To address the accountant shortage, KPMG, Deloitte and their colleagues at PricewaterhouseCoopers (PwC) and EY have begun developing alternative pathways to obtaining a CPA license. To become a certified public accountant (CPA), candidates will no longer be required to submit 150 college credit hours. They will only need to show 120 college credit hours. The remaining 30 hours, now available in the fifth year of school, will be replaced by work experience. The American Institute of CPAs first proposed this simpler, less expensive approach to certification in September. This is the institute’s way of addressing the shortage of accounting professionals. Older baby boomers are preparing to retire, and younger generations are reluctant to replace them. In 2022, only 67,000 candidates took the CPA exam, down 5,000 from the year before. Students are abandoning accounting majors in favor of investment banking or management consulting.
There are 340,000 fewer CPAs today than there were five years ago, according to the American Institute of Certified Public Accountants. It becomes increasingly difficult to complete expected work. Some companies, such as Advanced Auto Parts and Tupperware, failed to file financial statements on time simply because they did not have enough accountants.
“We have a crisis brewing,” says Paul Knopp, chairman of KPMG in the United States and one of the most vocal advocates for change. PwC and EY recently admitted in the CFO Dive newsletter that they also support “alternative paths.”
The Big Four are being cautious. They fear that states could create a variety of new rules that would prevent their accountants from working across state lines. The AICPA proposal is currently open for comment. The final framework should be ready by February 2025 and will help state boards make possible regulatory changes. Some states, such as California, are already moving forward. Their accounting council is drafting legislation that would allow them to gain work experience instead of one year of expensive training. The new law will also preserve service for customers in other states. The board just needs to find a state senator who will support its initiative.