There’s an accountant shortage. And some CPAs say the 150-hour college credit requirement needs to change

There’s an accountant shortage—and now some CPAs think it’s time to tweak the educational requirements to boost the path’s appeal. 

“The shortage is affecting firms of all sizes,” Bob Cedergren, CPA, partner at Wipfli LLP in Minneapolis, and board chair of the Minnesota Society of CPAs (MNCPA), tells me. But the shortage has “a large impact on CPA firms in smaller towns or more rural areas as they have difficulty attracting and retaining staff,” Cedergren says. 

In the past two years, more than 300,000 U.S. accountants and auditors have left their jobs, a 17% decline, the Wall Street Journal reported. Many baby boomers who are accountants are retiring. However, the U.S. Bureau of Labor Statistics reports that accountants in the 25-to-34-year-old age range and mid-career professionals ages 45 to 54 are also leaving the profession, according to SHRM. And in 2022, the number of candidates who took the Uniform CPA Examination was about 67,000, which is down from 72,000 in 2021.

The current standard to become a CPA entails 150 hours of college credit, meeting their state’s work experience requirement, and passing the CPA exam, Cedergren says. But the MNCPA introduced a bipartisan-supported bill to the Minnesota Legislature in Februrary that offers new pathways.

One path is passing the CPA exam and attaining 120 hours of college credit and two years of work experience. The other path is the same, except you’d earn 120 hours of continuing professional education in lieu of two years of work experience. The bill is expected to be discussed more thoroughly when the session starts in 2024, according to MNCPA.

In addition, South Carolina’s CPA society is crafting a bill for the next session of its state legislature regarding alternatives to the 150-hour requirement, the Financial Times reported.

Regarding the 150-hour rule, “the additional 30 credit hours is equivalent to an extra year of school at an average price tag of $14,000, a burdensome cost for many people,” Guylaine Saint Juste, president and CEO of the National Association of Black Accountants, Inc. (NABA), wrote in a recent Fortune opinion piece.

“This is a complex challenge we are facing, and the intent is to remove barriers to becoming a CPA while not sacrificing or reducing the necessary skills needed to be successful,” Cedergren says. 

The American Institute of CPAs (AICPA) noted that a national standard allows for CPAs to be mobile. “There is an effort by some states to rollback the standards that underpin CPA national mobility,” the organization said in a statement. “The AICPA does not support these efforts and is working to assure practicing CPAs maintain mobility and that their licenses are recognized nationally.”

Does Cedergren think there are other factors needed to attract students besides tweaking the education requirements? “Absolutely,” he says. “The CPA profession needs to be viewed as attractive to students and one that provides a satisfying career with the ability to earn a good income.”

He also notes that the AICPA has proposed additional actions to attract future CPAs. The latest example is the formation of a National Pipeline Advisory Group this past July to address the profession’s talent shortage. The group includes members from a range of perspectives and experiences, who represent state CPA societies, accounting firms of various sizes, and state boards of accountancy, along with education and business and industry. One of the items on the agenda for the task force’s review is the educational requirements. 

“We want to make sure we have a broad range of viewpoints and perspectives to help define the profession’s pipeline strategy moving forward,” Susan Coffey, the AICPA’s CEO of public accounting and executive sponsor of the initiative, said in a statement.

Cedergren also says the AICPA, along with state CPA societies and NABA are “working diligently to attract more students from minority groups into the profession.” They’re reaching out to high school and even middle school students. 

“There are many stereotypes out there about accountants and this hurts our image and ability to draw students into the profession,” Cedergren says. “Additionally, as a profession, we need to pay competitively and tell our story better regarding the future career trajectories of CPAs and the leadership possibilities available to those entering the profession.” 

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Mike Lenihan was named CFO at CKE Restaurants Holdings Inc., company of the brands Carl's Jr. and Hardee's. Lenihan brings 20 years of experience from Yum! Brands, most recently serving as VP of planning and analysis and treasury. In his Yum! brand roles with KFC, Pizza Hut, Taco Bell and others, Lenihan served in strategic planning, distribution management, development, mergers and acquisitions, and finance positions.

Robert L. Schrader was named senior vice president and CFO at Paychex, Inc., effective Oct. 13. Efrain Rivera, currently VP and CFO, will retire, effective Oct. 12. Rivera will remain as a senior advisor for the remainder of 2023. Schrader is currently VP of finance and investor relations at Paychex. He has more than 25 years of experience in corporate finance and public accounting. Schrader has served as vice president and controller, senior director of financial planning and analysis, and joined Paychex in December 2014 as director of internal audit. Before Paychex, Schrader was CFO for Unither Manufacturing, LLC. 

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Big deal

Board, a planning solutions platform, and a pan-European financial services management consultancy called Be | Shaping the Future UK (Be UK), have released a new report that explores the role of the CFO and the challenges they face.

The CFOs at the surveyed financial services firms in the UK were asked which of the three categories best describes their persona as a finance chief: a facilitator (bringing the organization together to operate effectively), a driver of change and progression, or the organizational fixer (bailing the company out of trouble). Sixty-one percent of CFOs currently describe their role as organizational fixers. However, in the future, just 17% want to be known as the organizational fixer. In the future, 56% of CFOs said they'd like to be known as a driver of change and progression.

The research also found that 92% of CFOs believe that getting finance into the cloud is a core "future finance" strategy, as 50% of the finance team’s time is currently spent on validating and correcting data. And 50% of CFOs believe ESG is highly important to the finance function.

Going deeper

"Future State of the Investment Industry," a new report by the CFA Institute Research and Policy Center, intends to provide a road map for investment leaders and professionals by framing the developments that will affect the industry over the next five to 10 years. The report is informed by input from a survey of more than 3,000 CFA Institute members.

Overheard

“Let’s be clear: This is a potential nightmare situation for GM and Ford.”

—Daniel Ives, a managing director and senior equity research analyst at Wedbush Securities, wrote in a Wednesday note regarding a potential worker strike that could cripple the progress of some of the auto industry’s giants. The United Auto Workers union is advocating for a new contract that includes a 46% pay raise, a 32-hour week, the restoration of traditional pensions, and more, Fortune reported.