The CPA talent pipeline today
Where the conversation is locally, nationally
Corey Butler, MNCPA communications manager | August/September 2024 Footnote
Martin Pittioni understands the challenges facing the accounting talent pipeline.
The executive director of the Oregon Board of Accountancy, working on behalf of and with his board, has been plugging away at changes within his jurisdiction to ease the barriers to those interested in pursuing the CPA credential in the Beaver State.
“We have done everything we can under our own power to address the pipeline,” he said. “Now we need your help.”
In Oregon, the BOA, among other actions, adopted an extended window for credit relief, tweaked the allowable internship hours that can be counted toward an accounting degree and aligned with other jurisdictions for the exam date window changes for score releases. Pittioni expects a bill to be introduced in 2025 to change the statute around CPA licensure.
Oregon is just one of more than a dozen states — either through the boards of accountancy or state CPA societies — along with working groups at the AICPA and NASBA now examining meaningful changes to addressing the pipeline challenge.
If you’re new to this conversation, here’s where the profession is at: There is too much work for too few people, affecting the ability to serve clients, businesses, nonprofits and the public interest. Simultaneously, the birthrate has been in decline for the better part of 15 years; fewer high school graduates are going to college; fewer college students are pursuing accounting degrees; and fewer accounting graduates are pursuing the CPA. This demographic challenge is not unique to the accounting industry, but it’s the one facing this noble profession.
Statistically stated: In 2022, according to Pew Research, the number of 18- to 24-year-olds enrolled in college in the United States was approximately 1.2 million fewer than 11 years prior. In 2007, the United States produced 14.3 births per 1,000 people. In 2022, it had declined to 11.1 births per 1,000 people — nearly 23%, according to the Centers for Disease Control and Prevention. The response to enact change within the accounting profession has been growing since December 2022 when the MNCPA board directed the MNCPA to draft legislation to broaden the pathways to CPA licensure.
“A student who wants to become a CPA should be able to,” said Aiysha Johnson, the CEO and executive director of the New Jersey Society of CPAs (NJCPA), where they have also been examining the pipeline issue. “We owe it to those individuals to find solutions so it can be a smooth pathway for them.”
Connecting with students and educators
Student outreach has always been part of programming for state societies, but many, including Minnesota, have found new ways to connect not only with students, but also with teachers and counselors. It’s not just about the college space, either; state societies are in high schools and, in some cases, middle schools.
The MNCPA has several programs to help funnel potential CPAs into the pipeline, including classroom visits, mentorship programs, like the MNCPA Scholars program geared toward underrepresented communities (read more
here), and various conferences and events aimed at students and/or educators.
Opportunities Week launched, which runs annually in November. The MNCPA has reached thousands of students with this targeted effort, a natural extension of our similar yearlong program, Talk to the Students. In 2022, Gov. Tim Walz also proclaimed that week in November as Accounting Opportunities Week in Minnesota.
In an increasingly diverse, competitive workforce, those early inroads will pay dividends in the long run.
“In the past year, the MNCPA continued to be at the forefront of the pipeline discussion,” said Bob Cedergren, CPA, the MNCPA past board chair. “Our efforts resulted in … infl uencing discussions and action in several other states. I am proud of the commitment the MNCPA has on this topic. We will continue to be a voice for the profession locally and nationally.”
Alternative pathways to CPA licensure
Last year, the NJCPA surveyed its members concerning the pipeline, and more than 80% of the respondents said it would benefit the profession to provide alternative pathways. Other state societies, including the MNCPA, yielded similar results when surveying members.
Other academic studies and a survey by the Center for Audit Quality found the educational requirements are a consistent barrier to entry. Ohio, New York, Nebraska and South Carolina already offer pathways to the CPA credential beyond the standard 150 college credits and one year of work experience.
The Minnesota legislation, which received traction in the 2024 legislative session and will return in 2025, would keep the 150-hour rule in place, but also allow candidates to earn the CPA credential with 120 college credits and two years of work experience. With either path, the candidate must still pass the CPA Exam, the only consistent requirement for all CPAs.
In Arkansas, unlike most states where the changes to licensure must be made in statute, licensure changes can be tweaked in its rule changes by the board of accountancy, contingent on approval by the state’s Legislative Rules Committee.
Jimmy Corley, the former executive director of the Arkansas Board of Accountancy and a CPA, is confident the rule changes will pass in the coming year in this “era of dysregulation and making things simpler.”
“This is an important step,” he said. “I’m excited to hear [the conversation is] happening in several states.”
Often cited by studies and people alike, one of the biggest barriers of the 150-hour rule is the additional cost of an extra year of school and the lost year of earnings, which is especially burdensome to marginalized populations. New Jersey is piloting a program that partners with universities and firms to allow students to earn credits while working toward a CPA. The AICPA in January launched a similar program to collaborate with firms and universities, called the Experience, Learn and Earn Program (ELE). While the impact may not be felt on a large scale, Johnson said, “These types of partnerships are here to stay.”
NJCPA’s survey asked respondents to comment on observations about accounting graduate readiness based on new hires that have 120 credit hours versus 150 credit hours. New Jersey’s results were similar to the results of other surveys.
“The answer was no, they didn’t see any significant difference,” Johnson said. “We support alternative pathways because it’s really important to accelerate access and opportunity in the profession with where the market is today.”
The national narrative
As more states joined the conversation by either drafting or discussing drafting legislation to change licensure law or rules, NASBA and the AICPA created their own task forces and invited stakeholders throughout the country to address the broader problem of the pipeline.
NASBA’s Professional Licensure Task Force is focused on updating the Uniform Accountancy Act and how substantial equivalency and mobility are executed. Earlier this year, the National Pipeline Advisory Group, spearheaded by the AICPA, surveyed CPAs, others working in the profession, and students in business and accounting programs, to gather their opinions on the pipeline issue.
In late spring, NPAG released its draft strategy report, identifying six areas of focus. (Editor’s note: The final report is expected to be released this summer and may be available by the time you read this article.) Those areas are:
- Telling a more compelling story about careers in accounting.
- Creating a more engaging college experience for accounting majors and potential majors.
- Reducing the time and cost of education.
- Growing support for CPA Exam candidates.
- Expanding access for underrepresented groups.
- Transforming employer cultures and business models.
Jason Fox, the vice president of government relations for the California Society of CPAs (CalCPA), said starting salaries, storytelling and work-life balance are playing key roles in how the profession is perceived by students.
“There are many pieces that have to go into making the profession more attractive,” Fox said. “Recognizing we need to have a licensing and regulatory structure that matches with the current demographic, and the generational professional shift of attitudes is important.”
The conversation in California has moved quickly in the past year, Fox said, and CalCPA is working closely with its BOA, the AICPA and NASBA.
“We are not doing it in a vacuum,” he said. “There are implications for other states and stakeholders.”
Obstacles — how high of a hurdle?
Corley, like most, has concerns about the state of the profession’s pipeline, and knows licensure changes alone won’t solve it. He agrees with others that the storytelling needs to be better but challenged decision-makers in accounting to help create a better story to be told, namely around opportunities for employees, salaries and the work itself. That, he said, along with reducing barriers to entry, will help ease the strain of the pipeline.
But there is the topic of mobility and substantial equivalency, and how it factors into CPAs working across state lines.
“My board has been very clear that while it shares the interest of other jurisdictions to add additional licensure options to be more responsive to the pipeline concerns, we are not intent to doing damage to the mobility framework,” Pittioni said.
Research indicates the current requirements, which started in earnest in 1983, do not reflect the 21st century environment we’re in, said Linda Wedul, the MNCPA president and CEO.
“We can minimize the disruption to mobility as more states align on broadening the pathways to licensure,” she said. “We are encouraged that CPAs in other states, state societies and the boards of accountancy see the need to evolve licensing rules.”
Though in the minority as of now, some states already automatically recognize other state CPA licenses regardless of how the license was earned. Other states have indicated they will move to have similar practices in place.
For each state with its unique needs of the CPAs who work there and the communities they serve, mobility — while important — is a problem to be solved later, some say.
“They need to do what’s best for their own states,” Corley said.
For Johnson, the NJCPA CEO, this is a big issue her association is committed to solving, but she recognizes this is just one (albeit a big one) of a continuous streak of trials facing a changing profession and world.
“We know it’s a long-term effort,” Johnson said. “Even when we chip away at it and fi nd some solutions, the profession is going to evolve and evolve rapidly.”
Learn more about broadening the pathways to CPA licensure
Follow the discussion as it continues to evolve around licensure and the talent pipeline through the MNCPA's
Broadening the Pathways Initiative.
