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Over the past decade, there has been a consistent decline in CPA exam participants, resulting in fewer and fewer entry-level accountants beginning their career. Accounting firms are feeling the impacts of this talent shortage. With this gap in the workforce, current students and graduates have the opportunity to pursue an accounting position with little competition and added benefits. Here is why this talent shortage is happening, and how students can benefit from it.
Why This is Happening
A major reason for this talent shortage is the perfect storm of older generations retiring and less of the younger generations entering the field. Gen Z can’t fill the gap that Baby Boomers are leaving.
Another contributing factor is the extensive requirements students must meet in order to take the CPA exam and ultimately receive their license. Currently, students need 150 credit hours in order to sit for the exam and obtain their license after passing. Since a regular four year undergraduate degree consists of 120 credit hours, this means students will need a fifth year of schooling, such as the first year of a masters program. With the cost of higher education being so high, this fifth year is not always financially feasible.
The CPA exam itself is quite demanding and causes a barrier to entry due to its difficulty. The CPA exam actually consists of four separate exams in the areas of Auditing and Attestation, Financial Accounting and Reporting, Taxation and Regulation, in addition to a discipline section that is decided on by the participant. The options for the discipline section are business analysis and reporting, information systems and contracts, and tax compliance and planning.
The Opportunity For Students
The job market is currently quite competitive. However, with so many entry-level accounting positions remaining unfilled, there is less competition in this specific field. Steps are also being taken to incentivize students to take the CPA exam and ultimately start a career in accounting.
Many firms have raised their base salary for entry level positions, along with implementing sign-on bonuses. With financial concerns being a common stressor for Gen Z, this initiative can provide an opportunity for students to have a career that gives them financial stability.
The requirements for the CPA exam are also changing. Some states are changing the 150-hour rule by allowing for two years of paid work experience to count toward total hours. This change means students can complete their four-year degree and then take a full-time role for two years, instead of having to complete a year in a masters program. Being able to work and get paid for two years instead of having to pay for an extra year of schooling is also a way to alleviate some financial stress from Gen Z.
Accounting firms are also attempting to alleviate the financial burden of the CPA exam by either covering the exam costs or providing a bonus after the exam is completed. For example, PwC has implemented a “CPA Bonus” of $10,000 for candidates who completed the exam before joining the firm, or complete it within their first year at the firm.
What You Can Do Now
For students who are interested in a career in accounting, you should first see if these opportunities are available to you. The new rule that allows for two years of paid work experience to count towards your 150 hours is state dependent, so look into your state's requirements and see if this is applicable to you.
Next, research firms you’d be interested in working at and see if they have financial incentives for the CPA exam. PwC is just one of many firms who have implemented this change. To find the top ranked accounting firms in the US, check out Vault’s Accounting Rankings.
The final step is to prepare for the CPA exam. All four parts of the exam must be completed within a 30-month time frame. Decide which portion of the exam you want to do first, and find a study schedule that works for you.
If you’re interested in an accounting career, don’t pass up these added benefits. Now is the time to start your career with fewer road blocks in the way.
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