 Prospective Students Survey found that more than half of millennials and Gen Z ranked consulting as their top sector in which to pursue a graduate degree. Unfortunately, the high cost of entry combined with lower starting salaries is making an accounting degree less desirable than these other fields.
The CPA and accountant shortage is more than just a hiring challenge: it threatens the stability of the profession. With firms struggling to recruit and retain talent, audit and advisory services may suffer.
The CPA talent gap also threatens financial reporting accuracy and quality, regulatory compliance, and overall industry credibility. These are critical risks that impact client expectations, investor confidence and company earnings.
Without new talent, the existing workforce faces increasing workloads, contributing to burnout and driving professionals to other careers. A 2023 FloQast survey showed that an overwhelmingly 63% of accountants second guessed if they wanted to stay in the industry, underscoring the challenges of overworked and overwhelmed employees in the industry.
The accounting industry has a longstanding reputation of being a respected and trusted career path, one that prioritises accuracy and confidence. However, the lack of action toward addressing the talent gap and dwindling talent pool may further threaten that reputation.
A new approach: Expanding access to the CPA profession
To reverse this trend, the accounting industry must understand the market transitions. We face a dwindling supply of talent, but since supply is artificially constrained, new entrants are not coming in. There are two related ways to thrive in these conditions.
First, accounting must modernise its approach, rethinking how the CPA pathway can allow for alternative licensure options. The 150-hour education requirement, designed to limit the number of accountants is outdated. Pivoting toward a competency-based model, for example, explores a quicker way to move potential CPAs through the system. Work experience, apprenticeships, and tech-driven training offer valuable alternatives to the standard CPA path.
This education requirement also must address the content of education received. Currently an MBA is perceived as a much more valuable graduate degree than a MACC. Education requirements should evolve to equip accounting graduates with more valuable skills and knowledge. This will change the demand for accounting talent and allow it to become more attractive relative to its consulting alternatives.
Another way for the industry to move forward with embracing alternate pathways is to make change on a regulation level. Industry leaders and executives should advocate for regulatory changes that allow for work experience to substitute some credit-hour requirements. In fact, the AICPA and National Association of State Boards of Accountancy recently released a draft proposal, CPA Competency-Based Experience Pathway, aimed at making this change.
Too many talented professionals are held back by rigid credit-hour requirements that do not account for skills they have already developed on the job. Allowing work experience to substitute for some of those requirements is not about lowering standards, it is about making them more relevant. The workforce is evolving, and the education and credentialing systems need to evolve with it.
Lastly, the industry needs to focus on developing structured apprenticeship programmes, rooted in technology, in partnership with universities and firms. Educators could leverage technology and AI-driven learning platforms to streamline CPA exam preparation.
Expanding pathways to CPA licensure will benefit firms, professionals, and the accounting profession as a whole. A more flexible approach can attract a broader and more diverse talent pool, ensuring the profession remains accessible and appealing to future generations. By increasing the pipeline of qualified professionals in the workforce, firms can sustain long-term growth, reduce burnout among CPAs, and maintain the industry’s reputation for accuracy and trust. A workforce equipped with diverse skills and experiences will enhance the profession’s ability to meet modern business demands.
Re-evaluating entry requirements will future proof the accounting profession, positioning it as an innovative, inclusive, and competitive field. The time for change is now. By embracing alternative pathways, the industry can ensure its longevity, strengthen its workforce, and maintain its critical role in the global economy.
