Number of Americans Taking Accounting Exams Drops to Lowest Level Since 2006

A calculator and tax files. (Steve Buissinne (stevepb)/Pixabay)

The number of Americans taking exams to enter the accounting profession has plunged to the lowest level in 17 years, according to new data from the American Institute of Certified Public Accountants (AICPA).

In 2022, the number of new entrants sitting Certified Public Accountants (CPA) exams dropped to just over 67,000, down from 72,000 in 2021, according to data published in AICPA’s annual report, marking a significant shortfall from the institute’s forecast of 74,000.

According to Financial Times, that figure also marked the lowest level AICPA has registered for the exam participation since 2006.

AICPA noted it had seen a declining number of U.S. accounting graduates and candidates sitting the exam, with the latest figures prominently being bolstered by candidates from overseas, which could further worsen the current shortage of professionals in the field across the United States.

To increase the number of Americans taking CPA exams and help ease shortages, AICPA said it had issued a “Draft Pipeline Acceleration Plan” focusing on “the root causes of awareness and attractiveness, costs, ease, and flexibility” that it said young Americans have cited as barriers to entry into the accounting profession.

It has also begun implementing a “multipronged strategy” to provide relief for talent shortages, including connecting Black and Hispanic/Latino high school and college students to the profession in conjunction with the Center for Audit Quality.

Lower Salaries, Exam Fees

AICPA said that it had also awarded more than $1 million in scholarships, grants, and fellowships to students for the 2022–23 academic year through the AICPA Foundation as part of its efforts to bring more students into the accounting sector.

The data comes as accounting courses are fast losing popularity among American graduates due, in part, to lower starting salaries when compared to other professions.

According to the Bureau of Labor Statistics, the median salary for accountants and auditors is $77,250 per year or $37.14 per hour. In comparison, the median salary for financial analysts is $95,570, while financial managers could earn as much as $131,710 a year.

Additionally, students wanting to become qualified CPAs must first obtain a license that requires them to undergo 150 semester hours of education, according to AICPA.

CPA exam fees could also cost up to $4,400, which could further exacerbate the shortages amid the increased cost of living.

“There’s definitely an accountant shortage out there,” Ben Lansford, an accounting professor and director of the Master of Accounting program at the Jones Graduate School of Business at Rice University, told Forbes in November. “I hear it from the firms,” he said. “We see the declining enrolment in graduate accounting programs.”

‘Tough Subject Area’

“Accounting is difficult,” he added. “It’s just a tough subject area, and you need a fifth year of college education to qualify to sit for the CPA exam. It makes the major less appealing to a lot of people.”

The accounting shortages are also being driven in part by a wave of retiring baby boomers, according to AICPA, which noted that 11,500 members retired in 2022.

Fast-developing artificial intelligence, which the World Economic Forum has warned could slash 14 million jobs worldwide by 2027, also poses a threat to the profession.

According to the National Association of State Boards of Accountancy, there were around 665,612 actively licensed CPAs in the United States as of August 2022.

However, experts now fear that the lack of accounting professionals is quickly becoming a crisis that will impact not just accounting firms, but also companies.

“With the length of time it takes to become a partner, the length of time it takes to achieve financial success, the financial model of CPA firms is archaic,” Alan Whitman, who previously ran the accounting firm Baker Tilly, told Financial Times.

“Firms need to work on improving the attractiveness of the profession through a variety of ways, the most important being reimagining the operating model and career progression,” he said.