ELE is one of several initiatives The Powers That Be have launched in response to the decline in CPA candidates that’s been underway since numbers peaked in 2016.

There is typically a flood of candidates ahead of major exam changes (like CPA Evolution that dropped at the start of this year), you can see this in the chart above as candidate numbers swelled in 2010 ahead of the large CBT-e change in 2011. However, Surgent’s Liz Kolar said in late 2023 that her CPA review company was “seeing more of a ripple than a tsunami this year.” Uh-oh.

Journal of Accountancy said in April that the ELE program had 38 participants. In a recent announcement, NASBA says ELE now has 105 students enrolled for this fall, representing more than 50 employers.

This is the list of ELE-registered employers as of October 2024:

Notice who is suspiciously absent from the above list: the four firms that employ the most accounting graduates on the planet. EY has its own 150-hour alternative called the EY Career Path Accelerator while PwC launched a pilot program with St. Peter’s University in New Jersey to offer a “work for credit” situation for their CPA aspirants.

Registration for the ELE’s spring 2025 semester is currently open until Jan. 1, 2025 and, as mentioned above, is now open to any accounting graduate who is “earning a paycheck from an employer not associated with the program.”

Here’s what NASBA said in their announcement:

“While we designed the program for accounting graduates and entry-level professionals, it’s gratifying to see participants from a diverse range of states, age groups, gender and ethnicities,” said Mike Decker, AICPA’s vice president of CPA examination and pipeline. “That’s a testament to the enduring value of the CPA credential, from the newest graduates to mid-career professionals.”

The ELE program is for individuals who have completed their bachelor’s degree and core accounting classes but possess fewer than the 150 credit hours required for licensure. Here’s how the program works:

• Full-time, employed accounting graduates can either join through an ELE-affiliated employer or sign up on their own.
• Program participants earn up to 30 university credits through online courses, and credit-hour costs are set at highly affordable rates.
• Participating employers are expected to support their employees, examples of which may include, but are not limited to:
  • flexible work schedule
  • tuition reimbursement
  • mentoring to help program participants work toward their CPA license
• The program is open to all employer types, including not-for-profit, businesses and government entities.
• Accounting graduates who sign up on their own rather than through participating employers may not necessarily have the same support or mentoring opportunities as those who have direct sponsorship.

IDK, this is smelling a little desperate no? 105 is 0.16% of the 67,336 people who sat for the CPA exam in 2022. Really making a difference there, guys.

Dear reader is invited to weigh in on the Experience, Earn & Learn program or any other pipeline initiative in the comments or via email.

The post The Powers That Be Are Getting Desperate For People to Do This Experience and Learn Thing appeared first on Going Concern.

To our knowledge, no photos of a mustachioed Joe Echevarria circa 1980 are floating around the internet so you’ll have to use your imagination with this horribly dated commercial.

That story comes from a 2013 Fortune interview in which the Bronx born-and-raised Echevarria reveals he had “rough edges” and desperately needed to acclimate to the polished culture of Big 8 (as we know, that’s now down to 4) if he was going to go the distance:

I had a big mustache and bad hair. Also, I had two suits, one brown and the other green polyester. I had no social graces, either — I didn’t know where the bread plate goes on a table, had never drunk coffee out of a cup with a saucer. It took me a long time to realize that these things matter in the corporate world. No one was willing to tell me.

Until a boss — who he refers to as “mom” in the interview — set him straight:

I had a boss, a Hispanic woman, who gave me good advice. Right before I left on vacation, she said to me, “You’re coming back without that mustache. You will never make it into management if you look like the Frito Bandito.” I had never realized that was holding me back.

In that same interview, he also calls his alma mater the University of Miami “a not-so-great school” (“it was nicknamed Suntan U.”) but they must not have been too pissed about that because they just named him actual president and no longer just an acting one. He’s the seventh president of UM and the first alumnus (’78) to hold that title.

Prior to this he served on the UM Board of Trustees from 2012 to 2019 and became Chief Executive Officer of UHealth in 2020 followed by CEO of the whole university two years later.

Nobody bleeds orange and green like Joe Echevarria!!

Congratulations on being named the seventh president of the @univmiami! pic.twitter.com/m2xUoejqaR

— Miami Hurricanes (@MiamiHurricanes) October 18, 2024

Reaction to the news on social media seems mostly positive except these people in r/professor griping about “how corporate universities have become.”

Joe Echevarria named seventh president of the University of Miami
byu/TheProfessorO inProfessors

Fans of Miami Hurricanes football seem particularly pleased with the appointment.

“Excellence, continuous improvement, and impact are more than shorthand for rising to our immense potential. Those words remind us that unless we are giving our very best—in academics, in research, in patient care, and in athletics—we are not worthy of ‘The U.’”

— Joe Echevarria pic.twitter.com/BoyDsUiapF

— GO ‘CANES! (@83_87_89_91_01) October 21, 2024

“[Coach Mario Cristobal] is the right person at the right time.”

— President Joe Echevarria pic.twitter.com/cP66cquQ7D

— GO ‘CANES! (@83_87_89_91_01) October 20, 2024

What better time then after a win to welcome our new @univmiami president?

Thanks for being right there with us for our victory against Louisville, President Joe Echevarria! #GoCanes pic.twitter.com/v0lwTYqyI0

— Miami Hurricanes Football (@CanesFootball) October 20, 2024

It’s been ten years since Joe surprised everyone by dipping out of Deloitte at the end of his first term as CEO despite not having reached mandatory retirement age. Joe said he left so he could focus on his “passion for public service” but some people floated the idea that he wouldn’t have been able to secure re-election had he stayed. Whatever the reason, seems he’s doing just fine these days.

For those who weren’t around back in those days, please enjoy this small selection of Joe Echevarria lore:

• Unfounded Crackpot Theory of the Day: Did Joe Echevarria Want to Stick It To Deloitte?
• Joe Echevarria Was a Hipster Before It Was Cool
• Deloitte CEO Joe Echevarria Doesn’t Want to Hear About the Troubles You’ve Had Selling Your House
• We Read This Awful Interview with Deloitte’s Joe Echevarria So You Don’t Have To

The post It’s a Good Thing Ex-Deloitte CEO Joe Echevarria Already Had Green in His Blood appeared first on Going Concern.

High Demand and Job Security

In today’s competitive job market, few professions offer the level of stability and demand as accounting. Every business, regardless of size or industry, requires skilled professionals to manage finances, prepare taxes, and provide strategic guidance. And with an annual projected demand of over 125,000 new Accounting positions over the next decade, the time has never been better to make a change.

OK, we’re with you. Granted firms have been laying off people left and right lately — and that’s not even getting into the more insidious silent layoffs — but generally speaking this is true. It could definitely be worse.

Related 2022 post that aged like milk: At Least We Aren’t in Tech, Boast Smug Accountants Who Didn’t Get Laid Off Today

Also the job market sucks right now for a lot of people unless you’re someone with an accounting background living in Manila but you know what, let’s move on.

Global Opportunities

Here’s what they have to say about the global opportunities afforded to the chosen few who take the blessed path of accounting:

Accounting is a truly global profession, with opportunities to work and collaborate across borders. As businesses expand their operations internationally, the demand for accountants with a global mindset and cross-cultural competence continues to rise. Whether you’re interested in working for a multinational corporation, a global accounting firm, or an international NGO, an accounting career can open doors to exciting opportunities around the world.

The biggest global opportunity afforded to accountants in 2024 is interacting with the ever-growing offshore team.

Diverse Career Paths

One of the most appealing aspects of an accounting career is its versatility, they said.

Accountants can choose from a wide array of career paths, ranging from public accounting firms to corporate finance departments, government agencies, non-profit organizations, and beyond. Moreover, within each sector, there are opportunities for specialization in areas such as tax planning, forensic accounting, auditing, financial analysis, and managerial accounting. This diversity allows individuals to tailor their career trajectories to align with their interests, skills, and long-term goals.

Alright, we’ll give them this one. Get through the public accounting gauntlet for two years and you can go do something better.

Intellectual Challenge and Continuous Learning

Do you ever wonder if they get paid off by the AICPA to say stuff like this?

Accounting is far from a monotonous profession. It requires analytical thinking, problem-solving skills, and a knack for attention to detail. As regulations and technologies evolve, accountants must stay abreast of changes and innovations to remain effective in their roles. This constant learning and intellectual challenge ensure that no two days are alike in the world of accounting, making it an ideal field for individuals who thrive in dynamic environments and enjoy tackling complex problems.

It’s also a great career for people who enjoy doing the same thing year after year after year after year after year.

Alright, here’s what we’re here for…lucrative compensation!

Lucrative Compensation

Beyond job security, accounting offers attractive financial rewards. The combination of high demand and specialized skills often translates into competitive salaries and benefits packages. The average annual salary for those with a Master’s degree in accounting is $80,000, whereas Accountants without a Master’s degree only average about $57,000 per year.

Hmm. Lucrative…

$80,000 isn’t a bad deal for someone from 2010 living in a LCOL city clocking a straight 9-5 five days a week. Lemme bust out a handy dandy chart here:

Oh.

Here’s another analysis that @kleib323 did on how much accounting salaries have increased since 2019 for partners and professional staff. Y’all are accountants so we don’t need to explain what the minus sign means in the % change column.

They would have been better off using lifetime earning potential in their argument, the math maths a lot better.

The post Bold Move Listing ‘Lucrative Compensation’ As One of Five Reasons to Pursue Accounting, Montclair State appeared first on Going Concern.

Text:

It has come to our attention that a “student-generated salary transparency spreadsheet” is being circulated, which may contain confidential information from offer letters. I am writing to remind you of the importance of maintaining confidentiality, particularly regarding sensitive personal and professional details.

As you know, our industry places a high value on confidentiality. Every day in the field of accounting, you will be entrusted with clients’ sensitive information, and they will rely on you to protect it. Sharing specific details from offer letters, including salary and benefits, is not only unprofessional but can also have serious consequences for you and others [Ed. note: By “others” this ethically compromised shill means accounting firms that would much prefer to cheat you]. Therefore, I ask that you cease using and sharing any such spreadsheets immediately and refrain from disclosing specific compensation details for any reason.

You may continue to do general research and use past outcome reports to make informed decisions on what you wish to say in your negotiation session. I highly recommend making an appointment with me before navigating this discussion.

As Aspiring CPAs, let’s make better decisions going [cut off]

So where exactly in the AICPA Code of Conduct does it forbid this activity? Granted I haven’t read the whole thing in years. If it’s on the same level as clients’ sensitive information, it should be immediately following the section on client confidential information. Except that would be ILLEGAL.

Read the National Labor Relations Act, prof.

Under the National Labor Relations Act (NLRA or the Act), employees have the right to communicate with their coworkers about their wages, as well as with labor organizations, worker centers, the media, and the public. Wages are a vital term and condition of employment, and discussions of wages are often preliminary to organizing or other actions for mutual aid or protection.

The only employers exempt from this are:

• Federal, state and local governments, including public schools, libraries, and parks, Federal Reserve banks, and wholly-owned government corporations.
• Employers who employ only agricultural laborers, those engaged in farming operations that cultivate or harvest agricultural commodities or prepare commodities for delivery.
• Employers subject to the Railway Labor Act, such as interstate railroads and airlines.

Companies that have a minimum of ONE contract with the government — so, most consulting firms — additionally fall under Executive Order 11246 which prohibits federal contractors and subcontractors from discharging or otherwise discriminating against their employees and job applicants for discussing, disclosing, or inquiring about compensation.

Generally speaking, any business or organization that (1) holds a single federal contract, subcontract, or federally assisted construction contract in excess of $10,000; (2) has federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or (3) holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount will be subject to the requirements of Executive Order 11246.

Hey kids, be sure you’re not just sharing those salaries amongst yourselves but plug them into Big 4 Transparency, too. Post them everywhere. Print it out and paper the professor’s office. Have T-shirts made and wear them to class.

The post Friendly Reminder That Sharing Your Salary Data is Not Only Legal, It’s Encouraged appeared first on Going Concern.

From the press release they put out today about the proposed CPA Competency-Based Experience Pathway:

Designed to increase flexibility for candidates, respond to market conditions, and protect the public, the pathway allows candidates to meet the final stretch of licensure requirements by exhibiting competencies according to a model framework that has been developed by AICPA and NASBA. The framework was developed with significant input and advice from a diverse cross-section of the profession, including members of an AICPA and NASBA working group made up of practitioners, regulators, academics, and state society leaders.

Recycling this gif from “Did the Anti-150 Hour Crowd Finally Beat the AICPA Into Submission? Looks That Way” because lol:

“The proposed pathway encompasses the perfect mix of flexibility for CPA candidates while maintaining rigor for public protection,” said NASBA President and CEO Daniel J. Dustin, CPA. “We look forward to the input and direction from the 55 U.S. Boards of Accountancy on this important and necessary framework to strengthen the CPA pipeline.”

Let’s remember this is the same group that fought hard to keep the 150-hour rule in place even when everyone else, even academia, was saying the profession should think about ditching or at least modifying it. The 150-hour rule has been successful in artificially inflated Underwater Basket Weaving 101 class lists at universities across the country for two decades, making better CPAs not so much. But sure, let’s talk about “maintaining rigor for public protection” now.

Said Journal of Accountancy in their write-up:

The proposed professional competencies are:

• Ethical behavior;
• Critical thinking and professional skepticism;
• Communication;
• Collaboration, teamwork, and leadership;
• Self-management and continuous learning;
• Business acumen; and
• Technology mindset.

The proposed technical competencies are:

• Audit and assurance;
• Tax; and
• Business and financial reporting.

The competencies, which would be verified in the workplace by licensed CPAs, are expected to take most candidates a year, but there is flexibility in the timing for completion.

Comments on the CPA Competency-Based Experience Pathway are open until December 6. If you have unhelpful troll comments to make or shitposting to do, please do so in our comment section and not the AICPA’s form. I’m serious.

Exposure draft in its entirety below:

Exposure draft: Proposed “CPA Competency-Based Experience Pathway” [AICPA]

The post Benevolent Overlords of CPA Licensure Float Batshit Insane Idea to Prove Competency, Not Just Credits appeared first on Going Concern.

So in 2025, PwC is paying summer interns $30.75 – $40.75. The winter intern posts we found don’t have a pay range listed.

Here’s the YouTube video they linked if anyone would like to spend three minutes and 36 seconds getting elevator pitched on this internship.

On the topic of working in audit at PwC, we have a much better video coming up that we’re almost done editing. The original is a relic that will make you pine for Pizzarias and Surge.

The post This is What PwC is Paying Its Audit Interns in 2025 appeared first on Going Concern.

These figures come from NACE’s 2024 Internship & Co-op report and include responses from 283 organizations, not strictly public accounting. Return offers are down, acceptance rates are about the same, and conversation rates — that is, interns converting to entry-level hires — are slightly down.

Here’s what NACE had to say about these findings:

The drop-off in the offer rate—which is the lowest reported offer rate in five years—could reflect lower-than-anticipated hiring needs, just as employers’ projections for full-time hiring for 2023 graduates fell from nearly 15% in fall 2022 to about 4% in spring 2023. The lower rate could also indicate problems in selecting students for internships. In fact, employers who gave themselves high marks for converting interns to entry-level hires had a significantly higher offer rate—72%.

In addition, in-person interns received more offers than their hybrid counterparts, 73.2% versus 64.5%. The executive summary can be found here.

If you’re one of the unlucky few who didn’t get a return offer, let us know.

The post Chart of the Day: Interns Just Aren’t Getting FT Offers Like They Used To appeared first on Going Concern.

The article tells the story of Kaylee Buckley, 2024 graduate of Marquette’s Master of Science in Accounting program, formerly confused freshman, and current RSMer:

Shortly after her first week of accounting classes, Kaylee Buckley called her father, sobbing. She understood nothing.

“I was in the same boat as a lot of the freshmen when I started; I felt like everyone was talking in a foreign language,” Buckley recalls.

Years later, she would find herself student ambassador to confused and overwhelmed students sitting in the position she once did.

She found that most students were confused about the same thing that puzzled her at first: industry lingo. The solution: make the terminology relatable. Instead of saying “accounts payable,” Buckley would use the analogy of a credit card bill: something that needs to be paid even if the bill isn’t due right away.

Something as simple as reviewing the vocabulary can make a world of difference to struggling students.

“A lot of students will preface their question with, ‘I know this is a stupid question,’ and I promise them it’s not,” Buckley says. “A lot of people are feeling this way, and you’re courageous for asking for that help.”

“That moment where students start to get the concept and they don’t even realize it, the times when students who got a D on a test email me to say they earned a 90 on the next one; if I could bottle that feeling up, I would,” she said.

Dr. Rich is looking to make the program more proactive going forward. Rather than waiting for students to get a D, he wants to “create a student support ecosystem that empowers everyone to seek the help they need no matter what grades they’re receiving or what issues they’re having.”

Accounting for student success [Marquette University]

*US News & World Report 2023 ranking

The post Marquette University Launches a ‘No Stupid Questions’ Program For Early Accounting Students appeared first on Going Concern.

I wasn’t able to find any information on the average cost of those extra 30 units, probably because it varies so much so instead let me drop two relevant links. You all are welcome to tell us how much you paid for your 30 units in the comments (or by email).

Rethinking the 150-Hour Requirement for CPA Licensure [CPA Journal] This one does a pretty good job of explaining the current debate over 150 units as well as the arguments for and against.

Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities [Center for Audit Quality] This CAQ research, now exactly a year old, dives deep into why students aren’t pursuing accounting or, if they did, why they aren’t interested in getting licensed. According to their research, 81% of undergraduate accounting majors plan to get their CPA. This research talks extensively about why the remainder don’t go that route and the cost of those extra units comes up quite a bit. As you can see from the chart below, cost is a hurdle to both the to CPA and to not CPA groups.

What doesn’t come up at all in that research is how people who scrimped and saved to make those 30 units happen are going to feel if the requirement is suddenly lifted in their state. Hell, even people who could afford it might feel some type of way.

Discuss. And let’s keep in mind this is tagged as a crazy idea, not a plausible and immediately actionable one.

The post Crazy Idea of the Day: If 150 Units Goes Away, Refund Everyone’s University Fees appeared first on Going Concern.

As much as I enjoy reading Going Concern, I find the article titled “Did the Anti-150 Hour Crowd Finally Beat the AICPA Into Submission? Looks That Way” troubling.  Busy people might read only the title and believe that the “extra 30” is dying. It is not. Rather, the proposal is to eventually do away with ALL university-based education but keep a weakened 150-hour requirement until that day comes. 

The National Pipeline Advisory Group has joined those who question the value of a university education. A college degree is not needed for many valued trades. Society needs plumbers, electricians, and just about every service provider imaginable. I am surprised that leaders of a profession that compares itself to lawyers and medical doctors are willing to eliminate the requirement for their future colleagues to have a university education.   

The National Pipeline Advisory Group’s (NPAG) Draft Report proposes a three-step process to reduce the cost and time of education. Step one is referred to as a now concept. The second, a near-term concept. The third step, a next concept, is a competency-based licensure model. The proposal is to measure competencies rather than time going to college. The model “moves the discussion completely away from 90, 120, or 150 hours.” Individuals could gain competencies any way they like, including self-study. The model envisions people who do not have a four-year degree developing expertise through work experience. This sounds like an apprenticeship program commonly used by the trades. 

The proposal would put the CPA on similar footing with the Association of Chartered Certified Accountants (ACCA) qualification.  The ACCA is a professional organization, headquartered in London, that has over 250,000 members, and 526,000 future members, spread across 180 countries. The path to ACCA qualification is open to everyone; there are no academic entry requirements. Candidates complete a maximum of 13 exams, complete an Ethics and Professional Skills module, and have three years of practical work experience in a relevant role.

Similarly, members of the Institute of Chartered Accountants in England and Wales, do not have to go to university to become an ICAEW Chartered Accountant in the UK. ICAEW has 165,000 members in 147 countries. 

Just because a candidate does not have to go to school does not mean they won’t choose to do so.  What might the ability to pursue a CPA without a college education do to starting salaries, even for those who choose to go to school?  In June 2023, the Financial Times reported that new graduates joining a Big Four firm in London might make as much as £35,000 or about $44,000.¹ The 2023 graduates of our Master of Accountancy program started at over $70,000, most of them in Denver. The cost of living in London is higher.  Is the profession pursuing a path that will result in even lower salaries? And does the AICPA want to be compared to the ACCA? 

The NPAG Draft Report recommendations are based on six major themes that emerged from the data. Interestingly, none of the six are starting salaries. Page 21 of the report copies a chart from the Center for Audit Quality’s study that shows 61% of students who chose NOT to major in accounting cited the ability to earn a higher salary with a different major as reason. Only lack of interest scored higher with 70% of students reporting that reason for not majoring in accounting.  

Starting salary is the return one earns on an investment in education. The NPAG cannot address starting salaries; instead, they try to address the investment in education. If you take the cost of education by the person receiving the education to zero, would starting salaries stay the same? I suggest not. As firms absorb the cost of education, it is the firms who are making the investment and they will recalculate their return. Firms already invest in training staff, and the value of the training is a reason they pay less starting salary than graduates can earn with other employers. As firm investment goes up, starting salaries should naturally decrease. If starting salaries in London are a predictor of where we are heading, is that where we want to go? 

Wouldn’t firms pay students who choose to go to college more than those who enter a structured learning program with the firm straight out of high school?  If that logic held, we would expect to see firms to pay CPA candidates who hold a graduate degree more than CPA candidates who obtain 150 hours with a collection of unrelated hours. We don’t see that.

The now solution proposed by NPAG is to point students to lower-cost, on-the-transcript learning options like one I have criticized before – the AICPA’s Experience, Learn and Earn (ELE) program. The near-term solution would move the extra 30 hours off-transcript by giving credit for on-the-job learning. Neither the now nor the near-term recommendations remove the extra-30 requirement.  

¹Junior auditors: Stunted salaries: Lex. (2023/06/19/, 2023 Jun 19). Financial Times Retrieved from https://du.idm.oclc.org/login?url=https://www.proquest.com/newspapers/junior-auditors-stunted-salaries/docview/2838872394/se-2 

View all articles authored by Sharon Lassar published on Going Concern.

The post Does Accounting Education Belong in the University Curriculum?  appeared first on Going Concern.

The leaders of the US accounting profession have signaled they could cut the education requirements for becoming an accountant, amid growing alarm about a shortage of new recruits.

The American Institute of Certified Public Accountants on Tuesday dropped its opposition to calls to reduce the amount of university education needed to qualify as a CPA.

Before anyone gets too excited, we have to remember that under normal conditions, implementing changes across all 55 CPA jurisdictions could take years. There’s a long, tedious process that often ends in the state capitol with a bunch of non-CPA lawmakers ultimately deciding whether or not to bequeath an education break on the state’s future professionals. No doubt the states have many enthusiastic amateur lobbyists happy to enlighten the legislature on why this change is not just a good thing but a necessary one if Minnesota is representative of the rest of the nation. Proponents of reducing education requirements have been nothing if not vocal about their opposition to the AICPA’s official position.

And before we beat up the AICPA too hard for only just now conceding ground on 150, we have to remember that their most valid talking point throughout this battle — a battle they were pretty much guaranteed to lose as a chorus of voices rose up from all corners of the profession against it — has been mobility. “Because this system was put in place decades ago, many CPAs practicing today may not remember life before CPA mobility,” said the National Pipeline Advisory Group in their recent draft strategy report [PDF]. They put it in bold blue text, no less. The subtext here is that currently practicing professionals may take it for granted because they’ve never had to think about it.

Substantial equivalency basically means the states agree that they trust other states to adequately gatekeep the CPA rather than requiring individuals to be licensed in each state they practice.

The official definition of substantial equivalency as it appears in the NPAG report:

Substantial Equivalency: Substantial equivalency is the determination by a state that CPAs from another state meet the threshold to practice public accounting under CPA mobility. While there are some variations and exceptions, licensing requirements are remarkably consistent from state to state and that has powered the unique mobility system the profession enjoys today. The most consistent and critical elements are the 3 Es, education, exam, and experience, which underpin substantial equivalency and mobility.

And here’s what NPAG said about discussions they’ve had about the future of CPA education. We suppose they figured out what the AICPA couldn’t, that mobility has to take a back seat to a critical shortage. It was getting harder and harder to ignore the evidence that 150 is actively driving students — in particular minority ones — away from accounting.

While the AICPA Council resolution convening NPAG aimed at preserving mobility while also addressing the pipeline challenge, NPAG members agreed they needed to explore all options to ease the time and cost of education – even those that might impact substantial equivalency and mobility. As a result, the group committed to and has practiced an “everything’s on the table” approach to its learning and solutioning.

FT continues:

An AICPA advisory group that included representatives from large and small firms said on Tuesday that the profession needed to “address the cost and time of education” as a priority for fixing the shortage.

It called for “a competency-based licensure model not tied to university credit hours”, among other reforms. The AICPA, in turn, expressed “directional support” for the group’s recommendations.

“While expanding approaches to CPA licensure alone will not solve the accounting talent problem, we believe our licensure process does need to acknowledge changing market conditions,” the AICPA said.

The AICPA’s answer thus far has been the Experience, Earn, and Learn Program. For more on that see What Would the Accreditors Say About AICPA’s ELE Program?

The FT piece also says that AICPA CEO of Public Accounting Sue Coffey (not to be confused with outgoing AICPA CEO of Everything Barry Melancon whose retirement in December was announced today) said the AICPA “aimed to propose an alternative to the current requirements by this time next year, but getting state accountancy boards or state legislatures to embrace the changes could take significantly longer.”

“I really hope Minnesota and others talking about this see value in working with the rest of the country,” Coffey said. “This is our attempt to bring everybody together.”

Kind of funny the group most in opposition to what the rest of the country has been saying is saying that now.

As always, I remain skeptical of how this will actually shake out. I wouldn’t celebrate the death of 150 units just yet.

The post Did the Anti-150 Hour Crowd Finally Beat the AICPA Into Submission? Looks That Way appeared first on Going Concern.

For accountants under some categories — Chartered and certified accountants Accountant (qualified), Auditor (qualified), Chartered accountant, Company accountant, Cost accountant (qualified), Financial controller (qualified accountant), and Management accountant (qualified) — the standard going rate is now £46,800 ($58k) or £24.00 ($30) per hour. Here’s a good read from a UK immigration lawyer on all the specifics.

After net migration to the UK hit a record 745,000 in 2022, Prime Minister Rishi Sunak expressed his displeasure and a desire to get those numbers down.

But that’s another issue. For people under 26, the minimum they must earn to qualify for a visa is £30,960 ($38k-ish). Apparently this was too much for KPMG so they’ve yanked job offers from some foreign grads who were expecting to start their careers at the House of Klynveld.

Reports FT:

KPMG has revoked job offers to some foreign graduates in the UK after the government tightened visa rules for overseas workers in an effort to cut record immigration.

The Big Four firm, one of the UK’s biggest graduate employers, told affected incoming staff this week that their offers had been rescinded, pinning the move on the government’s decision to raise the minimum salary required to sponsor a skilled worker visa in the UK, according to documents seen by the Financial Times.

KPMG said the changes to eligibility criteria had “unfortunately impacted some of our graduate programmes that were previously eligible for sponsorship under the skilled worker visa category”, according to the documents. The firm declined to comment on how many offers had been revoked.

FT said the average graduate makes between £25,000 and £35,000 at Big 4 firms in the UK.

KPMG has stopped hiring overseas graduates who need skilled worker visas outside of London as a result of the changes to the eligibility rules, said FT. Except for junior actuaries, they’re still in.

The post KPMG Was Too Cheap to Pay Foreign Graduates More So They Yanked All Their Job Offers appeared first on Going Concern.

The Rider University CPA Apprenticeship Program, announced here on March 11, allows new graduates to earn the required 150 units for CPA licensure in New Jersey through coursework and real-world professional experience. Unlike the Saint Peter’s initiative, the Rider program hopes to partner with multiple firms.

“Our new program is a novel and powerful tool to bridge the gap between academic learning and real-world accounting experiences,” says Dr. Evelyn A. McDowell, the chair of Rider’s Department of Accounting. “We’re proud to offer recent graduates a low-cost alternative to advancing their careers.”

To obtain 150 hours after graduation, Rider is offering as many as five online courses — worth six academic credits each and offered at $250 per credit — over seven weeks along with at least 34 hours a week “doing meaningful and substantial work as an accounting professional” at a participating accounting firm. So far WilkinGuttenplan (INSIDE Public Accounting #149, $33 million revenue) is the first and only firm to partner with Rider. “The cooperation and commitment of employers are integral to the program’s success, and we are extremely proud to collaborate with WilkinGuttenplan to support aspiring professionals,” said Dr. Ev.

A bit more from the announcement:

The program will begin accepting participants beginning in May, and the University is currently establishing partnerships with firms and companies. McDowell notes that participating in Rider’s CPA Apprenticeship Program can serve as a powerful recruitment tool as they seek both short-term and permanent talent.

Because it is open to partnering with a variety of firms, Rider’s program is the first of its kind in New Jersey. “By inviting multiple firms to participate, we are creating flexible opportunities inclusive to a wide range of individuals that will ultimately strengthen the pipeline of CPAs,” McDowell says.

More here. It appears the program is open only to Rider graduates.

Rider University launches CPA Apprenticeship Program [Rider University]

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Professor Abeysekera chose accounting to study in particular because the accounting syllabus comprises both narrative-based and mathematical-based learning.

The abstract:

ChatGPT is considered a risk and an opportunity for academia. An area of threat in contemporary settings is whether it can become a student agent for assessments in academia. This study determines how ChatGPT can become a human agent for students on two financial accounting course units, multiple choice question assessments. The study provided five numerical-based and five narrative-based multiple choice questions. There were ten questions for the Introductory Financial Accounting and 10 for the Advanced Financial Accounting course units. ChatGPT received one question at a time requesting a solution. In the Introductory Financial Accounting section, ChatGPT produced incorrect answers because it incorrectly assumed the underlying assumptions contained in those questions. In Advanced Financial Accounting, ChatGPT presented incorrect answers because of the complexity of the task contained in those questions. ChatGPT demonstrated similar competencies in providing solutions to numerical-based and narrative-based questions. ChatGPT obtained the correct answers to sit in the 80th percentile in the Introductory Financial Accounting course unit assessment and the 50th percentile in the Advanced Financial course unit assessment. ChatGPT4 showed improved performance, with the 90th percentile for Introductory Financial Accounting and the 70th percentile for Advanced Financial Accounting. The findings indicate that the knowledge construct requires reflective thinking with ChatGPT in the ecosystem, and what is assumed and assessable knowledge must be revisited.

Said Professor Abeysekera (as relayed by Phys.org): “The solutions provided by ChatGPT showed that it is a solution provider rather than a teacher or instructor.

“ChatGPT can be constructive to a competent learner who has reached the competency level to further develop critical understanding. As research has indicated, high achievers can have a fear of numbers, and they can benefit by using ChatGPT solutions as validation checks for their learning.

“ChatGPT does not provide scaffolding for novice learners to take over their learning and develop individual competencies to be less or not reliant on it. It can be destructive to an incompetent learner and can serve as a platform to simply find the solution or as a channel to ease their fear of numbers.

“Furthermore, the findings showed that ChatGPT is not a foolproof solution provider, especially when questions have discipline-specific underlying assumptions and increased technical and task complexity.”

The language in this paper is spectacular considering it was authored by a professor of accounting and not literature. A few highlights:

With nights and days passing serenely, a big surprise as morning dawns on November 30, 2022, has made a lasting change in how we have taken what we know, to know, and beyond for granted.

ChatGPT serves as a lighthouse with the metaphor of a sea route, where the light it surveys is perceived as a route for academic construction or destruction. ChatGPT provides the shining light, and the pathways are chosen by academia, defined by the five Ws: what it is being used, who uses it, where it has been used, when it is used, and why it is being used (Robertson, 1946)

The ChatGPT provides access to structured knowledge to anyone and uses a utilitarian position because it determines right or wrong based on the greatest number of people who have access to knowledge (Kay, 2018). Academia takes a deontological position to knowledge promoting the highest good as developing reasoning in people as a duty – rights and wrongs are determined by dutifulness (Misselbrook, 2013).

Beautiful.

As the professor points out in the paper, ChatGPT offers a lot of utility to learners of accounting, especially those familiar and comfortable with the concepts, but “can be destructive to an incompetent learner” as critical thinking is a necessity for understanding higher level accounting concepts. Anyone who’s had a lousy Intermediate teacher will tell you a professor can make or break a grade depending on how well they can explain the fundamentals.

With a critical shortage of PhD accounting professors that’s been brewing for well over a decade now, it’s too bad ChatGPT can’t do much to fix it in the short term.

Expert tests if AI can help teach students accounting [Phys.org]
ChatGPT and academia on accounting assessments [Journal of Open Innovation: Technology, Market, and Complexity]

Earlier:

The post Study: ChatGPT Won’t Be Replacing Accounting Professors In the Near Future appeared first on Going Concern.

The article is not ours (hence the compliment for good reporting and citations) but rather published on ProMarket: Young People Are Shunning the Accounting Profession. The 150-Hour Rule Is Responsible.

In the piece, industry OG Ray Ball wrote:

Why would accountants voluntarily increase the cost of producing their largest input (CPAs) when the additional cost could not be passed on to clients? Economists have long been skeptical of occupational licensing. Adam Smith’s long discussion of apprenticeships concludes, among other things, that lengthening the required duration of apprenticeship increases the earnings of incumbents, denies the rights of those who now cannot enter, and provides no assurance of increased work quality. Echoing this, Milton Friedman observes that occupational licensing typically is advocated by producers, not consumers, on the alleged grounds of public and not personal interest. It is important to note that the AICPA vote to require an extra year of college for entry to the profession was conducted among its incumbent members (i.e., currently licensed accountants), and not among CPA firms (their employers). The Rule does look more like incumbent accountants voting to restrict entry than to enforce quality. It has reduced entry to the profession to a level that does not satisfy demand. And it has fallen more heavily on minorities.

When we say OG, we don’t mean a guy who’s slaved away over hot ledgers for 50 years, this guy is an O G. His bio reads:

Ray Ball is the Sidney Davidson Distinguished Service Professor of Accounting Emeritus at Booth. He pioneered the application of financial economics to accounting. He (with his co-author Philip Brown) was first to demonstrate the link between firms’ accounting earnings information and their market values. He also was first to identify the existence of systematic anomalies in efficient market theory. He has received many awards, including five honorary degrees and inductions to the American and Australian Accounting Halls of Fame.

He was elected to the Accounting Hall of Fame in 2009 and to the Australian Accounting Hall of Fame in 2018.

So yeah, direct any accusations of slander his way please.

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Thank goodness for the Connecticut Society of CPAs! Without their posting, it would have taken me longer to learn about the latest half-baked idea by NASBA regarding the education requirements to become a CPA. It seems NASBA wants to keep this under wraps. I could not find mention of this exposure concept on NASBA’s website, and certainly no link for comments. I suppose they only want to hear from the echo chamber. Requesting comments during busy season was not safe enough, I suppose, to keep them from possibly hearing things they don’t want to hear.

What is NASBA up to now? They have formed a task force to look at the licensure model and their first idea is to further weaken, rather than repeal, the worthless education requirement of an extra 30 hours of course work. There are no educators on the task force. Not only does NASBA not want to hear from CPAs who are not members of the entrenchment club, but they also don’t want an educator’s voice in a discussion of the education requirements.

To become a CPA, one must meet the requirements of three Es: education, exam, and experience. The AICPA and NASBA want to retain the 150-hour education requirement that has been questioned repeatedly by rigorous peer-reviewed academic studies, by the Center for Audit Quality, and on these pages from the multiple perspectives including diversity and learning efficacy. Many potential CPA candidates never enter the pipeline due to the tuition cost and time involved to obtain an extra 30 credit hours. Rather than proposing to do away with the extra-30 requirement that has no demonstrated value, the AICPA created an Experience, Learn, and Earn (ELE) program. I have previously questioned the wisdom of the ELE approach. ELE candidates work for a sponsoring firm in a benefited position while enrolling in low-cost fully online courses where they earn credit hours on a transcript. Low cost might mean low value. A determinant of low value might be low effectiveness. We don’t know. ELE is currently promoted as a pilot program.

Ideally a pilot program would inform us about the efficacy of the pathway. Will ELE candidates complete the credit hours in a reasonable time frame? Will they pass the CPA exam in one 30-month window? Will they stay in the profession even a year beyond what might be required to not repay tuition benefits under their sponsoring firm’s employment contract? I would bet 20 to 1 that we’ll never know.

We won’t know for two reasons. The AICPA will not collect and report the relevant information. Secondly, NASBA and the AICPA will push through an alternative scheme that makes questions about the current form of ELE moot. NASBA is focusing discussions on an equivalent path to licensure without the need of having those extra 30 hours on a transcript. Instead, candidates could complete a “structured professional program” while they work. Hmm. That sounds like an experience equivalent to me.
Why not simply allow students who hold a bachelor’s degree to become CPAs with an additional year of experience over students who hold a master’s degree?

Oh, I know! Allowing bachelor’s degree holders to become licensed after two years of experience would remove the need for a “structured professional program” and the fees that such a program could generate for AICPA and NASBA. ELE could be offered solely by the AICPA. There would be no need for a university partner who would charge tuition. The AICPA could capture enrollment fees. And, who would certify a program as “structured”? That sounds like a potential revenue stream for NASBA. Like how CPE providers pay to join NASBA’s National Registry of Sponsors, firms that provide structured professional programs could pay to have their programs approved by NASBA.

Enough already! NASBA’s exposure concept of creating a structured professional program would evidently require legislative action in at least some states. If a “solution” that requires legislative action is being proposed, that solution should be to change the education and experience requirements to be what they once were in many states – license with a master’s degree plus one year of experience, or license with a bachelor’s degree and two years of experience.

The post Just Eliminate the Extra 30 For CPA Licensure Requirement! appeared first on Going Concern.

The new research by MIT Sloan associate professor of accounting Andrew Sutherland, Mattias Uckert of University of Amsterdam, and Felix W. Vetter of University of Mannheim entitled Occupational Licensing and Minority Participation in Professional Labor Markets (Journal of Accounting Research, forthcoming) says both. From the abstract:

We find a 13% greater entry decline following the [150 hour rule’s] enactment for minority than nonminority CPA candidates. Our analyses of parental income and financial aid availability point to a socio-economic status channel explaining the differential entry declines. Studying exam passing patterns, professional misconduct, and job postings we find a deterioration, or at best, no change in CPA quality following enactment.

From MIT Sloan’s article about the paper:

In the field of accounting, some observers argue that the current logjam in talent can be traced back to a four-decades-old rule that was implemented by the American Institute of Certified Public Accountants: To obtain a CPA license, accountants must complete 150 credit hours (five years) of university study rather than 120 hours (four years).

At the time the rule was implemented, the AICPA said that students needed the additional hours of study to keep up with new tax laws and more sophisticated approaches to auditing.

Naturally this is why the additional 30 hours can be in anything, because underwater basket weaving covers tax law. In We Get to the Bottom of Why the 150 Hour Rule Doesn’t Require Specific Courses, we recently dug up a statement of AICPA policies published in the 80s — just as the 150 hour rule was being adopted by a handful of states — that talks about why additional education should be required for licensure. Good read for anyone interested in what is increasingly seeming like an arbitrary and nonsensical rule.

“Tuition in professional fields like accounting is expensive, and forgoing a year of income to complete a fifth year of college entails a sacrifice,” Sutherland said. “Naturally, the burden of such requirements tends to fall on those least able to afford the additional year.”

HMM. It’s almost like we knew this already. No sassiness toward Prof. Sutherland intended. This is from the CAQ report mentioned above:

While the research showed the 150 credit hour requirement is a barrier across the board, it is more conspicuous for Black and Hispanic nonaccounting students, and in particular those students who considered accounting but opted out, meaning that these students looked into accounting as a major but ultimately went elsewhere due to the additional credit hour requirement. These students perceive the rule as an expensive, time-consuming requirement to advance their future career. To be sure, these students see the CPA license as a valuable certification, but they don’t view it as worthwhile to pursue.

“the research showed the 150 credit hour requirement is a barrier across the board”

In looking at the data, the MIT research identified a 26% decline for minority CPAs versus a smaller 14% decline for nonminority CPAs. Can the profession afford double-digit declines in any candidates?

For anyone wondering “what about Asians?” we’ve got you. Researchers found no statistical entry decline for Asians, “whose average income and wealth are comparatively high.” Here’s what they did find though:

Second, following enactment [of the 150 hour rule], CPAs increasingly come from universities whose students have high parental income. Third, cross-sectional tests show that entry declines are concentrated in states offering the least financial aid. Moreover, the parental income and aid patterns are evident in both minority and nonminority subsamples, indicating that financing constraints influence how and for whom the 150-hour rule affects entry.

All the half-assed diversity initiatives in the world are useless (other than making leadership feel like they’re the good guys) if minorities — and those from low socioeconomic backgrounds — are effectively locked out from the profession.

Just another check in the “maybe the profession should reevaluate this whole 150 hour thing” column.

Occupational Licensing and Minority Participation in Professional Labor Markets [SSRN]
‘150-hour rule’ for CPA certification causes a 26% drop in minority entrants [MIT Sloan]

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Fresh press release for you straight from the source:

Aiming to aid accounting students and increase the pipeline of future certified public accountants (CPAs), the Illinois CPA Society and its charitable partner, the CPA Endowment Fund of Illinois, are now accepting scholarship applications. More than 40 scholarships ranging from $1,000 to $4,000 each will be awarded to accounting students attending Illinois-based colleges and universities for the 2024-2025 academic year.

These scholarships are intended to provide essential financial assistance to qualifying accounting students while also rewarding them for their academic successes so far. Eligible applicants will be upperclassmen accounting students enrolled at Illinois colleges or universities who demonstrate financial need, academic achievement, and leadership qualities.

You only need to fill out one application to be considered for all scholarships and you have until April 1, 2024 to do it.

The scholarships available are:

• Illinois CPA Society Accounting Scholarships for seniors or graduate students.
• Herman J. Neal Accounting Scholarships for Black/African American juniors, seniors, or graduate students.
• James A. Sikich Visionary Scholarships for seniors or graduate students.
• Women’s Executive Committee Advancing Women in Accounting Scholarships for female seniors or graduate students.

For more info, go here.

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Traipsing haphazardly across the internet as one does, I came across this ancient scroll dated 1988 and entitled “Education requirements for entry into the accounting profession: a statement of the AICPA
policies.” When I say ancient, I mean ancient. Serif fonts hadn’t even been invented yet.

The introduction looks familiar. As the profession evolves, the profession’s gatekeepers are tasked with periodic review of the requirements to become a CPA. This is how BEC got killed off and we ended up with CPA Evolution, because the necessary entry-level knowledge of a CPA today is much different from that of a CPA 15 years ago. Reasonable.

It is the policy of the American Institute of Certified Public Accountants (AICPA) that “ the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA” and “the AICPA should review periodically the standards of admission requirements for CPAs.” To fulfill the AlCPA’s responsibility under this policy, the Education Executive Committee decided in 1986 to review the 1978 Education Requirements for Entry Into the Accounting Profession (the Albers report) to determine how the sample program contained therein should be modified to reflect changes that had taken place and trends that were expected to continue. After identifying significant changes occurring in public accounting, industry, and not-for-profit organizations, the Education Executive Committee engaged in extensive discussions of the impact these changes should have on education for CPAs.

And this is the AICPA’s official policy on education requirements for entry into the accounting profession in 1988:

1. The CPA certificate is evidence of basic competence of professional quality in the discipline of accounting. This basic competence is demonstrated by acquiring the body of knowledge common to the profession and passing the CPA examination.
2. Horizons for a Profession is authoritative for the purpose of delineating the common body of knowledge to be possessed by those about to begin their professional careers as CPAs.
3. At least 150 semester hours of college study are needed to obtain the common body of knowledge for CPAs and should be the education requirement. For those who meet this standard, no qualifying experience should be required to sit for the CPA examination.
4. The scope and content of the educational program should approximate what is described in Academic Preparation for Professional Accounting Careers and should lead to the awarding of a graduate degree.
5. At the earliest practical date, the states should adopt the 150-semester-hour education requirement. The date by which implementation of this policy may be practical may be dependent upon the following factors: (1) the current education requirement in each jurisdiction, (2) the availability of graduate accounting education in each jurisdiction, and (3) appropriate lead time to permit individuals to meet proposed education requirements.
6. Candidates should be encouraged to take the CPA examination as soon as they have fulfilled the education requirements, and as close to their college graduation dates as possible. For those graduating in June, this may involve taking the May examination on a provisional basis. [Ed. note: At the time this was published the CPA exam was given only twice a year, in May and November]
7. Student internships are desirable and are encouraged as part of the education program.
8. The AICPA should encourage the development of quality programs of professional accounting (or schools of professional accounting) and participate in their accreditation.
9. Educational programs must be flexible and adaptive, and this is best achieved by entrusting their specific content to the academic community. However, the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA.
10. The AICPA should review periodically the standards of admission requirements for CPAs.

Published prior to the moon landing, Horizons for a Profession – The Common Body of Knowledge for Certified Public Accountants [PDF] is so old it may have initially been written on papyrus paper. That’s what they’re referring to when they say “Horizons” above.

The scanned version is 346 pages so we won’t dig too deep into it but there are some interesting bits in there if you are a nerd who’s into accounting history (me).

Like how many firms performed what services:

Point being, Horizons gets many mentions in the 1988 report as does the “Education requirements for entry into the accounting profession” report published ten years before the one we’re talking about [PDF]. Dubbed the Albers report, the 1978 version came out five years before Florida became the first state to adopt the 150-hour rule.

But let’s get back to 1988 and this part in particular. Many people have questioned why the 150 hour rule lacks any requirement for specific education, especially so now that there’s a contentious debate raging about its continued existence. I mean, if it’s so critical to the public interest then why can it be met with whatever? The 150 hour rule may not have improved the quality of professionals since its widespread adoption but it sure gave us a lot of expert underwater basket weavers.

This is what the report says:

The profession requires that its entrants be men and women whose education has provided them with the foundations for lifelong learning, development, and growth. No attempt is made here to completely delineate the content of a CPA’s general education because it does not always relate directly to the demands of professional practice. Students should come to understand humankind, its history, the philosophies by which it lives, the languages in which it communicates, and the arts and sciences that enrich its existence. Emphasis should be on developing analytical abilities and problem-solving skills, as well as perception, judgment, and integrity. [emphasis ours]

Huh. Who knew.

The post We Get to the Bottom of Why the 150 Hour Rule Doesn’t Require Specific Courses appeared first on Going Concern.

Here’s what the AICPA has found on their quest to pinpoint reasons for the pipeline problem, in Sue’s words:

[T]here’s also a lot of data that we’ve been kind of parsing through to determine other root causes of the talent challenges we’re having. And we’re finding that there are leakage points in a couple of key areas that are kind of driving our focus as part of this initiative. One is in the college to graduation group and about 208,000 on any given year declare an accounting major, but then by the time they graduate, only 50,000 are graduating in accounting. So there’s something going on in that declaration of a major to graduation and university.

AICPA’s Sue Coffey speaking on the Accounting Today podcast episode “A pipeline progress report“

In other words, something’s happening junior/senior year to pivot a lot of willing victims eager students away from accounting and into something else. Something other than Intermediate alone, probably.

Brushing past that, they somehow figured out that people who no more than five years in public accounting are poisoning the well and tales of their negative experiences are echoing down as far as high schools. For every pair of cool accounting professors giving talks at the local high school, you’ve got however many hundreds of comments online contradicting everything the profession’s cheerleaders are saying out on their roadshows.

Another area we’re finding relates to retention and how retention in firms is impacting the beginning of the funnel and the desire for people to come into our profession. And so that one to five year group of professionals that are within a firm and tend to leave within that period and may not have a good experience are impacting what, for example, high school and college students think about our profession and that’s creating pipeline challenges.

This was CSU Monterey Bay professor Shaowen “Sharon” Hua speaking to students at North Salinas High School about why accounting is a pretty good career earlier this year:

“Accounting jobs pay well,” she told them. “Accounting jobs are fun.”

“I have a [former] student who works for Driscoll,” Hua said of the Watsonville-based berry grower. “She travels to England, Singapore and Japan because Driscoll has businesses all over the world.”

“You might work with clients from Pebble Beach, the NBA and Hollywood,” she said. “They have so much money, they don’t know where to put it and you get to service them.”

And this is the other side of the coin, one of the first posts one is greeted by when visiting r/accounting today.

When did you realize that it was time to get out of public accounting?
byu/stanerd inAccounting

The other thing I feel compelled to point out from Sue’s appearance is this. SALARY is a naughty word.

We’ve been talking about the S issue for many, many months now, right? Starting salaries are not where they need to be in our profession, and those young adults and young professionals see more opportunity elsewhere for higher pay.

The S word. I mean, it is obscene how little they pay early-career public accountants, maybe we should have been censoring the S word all along.

The post It’s Official, All the Complaining Is Directly Contributing to the Pipeline Problem appeared first on Going Concern.

One CPA candidate is able to meet the 150-hour requirement by using dual enrollment credits earned five years ago while still in high school. In contrast, a workplace associate is pursuing the needed additional 30 hours by obtaining a master’s degree at a cost of $30,000. The National Association of State Boards of Accountancy (NASBA) considers these to be equivalent college credit hours. Clearly, they are not.

While CPA firms continue to have difficulty finding and retaining qualified accountants, the NASBA continues to defend the 150-hour rule. They do so using the concept of substantial equivalency, which is defined in Section 23 of the Uniform Accountancy Act (UAA). This Act sets forth three pillars of equivalency. These are (1) pass the CPA exam, (2) work for one year under a licensed CPA, and (3) obtain 150-hours of education.

Quantity Over Quality?

For the third pillar of equivalency, the NASBA emphasizes the quantity of required college credit hours, but the quality of such credit hours is not explicitly considered.

To be sure, the language in most state laws includes phrasing such as “content as approved by the board.” The problem is, the several state boards do not audit individual college or university course concept coverage. In Florida, for example, the Board of Accountancy reviews colleges’ accounting major syllabi in order to gain insight into an institution’s stated course content coverage. However, there is no subsequent assessment of whether this content is actually being delivered in a classroom.

To a significant degree, state boards rely on regional accrediting commissions as a basis for assuming quality. And, to a lesser degree, they rely on private accreditation bodies such as the Association to Advance Collegiate Schools of Business (AACSB) or the Accreditation Council for Business Schools and Programs (ACBSP). While accreditation by these bodies provides some comfort in the area of educational quality, such comfort is tenuous.

Why? Because accreditors do not examine the depth of course content coverage in specific majors or programs. For the most part, accreditors assess the financial viability of an academic institution and the degree to which its mission is being pursued. If an approved course syllabus sets forth specific concepts to be covered, accreditors have no idea whether that content is actually being delivered to students. This undermines the soundness of the 150-hour third pillar.

Quality

Sadly, quality is under pressure at many tuition-dependent institutions. As budgets are stretched and cash flow constricted, academic standards are being relaxed in order to attract students. Institutions that shorten program length, that shorten class meeting time, and that reduce course content coverage all undermine quality.

The devolution of course content coverage is not readily apparent to those outside of academia. However, some are beginning to take notice. For example, writing in Business Insider, Ayelet Sheffey noted that “there can be a significant disparity between the quality of programs offered online and in person.”

I recently delivered an 8-week online finance course at a small, private university. I won’t do so again. That course covered only about 15% of the content coverage of a traditional 15-week course, did not require a textbook, and did not have synchronous student/instructor interaction. I believe this is an example of the quality disparity to which Sheffey is referring. One CPA candidate might take this online course while another takes the 15-week course. The NASBA counts them as equivalent.

To be sure, there are quality online programs at both large and small institutions. Penn State World Campus and Purdue Global Online are examples, just to name two. But the NASBA makes no distinction between courses taken at institutions that deliver quality courses and those that do not. This undermines the soundness of the 150-hour third pillar.

What Courses Count?

Once a student in Florida has both earned a bachelor’s degree and achieved the prescribed 30 accounting and 36 general business hours, the additional 30-hours needed for licensure, pursuant to Chapter 473.308 (3) of the Florida Statutes, simply need to be college credit. Indeed, such hours can be obtained in any subject matter area (e.g., coaching, theater, or basket weaving), or at any content level (high school dual enrollment, freshman, sophomore, etc.).

Most states accept credits in a manner similar to that of Florida. Accepting any and all college credit, no matter what the subject matter area, undermines the soundness of the 150-hour third pillar.

Summing It Up

Clearly, passing the CPA exam is a solid pillar of equivalency. Clearly, working under the mentoring of a licensed CPA is a solid pillar of equivalency. On the other hand, an additional 30 hours of college credit at any content level, and in any topic area, fails the equivalency test and undermines the soundness of the 150-hour third pillar.

Both the Minnesota Society of CPAs and the South Carolina Association of CPAs are proposing legislation that will allow a CPA licensure candidate to substitute workplace training for required college credit. If workplace training trumps college credit in terms of a CPA candidate’s professional development, then such training should be validated by the NASBA. Doing so will emphasize the quality of learning, rather than the quantity of college credit hours earned.

About the author:

Dr. William Hahn is a CPA with four years of audit experience with Ernst & Young, twenty years of CFO experience with NASDAQ traded banking organizations, and thirty years of teaching both accounting and finance in both undergraduate and graduate programs at higher education institutions. He has published over thirty articles in practitioner and academic journals, and is a coauthor of a textbook published by Pearson titled Forensic Accounting.

View more letters to the editor published here.

The post The 150-Hour Rule: A Case of Quantity Over Quality appeared first on Going Concern.

46 percent of student respondents cited “career stability and comfortable lifestyle” as one of the top motivations to pursue a career in accounting. The ability to find solutions within numbers and data (25%), the opportunity to contribute to society (23%) and the chance to impact sustainability (21%) rounded out the list. Almost 8 in 10 accounting and STEM students surveyed believe an accounting career will deliver long-term value and 34 percent of the students see a career in accounting as a steppingstone to other leadership opportunities.

Great. That’s all great. Let’s talk about this part though. There are citations littered throughout the text in EY’s report, we’ll hit each of them as we go.

The CPA career path advances opportunities

In a survey by the Center for Audit Quality (CAQ) and Edge Research, 82% of undergraduate accounting majors and 74% of recent accounting graduates find value in the CPA exam, citing respect, career advancement and higher earning potential as the top motivators for obtaining CPA licensure

They’re talking about this CAQ survey: Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities. The one that contains this quote:

The EY survey report continues:

CPAs bring desirable skills to C-level executive roles. According to recent survey data shared by the Association of International Certified Professional Accountants and the Chartered Institute of Management Accountants, the top undergraduate major among CFOs was accounting. Additionally, of the 652 CFOs surveyed in that study, close to 45% were CPAs.

They’re now referring to this: Diversity continues to rise among CFOs and CEOs, survey shows in Journal of Accountancy (January 2022).

Next:

Yet the National Association of State Boards of Accountancy’s data indicates that the number of CPA exam takers fell by almost 50% between 1990 and 2021. [Ed. note: new CPA exam candidate data came out just before EY released this survey and surprise, it’s worse]

Another cite here. The More Things Change, the More They Stay the Same: Addressing the CPA Pipeline Crisis written by Rick Reisig, CPA and published on NASBA’s blog on March 14, 2023. Choice quote from his article:

Yes, like me, many of us obtained a CPA license prior to the 150-credit hour education requirement, and we’re doing “just fine.” We need to acknowledge that we expect much more from our staff when they come to us — particularly during their first year with the firm—than we ever did before. If there were ever a time we need our young staff to come to us with more education not less, it’s now. That’s what CPA Evolution is all about–providing the education and the skillsets not needed yesterday, or even today, but those that will be needed for tomorrow! How can relying on the experience earned “yesterday” be an effective replacement for the education necessary to prepare our staff for what will be needed tomorrow?

Then EY swings back around to the CAQ report:

However, according to CAQ research on increasing diversity in the accounting profession pipeline, many students have expressed that the cost and time needed to reach the 150 credit hours required for CPA licensure serve as a big obstacle.

For 52% of the non-accounting students, not being able to afford the 150-hour obligation was a reason for not choosing the profession. This concern was even higher among Black (62%) and Hispanic (69%) respondents.

Interestingly, in the EY survey it’s the executives who support alternate paths to CPA licensure more than the students. 87 percent of executives surveyed believe the profession would benefit from alternate pathways to earning a CPA.

Said Becky Burke, EY Americas Assurance Chief Operating Officer: “Our survey findings underscore the importance of creating alternate paths for students to become CPAs. A career in accounting can open the door for many opportunities. Organizations, academic institutions and professional associations can collaborate to demonstrate the benefits that a career in accounting provides and remove potential barriers to entry.”

Right now the prevailing alternate pathway being considered is 120 units and two years of experience as introduced in Minnesota and hated on by the AICPA and NASBA. The debate on that continues.

Does the 150 Hour Rule Provide Value to the Profession or to Students as Future CPAs? No, Says Professor

The post EY Survey: Students and Executives Alike Support Alternate Pathways to CPA Licensure appeared first on Going Concern.

Some choice quotes from PKF O’Connor Davies interns:

“I never felt stressed being a part-time worker and a full-time student. The balance was great, and my advisors were always so understanding if I needed a day for school. What I really found extremely helpful is the trainings this office holds, and I have learned a lot from having specific training days on certain topics.”

“As interns, you are only expected to work the hours when you are able to work. Even though it was the busy season, no one ever pressured me to work long hours, I was also told to put school first. If I need to take my scheduled day off for school or any reason, it was always approved immediately.”

“Everyone in the office was very welcoming and helpful. This was the first time that I was doing auditing, and the office was small, so there wasn’t a lot of room to hide if I made an error. However, each person who I worked with never failed to walk me through each process and answer any questions that I might have had. There was never a time when I felt like I couldn’t reach out to someone for help. Each person, all the way up to the partners, was always willing to answer a question or steer me in the right direction.”

“Everyone is extremely approachable and friendly. It feels like a nurturing environment; there is no competitive or cutthroat air. I feel that the culture at PKF OD allows me to learn and become more comfortable and useful.”

Warms your heart, doesn’t it?

Not only did the top firm kill it, accounting firms took half the spots in the top ten. Those firms are:

• 4. Weaver (2023 rank: #14)
• 5. Frazier Deeter  (#25)
• 8. Lumsden & McCormick (#76)
• 9. Elliott Davis (#12)
• 10. Freed Maxick (not ranked in 2023)

Honorable mention: Grant Thornton coming in at #12 (2023 rank: #24). Actually, let’s grab all the firms on the list. Haters of the Big 4 oligopoly will note only one Big 4 firm made the list and it doesn’t appear until the bottom. The remaining best firms for interns, their respective ranks, and their rank on last year’s list are:

• 14. Frank Rimerman & Co. (2023 rank: #2)
• 19. Baker Tilly (not ranked in 2023)
• 22. Aprio (#4)
• 26. CohnReznick (#35)
• 28. BDO USA (#40)
• 32. Moss Adams (#20)
• 41. Cherry Bekaert (#71)
• 43. Wipfli (#56)
• 52. EisnerAmper (#17)
• 57. Marcum (#54)
• 61. Ryan (#84)
• 70. Armanino (#43)
• 72. PwC/Strategy& (#59)
• 94. Eide Bailly (#86)
• 97. Withum (#52)

To calculate scores, Vault surveyed thousands of current and former interns in the summer of 2023. On a scale of 1 to 10, with 10 being the highest and 1 being the lowest, respondents were asked to rate their internship experiences in six core areas:

• Quality of Life (company culture, hours, work-life balance, flexibility)
• Compensation & Benefits (pay structure, subsidized expenses, technology resources, office space, perks)
• Interview Process (application process, requirements, number of interviews)
• Career Development (including four separate ratings for training and mentoring, quality of assignments, real-life experience, networking opportunities)
• Full-time Employment Prospects (opportunity to obtain a full-time job with this organization)
• Diversity (including four separate ratings for diversity with respect to women, racial & ethnic minorities, LGBTQ+ individuals, and other underrepresented groups)

Vault scientists then assigned relative weights based on what interns said they value most in an internship. The overall scores are based on the following weighted formula: 30 percent career development, 20 percent employment prospects, 20 percent quality of life, 20 percent compensation, 5 percent diversity, and 5 percent interview process.

Although accounting had a heck of a performance overall this year, as you can see from the ranking above some firms are really killing it while others appear to be slipping and might disappear off the list altogether come 2025.

Interns of any of the listed firms are welcome to share their experiences in the comments or via editor mail.

The post List of the Day: The Accounting Firms on the 2024 Vault 100 Best Internships List appeared first on Going Concern.

When I was a junior in high school, I took my first accounting class. Admittedly, I’ve always been a little bit of a nerd and addicted to numbers, statistics, and anything of the sort. I loved the class. Looking back, there is nothing that I really learned in that class that helped me through my college years and into my first year at KPMG except for debits and credits, but it sparked my love for the profession. I made the decision to attend Dordt University in Sioux Center, Iowa because my dad works there, and it made tuition a lot more affordable. I was more fortunate than most. I double majored in Accounting and Finance, and I carried 6 credits into college, so I took about 144.5 credits over the next four years because everyone indicated that the CPA route was the way to go, and that was the “golden ticket” to a life that so many people desired.

Flashback to sophomore year of college, we experienced the Covid pandemic. Like most people, I had a lot of time to think about what I was doing, what I wanted to do, and where I wanted to go from there. I had coached baseball for 3 years at this point, umpired baseball games for 6 years, played basketball my whole life, and coached junior high football for a year. At that point, I was naturally interested in teaching and coaching because that seems to be what most people turn to when they have no idea what else they want to do with their lives. At this point, I met a local CPA, and he changed my life. I found someone who was personable, easy to talk to, and he had a purpose for what he did and why he did it that went beyond just the numbers that most accountants typically deal with. Because of him and others at the firm, I decided to stick with the accounting profession and finish out my four years at Dordt. I interned at that firm for 2 years during college, and I felt like it was a family. I watched as the CPAs/partners there coached people through their business, worked with them 1 on 1, and showed them places they could and couldn’t save money. They knew the people’s business better than what they did, and they showed that they cared with the way that they prepared for each meeting. There was only one time that I saw someone walking out of our office with a frown on their face, and that’s because one of the CPAs told them that they couldn’t commit tax fraud on their farm. Crazy how that works.

Following graduation, I took the summer off of work and umpired baseball games, golfed 18 holes, and studied for the CPA exams. I enjoyed the CPA study material, and it was helpful for me to have a structured way to study and feel as though I was tangibly working towards something and trying to achieve something that other people were unwilling to do. I truly believe the exams are a battle of attrition, and I think that anyone who studies for them and can pass them with a 75 or better (arbitrary) should be able to be a practicing CPA. 120 hours, 150 hours, associates degree, bachelors degree, high school diploma or not, I think that the exams were the truest test of what it takes to be a CPA. Not 1.5 hours of racquetball, wine tasting, basketball coaching, or the history and philosophy of education. I understand that some people want to keep 150 because they achieved it and they walked uphill into the wind through 6 inches of snow every day, but I think that the CPA pipeline is a real issue, and I think that people that want to keep 150 as an arbitrary measure of competence are extremely out of touch with the state of the profession and they will be sadly mistaken in a couple of years when they want to retire with their pension and they don’t have any capable associates, seniors, and managers left to be able to help them do so.

After (during) I worked towards the CPA exam, I began work at a Big 4. Like most public accounting experiences, it has been a mixed bag. I have had the opportunity to meet, work with, and network with some of the most intelligent people that I have ever met in my life. They know their stuff, they understand business, and (most importantly) they have a direction and a plan for where they want to go the rest of their lives. We have future CFOs, controllers, partners, professors, lawyers, and a myriad of other things in our office. That’s what makes Big 4 special, and that’s what I’ve found to be special about this office in particular.

However, I have lost my love for the work. And as much as I’ve tried to bootstrap it up and deal with it, I simply do not see the value in working my butt off for 50-60+ hours for 5-6 months out of the year for a company that does not care about my well-being, does not want me to be anything other than a number, and does not see the value in individuality and the skills that different people can bring to the table. I think that there is so much value in public accounting because of the learning, growth, and opportunity to take hold of your own career that it provides that other careers simply do not. It’s a special place.

This brings me to my next point. While I think that there is a lot of value in the accounting profession, I do not feel as though the accounting profession adequately values their people. As a CPA, we all paid for 150 credits and gave up significant areas of our lives in order to be in the situation that we are in. 150 v 120 credits aside, I think that more people are leaving the accounting profession than ever before because the compensation and benefits that we are offered do not align with the quality of work that we put in, the amount of hours that we are required to work during busy season, and ultimately the decrease in overall quality of life that people can experience when they are working in a public accounting firm. I have a few friends in different fields, and we talk a lot about our hopes and dreams and where we think that we can go in our careers. I have a friend that almost flunked out of college, took an extra year after walking across the stage to achieve his physical diploma, and he got D’s all through college. He works as a real estate agent, and he’s on track to make 2.5-3x what I made this past year. He works his butt off and so do I, but he has chosen a profession that allows him to chase his dream, live up to his potential, and utilize the skills that he spent a lifetime developing to make a career and build a life for himself that he believes is worth living.

I have another friend (Elijah Watt Sells winner) who spent a year at a Big 4 before getting into investment banking. He quadrupled his salary in a year. He works his butt off, works insane hours, but he’s compensated what he believes is fairly for the amount of work that he puts in. I have other friends in sales, financial planning, and a couple other finance-related fields that have similar stories. They have the opportunity, right out of college/university, to bet on themselves, go and make a difference, and push all the chips to middle of the table because they are holding a royal flush. Right now, I feel as though I’m holding a full house at the poker table and I’m betting the minimum every time the hand comes to me. For young, ambitious professionals with very little to lose, I do not see the value in working a stable job and getting a salary and praying for a bonus if you hit your utilization goals. We had “record setting” revenues this year, and most of the associates and seniors didn’t see a dime. Maybe expenses were up, but I think someone has a pile of cash and they will not share it.

I do not think that the quality of life that is promised by CPA firms is worthwhile for a young professional. In tax, we have approximately six months of busy season, which leaves six months to try to cram in everyone’s PTO that they have to use. If you don’t use it, you lose it. My boss was awesome about encouraging people to take PTO and trying to get them to go on vacation. However, there simply is not enough time in the year. Everyone is trying to take vacation, people have to stagger their vacations, and work is left in review for months at a time and then we are required to make review comments the minute that a manager or MD or anyone gets around to reviewing our work, and it throws added stress to a person’s life, decreases their quality of life, and drains any sort of soul or social battery that they have left in their body. It is not sustainable. I think that the people that made it as long as they have in public accounting have to be wired completely differently from me, because I don’t see how I could be 45, married with kids, and be able to be physically, emotionally, and spiritually present at the dinner table. I get that sacrifices must be made in order for someone’s career to go somewhere, but I don’t agree with the fact that people in this profession are required to put every piece of their lives on hold because a client needs a deadline met when they’ve been unresponsive for months, or we have to hit arbitrary 55+ hour requirements for the week when we got our work done more efficiently and with better quality than associates from other offices/business units. I think that public accountants are exceptional people, and I believe they should be treated that way. Other professions that do not require a rigorous education and licensure process are the rules in this situation, and they should be treated as though they are the rules. Exceptional people should be rewarded for their efforts.

I do not expect you to make it this far. I hope that individuals can work to widen the pipeline to the point that anyone who has ever even THOUGHT about pursuing the CPA designation has the resources to do so, and I hope that they can be encouraged along the way instead of pushed down by a “good old boys” club that grew up in a time where diversity and inclusion didn’t exist, and when people were satisfied working 40 years in the same cubicle so that they could maybe have enough money to retire when they were 65 and enjoy life for 2 years before they died of stress, heart attacks, or boredom from wasting their life sitting at a desk for an employer who never cared about them anyways.

I quit my job cold turkey. I passed my work to my coworkers because they know I’m chasing a greater purpose, and that purpose will not be fulfilled in a cubicle and filling out timesheets. Other people can do that, and they are very good at it, and that’s how they can serve and lead. Not me.

I’ll leave you with this, and it’s a spin-off from an Oscar Wilde quote that one of my friends sent me:

You can be an accountant, you can be a lawyer, you can be a politician, doctor, nurse, farmer, pastor, or whatever you want to be. And, if that’s what you BECOME, then you have failed. Your life was not worthwhile. You have wasted your time, your talent, and most importantly, your family’s time because they didn’t get a fulfilled person. That is your PUNISHMENT. But, you can also be a dynamic person, try different things, reinvent yourself, be a person in the world, and be the hands and feet of Jesus to everyone that you meet. You can go and do, be and become, and if you do that, then you become NOTHING. Hopefully you die with nothing because you gave it all away. And, everyone’s lives that you touched will write your obituary. Because you don’t get to do that yourself, everyone else does that for you. You can’t change THE world, but you can change YOUR world. And if you do that, that is your REWARD, and that is forever. Take a risk in whatever capacity you feel called, but go out and do it. Go and Do.

Be and Become.

The post Letter to the Editor: Life in Public Accounting Doesn’t Add Up For Young Professionals appeared first on Going Concern.

The phys.org write up is titled:

Accounting is facing a labor crisis. Could fraud be part of the solution?

OMG they’re serious. And it says:

Expert concerns of a potential rise in financial fraud with fewer accounting professionals in the field notwithstanding, fraud plays a surprising role in the accounting labor force, according to new research from the University of Florida.

“Research to date suggests that financial fraud can have damaging consequences, like increased criminal activity as well as reduced trust and participation in capital markets,” said Assistant Professor Robert Carnes. “Insights from these studies imply that fraud would create a negative stigma around the labor market for all business fields, and accounting in particular, but we find the opposite.”

Carnes, along with co-authors Paul Madsen of the University of Florida and Dane Christensen of the University of Oregon, find that incoming students are actually more likely to major in accounting when local frauds occur during their formative years. Specifically, the researchers find a 4% increase in the likelihood of majoring in accounting when local financial frauds are covered by the news media during students’ formative high-school years.

“This size effect is modest,” Carnes explained. “But we view it as meaningful because it suggests that fraud does not harm the flow of students into the accounting major, but rather it attracts more students.”

The abstract explains further (emphasis ours):

Financial statement fraud generates many negative effects, including reducing people’s willingness to participate in the stock market. If it also stigmatizes accounting, it may similarly adversely affect the quantity and quality of workers willing to become accountants, thereby potentially creating negative effects for years to come. We examine the impact of fraud on the labor force entering the accounting profession, which is a key input into the production of accounting information (i.e., the output). Using data describing millions of college students across the United States, we find incoming students are actually more likely to major in accounting when local frauds occur during their formative years. These students are also more likely to have attributes desired by the accounting profession (e.g., high academic aptitude) and are more likely to subsequently serve in public accounting and become Certified Public Accountants. In the context of other fields (i.e., all college majors), we find that fraud similarly spurs interest in other business disciplines, but not in majors outside of business schools. Those attracted to other business disciplines, however, generally possess different traits. Specifically, students entering accounting are distinctively more likely to exhibit values espoused by the accounting profession, including a predisposition to public service and less commercial orientation. Thus, nonpecuniary motives appear to uniquely drive accounting student enrollment following fraud. Collectively, our findings suggest that, while fraud is unmistakably bad, it appears to have the positive unintended consequence of attracting labor into business disciplines and, in accounting, increasing the prevalence of desirable traits among entrants.

Well clearly there have to be some nonpecuniary motives at work otherwise accounting graduate numbers would be even lower than they already are.

The data also suggests that accounting graduates with higher rates of fraud exposure in high school are more likely to work in public accounting, work for a Big 4 firm, and become CPAs. So get to frauding, people!

The post Who Had ‘Do More Fraud’ on Their Things That Could Save the Accounting Profession Bingo Card? appeared first on Going Concern.

Says the AICPA, bachelor’s degree completions in accounting dropped 7.8% from 2021–2022 after steady decline of 1-3% per year since 2015–16. Master’s degree completions also fell in 2021–2022 (-6.4%) but the percentage decline is significantly less than in 2019–20.

65,035 total accounting degrees completed for 2021-22. So 3,964 fewer bachelor’s and 1,246 fewer master’s for a total of 5,480. Since accounting graduate numbers peaked in 15-16, here’s the difference by year compared to prior year. As always, accountants are encouraged to audit the math:

• 2016-17: 1,336
• 2017-18: 394
• 2018-19: 2,204
• 2019-20: 3,391
• 2020-21: 2,408
• 2021-22: 5,480

Comparing the latest report to 2015-16 that’s 14,819 fewer BS and MS degrees for 2021-22.

Anyway, while we crunch some numbers and work up some obnoxiously snarky observations on the 2023 Trends report, you can catch up on where we were when the 2021 report was released in early 2022: State of the Accounting Profession 2022 Via the AICPA Trends Report

The post The 2023 AICPA Trends Report Shows Things Are Looking Up For Accounting Grad Numbers! JK They Suck appeared first on Going Concern.

We’re a little late on this, only found out because of this txeet from @BYUSOA:

Don’t forget to check out the new BYU dress and grooming expectations!#byuaccounting pic.twitter.com/csmcTOOUyv

— BYU Accounting (@BYUSOA) October 12, 2023

Being a person who probably violates the BYU honor code on a daily basis in just about every way possible, I had to look it up. This is from the Church Educational System (CES) Honor Code on Dress and Grooming Expectations, not to be confused with Dress and Grooming Principles:

• Dress for men and women should:
  • Be modest in fit and style. Dressing in a way that would cover the temple garment is a good guideline, whether or not one has been endowed. [Ed. note: Get your mind out of the gutter, I know what you’re thinking] Accommodation may be made for athletic participation.
  • Be neat and clean. Sloppy, overly casual, ragged, or extreme clothing is not acceptable.
• Grooming
  • Hair should be clean, neat, modest, and avoid extremes in styles and colors.
  • Men’s hair should be neatly trimmed. Men should be clean shaven. If worn, mustaches should be neatly trimmed.

A brief FAQ explains further:

Are there specific changes in dress and grooming now?
Yes. For example, students on each campus will be allowed to wear shorts, provided those shorts are in keeping with the principles and expectations given. As noted above, dress and grooming decisions should align with the Dress and Grooming Principles and Expectations, and application of these principles is not limited to the expectations listed. We are striving to create a culture that is consistent with the distinct religious purpose of CES institutions.

Remember, this is not promoting modesty, cleanliness, neatness, and restraint in dress and grooming:

The post The CPA Exam Whizzes at BYU Accounting Can Wear Shorts Universally Now appeared first on Going Concern.

[She] said having the equivalent of five years of higher education remains a good idea, and removing the requirement is no silver bullet for dealing with a talent shortage. It took about two decades of work to align all 50 US states around the current standards and get agreement to recognize each other’s licences, and trying to repeat the feat looks daunting.

“What exists is a very delicate system of agreement and trust,” she said. “This has been my challenge with Minnesota. It just takes one to upset the apple cart and that could upend mobility across the country.”

With the AICPA’s position in mind, here are some highlights from Boz’s apple cart-upsetting post on the MNCPA blog:

Simply put, the 150-hour requirement is a barrier to entry into the accounting profession. Research done by John Barrios, an assistant professor of accounting at Washington University in St. Louis, found that the 150-hour rule reduced those taking the CPA exam by 15%. When that barrier is reduced, more candidates will take the exam. Research done by Berry College professors Brian Meehan and E. Frank Stephenson found that elimination of the 150-hour rule (to take the exam) increased those taking the CPA exam by 25%.

What is troubling is there is no evidence that this barrier has elevated the profession. Barrios found that those with 150 hours did not have higher CPA exam pass rates, nor did those people stay longer in public accounting or more quickly become a CPA firm partner. Meehan and Stephenson found that elimination of the 150-hour rule (to take the exam) did not impact CPA exam pass rates, suggesting that the 150-hour rule does not necessarily eliminate poorer performing candidates.

GET OUT OF HERE WITH YOUR FACTS AND RESEARCH.

In a guest article published here on GC in August titled “150 Hours is a Barrier – Really!,” fellow educator Sharon Lassar, John J. Gilbert Professor and Director of the School of Accountancy, University of Denver, wrote of the Barrios study:

Satisfyingly, Barrios found value in earning a master’s degree. He did not find value in a hollow extra 30 credit hours. Those with a master’s degree are promoted faster. As the academic director of the MACC and STEM-Qualified Master of Science in Accounting, Technology, and Analytics at the University of Denver, I enjoy reading research that supports my personal observations. Our graduate degree holders are promoted quickly, given big raises, and constantly recruited by placement professionals.

Back to Boz:

I have not seen one single piece of research that supports the 150-hour rule. The AICPA has provided no evidence to support its claims that Minnesota’s efforts to offer alternative pathways are “lowering the bar” or that the 150-hour requirement has “elevated accounting from a trade to a profession.” For a profession that prides itself on evidence-based decision-making, the AICPA’s comments are quite troubling.

But MuH MoBiLiTY

This fall, I began my 20th year of teaching as a university accounting professor. It will be my 20th year of helping students navigate how to earn the 150 hours needed to become a CPA. I imagine very few professors in the nation advise more students than I do. When my students ask me why they need 150 hours, all I can tell them is, “Because it’s the rule.”

When they ask if the rule provides value to the profession or to them as future CPAs, all I can tell them is what the evidence has shown: No.

Students take a hit on both the revenue and expense sections of the income statement with the requirement to have 150 college credit hours: lost wages and increased tuition and fees. When aggregated, this is tens of millions of hours and hundreds of millions of dollars.

And yes, he did the math on that:

My simple estimate, which needs refining and is for discussion purposes only, is that the nation’s 33,000 new CPAs each year require an average of 20 additional credits, which is 660,000 total credits. One credit is intended to be 40 hours of work. The result is 26.4 million extra hours per year. Applying an inexpensive rate of $300 per credit, I compute an annual cost of $198 million. My sense is the number of hours is high but the cost may be low.

In summation:

Education is valuable. As a profession, we are lifelong learners. As an educator, I acknowledge that learning includes both classroom and work experience. The debate about 150 hours is not about the value of education, it is about setting practical requirements for CPA licensure that align with the demands of the profession. Flexibility in combining formal education and work experience supports the values and demands of the profession.

If you’d like to jump into the fray to discuss the topic on Boz’s LinkedIn you can do so here or let ‘er rip in the comments. If you prefer, you can write a letter to the editor with your opinions on the 150 hour rule, for or against.

We must change the conversation around pathways to CPA licensure [MNCPA]

The post Does the 150 Hour Rule Provide Value to the Profession or to Students as Future CPAs? No, Says Professor appeared first on Going Concern.

The Illinois CPA Society (ICPAS), in partnership with the Center for Accounting Transformation (the Center) and other stakeholders, has launched a survey to figure out why modern day accounting students and professionals are so uninterested in pursuing the CPA credential. ICPAS tackled the issue before in 2020’s A CPA Pipeline Report: Decoding the Decline but things have changed since then and young people who graduated into the pandemic may have unique perspectives. Or it will just be the same perspectives and the profession will have more data points echoing them. The new findings will be published and shared to bring awareness of, and renew focus on, the most relevant and effective strategies to promote the CPA credential and ensure its sustainability and relevance moving forward, said ICPAS in a press release.

They also said:

A key focus of this survey is to understand why a growing number of accounting students and young professionals in accounting and finance careers don’t finish the CPA exam or elect to never take it at all. Accounting and finance students and professionals under the age of 35, with and without the CPA credential, are encouraged to complete the survey. The organizing partners also encourage all accounting and finance professionals to share the survey link with those they know in the target audience.

The responses are anticipated to reveal recent trends and key issues that will arm CPA profession leaders and stakeholders with a deeper understanding of the current perceptions of the profession, the decision-making process regarding pursuing or not pursuing the CPA credential, and the perceived value and relevance it holds today.

“The profession is aligning on the approaches necessary to help stem the tide and ultimately reverse the negative CPA talent pipeline trend we’re collectively facing,” says Geoffrey Brown, CAE, ICPAS president and CEO. “While there’s more research than ever on this topic, interest continues to be high in learning more about the perceived barriers deterring prospective CPAs from ever pursuing the credential. A lot has happened in the three years since our last survey was issued, which is why we were compelled to partner with influential stakeholders across the country to garner a fresh look.”

Survey here, it takes about 10 minutes to complete and you have until December 15, 2023 to do so.

The post Students and Professionals Under Age 35 Are Invited to Take This Pipeline Survey appeared first on Going Concern.

Free pizza for everyone on the governor? Not quite. In November, dozens of Wisconsin CPAs are heading to high schools throughout the state to preach the joys of a career in accounting (that’s not as sarcastic as it sounds) and inform students of their many options should they be interested in language of business fluency when they grow up.

“This is a great way for our members to give back to the profession and volunteer their time to talk about the career opportunities available in accounting,” said Tammy Hofstede, WICPA president and CEO.

Wisconsin CPAs who want to do their part can find more information from WICPA here.

The post Wisconsin Is Putting Its CPAs to Work For ‘CPA Appreciation Month’ appeared first on Going Concern.

Different generations in the workforce often struggle to understand each other. But experts say one thing that young professionals can do, including young accountants, is to be more patient.

Jerry Maginnis, former office managing partner of KPMG in Philadelphia and author of the new book Advice for a Successful Career in the Accounting Profession: How to Make Your Assets Greatly Exceed Your Liabilities, told me on my podcast that younger professionals have short attention spans and they’re very interested in what’s next. Their mindset is: “I’ve been doing this job for six months; when will I get promoted?” or “When will I have my next opportunity?” That kind of ambition is not necessarily a negative, but Maginnis said it can get in the way of a successful career if they change jobs or switch departments every time they hit a few bumps in the road.

“Let’s say they’re in public accounting, and they get assigned to an engagement with a manager or client they don’t particularly like,” asked Maginnis. “Or suppose they have to put in very long hours for a few weeks. Too often, young people will say: ‘That’s it. This isn’t the right profession for me. I’m leaving.’”

Instead, Maginnis said you have to give things time to play out because your next engagement might be with great people and a terrific client that ends up defining your career. But by bailing out too soon, you miss it. Maginnis recalls early in his career when Newt Becker, founder of the Becker CPA exam prep courses, told him that every year spent in public accounting is the equivalent of two years in private industry. But too often, young CPAs flee public accounting for what they believe are the greener pastures of industry and miss out on that learning and development.

It’s no secret the workload is notoriously tough for young accountants starting in the Big Four. It’s often described as “trial by fire” or “getting thrown into the deep end of the pool.” This could intimidate and discourage anyone, including people just starting their careers. But you have to show some grit and not be afraid to ask for help.

As Maginnis details in his new book, firms of all sizes have become much more sensitive to the importance of work-life balance, mental health, and the overall well-being of their employees. “As a profession, we have a way to go, but there are many firm-wide programs and initiatives to support young professionals through this,” noted Maginnis. By the same token, Maginnis said young professionals are sometimes “their own worst enemy” because even at age 22 or 23, they need to take ownership of their schedules (and their lives) and set priorities. He said firms don’t expect anyone to work 75 to 80 hours a week, and you shouldn’t be afraid to ask for flexibility – even during busy season – if you have important family or social commitments during the early evening on weekdays. He said you can usually trade off with co-workers to go home earlier on those nights and then work later on other nights.

Maginnis said most firms give you 30 days of PTO when you walk in the door. That’s the equivalent of six weeks off right off the bat. And for much of the year, the workload is closer to 40-hour weeks, with occasional 50-hour weeks.

Intellectual curiosity, advocate for yourself

“At KPMG, almost everyone came in with a baseline level of skills that enabled them to be successful in their job,” observed Maginnis. “The ones who rose to the top were the ones who showed great intellectual curiosity and who were avid learners.” In other words, they weren’t satisfied with understanding debits, credits, and audits. They wanted to know about the client’s business model and how they made money.

They wanted to know about their international expansion strategy and technology use. “The hallmark of a great auditor is not just understanding debits and credits, but understanding how the client makes money and the economics and the cash flows,” added Maginnis. “A lot of the auditing failures we’ve seen in the past could have been avoided if people got beyond the debits and credits and thought about the substance of the economic transactions they were auditing and whether or not they made sense,” noted Maginnis.

From where I sit, accounting gives you a great window into the inner workings of a company. That’s why it’s such valuable training for many business careers.

Importance of soft skills

While there is so much emphasis on staying current with technical skills, I’ve found that so much of success in the accounting profession revolves around your ability to work effectively with others, whether it be your client, colleagues, or peers. You could be the smartest person in the world and have all the answers. But if you’re challenging to interact with, you’re probably not going to do well. One of the most common complaints Maginnis hears from fellow managers is that their younger colleagues don’t possess soft skills. He’s hoping to see soft skills stressed more in the accounting curriculum but feels many advisory boards think some of the ever-changing “core requirements” would have to be eliminated to make room for soft skills. That can be a tough fight to win.

Maginnis recalls a situation early in his career when he was assigned to a large engagement with a principal client official who was rude and hostile toward the entire audit team. Instead of bad-mouthing the official or begging for a transfer, Maginnis invited the hostile client official out for coffee and tried to understand where he was coming from.

Maginnis quickly learned the official needed help understanding the role of independent auditors or why they were asking him to do certain things or provide so much documentation. However, after Maginnis patiently explained the role of auditors, the client asked Maginnis for regular weekly coffees and pointed out several areas in which KPMG could be more efficient. Long story short, Maginnis made partner a few years later, and the once hostile client was among the first to write him a congratulatory letter.

It’s a great success story, but Maginnis quickly points out that bringing in the business and building client relationships is not the only criteria for making partner. He said soft skills that include building relationships with team members and helping younger professionals achieve their potential are just as critical as business development and strong technical skills.

And, of course, having a high degree of intellectual curiosity about understanding the client’s business better or what’s keeping the C-suite up at night. “What are their biggest challenges? What are their biggest opportunities?” asked Maginnis. “It’s about being not only a student of the client (what their needs are) but being a student of your own firm — knowing all of the firm’s capabilities and how they can help the client make better decisions,” noted Maginnis.

Specialties to consider

Every business needs accountants, from local mom-and-pops to multinational corporations. “Young people today have the opportunity to marry a personal passion with the type of organization that needs accounting services,” said Maginnis. “It could be sports and entertainment, tech companies, life science companies.” There are also hot areas of specialization, such as forensic accounting, since AI has accelerated the pace and scope of fraud. There’s also the cannabis industry, digital currencies, and artificial intelligence. These emerging industries have some unique accounting and reporting issues and tax issues.

As a profession, we must better explain why accounting is a great, exciting profession and why it can provide young people with many opportunities. Unfortunately, Maginnis said the awareness level is not where it should be, and the stereotype of long hours, tedious work, unappreciative clients, and nerdy coworkers persists. He said the misconceptions became readily apparent after he retired from KPMG and started teaching at Rowan University near his home in New Jersey. He found the students highly motivated and curious about stable careers like accounting. But, they had concerns about the long hours, the 150-hour rule, the fear of boredom, and the lack of work-life balance.

Conclusion

“It dawned on me that there might be a broader need for explaining what accounting careers are like, the doors they can unlock, and the importance of forming good habits that will serve you well for a lifetime,” said Maginnis. What kinds of career advice are you giving young professionals? I’d love to hear more.

Blake Oliver, CPA, is the founder and CEO of Earmark and co-host of The Accounting Podcast, the No.1 podcast for accountants and bookkeepers.

The post Listen Up, Young Accountants: Career Advice For Sticking Out Those Early Years appeared first on Going Concern.

She’s riding a skateboard because you can’t afford a car on a public accounting starting salary.

Why’s there a bearded hipster hanging out creepily in the back?

Some appropriate Twitter reactions:

Vibes: pic.twitter.com/p9pqErdnyG

— Matthew J. Cordes, EA (@cordes_tax) September 26, 2023

CPAs be like pic.twitter.com/FwlwKqi2s7

— Daily Tax Memes (@DailyTaxMemes) September 26, 2023

Someone there watched Barbie one too many times

— Jack Castonguay, PhD, CPA (@profjackc) September 26, 2023

pic.twitter.com/P5h8whajDM

— Nick Meals (@nickmeals) September 26, 2023

Earlier: AICPA Council Approves 12-Point Plan to Do F*ck All to Solve the Accountant Shortage

The post AICPA Unveils Its Most Desperate Pipeline Initiative Yet appeared first on Going Concern.

I love accounting. Though an attorney and not a CPA, I’ve spent over 30 years in and around the CPA profession, retiring from PwC as a Principal. The profession provided me with a lifestyle I never believed possible. But not until being appointed to the Maryland State Board of Public Accountancy following my retirement did I truly understand how ‘white’ the profession had become – only 2 percent of CPAs are black – and how difficult it has been to change that. Shame on me for not taking notice sooner.

The CPA profession knows this is a problem and is struggling with its causes – and solutions. A high level Advisory Group was recently empaneled by the AICPA, in conjunction with NASBA, to seek ways to increase the numbers of students becoming CPAs. This follows the previous National Committee on Diversity and Inclusion, as well as the AICPA’s Pipeline Acceleration Plan. CPAs love to study things.

Many in the profession, especially at the state CPA society level, believe the 150-hour education requirement is a major cause for the lack of especially minority students entering the profession, if not the sole cause. Their argument makes sense when you consider the additional year of education was approved by the AICPA and NASBA in the late 1980s when colleges cost much, much less and few students graduated with crushing debt loads. No one could have foreseen that costs would increase an astounding 200 percent. If so, it’s likely the profession would have made a different choice. Given that college costs are unlikely to drop, and probably continue to rise, the issue needs to be addressed.

Many studies have shown that minority students are especially sensitive to the cost of college and wary of debt; as such, the lack of minority students becoming CPAs becomes a cost-benefit function. The juice isn’t worth the squeeze in the words of one politician. Becoming a CPA requires five years of college education including a baccalaureate degree, an additional year of work experience and passing the very difficult Uniform CPA Examination. For around the same amount of time and cost one can become a lawyer, whose bar passage rates in most states are much higher than for the CPA exam, as is starting pay.

To make becoming a CPA less expensive, I support allowing students to use on-the-job ‘experiential learning’ credits to meet their 150-hour requirement. Students work full-time and get paid while concurrently fulfilling their one-year experience requirement. The work they perform is their education, and is incorporated into on-line courses specifically designed by accredited institutions, and the credits go on a college transcript. This approach would satisfy state mobility and substantial equivalency requirements and, from a regulator’s perspective, it provides assurance the courses are as academically rigorous as any other course provided by the accredited institution, on-line or not. Being on-line significantly lowers the cost of providing the course for the institution, and doesn’t take up a physical ‘seat’ which can be taken and paid for by another student, so tuition should be less.

Just as important, since experiential learning credits are no different than any other credit on a student’s transcript, they should be accepted by every state board of accountancy without their having to change a statute or rule. The two state accountancy boards to consider the issue to date, New Jersey and Maryland, have come to this conclusion. This means that experiential learning can be quickly implemented. It can buy time for the profession to think about the 150-hour requirement yet help attract especially minority students to the profession in the interim. Plus, regardless of whether 150-hours is maintained or not, experiential learning still deserves to be utilized.

Accounting academics and especially accounting department chairs fret that experiential learning courses, and the AICPA’s Experience, Learn and Earn program which enables students to work their last year while learning on-line, may deter students from pursuing a Masters in Accounting. The concern is that students who leave the classroom may not return. But the fact is that students are already abandoning Masters in Accounting programs. Neither ELE or experiential learning can be blamed for that.

The good news is that college presidents typically view experiential learning programs positively, and a number of schools utilize them. Vanderbilt was recently honored for its experiential learning program, as was Pace University, Indiana University, Tufts, University of Alabama, the University of North Carolina at Chapel Hill, NYU, Columbia, Boston College, Rutgers University and a number of other nationally recognized schools. In my state, one of the University of Maryland’s schools has an extensive experiential learning program, though not for accountants – yet. What is needed for that to happen are employers who are willing to work with educational institutions to shape experiential learning programs for accounting students, and employ them in their firms and businesses.

If only two percent of the workforce of Starbucks were black, no amount of corporate explanation or detailed studies would keep their customers from boycotting and demanding change. Yet, individuals and businesses which otherwise support social change and racial equity are complacent to allow their CPA advisors to continue to be overwhelmingly white. It’s only a matter of time before their patience with the profession runs out. A CPA degree can lead to a multitude of highly rewarding career paths, including small business owner, corporate CFO and Comptroller as well as consulting and other advisory roles. Minority students should not continue to miss out on these opportunities. It is the obligation of the profession to make sure that does not happen.

Joe Petito currently serves on the Maryland State Board of Accountancy and on the board of directors of the NASBA center for the Public Trust. He has served on numerous AICPA and NASBA committees, including the AICPA-NASBA IQAB Committee, the AICPA-ABA National Conference of Lawyers and CPAs, the NASBA Legislative Support Committee as well as on the board of directors of the National Judicial Conference. He currently resides in Bethesda, Maryland.

The post Opinion: On-the-Job Experiential Learning Credit to Meet the 150-hour Requirement Makes Sense appeared first on Going Concern.

The AICPA announced the formation of a National Pipeline Advisory Group, published an article about its focus on the accounting talent shortage, and scheduled a webinar titled “Special Pipeline Series: Path to 150.” All of this happened after the Center for Audit Quality (CAQ) released its study titled “Increasing Diversity in the Accounting Profession Pipeline.” I previously wrote about this CAQ diversity study and I have been watching for the AICPA to acknowledge its existence. I have yet to see it.

Why is the AICPA ignoring a study that provides insight on an issue the AICPA has been trying to address since the mid-1960s? From 2008 to 2011, I served on the AICPA’s Minority Initiatives Committee and learned the history of various initiatives. Yet, the AICPA is ignoring a sound study that identifies root causes for the lack of diversity in the profession pipeline.

Maybe the study shows something the AICPA and NASBA do not want known. That is, the 150-hour rule has a disproportionate effect on underrepresented minorities. Those arguing to keep some version (any version – no matter how watered down) of the 150-hour rule will not consider other points of view.

The CAQ surveyed 1399 undergraduate business students with 35% identifying as Black/African American and 33% identifying as Hispanic. Black and Hispanic students change majors during college at a higher rate than other students. Overall, 40% of non-accounting majors considered majoring in accounting, and the percentage is higher among Black and Hispanic business students at 50% and 48%, respectively. Given such a high percentage considered majoring in accounting, it is important to understand why they ultimately decided against it. There are many reasons; please read the study.

Relevant to this commentary, is that 56% of White students who decided against accounting as a major identified not wanting to pursue 150 hours to become a CPA as a reason. This percentage jumps to 64% and 70% for Black and Hispanic students, respectively. Data show the 150-hour rule is a barrier and it is more of a barrier for Black and Hispanic students than for White students.

Rather than removing the barrier, some professional associations propose alternative paths to obtain the 150 hours. Those paths, however, may be a way to keep down those from humble beginnings.

Academic research finds no value in a 150-hour rule. Conversely, it demonstrates the value of a master’s degree. Dr. John Barrios found those with a master’s degree are more likely to be employed by a Big N firm, spend less time at each position, have more jobs, and are promoted more quickly. Dr. Alisa Brink and her coauthors found that individuals obtaining a 150-hour bachelor’s degree compare unfavorably to those who obtain a graduate degree in the likelihood of promotion from Senior Manager to Partner. The Experience, Learn and Earn (ELE) program created by the AICPA and promoted by NASBA falls in the 150-hour bachelor’s program category. ELE students do not earn a graduate degree.

A master’s degree is the most valuable way to meet the 150-hour rule. Students with the means to pursue this path will continue to do so. For those students without the means, less-valuable paths are available and ELE is yet another one. That less-valuable path may just “keep you in your place” – with more time in your position and a slower promotion track. Is that really what we want? The decision to keep a 150-hour rule where NO research demonstrates it has value is making our lack of diversity more pronounced.

If you believe that the CPA profession can be a life-changing choice for individuals, particularly those who come from humble beginnings and are willing to learn, work hard, and improve their communities, remove the 150-hour barrier.

The post Keeping the 150 Hour Rule Is Making the Profession’s Diversity Problem More Pronounced appeared first on Going Concern.

He writes:

Two of the visitors were teachers at a University. The first guest speaker was an accountant who told us what it was like being an accountant and told the class the requirements and qualifications to get there. The second guest speaker taught business and finance. The third guest speaker was a college student from a University whose major was in accounting.

Behold, the first two guest speakers:

Accounting: The first guest speaker highlighted the different fields of accounting. He said accounting would be a good paying job right after college. He took four to five years of College and took Business in high school. After those four to five years of college he said he took the CPA which is a big test for accountants. The CPA is a big test which opens you up to many people and bigger opportunities and a better career position. He also talked about how he knew it was the right career path for him. He said during his entire life he had always been into puzzles which is something similar that all the speakers had in common.

Business and Finance: When he was younger he said when he was fifteen he got into business and finance whenever he saw a person he knew with a really nice car that he thought was cool. He asked the person how he was able to afford it and said he worked in finance. The speaker said this motivated him because he wanted really nice things, a family, and having more freedom than being an accountant.

accounting and finance pic.twitter.com/OnOs1TUpV4

— memes.xlsx (@ExcelHumor) March 9, 2023

The post A Tale of Two Business Majors Speaking to Young People About Their Careers appeared first on Going Concern.

Anyway, enough with the corny shit. When this opinion piece popped up in my Google News I was hoping for a refreshing take on the benefits of accounting as a career and some passionate cheerleading. Maybe a field report from some young, enthusiastic former partner who started in public and ended up controller at a cool startup or doing taxes for NBA stars or something. Perhaps finally some common misconceptions would be smashed!

Nah.

Accounting is a field with high demand, and successful accounting students are virtually guaranteed employment upon (or even prior to) graduation. I’m involved in recruiting for one of the largest accounting firms in Connecticut. When I talk to students about their biggest concerns in pursuing an accounting degree and a career in public accounting, they typically point to four misconceptions: lack of work-life balance, the difficulty of the CPA exam, lower pay compared to other financial career paths, and lack of excitement in the work.

Each of these objections is based on a misunderstanding of what a public accounting career is really like in 2023.

With all due respect, sir, these are not misconceptions. Pretending as if they are does a great disservice to young people and is part of the reason why the younguns have issued a collective “fuck that” when it comes to accounting. It depends on the firm of course but given that professors across accounting departments everywhere urge students to go into public accounting (miserly Big 4 firms in particular) with the threat of a pathetic career doing taxes in a strip mall for the rest of your life if you don’t, we need to be honest about starting salaries at public accounting firms. Yes, accountants have incredible lifetime earning potential. Fact. Yes, CPAs do even better over a lifetime. Fact. Good luck selling that to a 22-year-old kid with data analytics skills who can make buckets more money out of the gate in a different field when there’s a cost of living crisis.

The disappointment only grows from there. Here’s his take on work-life balance:

In accounting, finding balance is a matter of weighing the value of hard work and career progression. You get out of the job what you put into it. But the job doesn’t have to include excessive overtime hours every January through April. There’s been a shift in expectations in the industry — while you may be asked to work some overtime during the busier times, you have more flexibility around your schedule to accommodate other events in your life.

“You get out of the job what you put into it” compelled me to Google this guy, you can imagine my shock when I found a young Gen Xer and not an old man who had to walk to the uphill both ways in the snow to sit for all four parts of the CPA exam on a hard chair in a cattle barn on the Indiana State Fair Grounds over two days.

Way to minimize the reality for countless public accountants. Some of them are working more than ever due to firms being short-staffed, the offshore teams have it even worse. This claim is disingenuous at best, he should have stuck to the “yeah you have to pay your dues early on but it pays off as you advance up the ladder” pitch. Is there greater flexibility these days? Sure. Because people started quitting en masse if they couldn’t get it. It shouldn’t have taken a worldwide pandemic for firms to start letting people pick their kids up from school in the afternoon and finish their work from home later in the evening. Do many government and industry accountants have it better? Yep. Could have led with that, at least that’s mostly factual. And a big reason why so many accounting grads are bypassing public completely and going straight to industry or sticking to the more progressive tech-focused small firms. Let’s not lump them in with the public accounting meat grinder.

Moving on. The CPA exam is hard. Fact. Much like the ritual beating one must endure to gain lifetime membership into a street gang, it is at its core a test of one’s dedication to the profession with a test of entry-level knowledge secondary to that. “The path to becoming a CPA is challenging, but doable if approached strategically,” he says. Well obviously. If it wasn’t doable, no one would do it. Increasingly, they aren’t. This is a value proposition problem and as of now, the profession has not done a good enough job demonstrating value, something you’d think a bunch of accountants would excel at (no pun).

It’s true that becoming a CPA takes effort and dedication. A fifth year of college is generally required (to obtain the 150 credit hours required to become a CPA) even if you’re not getting a master’s degree in accounting.

Also, the CPA exam is hard. Only about 20 percent of candidates pass all four sections on the first try — a lower pass rate than the bar. But you don’t have to take all four parts at once, and the rates for passing each section are much higher, about 50 percent. As the AICPA points out on its website, “The Exam is not harder or easier to pass at different times. An increase in pass rates simply means that candidates are better prepared.”

The exam is doable if you approach it strategically, and the additional time and effort invested in becoming a CPA is worth its weight in gold.

This is your selling point? If I’d written this, I might have referenced This Way to CPA’s Why CPA? page. Under the “What’s in It For You?” section:

10-15% higher salary than regular accountants
Becoming a CPA is an investment. CPAs have the potential to boost their earnings by $1 million of their lifetime compared to a non-CPA in the same position.

I would not have referenced this from UWorld Roger CPA Review:

According to Monster Jobs, a CPA’s earnings over the course of 45 years is $3,200,000 if the starting pay is at $46,200 and the pay at 20+ years is $76,000. Such salary data was compiled by looking at the expected lifetime median earnings which were calculated for a 45-year period based on median annual pay levels for 1, 5, 10, and 20 years of experience in each position.

Yeah that’s got to be old info. It checks out though.

Thankfully those numbers have edged up in the last few years though it’s looking like the big jumps of last year are cooling off now.

Finally, here’s his pitch on salaries:

CPAs have a very strong starting salary, and comparisons can be deceiving

The idea that the pay for an accounting major coming out of college is lower compared to other finance or business careers is a bit misleading. Most college students in accounting have a job locked up by the beginning of their senior year — demand is that high. Everyone who leaves school with an accounting degree seems to get a job.

Bro at no point in that paragraph did you explain why it’s misleading, all you did was gaslight people about the accuracy of countless salary reports.

He does add:

Starting salaries in public accounting in 2023 are very good, typically exceeding $70,000. While other financial and professional fields might state similar or higher starting salaries, it’s important to note that they aren’t typically placing as high a percentage of students. It’s harder to get those jobs, and there aren’t very many of them, despite the volume of the surrounding buzz.

Like how he says “might state” as if investment banker salaries are some wildly unreliable As Seen on TV claim. Per the US Census Bureau, the median annual income for Americans in 2021 was $70,784. “Very good” is dependent on a lot of factors, for some people $70,000 is in fact very good. Let’s not kid ourselves, accounting salaries have lagged behind other fields for a very long time (see this 2022 Bloomberg Tax article “Accounting Faces Reckoning After Years of Sluggish Pay Growth“).

Now, high demand is an accurate selling point. In fact, it might be the best one the profession has. Young people may fall victim to being seduced into other career paths with the lure of better starting pay but at least some of them could be swayed into accounting by emphasizing that even in difficult economic times, accountants can find work more reliably than their classmates who went into tech or law. See also: At Least We Aren’t in Tech, Boast Smug Accountants Who Didn’t Get Laid Off Today. Sadly the layoffs came later.

In September 2009, Rick Telberg’s CPA Trendlines shared that the accounting industry added 2,300 jobs in August of that year while the broader US economy lost 216,000 jobs and unemployment hit 9.7 percent. For those not old enough to have experienced the Great Recession as an adult, that was a big deal and evidence of the profession’s resiliency even in tough times because boy were things dire back then. This is a strong selling point and one that is unique to accounting. Can lawyers say the same? No, see the “Notes From the Breadline” tag on Above the Law. Not that accounting escaped that period of time completely unscathed, comparatively speaking it hurt a lot less.

Next time go hard on the employability thing. That one’s not misleading. Talk about specific career opportunities available to accounting majors and tell stories of the people who work in and around the profession, especially those who aren’t in public because they seem to be happiest with their chosen career. That’s a better pitch than “the money isn’t that bad and the work-life balance is fine most of the time except for several months out of the year.”

The post Guy Who Works at a Firm Actually Named FML on Why Accounting Is a Great Career appeared first on Going Concern.

A friend asked why I believe the 150-hour requirement is more of a barrier of entry to the accounting profession than a 120-hour requirement with added experience.

That is a great question. Although, it does not matter what I think. What have we learned through research? And, how good is the research?

The AICPA and several state societies have cited a study by the Illinois Society of CPAs to say the 150-hour rule is not one of the top 5 reasons students do not pursue a CPA. A leader in the profession told me privately that the Illinois study is “bunk.”

So why is the Illinois Society study questionable? First – the survey went to accounting students, graduates, and young professionals. It did not go to those who chose to study something other than accounting. Those who decide NOT to study accounting are not in the sample. Additionally, 89% of students who responded were already on a CPA track. We need to know whether the 150-hour rule prevents students from entering the pipeline. This study does not give us that information.

Second – I question the results. The participants selected three challenges or barriers associated with becoming a CPA. Workload time commitments and personal time commitments are the top two reasons. These variables sound like they might be capturing the same thing. We do not know how the results would change if these two highly correlated variables were collapsed into one called “time commitment.” An independent reviewer likely would have asked for this analysis, if the study was submitted for publication in a peer reviewed academic journal. The next three variables are similarly highly correlated: difficulty of the exam content, difficulty of applying for the exam, and fear of failure. With multiple highly correlated variables, the ability to pick only three, and the fact that the respondents were already in the pipeline and therefore had already sunk time and cost towards obtaining 150 credit hours, it is no wonder that the 150-hour rule is not in the top 5 barriers listed. Additionally, the impact of the 150-hour rule might already be captured with the time commitment variables.

The Center for Audit Quality (CAQ) recently released a more credible study. The AICPA should be reading and reacting to this study. The CAQ surveyed all business majors and asked those who did not study accounting, why not? Some interesting results from this study are that more than 40% of non-accounting majors considered majoring in accounting. Of those who considered majoring in accounting but decided against it, 60% cited not wanting to pursue 150 hours as either the major reason or part of the reason they did not study accounting. Of those who did not consider studying accounting, 54% cite not wanting to pursue 150 hours as part of the reason. For those who considered but decided against accounting, starting salary was the primary reason. That is a topic for another day.

Even more credible than the CAQ’s study is one by Dr. John Barrios, based on his dissertation, and published in what is unarguably one of the top three academic journals for accounting research. I encourage you to read it. You will gain an appreciation for the peer review process and an understanding of why it can take a long time to do a thorough academic study. Although I have read it a few times, I was fortunate to see Barrios present his findings. It was much easier to understand that way.

Barrios’s study tells us a great deal. But, relevant to this commentary, it tells us that implementation of the 150-hour rule resulted in about a 40% decline in the number of first-time candidates taking the CPA exam. The loss of pipeline was all through the distribution; both high-performing and low-performing students decided against pursuing the CPA after implementation of the 150-hour rule. And, through collected LinkedIn data, he shows that there is no difference in the career outcomes for those who became CPAs under a 150-hour regime and those who became CPAs under a 120-hour regime.

Satisfyingly, Barrios found value in earning a master’s degree. He did not find value in a hollow extra 30 credit hours. Those with a master’s degree are promoted faster. As the academic director of the MACC and STEM-Qualified Master of Science in Accounting, Technology, and Analytics at the University of Denver, I enjoy reading research that supports my personal observations. Our graduate degree holders are promoted quickly, given big raises, and constantly recruited by placement professionals.

Based on the research, I suggest states reduce the barrier to becoming a CPA and recognize the value of graduate education by requiring two years of experience for baccalaureate degree holders and one year of experience for graduate degree holders. Notice I did NOT say, 150 or 120 hours. The education requirement should be based on earning a degree, not random hours.

The post 150 Hours is a Barrier – Really! appeared first on Going Concern.

Unless you’ve been living under a rock, you’re likely aware that the accounting profession is experiencing two simultaneous massive shocks.

These shocks (of our own making) are the collapse of the CPA candidate pipeline and launch of the CPA Evolution, the largest change to the CPA exam since the exam went digital nearly 20 years ago. Of course, exam computerization came after current partners had to walk uphill in the snow both ways to make it to and from the client site. Cue the violins.

Many of the discussions about these shocks have come in a vacuum, mentioning either the pipeline collapse or CPA Evolution, but the two are as connected as they’ve ever been. I’ve seen several major changes to the CPA exam throughout my career as a practicing accountant, university professor and exam prep instructor: 1994 – the exam was shortened from 19.5 hours to 15.5 hours; 2004 – the exam went from a paper and pencil exam to a computerized exam; 2011 – the first Computer-Based Testing Evolution (CBT-e) was enacted and the task-based simulation format was introduced; 2017 – higher order skill testing was introduced; and 2018 – Excel was added as a tool, along with a new user experience. Now, we’re facing the CPA Evolution’s arrival in 2024. Typically, each major change is accompanied by a tsunami of candidates rushing to test before the change takes effect and is followed by a drought of candidates signing up to test immediately after the new exam changes go live. We’re seeing more of a ripple than a tsunami this year and could be in for a massive drought in 2024 and 2025.

It doesn’t look like our profession or university accounting programs should expect the calvary to be coming anytime soon. It’s likely the well-documented pipeline shortage is going to get worse initially because of the CPA Evolution, not better. Fewer candidates are racing to test before the changes despite Business Environments and Concepts (BEC), having the highest pass rate and being a known evil, being eliminated as a section in 2024. This is why Surgent, along with the editors at Going Concern, are encouraging any candidates to sit for BEC (and AUD!) before 2024.

Exam review providers like Surgent know what BEC questions and writing prompts look like. We know how to prepare candidates. And so do professors in accounting programs. The discipline sections replacing BEC are all new: Business Analysis and Reporting (BAR), Tax Compliance and Planning (TCP), and Information Systems and Controls (ISC). Exam candidates must pass one of the three to be licensed. We don’t know how these disciplines will be scored. And the AICPA will need time to collect data and assess performance; it’s why they are bringing back testing blackout periods in 2024.

The change to a discipline-focused CPA exam brings us to the most pressing pipeline issue – the impact that the CPA Evolution will have on enrollments in accounting programs at colleges and universities. Sure, we need more CPA exam candidates to have more CPAs, but given licensure requirements, we need even more collegiate accounting students to have more CPA exam candidates. Exam candidates are in the middle of the funnel. Because the current licensure model requires 150 hours of collegiate credit and a set number of hours in accounting specific courses, accounting students are the top of the funnel and the most important piece. If we don’t get more students to major in accounting, there is no pipeline.

The CPA Evolution may squeeze the funnel even more for colleges and universities by further focusing the exam on more analytical and information systems topics such as digital acumen, data literacy, data analytics, and internal control structures. Do these sound like subjects many accounting students learn in their typical accounting courses? They aren’t in most traditional curricula.

And most universities outside of elite schools and large state schools don’t have the resources or ability to integrate them into the curriculum before 2024. Many universities typically need four to five years, at a minimum, to implement large scale curricula changes. That’s just the nature of the academic beast. There’s already only one semester remaining between now and the CPA Evolution. So, students will be left to rely on exam review providers, YouTube, and other self-study programs to fill the gaps.

At least students knew the old exam matched their coursework. The new one will in time, but that will take four to five years, not the 18 months’ notice the industry was given.

Many accounting degree programs have gone largely unchanged this millennia apart from some added Excel assignments and data analytics courses sprinkled in. And getting those changes took years! The CPA Evolution ignores the pace of play in higher ed. Universities were given less than three semesters to adapt their curricula and prepare their students – the future CPA candidates – and single biggest pipeline fillers. Many have not adapted and are questioning if they even can. Others are wondering which courses they need to change – implying they’ve not responded at all. I believe all the schools want to give their students the best education to match the needs of the profession. But, higher ed is more bureaucratic than the federal government. It does move. It just doesn’t move in three semesters. It rarely moves in three years.

I’ve been in the accounting industry my entire life. I want the profession to succeed. I want the pipeline to grow. Change is often good for industry. But too much change, too quickly, can make our already difficult problems even worse. I worry the CPA Evolution solves a future problem in preparing students for the needs of the firms but comes at the cost of fewer people available to the firms. We could have had both if we gave universities and students the time to prepare.

The post CPA Exam Changes and Pipeline Woes Are a Perfect Storm of Problems For the Profession appeared first on Going Concern.

From Withum’s news release:

Students will be full-time apprentice-level team members at Withum, with an opportunity to work in all service lines and industries while earning credits for their curriculum-driven experience alongside university coursework to fulfill the remaining credits needed to reach the credits hour requirement to hold a CPA license. The students may also sit for the CPA exam during the program, affording them the opportunity to become licensed CPAs by the time they start their accounting career as full-time, entry-level Staff I team members at the Firm.

Five Seton Hall students will start at the firm in September and the pilot program lasts for a year. The news release includes a quote from one of them who said:

“Everyone knows how hard it is to obtain the CPA certification, and with this program, I am substantially closer to obtaining the certification. With the help of Seton Hall University and Withum, I can now continue my academic career with the people who helped me get here.”

They don’t say how much these five folks will be paid, only that they will “receive compensation during their final year of school.”

“We truly value Withum’s partnership and investment in this innovative apprenticeship model and the Seton Hall accounting talent pipeline,” said Mary Kate Naatus, Ph.D., Assistant Provost and Dean of Continuing Education and Professional Studies at Seton Hall University. “The combination of a strong curriculum with excellent faculty members with the real world ‘work for credit’ experience on-site at Withum is an exemplary model that mutually benefits the students, industry partner and the broader accounting field.”

Wow they’re really laying it on thick aren’t they.

“The war on talent remains at an all-time high in the accounting industry, the CPA Pathway Apprenticeship is a solution to expose emerging talent to the day-to-day life of an accounting professional at Withum,” reads the release. A similar collaboration between PwC and New Jersey’s St. Peter’s University was launched last year.

If you’re going to be forced to work in order to meet some arbitrary requirement that is proven not to have any positive impact on the quality of CPAs entering the profession, there are worse places than Withum to do it.

Seton Hall University and Withum Launch CPA Pathway Apprenticeship for Aspiring Accounting Students [Withum]

The post Withum’s Solution to the War on Talent Is to Throw Students Onto the Battlefield appeared first on Going Concern.

The below essays reflect the author’s opinion not necessarily the opinion of The Pennsylvania State University nor that of Going Concern.

Why I Am Quitting the AAA

by J. Edward Ketz

The American Accounting Association (AAA) is the organization for accounting professors not only in the U.S. but throughout the world. It is a prestigious group for advancing accounting thought, developing improved teaching methods and materials, improving the public’s understanding of financial reports and the tax system, and enhancing ethics and the public trust. Unfortunately, the latter function is broken.

The AAA approached me in July of 2022, asking me to write an opinion piece “to provoke thought on an important contemporary issue,” similar to an essay penned by Maurice Moonitz in January 1979. I agreed and soon sent the accompanying essay about E&Y personnel caught cheating on an ethics exam and the SEC’s claim about the firm’s interfering with its investigation of the incident. Initially I was congratulated about discussing a topic on many minds. Shortly thereafter I was told that some in the organization wanted a temporary halt to the publication and wanted to study the “process” of putting opinion pieces into its publications. I was reassured that it was only a matter of time before the piece could see the light of day.

During the past year, there has been a snail-like pace by the Board and then by Management of the AAA. Nobody wanted to reject the paper but neither did anybody want to accept it. I have been put off for a year with no resolution in sight. So now I seek an alternative publication space.

Admittedly the story is a year old, but the questions are not resolved. The issue remains whether the profession wants to get serious about ethics.

In the meantime it appears that the AAA is not serious. Therefore I am saying good-bye to the AAA.

Ernst & Young in an Ethics Scandal: Ho-Hum

By J. Edward Ketz

Written for Accounting Education News, not published.

On June 28 of this year the SEC announced its largest penalty ever levied against a large accounting firm because E&Y had many of its audit professionals cheating on ethics exams. (How deliciously ironic when one cheats on an ethics exam!) Says the SEC, the firm “hindered our investigation” by “withholding evidence of this misconduct.” E&Y, in the end, agreed to pay a fine of $100 million to settle the matter, which follows similar incidents by PwC Canada earlier this year and by KPMG in 2019.

When this announcement was made public by the SEC, news agencies, blogs, and twitter feeds exploded with tsking, booing, alas-ing, and pshaw-ing. There was shock and dismay—how could they do this? There was surprise and bewilderment—what is going on with those entrusted to ensure financial integrity? And, of course, there was condemnation and finger pointing.

Going Concern, for example, says that “there’s a serious ethics problem at large firms that clearly isn’t being addressed.” Michael Shaub says he felt anger at first, now replaced by sorrow. He asks why the public trusts us with audits of corporate reports. They show outrage at this lapse of professional ethics, and I agree that such episodes are repugnant, but let’s shift attention to the question of who is surprised by the incident. Given the many ethical lapses of the last (say) 25 years, why does anybody express astonishment?

Instead of our collective chest thumping about how independent auditors are paragons of integrity, we should examine humbly the human situation. In The Cheating Culture David Callahan asserts that the U.S. society is seeing an ever-increasing amount of cheating, and “everybody does it.” Temptations abound, which are dangerous with America’s winner-take-all attitude and the rewards for success bigger than ever. Dan Ariely contributes to this discussion in his The (Honest) Truth about Dishonesty. He claims people desire to view themselves as honest individuals, but cheat because they gain many benefits from duplicity. He advances the fudge factor theory to account for both tendencies. What is most interesting about this theory is that Ariely practices what he preaches. In an expose by Alexander Danvers, Ariely was found faking data in a 2012 honesty study!

If Callahan and Ariely are correct, one wonders how humans, free moral agents, have devolved to this nadir. Gary Becker assists this understanding by postulating an economic model of crime in which rational beings will commit crime if the rewards are sufficiently high, the odds of getting caught sufficiently low, and the punishments if caught sufficiently low. Ariely claims that this model is not quite correct because, wanting to be seen as “good,” humans typically will commit crime only to a point. Callahan does not address these economic accounts, resting instead on social forces.

Regarding E&Y, there are plenty of examples that are congruent with Callahan, Ariely, and Becker and beg the question why anybody is surprised at what transpired. One recalls the egregious tax shelter set up by E&Y to benefit Sprint and its top executives. Another incident involved an E&Y auditor and her romantic entanglement with the CFO of the firm being audited. There was also a case that involved an E&Y auditor’s spending a fortune on football and hockey games and vacations with the CFO of the firm for which he was the audit partner in charge. Another demonstration focused on auditor independence when the independent E&Y auditors interfered with a firm’s auditor proposal process. And let us not forget the sad and ineffective audit at Wirecard; it was not the profession’s finest hour. I should add that there exists a plethora of similar episodes at the other large accounting firms. (Also see my essay “The Myth of Auditor Independence.”)

Researchers should find fertile territory to study. What is the cost-benefit calculus that auditors employ when deciding to cheat on ethics exams? What social factors and historical antecedents explain the behavior of the accounting industry? How are juniors socialized in the practices of their chosen profession and to what are they socialized?

These incidents also impact our teaching mission. How are we to teach professional ethics and tenets like independence—are they desired ideals or mere myths?

These situations do not occur every day, so many conclude that these events merely prove that there are some bad apples in the profession. In this case, “over 200 EY audit professionals” cheated. How many ethical lapses does one need to see a cultural paradigm rather than isolated incidents? It is no longer meaningful to deny the obvious.

Having auditing professionals cheat on ethics exams is tragic, sad, appalling, and confusing. But surprising? Hardly.

About the author: J. Edward Ketz is Associate Professor of Accounting at Penn State and has been a member of the faculty since 1981. Ed has authored and edited 17 books as well as numerous articles. He has been cited often in the popular and business press; he also has appeared as an accounting commentator on radio and television. Besides teaching and writing, he serves as an accounting expert witness from time to time.

The post ‘The American Accounting Association Is Not Serious’ and Other Such Thoughts From a Professor Who’s Quitting the AAA appeared first on Going Concern.

This deep dive was inspired by earlier research on student perceptions and attitudes toward accounting, especially attitudes among Black and Hispanic high school and college students [PDF of those findings here]. This quote included in that report is so important to the research it appears twice in the PDF so I’m including it here too:

The earlier research better defined the profession’s image problem and inspired the CAQ to take a deep dive into “students’ perceptions of and experiences with accounting to develop a clearer understanding of what can be done to further diversify the accounting talent pool.” So here we are at round two and this is what the CAQ found.

The research demonstrated a missed opportunity amongst a sizeable number of students, with four in ten non-accounting business undergraduate students reporting they considered accounting. Broken out by demographics, even higher rates of Black and Hispanic students say they considered accounting before choosing a different field of study. Asked about their experiences with introductory accounting courses, only 1 in 3 non-accounting majors who considered accounting said the content was interesting or engaging. Consistent with our prior research, the lukewarm reception indicates a need for increased classroom engagement on accounting across a sizeable number of students who are still in the process of deciding their major.

Other themes emerged among students who ultimately chose not to pursue accounting. Chief amongst their reasons was a lack of passion, followed by higher starting salaries for other majors and not wanting to pursue the additional academic hours necessary to become a CPA (i.e., the 150 credit hour requirement).

Let’s break down a few points by topic.

Reasons for Not Choosing Accounting as a Major

When discussing the profession’s diversity problem, the old white guys at the top almost always get some blame but as you can see below “Don’t see people like me represented in profession” is actually way down on the list of reasons why students don’t choose accounting as a major.  At the top of the list: lack of interest/passion in accounting, other majors pay better, the 150 hour rule sucks, lack of math skills (wtf), and being unable to afford 150 hours.

Shout-out to the peers who pursued accounting making sure everyone knows how miserable and full of regret they are. Keep preaching the good news, kids.

A breakout quote from a recent graduate who identifies as Black/Hispanic explains a well-known problem with accounting education:

“…it wasn’t taught to make it more engaging or make you more interested….it’s almost like they were trying to do it to see who they could eliminate…the classrooms were so big, and it was just going slide by slide almost and it was not engaging.”

Another Blow to the 150 Hour Rule

As literally everyone knows but only some are willing to compromise on, the intentional barrier to entry that is the 150 hour rule is doing too good a job of keeping people out of the profession. Too good a job.

While the research showed the 150 credit hour requirement is a barrier across the board, it is more conspicuous for Black and Hispanic nonaccounting students, and in particular those students who considered accounting but opted out, meaning that these students looked into accounting as a major but ultimately went elsewhere due to the additional credit hour requirement. These students perceive the rule as an expensive, time-consuming requirement to advance their future career. To be sure, these students see the CPA license as a valuable certification, but they don’t view it as worthwhile to pursue.

Only a quarter of those students who considered accounting said they don’t want to take the CPA exam but half said they don’t want to pursue 150 hours which suggests that allowing for a second pathway requiring just 120 hours of education like the proposal in Minnesota might successfully bolster dwindling CPA candidate numbers. In fact, the research showed that most students favorably view the CPA credential; 82 percent of accounting majors report the CPA license would be extremely valuable or very valuable for their career goals, 77 percent of accounting majors who are not planning to, or are unsure about pursuing the CPA license, also reported they see value in the credential.

Major Obstacles to Becoming a CPA

All demographics report the time required to study for the CPA exam as a top obstacle but costs of additional education and CPA exam prep rank highest among Black and Hispanic accounting majors.

Chief barriers cited by those not pursuing the CPA were the beliefs they do not need the credential, and that CPAs have a poor work/life balance. The time/cost of the 150 credit hours and low starting salaries also were noted. In the qualitative research phase amongst recent accounting graduates, the top obstacles to pursuing CPA licensure were the time required to study for the exam as well as the rigor of the exam content. Of those recent accounting graduates who reported having already attained their CPA or are planning to pursue licensure, these factors were confirmed in the quantitative phase.

However, for those recent graduates who have yet to complete the 150 credit hour requirement, the cost and time associated with obtaining the 150 hours are the biggest factors. While employers offer numerous supports to recent accounting graduates to help with attaining CPA licensure – such as structured study groups, study materials, flexible work hours, and covering exam costs – fewer respondents reported taking advantage of these benefits.

This under-utilization of resources continues, despite accounting graduates perceiving these programs and support as useful. Early career professionals reported coverage of exam costs, flexible or reduced hours to study, and structured study groups as resources most useful. For Black graduates, an employer-sponsored mentorship program is at the top of the list as the most helpful support in pursuing CPA licensure.

What is the takeaway? The profession has ample evidence that the 150 hour rule is a hindrance to all students but especially those from diverse backgrounds. The question is what is it going to do with that information? That’s less a question and more of an accusation.

Full report below:

Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities [CAQ and Edge Research, July 2023]

The post Research: Why Students — Particularly Diverse Ones — Aren’t Pursuing Accounting appeared first on Going Concern.

At its spring meeting in Washington this week, the AICPA’s governing body (“Council”) approved this plan. Yay. Cue measured fanfare.

From Journal of Accountancy:

The resolution acknowledges the challenges facing the talent pipeline and the need for a “thoughtful strategic process” in the search for solutions while reiterating the Council’s commitment to preserving the mobility of CPA licensees. [AICPA CEO—Public Accounting Susan] Coffey said the state CPA societies’ role in helping address the pipeline is essential.

The resolution reads in part: “This collaborative process, convened by and through the AICPA, should result in a continuous research-driven national pipeline strategy that, among other things, addresses the image of the profession in the eyes of students as well as educational and experience requirements, and outlines short and long-term initiatives and actions that result in measurable outcomes to address the profession’s ongoing and evolving human capital needs and priorities.”

As you can see from the above graphic, this plan includes many things that would be wholly unnecessary were starting salaries at public accounting firms able to compete with the industries currently jacking talent from the profession at the college level. Going into high schools to talk about the opportunities in accounting is great, people should be doing that. Extending the time a person has to pass all four parts of the CPA exam is great, too. As are alternate pathways to licensure but not everyone agrees on that one. All of this is pointless if the money isn’t there.

The original pipeline acceleration plan released earlier this year was just eight items, seen here in this AICPA Town Hall Series video and believe it or not, it was somehow more useless than the 50% larger 12-point plan.

On the Integrated Education and Experience Program, the South Carolina Association of CPAs Board of Directors said they “have no confidence in this proposed solution” in this January 24 letter to the AICPA and NASBA:

While this initiative could ultimately lower the candidate cost for the remaining 30 hours, we feel strongly that it will not adequately address pipeline compression. We do not believe this approach removes barriers to entry, but instead places additional strain on those seeking to join the profession. As such, we have no confidence in this proposed solution.

Alright, what else do they have?

The revised plan has the Experience, Learn & Earn program which Director of the School of Accountancy at University of Denver Sharon Lassar, PhD, CPA has written about here and here. Here’s an excerpt from her guest post “Is It Ethical to Endorse an Educational Path That Is Susceptible to Cheating?”:

The AICPA should disclose exactly what will be taught in the ELE program. If it moves forward, it should disclose the characteristics of the students enrolled; the courses selected, attempted, and completed with grade earned; the parts of the CPA exam attempted and those passed by the candidates before they started the ELE program; the parts scheduled, attempted, and passed while enrolled; and, the time to complete this pathway to licensure. If this model is one that the profession uses to justify the continuation of the 150-hour rule, it should also then show the progression of these candidates through their careers. Each year’s annual salary and rank should be disclosed. Let’s get some real data that is open for academics to analyze.

I’ll leave those high level discussions to people smarter than anyone here but I do happen to be an expert in getting paid diddly squat so believe me when I say if you pay them, they will come.

Supposedly salaries fall under item 2 of the revised plan: “Addressing firm culture and business model challenges.” In AICPA language:

In collaboration with stakeholders, the AICPA has identified initiatives that address the following key areas:

• Awareness: Increasing awareness about the accounting profession and promoting the benefits of a career in accounting
• Improved perceptions: Dispelling outdated perceptions and leveraging updated, positive messaging that can help the profession resonate with today’s students
• Training and education: Providing high-quality accounting education and training opportunities
• Firm culture and business models: Equipping firms with the tools to offer competitive salaries and benefits, as well as career advancement opportunities and compelling work

Firms have the tools. They just don’t want to use them.

Why not save everyone a lot of time and address THE #1 cause? They could send a bunch of AICPA goons to shake down firm leaders and tell them it’s time to pay up. Please record it and put it on YouTube.

Pay better salaries, attract more students, hire more graduates, then we can get to work on the second biggest issue scaring young people away from the profession: the hours.  It won’t totally fix the problem but it’ll at least push the needle and get us through this rough spot before automation saves the day and puts everyone out of a job like they’ve been threatening it will for a decade now. Maybe that’s why firms are putting so much money into technology investments and AI? Whatever, just don’t complain that you can’t find talent in the meantime.

I’m aware there are problems other than pay plaguing the profession but all of this crap is like a municipality focusing on patching potholes while half the city is in flames. PUT OUT THE FIRE FIRST.

Tangentially related:

Want to Do Your Part to Help the Accountant Shortage? Here’s What You Can Do Right Now

The post AICPA Council Approves 12-Point Plan to Do F*ck All to Solve the Accountant Shortage appeared first on Going Concern.

From New York State Society of CPAs:

COAP helps you explore what you can do in the accounting field. If you think accounting is just tax, think again. Plot your future as a Chief Financial Officer, forensics investigator, data analyst, software developer, entertainment and sports agent, auditor or entrepreneur.

When you apply, please note the location of the program for which you are applying. Note that program planners may arrange for transportation to their colleges or universities, but please plan for alternative transportation as backup. Be aware of the deadline and note the need for a high school guidance counselor and parental approval.

The program provides real insight into how CPAs influence the business world. The program is an important component of the New York State Society of CPAs’ (NYSSCPA) efforts to recruit an increased number of students into the accounting profession, with a particular focus on those from underrepresented groups. The Career Opportunities in the Accounting Profession (COAP) program is open to all, regardless of race, color, national origin or sex.

According to the brochure which you can find below, participants will learn professional etiquette, interviewing skills, team building, and resume writing, among other things. The events take place on college campuses across the state over one or two days. Here are this year’s dates:

COAP Programs June 26-27, 2023

Adelphi University
Garden City, New York (Two-Day Program)
June 26 – June 27

Ithaca College
Ithaca, New York (One-Day Program)
June 26

Rochester Institute of Technology
Rochester, New York (One-Day Program)
June 26

Siena College
Loudonville, New York (Two-Day Program)
June 26 – June 27

SUNY New Paltz
New Paltz, New York (Two-Day Program)
June 26 – June 27

SUNY Oswego
Oswego, New York (Two-Day Program: Day 1 – SUNY Oswego; Day 2 – Syracuse, NY)
June 26 – June 27

University at Buffalo
Buffalo, New York (Two-Day Program)
June 26 – June 27

Westchester Community College
Valhalla, New York (Two-Day Program)
June 26 – June 27

Anyone with questions can email coap@moynihanfund.org.

Here’s a brochure.

More info from University at Buffalo here.

The post Accounting Summer Camp is a Thing in New York appeared first on Going Concern.

Now it seems firms are seeing the skills gap in people who hadn’t quite reached the workforce when the world turned upside down. FT:

Deloitte and PwC are giving extra coaching to their youngest UK staff after noticing recruits whose education was disrupted by lockdowns have weaker teamwork and communication skills than previous cohorts.

Junior employees who spent part of their school or university years isolated from their peers have found it harder to adapt to the work environment, partners at the consulting firms told the Financial Times.

The recruits have less confidence doing basic tasks such as making presentations and speaking up in meetings, they said.

“This means that there is a greater need for employers to provide training on basic professional and working skills, that wasn’t necessary in prior years,” said Jackie Henry, Deloitte’s UK managing partner for people and purpose.

It makes sense. Like the military and Internet hate mobs, teams of like-minded people moving together as one well-oiled machine are what make the whole thing work. A team can make or break your Big 4 experience, you may even find yourself taking them into account before you jump ship. The classes of 2020 and 2021 did not get the same opportunities the rest of us did to work in close quarters with fellow students, a critical life lesson that forms the basis of future cubicle-hopping to get answers from superiors as an intern and later full-time hire.

Ian Elliott, PwC’s UK chief people officer, said it was “understandable that students who missed out on face-to-face activities during Covid may now be stronger in certain fields, such as working independently, and less confident in others”. Some were “less confident” presenting and talking at meetings, collaborating with colleagues and networking, he said.

Many of the younger cohort “have only had minimal or virtual work experience, with less exposure to a corporate environment”, said Henry.

Ian has talked about this group of young people before. In March, he said that PwC was “acutely aware” that lockdowns affected students in many ways. “It would be remiss for us not to look at our approaches … to make sure we … are providing the best support,” he said. At that time, the firm was considering a change in its hiring process to make it less imposing for these candidates though he didn’t elaborate much further than that. PwC utilizes a notoriously difficult recruiting labyrinth to separate the wheat from the chaff, they might have to rehaul it considerably to make sure decent candidates aren’t slipping through the cracks (and many trap doors set up along the way).

It will be interesting to see how firms handle this going forward. Will they have to change up their entire recruiting strategy? Will they bring back face-to-face interviews because everyone is bombing the personability component of video interviews? Will they just crap out a bunch of online learning modules on public speaking and call it a day? We’ll see. In the meantime, people skills are going to be the hottest skill on resumes for the foreseeable future.

The post Big 4 Firms Are Noticing a Sudden Skills Gap in New Hires appeared first on Going Concern.

There has been much discussion about the 150-hour rule recently. Going Concern previously reported the AICPA and NASBA are trying to strong-arm Minnesota into maintaining the 150-hour rule. I wrote that NASBA can be a bully because many state licensing laws give them that power. Like many bullies, could NASBA be delivering a hollow threat? Would NASBA truly exercise its power to take away mobility of CPAs licensed in states that drop the 150-hour rule?

That question led to another. When and where did the concept of mobility originate? It probably happened earlier than the first reference I found. In 1991, the subtitle of a Journal of Accountancy article read, “As business operations become global and client operations expand, CPAs in forms of all sizes must be free to practice outside their licensing jurisdictions.”¹ Discussions seem to have progressed in earnest during the 1990s.

In 1997, the AICPA and NASBA jointly identified mobility as an important goal and established the concept of “substantial equivalency.”² States were so slow to adopt the substantial equivalency provisions of the Uniform Accountancy Act (UAA) that the AICPA created a Special Committee on Mobility in April 2006. The committee ultimately recommended a federally mandated state-based mobility provision that would allow any CPA with a valid state license to obtain practice privileges in any other state. The AICPA Board of Directors delayed implementation of the recommendation to allow more time for states to adopt modified substantial equivalency provision of the UAA.³

Let me repeat that. The AICPA’s conviction was so strong that it was ready to go to Congress and seek federal mobility legislation if the states did not adopt mobility provisions in the UAA.

So, just how important is the 150-hour rule? Does it trump mobility? I doubt it. What evidence can we glean from NASBA’s actions?

Interestingly, NASBA has entered into Mutual Recognition Agreements (MRA) that allow professional accountants from other countries to practice in the United States without having to re-credential. For example, a Chartered Accountant (CA) who is a member of the South African Institute of Chartered Accountants (SAICA) may sit for the International Qualification Exam (IQEX) if she meets the eligibility criteria set forth in the 2019 MRA. The educational requirement under the MRA is a baccalaureate degree and completion of the SAICA post graduate qualification. The post graduate qualification is completion of a “training contract.” So, if you are a South African CA, an extra 30 hours of university course credit is not required.

Wait, what is the IQEX? This is an exam that allows CPA-like designation holders from countries with whom NASBA has executed an MRA to practice in a US jurisdiction, providing other eligibility requirements are met. In other words, the IQEX provides a path to reciprocity for certified/chartered accountants from around the world. There are currently eight MRAs, the most recent of which was executed with CPA Ireland less than a year ago.

International candidates are offered a path to licensure as a US CPA without meeting a 150-hour rule. The MRAs might require international candidates to complete certain training in addition to holding a baccalaureate, but they need not earn an extra 30 credit hours.

What about that exam? Is the IQEX what protects the public interest? Well, it turns out that the IQEX is the REG section of the CPA exam.

International candidates covered by MRAs take only one section of the CPA exam and do not have to meet the 150-hour rule to be able to practice in the US. I’m not kidding. Yet, NASBA insists that all US CPAs meet a 150-hour rule and pass all four parts of the CPA exam! That doesn’t seem fair.

How can the AICPA and NASBA justify entering such MRAs? They might be responding to some international pressure. International agreements such as the United States-Mexico-Canada Agreement (USMCA) and the General Agreement on Trade in Services (GATS) impose an obligation by signatory countries to work toward professional licensure international reciprocity. In fact, NASBA refers to GATS signatory countries on its MRA website.

Or, perhaps NASBA likes the $895 fee they charge for candidates to sit for the IQEX. I am just speculating. If you know the reasoning and purpose for executing MRAs, please let me know or post a citation in the comment area.

The point is, NASBA does not require equivalent university education and, in fact, seems to substitute additional training (experience) for additional education when executing MRAs. If this approach is acceptable across international borders, why not across state borders? And, if NASBA is bowing to political pressure to allow international mobility, shouldn’t they bow to pressure by the AICPA and its members to promote interstate mobility?

¹ Rimerman, T. W., & Solomon, J. P. (1991). Uniformity of regulation – the time is now. Journal of Accountancy, 171(4), 69. Retrieved from https://du.idm.oclc.org/login?url=https://www.proquest.com/trade-journals/uniformity-regulation-time-is-now/docview/206775220/se-2
² Hock, S. (1997). Erasing the barriers: Interstate mobility for CPAs draws near. Ohio CPA Journal, 56(2), 5-8. Retrieved from https://du.idm.oclc.org/login?url=https://www.proquest.com/trade-journals/erasing-barriers-interstate-mobility-cpas-draws/docview/214814973/se-2
³ Voynich, S. (2007). Barriers to mobility: A crisis for many CPAs. Journal of Accountancy, 203(4), 46-48. Retrieved from https://du.idm.oclc.org/login?url=https://www.proquest.com/trade-journals/barriers-mobility-crisis-many-cpas/docview/206759463/se-2

The post Would Mobility Go Away Without the 150-Hour Rule? appeared first on Going Concern.

Published in Issues in Accounting Education, a total of 328 authors from 186 different institutions in 14 countries sought to answer the question: how well does ChatGPT answer accounting assessment questions? TL;DR Not great, Bob. But not bad either.

Abstract:

ChatGPT, a language-learning model chatbot, has garnered considerable attention for its ability to respond to users’ questions. Using data from 14 countries and 186 institutions, we compare ChatGPT and student performance for 28,085 questions from accounting assessments and textbook test banks. As of January 2023, ChatGPT provides correct answers for 56.5 percent of questions and partially correct answers for an additional 9.4 percent of questions. When considering point values for questions, students significantly outperform ChatGPT with a 76.7 percent average on assessments compared to 47.5 percent for ChatGPT if no partial credit is awarded and 56.5 percent if partial credit is awarded. Still, ChatGPT performs better than the student average for 15.8 percent of assessments when we include partial credit. We provide evidence of how ChatGPT performs on different question types, accounting topics, class levels, open/closed assessments, and test bank questions. We also discuss implications for accounting education and research.

Here are the specifics on the study:

During the months of December 2022 and January 2023 each coauthor entered assessment questions into ChatGPT and evaluated the accuracy of its responses. The study includes a total of 25,817 questions (25,181 gradable by ChatGPT) that appeared across 869 different class assessments, as well as 2,268 questions from textbook test banks covering topics such as accounting information systems (AIS), auditing, financial accounting, managerial accounting, and tax. The questions vary in terms of question type, topic area, and difficulty. The coauthors evaluated ChatGPT’s answers to the questions they entered and determined whether they were correct, partially correct, or incorrect.

Across all assessments, human students scored an average of 76.7 percent, while ChatGPT scored 47.4 percent based on fully correct answers and an estimated 56.5 percent if partial credit was included. BUT…

[W]e also find that ChatGPT scored higher than the student average on 11.3 percent (without partial credit) or 15.8 percent (with partial credit) of assessments. The study also revealed differences in ChatGPT’s performance based on the topic area of the assessment. Specifically, ChatGPT performed relatively better on AIS and auditing assessments compared to tax, financial, and managerial assessments. We suggest one possible reason this may occur is that AIS and auditing questions typically do not include mathematical type questions, which ChatGPT currently struggles to answer correctly.

Can relate.

ChatGPT shined on true/false and multiple choice questions, with full-credit accuracy rates of 68.7 percent and 59.5 percent, respectively. Where it struggled was with workout and short-answer questions with accuracy rates of 28.7 percent and 39.1 percent, respectively. ChatGPT answered textbook bank questions correctly 64.3 percent of the time, doing especially well on audit questions (83.1 percent correct) and AIS (76.8 percent correct).

Some charts of humans vs. AI:

Given the unique nature of the crowdsourced data collection process, the paper’s authors offered some anecdotes that individual authors found interesting and wished to highlight. There are many of these anecdotes in the paper, since most of you are checked out by this point in the article I’m including only a few.

• During testing, ChatGPT did not always recognize it was performing mathematical operations and made nonsensical errors, such as adding two numbers in a subtraction problem or dividing numbers incorrectly. This is especially problematic for workout problems.
• ChatGPT often provided descriptive explanations for its answers, even if they were incorrect. This raises the important question about how its authoritative, yet incorrect, responses may impact students. Similarly, at times ChatGPT’s descriptions were accurate, but its selection of multiple-choice answers was incorrect.
• ChatGPT sometimes “made up” facts. For instance, when providing a reference, it generates a real-looking reference that is completely fabricated—the work, and sometimes authors, do not even exist.
• ChatGPT could generate code and find errors in previously written code. For example, given a database schema or flat file, ChatGPT could write correct SQL and normalize the data.
• If unable to directly generate answers, ChatGPT could provide detailed instructions to complete a question. For instance, it could provide steps on using a software tool or sample code to solve problems that require access to a specific database.
• In a case study context, ChatGPT was able to provide responses to questions based on assessing past strategic actions of the firm. However, where data was required to be used, ChatGPT was unable to respond to the questions other than providing formulas. ChatGPT performed even worse where there was a requirement for students to apply knowledge. This highlights that ChatGPT is a general-purpose tool as opposed to an accounting specific tool. It is not unsurprising, therefore, that students are better at responding to more accounting-specific questions where the technology is not yet trained to answer accounting-specific questions.

In the conversation about AI replacing accountants, the current consensus is that it is best suited for repetitive tasks of the sort monkeys (and interns) can do and not higher-level thinking, which aligns with what researchers uncovered. They pointed out that ChatGPT — the GPT stands for “General Purpose Technology” — was not specifically trained on accounting content and therefore may not perform well on it “as faculty and textbook authors often design questions to elicit nuanced understanding from accounting students, which may not be comprehended by AI algorithms.” Turns out your professors weren’t being dicks for no reason by throwing stumpers at you but rather trying to train you to think critically.

Before I wrap this up, the researchers offered a bit of sage advice to accounting educators I feel compelled to pass along:

Perhaps the most important contribution of this paper is to highlight that accounting educators need to prepare for a future that includes broad access to AI to serve their students and the needs of the profession effectively. We believe that accounting educators should engage in discussions about the impact of AI on their teaching. This includes addressing questions such as: How should students be allowed to use AI? What material should be memorized versus referenced? Can interactions with AI enhance students’ learning, and if yes, how? What value do educators and accountants provide beyond what AI can provide? These are all important questions that accounting educators should discuss and research. As AI technology continues to improve, educators need to prepare themselves and their students for the future, making AI technology a promising area for future research.

The ChatGPT Artificial Intelligence Chatbot: How Well Does It Answer Accounting Assessment Questions? [Issues in Accounting Education Volume 38, Number 4, 2023]

The post Academics Pitted Human Accounting Students Against GPT-3, Students Won appeared first on Going Concern.

Last week I raised the question of whether it is ethical to promote an educational path to CPA licensure that is (highly) susceptible to cheating. The AICPA’s pipeline acceleration plan proposes an Experience, Learn & Earn (ELE) Program that is so outrageous to the academic community that I keep hearing the same question, “Does AACSB know about this?” The implication being that AACSB would never allow such a program to be delivered. Unfortunately, reliance on AACSB to question ELE is misplaced. AACSB will not review these courses.

AACSB is the organization that top business schools turn to for accreditation. AACSB requires schools to undergo quality review by a team of peers every five years. AACSB-accredited schools generally deliver higher quality degree programs than those not accredited by AACSB. I have served on over a dozen peer review teams and am therefore familiar with accreditation standards.

News Flash! AACSB accredits degree programs – as in bachelor, master or PhD programs. The courses planned for ELE would not be part of a degree program and therefore would not be subject to quality review by AACSB.

Why is this important? Courses that students take outside of AACSB-accredited degree programs are frequently not worth taking. ELE courses would be outside of degree programs.

How do I know that courses outside AACSB-accredited degree programs are of questionable quality? When students apply for admission to programs I oversee, it is up to me to determine whether students should receive transfer credit or have met the prerequisites required for courses they wish to take. For example, the MAcc at University of Denver requires students to have demonstrated competence in the prerequisite courses of Intermediate Accounting I and II. Students demonstrate competence by taking Intermediate as part of an AACSB accredited degree, passing competency tests on Intermediate material, or (re)taking the courses as part of our MAcc.

Students who take Intermediate Accounting at schools not accredited by AACSB frequently fail our competency tests. They retake Intermediate Accounting with us as they work towards our MAcc or Master of Science in Accounting, Technology and Analytics.

Last week I alerted readers about ELE courses being susceptible to cheating and hinted at quality issues. A response I’ve heard is that the partner institution will be an AACSB accredited institution. To that I say, so what. ELE courses will not be subject to AACSB peer review and being offered at an AACSB accredited institution therefore does not mean they will be quality courses.

There is another, even bigger, problem. That is, ELE courses will land on a transcript issued by an AACSB-accredited school even though the courses do not need to meet AACSB quality standards. This will cause confusion (dare I say fraud?) in the evaluation of transcripts. Hang with me. I need to go deep into the weeds to explain what I mean by confusion in evaluating transcripts. I’ll use transfer students as an example.

When a student wants to transfer from one school to another, the second school typically does not require the student to repeat a course that the student took at the first school. The assumption is that the student had been admitted to a degree program, had started working towards that degree, and experienced a situation necessitating a transfer from one school to another. Schools accommodate transfer students through blanket acceptance or course-by-course review.

What I call blanket acceptance is generally spelled out in an articulation agreement where transfer of credit is guaranteed by the agreement. For example, if a student earns an associate’s degree at a community college, the state university system in the same state will typically give the student 60 semester hours of credit for the associate’s degree when the student transfers into a university. The community college and state university systems execute these agreements so that students do not need to worry about whether they will receive credit for a particular course upon transfer.

When a student does not meet the terms of an articulation agreement, a university will evaluate the student’s transcript on a course-by-course basis and decide whether to grant transfer credit for each course independently of any others taken. Universities try to perform such an evaluation only once. For example, I am asked to evaluate courses for transfer credit frequently. Once I approve a course, it is placed on our transfer credit list and I am not asked to evaluate it again. Schools maintain databases where students can look up whether a course from one school has previously been evaluated and granted credit by the second school.

With the creation of courses offered outside of degree programs, registrars should no longer trust their long-standing transfer credit process. As far as I know, there will be nothing to indicate whether a course was completed as part of a bachelor’s degree or as part of an ELE program. Suppose a course is titled Accounting Information Systems 301. Is that AIS class part of the peer-reviewed degree program, or is it an AIS class that was 100% asynchronously delivered as part of ELE? If it is the latter, I would not accept it for transfer credit. But, how would I know?

If I learn of a school participating with ELE, I will ask my registrar to remove all previously approved classes from our transfer credit list so they can be re-evaluated. Is the student asking to transfer an ELE course (which we may deny) or is the student asking to transfer a course taken as part of a degree program that was subject to quality review (which we will likely accept)? And, if only 1% of the transfer course requests are for ELE courses, we are creating a paperwork nightmare for 99% of the transfer requests. Wow. What a mess. All this so that the AICPA can create a questionable path to meeting the extra 30 credit hours required for licensing.

In a way, I am glad the AICPA proposed the ELE program. Until now, I generally accepted credits on transcripts for transfer into my university. Now I know to question them. In fact, I learned one of the Big 4 firms already has a program similar to ELE with a partner institution. And, I’ve admitted a student from that school to our MAcc. Fortunately, the student did not request transfer or prerequisite credit for Intermediate Accounting and is taking the courses with us as he completes his MAcc. Whew! I dodged a bullet that I didn’t know about until recently.

The post What Would the Accreditors Say About AICPA’s ELE Program? appeared first on Going Concern.

She writes:

Over the past 12 months, I have met countless motivated, hardworking individuals that are interested in pursuing a career in accounting. However, many of those same candidates expressed their frustration as they struggle with the financial commitment of obtaining 150 credit hours to become a certified public accountant (CPA).

Many students are eager to enter the workforce full time and make a living. Some of the most inspiring students we meet with are working 30 to 40 hours a week on top of their academic courseload to make ends meet.

They continually share that any dollar invested in education needs to have a clear value proposition. The goal for many is to complete necessary coursework and start working at the earliest opportunity, nothing more.

The value proposition is something I wrote about last year, back before the Wall Street Journal gave a shit about the accountant shortage. Allow me to resurrect that paragraph:

The accounting profession has a critical value proposition problem — it has consistently failed year after year to demonstrate that it offers enough perks to make up for the downsides. The profession asks students to commit five years of their life plus however long it takes to study for a difficult professional licensing exam oh and also you’re going to be doing 70 hour weeks in a good week while living with four roommates for the first couple years but don’t worry, one day you’ll make some good scratch. You just have to get through a very unpleasant gauntlet first. If you express any discomfort about this process, you’re labeled a punk who can’t hack it in public by people who also can’t hack it because no one can but they do it anyway and say nothing because their university professor told them if they don’t shut up and take it they’ll be marked unemployable for the remainder of their career.

Back to Jen and her LinkedIn post. She says that the Minnesota initiative is “opens [a] much-needed pathway to licensure and that the “conversation and remedy is years in the making.”

Minnesota has argued, and Jen seems to agree, that whether a person has 120 or 150 units, it doesn’t matter as long as they can pass the CPA exam. In other words, the exam is perfectly sufficient as a barrier to entry to keep out the riff-raff. As anyone who has taken it knows (and though I never took it, I sat through hundreds upon hundreds of hours of CPA review class and served as therapist to many CPA exam candidates over the years so I can say with confidence I have a general idea), it requires you to know a little bit about a lot of things and just getting through the entire process is a test by itself. Licensing bodies oversee the application process and can purge “undesirables” before they get that far. So enough bouncers already exist without the profession needing 30 arbitrary college units to really really weed people out.

Critics of the legislation argue that adjustments to the credit requirement may impact the quality of accounting candidates entering the profession. However, there is no empirical evidence to suggest that the 150-hour requirement has elevated our profession. In reality, we’ve experienced a shortage of talent that continues to accelerate. Before the current rule was implemented, the industry welcomed top talent that currently comprises far-reaching leadership positions with crucial experience navigating the country’s biggest economic crises. I can see a clear plan where this legacy and standard of work can continue without the additional 30-hour course requirement.

In reality, the uniform CPA exam is our mechanism to provide talent with the technical acumen to serve in today’s world. Just as this exam has continuously evolved, so must our certification process.

She references the lack of empirical evidence to suggest that the 150 hour rule has elevated the profession. Not only is there little to no evidence, there is evidence that the 150 hour rule decreases CPA candidates, and we’ve known this for a while. See: “Occupational licensing and accounting quality: Evidence from the 150-hour rule” by John Barrios, a professor at the University of Chicago Booth School of Business. He found a 15% reduction in first-time CPA exam candidates after the 150-credit requirement was implemented, a decline that aggregates over multiple years. AND he found that the 150 rule did not actually improve the quality of talent. So not only did it function a little too well as a barrier to entry, it did not lead to better CPAs like it was supposed to. Which, duh. But boy do we have some expert basket weavers in the profession.

“I myself graduated from college when you needed only 120 credit hours plus work experience. As someone who could not afford another day of college after graduation, I can honestly say I wouldn’t be in my current role if the 150-hour requirement was enacted when I was working on my CPA certification,” writes Jen.

“Minnesota’s proposal marks tremendous progress in attempting to remove a barrier to entry by broadening the pathways and increasing accessibility to the accounting profession. To tackle declining numbers of new talent and be sustainable well into the future, we need to double or even triple the number of students who choose accounting as a major and stick with it through graduation and beyond. Broadening the pathway to become a CPA has the potential to increase the number of CPAs overall and encourage hard working, diverse talent to join the profession.”

“Our hope is that, with the exemplary action taken by Minnesota, this legislation can spur a national dialogue that challenges the current licensure requirements and empowers the accounting profession to look inward at how it welcomes and fosters prospective talent.”

I will say this. From where I am sitting and from feedback I have received from readers, lurkers, and other citizens of the CPA peanut gallery, the AICPA’s stance on Minnesota’s proposal does not vibe with the general consensus. All the comments I saw on Jen’s post are also in agreement that something must be done, and maybe offering an alternative to 150 units is a good start. It is my hope that more stakeholders, leaders, and educators will speak up and share their views publicly as Jen has. Even if they disagree.

If you have an opinion on alternative pathways to CPA licensure please feel free to reach out and weigh in, your viewpoints are important and better inform our coverage on this topic. Remember also to contact your state board of accountancy and let your voice be heard. They don’t read Going Concern comments. At least I hope not.

Earlier:
The Accountant Shortage Isn’t Bad Enough For NASBA to Entertain Dropping the 150 Hour Requirement
Minnesota Throws TPTB the Finger and Introduces Legislation to Offer an Alternate Pathway to CPA Licensure
The Beef Between the AICPA and Minnesota Over the 150 Hour Rule Heats Up
MNCPA to Educators: “We Do Not Need New CPAs Who Have Additional College Credits; We Need More CPAs, Period.”

The post One of Minnesota’s Largest Accounting Firms Can Totally Get Behind the Alternative Pathway to CPA Licensure appeared first on Going Concern.

The AICPA’s website includes a statement titled Purpose in action that, in its 129 words, uses “trust” (twice), “integrity”, “ethics”, and “public interest”. Yet, its pipeline acceleration plan proposes an Experience, Learn & Earn (ELE) Program that, in my opinion, may perpetuate academic dishonesty. The initiative would enroll first-year staff in asynchronous courses to earn as much as 30 hours of academic credit while they work. What could possibly go wrong?

Is it ethical to promote a path to earn the extra 30 credit hours of college credit required for CPA licensing without addressing threats to academic integrity in online education? Cheating in college courses has gone on as long as college courses have existed. However, the Internet increased the ease and speed of obtaining and sharing coursework. There has been a proliferation of businesses built to “help” students succeed in college. Students have long been able to purchase term papers that are marketed as “research assistance” by providers who fully expect students to submit the work as their own. Anti-plagiarism tools moderate this behavior. In a fully asynchronous setting, like that proposed by ELE, students can hire someone to take their classes. Google “take my online class.”

The CPA Exam is not offered in a fully remote setting – for good reason. In July 2022, FINRA barred two individuals for cheating during online qualifications exams. Cheating has even happened on relatively low-stakes exams, like CPE exams to maintain a CPA license. The SEC charged its largest ever penalty to an accounting firm, $100 million to EY, for cheating by its audit professionals. The double irony is that EY cheating happened on ethics exams.

Ok, let’s say all available security measures are taken and that we can somehow gain comfort over the academic integrity of the courses. Is online education for young professionals a good idea? And, if it is, how is it any different from first year professionals completing online training modules provided by their employers, Linkedin Learning, Coursera, or any other number of providers? Oh, I know! Training by those other providers does not appear on a college transcript. And, the CPA profession has a licensing law written into the Uniform Accountancy Act that 150 hours have to appear on a college transcript. It sounds to me like it’s time to change the law. After all, isn’t the ELE simply a way around its intention?

But, I digress. What are some other factors about online education that should be addressed before continuing to promote ELE? There are too many to include in the word limit of this article. Online learning is fantastic for the highly-motivated, self-disciplined learner. I taught in the first fully online Master of Taxation program in the country around 2004 and was proud of the learning that took place. But, it was a highly-technical program where assignments were built on new tax law with no clear solutions. Hiring someone to take the class would have been possible. But, people with the technical knowledge needed to pass the course would have been too expensive to hire. This is not the kind of course the AICPA is proposing for ELE. In fact, we don’t know what the curriculum will be. My prediction: 9 hours of internship and 21 hours of content that could be found on Linkedin Learning or Cousera. Just what is the value proposition?

Again, I digress. Is providing the extra 30 hours online a good idea? Maybe. Overall, the empirical evidence is mixed on whether online students perform at the same level as their traditional student counterparts. I found one study that looked specifically at online versus face-to-face accounting education. Morgan (2015) found online accounting programs have much lower average CPA pass rates than their matched face-to-face counterparts. I won’t rely solely on one academic study, especially if it is published anywhere other than the most rigorously reviewed academic journals. But, if the goal of ELE is to produce more CPAs, it might fall short.

The AICPA justifies the 150 hour requirement with remarks about the complexity of business, the proliferation of standards, and the increasing sophistication of audits. I agree. High level knowledge and skills are needed to assure the quality of services provided by CPAs. The AICPA states that “In most cases, the additional academic work needed to acquire the technical competence and develop the skills required by today’s CPA is best obtained at the graduate level.” Yet, ELE credit hours would not even be part of an undergraduate degree program. Are we supposed to trust the quality of this plan?

The AICPA should disclose exactly what will be taught in the ELE program. If it moves forward, it should disclose the characteristics of the students enrolled; the courses selected, attempted, and completed with grade earned; the parts of the CPA exam attempted and those passed by the candidates before they started the ELE program; the parts scheduled, attempted, and passed while enrolled; and, the time to complete this pathway to licensure. If this model is one that the profession uses to justify the continuation of the 150-hour rule, it should also then show the progression of these candidates through their careers. Each year’s annual salary and rank should be disclosed. Let’s get some real data that is open for academics to analyze.

The post Is It Ethical to Endorse an Educational Path That Is Susceptible to Cheating? appeared first on Going Concern.

There is one group particularly disrupted by the events of 2020, a group that sadly doesn’t get much attention when we talk about things the pandemic screwed up and the lasting effects of that disruption: students. According to The Times, the King’s PwC is thinking about giving those kids a break and adjusting its hiring process to accommodate them.

Accountancy firm PwC is considering revamping its recruitment and training schemes for the “lockdown cohort” of school leavers and graduates whose education was interrupted during Covid when many did not sit exams under the usual conditions.

The firm is considering tailoring its hiring process to make it less imposing for these candidates.

It has noticed that some of its latest recruits have needed extra help in their study for professional exams, having missed out on sitting formal exams for GCSEs, A-levels and other qualifications.

Ian Elliott, PwC’s chief people officer, said: “We’re acutely aware that lockdown will have impacted students in all sorts of ways. It would be remiss for us not to look at our approaches … to make sure we … are providing the best support.”

Decisions have not been made about any changes, but PwC currently uses a mix of online and face-to-face meetings and is looking at whether this is appropriate.

As you are currently reading a Yankee rag, some definitions might be in order:

• School-Leaver: a young person who is about to leave or has just left secondary school
• GCSEs: The General Certificate of Secondary Education is an academic qualification in a particular subject, taken in England, Wales, and Northern Ireland
• A-Level: The A-Level (Advanced Level) is a subject-based qualification conferred as part of the General Certificate of Education, as well as a school leaving qualification offered by the educational bodies in the United Kingdom and the educational authorities of British Crown dependencies to students completing secondary or pre-university education

PwC UK has a notoriously rigorous hiring process that includes psychometric assessments. There’s even an entire cottage industry built around helping candidates prepare for and ace these, which PwC does not endorse and instead directs candidates to its own e-learning modules. These assessments are just 11.1% of the nine-step hiring process, laid out in pretty PwC autumn hues below:

There are also the standard, incredibly lame and insanely creepy video interviews which candidates can also prepare for using PwC’s own modules.

92,000 people applied for entry-level roles at PwC UK in the first half of 2022, fighting for about 1,900 jobs. Despite the flood of applicants — which was up from 71,000 the same time the year prior — only 80% of these jobs were filled. Meaning a huge number of the 92,000 trying to get into PwC did not meet their standards, or so PwC said.

A cynical person might suggest that PwC is now rethinking the gauntlet it puts aspiring candidates through out of sheer desperation but it could be that they want to make sure they aren’t missing out on young talent just because someone does not check all the right boxes. Especially someone who has a helluva excuse for why they weren’t able to get those boxes checked in the last three years.

The post PwC UK Has a Soft Spot For Students Who Got Wrecked By the Pandemic appeared first on Going Concern.

As you should well be aware, MNCPA wants to add another lane to the CPA highway that would offer candidates an option of 120 units of education and two years of experience as an alternative to, but not a substitute for, the state’s existing 150 units and one year of experience rule. In a January blog post, MNPCA clarified its position:

The MNCPA does not believe that legislation to broaden the licensing requirements is a magic solution and candidates will flock to the CPA exam. It is one part of a multi-layered campaign to promote the accounting profession and make it an attractive career choice to students.

The MNCPA initiative does not eliminate 150-college credit hours with one year of work experience as a path to licensure. That should remain an option for candidates who have the means and time to take the additional credits.

Alas, this is a contentious issue and much more clarifying must be done going forward. The educator email you’ll read in a moment contains some interesting factoids:

• • Of MNCPA members working in public accounting polled, 85% of respondents supported additional pathways to CPA licensure
  • New hires with 120 college credits are unlikely or very unlikely to take the CPA exam
  • CPA exam first-time applicants dropped by 15–25% once the 150-hour rule was applied
  • The 150 hour rule has not improved quality, though it has done a great job at serving as a barrier to entry, particularly to diverse candidates

Now for the email:

A poll of MNCPA members working in public accounting found 85% of respondents supported additional pathways to CPA licensure. When evaluating the decision to pursue legislation, the MNCPA board focused on attracting students to the accounting degree and, ultimately, CPA certification. The additional tuition expense and delay of entering the workforce are deterrents to earning an accounting degree when other degrees offer similar or higher salaries with a four-year degree with 120 college credits.

A decline in CPAs is affecting smaller cities, counties and school districts that are unable to find a CPA to perform their audits. A meeting with Julie Blaha, the Minnesota state auditor, confirmed this issue in Minnesota.

The member poll also showed the number of firms hiring accountants with 120 college credits is increasing. More than 50 percent of the respondents also shared that those new hires with 120 college credits are unlikely or very unlikely to take the CPA exam. There is a significant pool of potential candidates who have an accounting degree and multiple years of experience but do not see enough value in paying for additional college credits for licensure.

The time for action is now

The CPA profession is at an inflection point where the declining number of CPAs in our communities is eroding financial stability and creating a public protection issue. Academic studies published in 2020 and 2022 show that the education requirement has not improved quality, it has reduced the number of first-time candidates and it has created a barrier to entry that is affecting the profession’s effort to improve DEI. We know offering alternative pathways is not a silver bullet to fix the pipeline problem, but the academic studies find that CPA exam first-time applicants dropped by 15–25% once the 150-hour rule was applied.

With the aforementioned in mind, the MNCPA is increasing our outreach to high schools and colleges to communicate the benefits of an accounting degree and the many career paths that are available. Both college accounting programs and the profession will benefit with more students enrolling in accounting programs.

The AICPA has also proposed a new program called Experience, Earn, and Learn (ELE). The AICPA proposal is to partner with one private college starting September 2023 to offer up to 30 college credits. In time, the number of schools would be increased to four or five institutions. Students who enroll are hired by a firm, work reduced hours and take online college credits. This is not an internship or an apprenticeship. The goal is to have a tuition rate equivalent to community college. Candidates enrolled in the program would be considered first-year staff. We do not believe this is an effective solution because the barrier to 150 credits is not the lack of options for college credits, especially with students more comfortable in pursuing online options from a variety of colleges due to COVID-19. This program would not eliminate the additional tuition expenses, and the reduced work hours would also mean a reduced salary and benefits. This program would drive students from Minnesota schools where students already have a relationship. The MNCPA sent a comment letter to the AICPA to share we don’t believe the program will have the impact the AICPA is suggesting.

This is not a short road

As the MNCPA licensure initiative moves forward, we expect the legislation to evolve. It is rare that legislation is passed as originally introduced. We are working with MNCPA members, the AICPA, NASBA, other states and the Minnesota Board of Accountancy as this initiative moves forward.

We know that those of you who offer MAcc programs may be especially concerned. However, our members have made their message loud and clear: We do not need new CPAs who have additional college credits; we need more CPAs, period.

We welcome your feedback and questions. We expect more dialogue among the many stakeholders as we seek to broaden licensure and attract more students to accounting programs.

FWIW in our informal survey of @s, random people on Reddit, and anonymous commenters, the consensus seems to be that the unwashed masses are not particularly interested in fighting for 150 hours, something the AICPA should be mindful of when sending scaremongering letters to membership on the subject.

You are welcome to use the comment section to share your feelings. You are also encouraged to let your state board of accountancy know how you feel because they are not hanging out in our comments, or around here at all for that matter (lucky them).

Earlier:
The Accountant Shortage Isn’t Bad Enough For NASBA to Entertain Dropping the 150 Hour Requirement
Minnesota Throws TPTB the Finger and Introduces Legislation to Offer an Alternate Pathway to CPA Licensure
The Beef Between the AICPA and Minnesota Over the 150 Hour Rule Heats Up

The post MNCPA to Educators: “We Do Not Need New CPAs Who Have Additional College Credits; We Need More CPAs, Period.” appeared first on Going Concern.

With the accountant shortage in full swing and the profession’s talking heads, peanut galleries, unwashed masses, and unelected old white guys in charge discussing ways to ease it, it’s inevitable that we’ll start throwing out some WILD ideas. Like this one:

Want more CPAs?

Make the exam easier… that test is hard

120 vs 150-hour rule doesn’t make a difference because you still have to conquer the beast

There are many with 150 hours that never become CPAs because they give up on trying to pass

Expanding the pass credit window… https://t.co/L57RWaVqav

— Tax TeleGraf (@LoganGrafTax) March 10, 2023

Logan meant to open the floor on a discussion about this crazy idea, a noble intention that was immediately met with rage. The kind of rage that only Twitter can stir up.

I’m trying to redirect attention away from the 120 vs 150-hour rule debate

You can make it easier to sit for the test, but that doesn’t mean more people will become CPAs

Lowering hour requirements will increase the pool of who is eligible

But as I said, the difficulty of the test will weed out a lot of candidates

Observations about the reactions towards this tweet…

Seeing a trend with anon accounts being very against increasing the ability to become a CPA

People are so passionate about this topic at a level that doesn’t make sense

— Tax TeleGraf (@LoganGrafTax) March 10, 2023

In fairness to Twitter, some folks understood the assignment. Like David here:

How many of those CPAs saying “You can’t make the exam easier, it’ll diminish the profession” could score higher than a 40 on AUD or FAR today? It’s 2023, we don’t need to memorize every arcane rule anymore. Ease the exam up before there are only like 12 CPAs left.

— David Troyer (@DavidTroyer4) March 10, 2023

There’s some more reasoned discussion to be had here should you be interested.

SO. Let’s place a moratorium on discussing this particular item, perhaps permanently. What else we got? Have we considered giving CPA exam candidates free toasters upon passing all four parts?

The post PSA: Do Not Suggest That We Make the CPA Exam Easier in Order to Solve the Accountant Shortage appeared first on Going Concern.

Going Concern previously reported on bits of an interview with Ken Bishop, President and CEO of NASBA, published in Journal of Accountancy. A cut out in the article includes this quote, “Should any state or jurisdiction lower the licensure requirement to 120 hours, their CPAs would no longer be automatically substantially equivalent and would no longer enjoy the mobility and reciprocal practice privileges they currently are afforded.”

A follow up article let us know how the AICPA and NASBA have locked arms to dissuade any further talk by states regarding the 150 hour requirement.

How can NASBA be such a bully? Doesn’t it work for the Boards of Accountancy of the states who pay NASBA membership dues and fees for services? That’s what you might think.

Written into the mobility legislation that NASBA, AICPA, and state societies pushed to enact over about a 20 year period is a substantial equivalency clause. For example, Section 5.2 of the Illinois Public Accountancy Act provides practice privilege to licensed CPAs from states that NASBA has verified “to be in substantial equivalence with the CPA licensure requirements of the Uniform Accountancy Act…” Thus, Illinois, like many states, has given NASBA authority that would otherwise rest with the Board of Examiners.

Changing the Illinois Public Accountancy Act will not be easy. Legislative language needs to be drafted, a member of the state legislature needs to introduce a bill, and the bill will have to pass and be signed by the governor. Changes to bills are often spearheaded by professional associations like state societies, AICPA, or NASBA who employ their lobbyists. I wonder how NASBA as the arbiter of substantial equivalency was written into Illinois statute in the first place.

Other states retain some authority over the determination of substantial equivalency or allow for an easier path to change. For example, Colorado’s Accountants Practice Act provides practice privilege to CPAs licensed in other states according to rules promulgated by the Board of Accountancy. The Board rules then give NASBA the power to determine substantial equivalency. NASBA’s power can be stripped by a change to Board rules; no legislation seems to be necessary.

If you believe that Minnesota’s CPAs should be able to continue to practice in your state should Minnesota enact the alternative pathway to CPA licensure that is under consideration, let your state board members know.

If your state board does not hear from you, the members assume everything is fine. Most state board members serve limited terms and may not realize that a previous board gave power to NASBA that should reside with the board. Write a letter, send it to each board member, and share it with your colleagues.

The post Why NASBA Can Be a Bully and What CPAs Can Do About It appeared first on Going Concern.

WRAL reports that at Cristo Rey Research Triangle High School in Durham — a Catholic-based private school open to students of all faiths — its 140 students attend classes four days a week and work for one. Its 37 corporate partners (like Cisco, Lenovo, Microsoft, and EY) pay 50% of the student’s tuition. According to the school, the total cost to educate each student is about $15,700 but family contributions average $70/month, including the tuition support from the work study model. At Cristo Rey, the average family of four has an income of $30,000 a year.

Student/employer matches are based on the students’ interests according to Cristo Rey prez Jeb Myers. “If a student really likes math, we will get them into an accounting firm. If they are an extrovert, we try to place them in a company where they will get to work with people.” …who’s gonna tell him? The students tend to stay with the same company throughout their high school years. “They’re doing real work … and we want to support them through it,” he said. “We believe everyone has the talent. Our students don’t necessarily come from families that live in and around business professionals, so this gives [students] the opportunity to see that they can do it or so they can see themselves in that company in the future.”

In the WRAL segment video — which doesn’t have the option to embed so you’ll just have to watch it on their site — we meet aspiring economist and 10th grader Emmanuel Johnson who is learning how to grind spreadsheets at EY.

Emmanuel Johnson, a 10th grader, wants to be an economist. He spends one day per week at accounting firm Ernst & Young, where he manages tables and databases and creates PowerPoint presentations for the company.

“I really like how Cristo Rey provides an opportunity for young people to know people in corporate areas and to have connections at an early age so when they do graduate they won’t be out of a job,” Johnson said.

Some of the kids work remotely, like the 12 who are at Cisco, while others are working in schools or offices. “Other students travel to a corporate office weekly to work alongside professionals, organizing spreadsheets and databases, coding, managing the front desk, assisting with marketing campaigns and more,” says WRAL.

The school keeps tabs on how the kids are doing at work and helps them assimilate to corporate culture. Director of corporate work study Roger Reed gets feedback from the students’ employers, and teachers provide the kids — as young as 14 — with the practical skills one needs in the corporate world like how to keep eye contact, network, and write professional emails.

So what do we think? Beats the burger-slinging job I had in high school that only taught me how to make change and hate the general public for five bucks an hour.

The post Actual Kids Are Working at EY Now appeared first on Going Concern.

I mention her net worth because a recent Puget Sound Business Journal article discussed Baker Tilly — along with Seattle’s Moss Adams — in an article about the difficulties firms are having recruiting young people. It is, as you would expect, full of lots of dumb ideas that don’t start with Sal and end in ary.

This is from “The new math in recruiting at accounting firms”:

When they’re not striving for the pinnacle of their sports, internationally famous mountaineer Jimmy Chin and teenage tennis phenom Coco Gauff are promoting accounting firm Baker Tilly as brand ambassadors.

The press releases drop phrases like “new horizons” and “blazing new trails” to maximize the star power in an industry typically noted for its stodginess. It’s part of a larger trend of accounting firms trying to find young talent as the industry wrestles with staffing shortages.

“Baker Tilly’s purpose is to unleash and amplify talent – to help our people discover their strengths, sharpen their skills, deepen their knowledge, explore possibilities and soar to personal heights,” said Baker Tilly CEO Alan Whitman. “Coco Gauff embodies this very spirit.” He said the same thing in regards to the partnership with Chin, just changed a few details: “Baker Tilly’s purpose is to unleash and amplify talent – to help our people discover their strengths, sharpen their skills, deepen their knowledge, explore possibilities and soar to personal heights,” he said. “Jimmy Chin knows all about soaring to personal new heights.” (he does)

Accounting firms in the Pacific Northwest are particularly challenged when it comes to standing out as employer of choice against Amazon, Microsoft, and numerous other tech outlets that pay better than firms in the Pacific Northwest do. So they’re pitching experience as the draw:

Local accounting firms pitch the breadth of experience young accountants gain working for them.

“You’re getting exposed to a lot of variety and a lot of industries,” said Kelly Nelson, Seattle managing partner for Baker Tilly. “We have access to some of the greatest minds in the Seattle landscape through who our clients are.”

Nelson acknowledges that, more so than in the past, young accountants do have the option to start their careers as in-house accountants in a specific field. She said, however, that it’s hard for young accountants to know what field is a best fit before gaining broader experience at a public accounting firm.

I’m not going to spend all day hunting down figures but I found something from 2019 that says the average entry-level Amazon salary for computer science majors is $108,000 plus bonuses, extrapolated from this r/cscareerquestions thread. Do yourself a favor, don’t look at it. We’re working on a more thorough comparison of starting salaries for compsci vs. accounting that should be ready shortly which I also recommend not reading because it is depressing. But that is where the talent is going, and not because their new employer has the coolest celebrity endorsements.

I had to scroll way too far down in the business journal piece before I found any mention of pay, which finally came after a brief mention of CPA exam perks — paid time off to take the exam at Baker Tilly, a bonus for passing the exam from Moss Adams. They also got the Seattle managing partner at Deloitte to say the firm provides bonuses and reimbursements for passing the exam if you knock it out within a certain time after hire, pretty sure it’s $5,000 within a year plus paid study materials (feel free to correct that in the comments if wrong). TL;DR: firms “are prioritizing better pay for accountants.”

There are positive signs in the industry. [University of Washington accounting department chair David] Burgstahler said firms are prioritizing better pay for accountants, and the profession is very recession-proof, making it more popular if the economy continues its current downturn.

Ugh, not this again.

I know we have been banging the salary drum hard lately but come on, celebrity endorsements!?

Here’s what Glassdoor has for average Baker Tilly US salaries. I imagine this is what potential recruits are looking up first, not “which accounting firm does Jimmy Chin think is cool?” But what do we know

The new math in recruiting at accounting firms [Puget Sound Business Journal]

The post Baker Tilly Banks on Celebrity Endorsements to Bring in Young Talent appeared first on Going Concern.

In New Jersey, they are piloting a program that grants credit for work. A partnership between PwC and Saint Peter’s University in Jersey City, the program essentially trades that 5th year of education for experience in the field, a win-win for both students and firms. The university oversees the work for credit program the same they would any other internship for credit, making sure that students are actually learning and not just working for free. No reasonable person can argue that 30 arbitrary units in any subject (the current requirement) is better than actual experience and exposure to accounting practice where you learn more about accounting than you would in underwater basket weaving. One CPA I spoke to who was instrumental in arranging this pilot program told me that he hopes to see this program expanded to firms of all sizes, and accounting employers beyond large public accounting firms, even non-profit, government, and industry. We’ll have to wait to see how that shakes out.

On this topic, I came across a recent article in the Journal of Accountancy that describes another firm/education partnership also integrating experience and education, albeit in a different way to what they’re doing in New Jersey. Read:

Though it wasn’t common among [2022–2023 chair of the AICPA board of directors Anoop Natwar] Mehta’s peers when he was in school, he got work experience in accounting while still a student. He believes that gave him a leg up, and he believes today’s company leaders can benefit from offering the same opportunities.

“These students are getting recruited before even they finish their degrees, which is new and which is exciting,” Mehta said. “If I relate back to my own career, I started working after a couple of years in college, and I do know that I felt that I came out ahead because of it.”

Mehta made mention of an AICPA program in development to help firms and students alike. Students finishing their undergraduate degree who haven’t yet reached the 150 hours required for CPA licensure would be hired by firms and work as first-year associates while taking up to 30 hours of cost-effective classes catered to the skills the firms need.

“I’m all for figuring out a way to formalize one year of work experience tied in with their education,” Mehta said. “If we can figure out a way to make that affordable, I think we’re really going to start to move toward solving pipeline issues.”

Watch this January 19 AICPA Town Hall for more on this topic, pipeline discussion timestamped here.

A couple years ago, EY announced EY Career Path Accelerator, a partnership with Hult International Business School to offer a free online MBA to 312,000 employees. As of February 2022, only 55 EYers had graduated from the program. So that concept has already been tried out to some success.

Desperate times call for desperate measures and the traditionally uncreative profession is going to have to start hitting the blunt to come up with some wild ideas to get students into accounting. We imagine it won’t be too difficult to convince firms to let people work for free. The rest might take some evangelizing.

The post Integrating Experience and Education is One Way to Ease the Accountant Shortage at Least a Little appeared first on Going Concern.

Last week we told you about HF 1749 and SF 1660, bills introduced to the Minnesota legislature that would allow for a second pathway to CPA licensure of 120 units and two years of experience. Let’s just say the AICPA is not happy. And we can demonstrate just how not happy they are based on this letter they sent out to membership on February 15:

Burdensome MNCPA Legislative Proposal Needs Your Attention – Please Act Now

Dear member,

The Minnesota Society of CPAs (MNCPA) is advancing a bill that would result in cross-border restrictions for licensed CPAs and public accounting firms in Minnesota.

The proposal would make it harder for Minnesota CPAs to practice across state lines, physically and virtually. The AICPA has expressed directly to the MNCPA leadership our concerns about any effort that would undermine the profession and the CPA license. We write to you now to alert you to this issue and urge you to share your concerns about the legislation.

What’s at risk: A legal review of the proposed changes has been conducted by the National Association of State Boards of Accountancy (NASBA). As the member organization for all state boards of accountancy in the United States, NASBA spelled out key consequences for Minnesota licensees and firms.

Some of the risks that were highlighted:

For Minnesota CPAs: Any change to Minnesota’s education requirement for licensure means Minnesota CPAs would no longer be able to practice in another US state or jurisdiction without first having a re-assessment of their license qualifications, and in most cases, if not all, apply for a license in that jurisdiction.

CPAs would need to hold multiple licenses and incur additional expenses. They would risk being unable to serve clients in a timely manner, would face administrative burdens, and risk noncompliance of various state laws. These requirements would affect current and prospective Minnesota CPA licensees.

For public accounting firms in Minnesota: Minnesota public accounting firms, no longer being able to practice freely across state lines, would need to provide advance notice and gain a practice permit before signing any client engagement agreement or providing any public accounting service.

Real world impact: What do these consequences mean in the real world? If a CPA in Minnesota serves clients in Illinois, they will need to do the following:

• Submit all college transcripts, experience verification documentation, and exam scores to NASBA to determine if the licensee’s initial licensure qualifications meet the requirements to practice in Illinois.
• At the discretion of the Illinois Board of Examiners, the Minnesota CPA may need to additionally apply for an initial license in Illinois.
• The Minnesota CPA’s continuing professional credits may not transfer to Illinois, and the CPA will need to meet any additional continuing professional education requirements in Illinois.
• The Minnesota CPA may need to meet all relevant or additional ethics requirements in Illinois.
• The Minnesota CPA may incur additional fees in Illinois to practice public accounting.

What you can do: Carefully consider how this proposal would impact you. Some questions to consider include:

• What would the new requirements mean for you, your partners, and employees?
• How would your business suffer, given the loss of mobility to serve clients outside of Minnesota?
• Would the stipulations diminish the value you provide to clients?
• Would you be able to set up or continue a virtual and physical practice with these limitations?

If you have concerns about the consequences to you as a CPA, or to your firm, we ask that you share your concerns with the AICPA by filling out this quick survey. As AICPA members in Minnesota, we value your feedback and will defend the importance of mobility for the profession and the public.

The letter is signed by Going Concern favorite Susan S. Coffey, CPA, CGMA and Anoop Natwar Mehta, CPA, CGMA who is also cool af.

Well the Minnesota Society of CPAs was not content to sit around and let the AICPA take shots at them so they penned a response that went out to their membership on February 23. H/t the tipster keeping us abreast of this developing conflict.

The profession is at critical point. In change management, it is called an inflection point — a time of significant change in a situation, a turning point.

Declining high school graduation sizes, increasing demand for CPAs, increasing retirements and declining number of candidates sitting for the CPA exam are converging to severely restrict the number of CPAs who provide critical financial services and advice to communities, businesses and individuals.

Facts to consider:

1. A survey of MNCPA members shows an increase in the number of new hires who hold accounting degrees with 120 credit hours. Fifty percent of respondents say it is unlikely or highly unlikely staff with 120 hours will sit for the CPA exam.
2. A 2019 study titled, “Occupational licensing and accounting quality: Evidence from the 150-hour rule,” by John Barrios, a professor at the University of Chicago Booth School of Business, found a 15% reduction in first-time CPA exam candidates after the 150-credit requirement was implemented. This decline aggregates over multiple years. The study also found there wasn’t an increase in work quality after the 150-hour rule was adopted. [Ed. note: we’ve written about that study before, see: The 150-Hour Rule is Kinda Bullsh*t, Says Guy]
3. A working paper published in 2020 by Brian Meehan and E. Frank Stephenson from Utah State University found the 150-hour education requirement acts as a barrier to entry, and their analysis suggests that that the additional educational requirement does not enhance candidate quality.
4. We see the impacts across Minnesota with a disproportionate effect on Greater Minnesota as businesses, governmental entities, nonprofits and individuals report they are unable to find CPAs. This is also happening in other states.

The profession is under a great deal of pressure. A system under pressure seeks equilibrium. To increase staff, more firms are moving work to an overseas labor force. Not all workers in other countries are subject to the 150-credit requirement. When entities can’t find qualified auditors, will audit thresholds be raised, which increases the risk to communities? Will regulators allow other options for audit and attest requirements because the CPA profession is unable to meet the market needs?

Legislation introduced last week to make a reasonable modification to broaden licensure requirements is being positioned as destroying mobility and isolating Minnesota CPAs. It feels like the David versus Goliath story. To quote a message sent to MNCPA members by the AICPA: “Any change to Minnesota’s education requirement for licensure means Minnesota CPAs would no longer be able to practice in another U.S. state or jurisdiction without first having a reassessment of their license qualifications, and in most cases, if not all, apply for a license in that jurisdiction.”

Three items to consider about this statement:

1. It is the individual state boards of accountancy that determine who can practice in their respective states. The AICPA and NASBA have significant influence, but they are not the regulators.
2. Is it reasonable that CPAs who currently practice across state lines will have mobility revoked if Minnesota makes a licensing change for future licensees? Some individuals would consider that a significant overreach when a large number of those CPAs have 150 credit hours or were grandfathered in and have practiced across state lines for nearly 15 years.
3. The AICPA and NASBA messaging is focused on mobility as it currently exists, when it should focus on the critical problem: More CPAs are needed and the lack of CPAs is a public protection problem.

The MNCPA introduced legislation because attempts over many years by various AICPA and NASBA constituents to have meaningful discussions about licensure were rebuffed. As the largest national association for CPAs, it is the role of the AICPA to bring stakeholders together. It took legislation to open up the conversation. Mobility is a hurdle to solve, but it is not the problem.

The CPA exam is the common requirement that is the same across all jurisdictions for all CPA candidates. Variations exist in the ethics, experience and educational requirements among states. There are examples and precedents that demonstrate mobility and variations in licensing requirements can and do coexist.

The profession has adapted through many technological and cultural changes. Its long tenure is evidence of this adaptability. For the profession to be adaptable, the requirements for licensure must also be adaptable. If there are no substantial equivalents to the additional 30-college credit hours because it would destroy mobility, the profession is missing a critical element of adaptability.

Introducing legislation is the beginning of a necessary robust and public conversation about CPA licensure. Proposed legislation rarely, if ever, passes as originally introduced. We expect more conversation, new ideas to emerge and the legislation to evolve. Legislation is a tool to challenge regulatory rules when the voices of stakeholders are ignored.

Now is the time for the AICPA and NASBA to focus on the core problem and demonstrate leadership and adaptability in lieu of threats and protecting the status quo. It is important for MNCPA and AICPA members to share their opinions about licensure requirements and about the CPA pipeline. Together, the profession will remain resilient, adaptable and continue to provide the financial stability our communities need to thrive.

The letter is signed by MNCPA president and CEO Linda Wedul who is a certified badass for writing it.

There’s no doubt any changes to the 150 hour rule come with some complications and that conversations need to be had around mobility, and that these changes will not happen overnight much in the same way 150 did not become the rule overnight when Florida became the first state to roll it out in the 80s. The question I have is why are we only just talking about it now? Decisions out of desperation tend not to turn out well except by accident.

FWIW from where I’m standing the people we’ve talked to are in support of a change because clearly what we’re doing is not working, whether or not that means lowering the requirement for licensure is a bit more sticky a subject though most people we talk to are certainly open to it if not in full support. As I was writing this we got a comment saying the 150 hour rule is pointless because students can take physical education — or everyone’s favorite, underwater basket weaving — to meet this arbitrary requirement. The AICPA would have a big more leg to stand on if the additional 30 units were guaranteed to develop young accountants into better educated, more well-rounded candidates. As it stands, they’re just really, really good at weaving baskets underwater.

Anyway, that’s where we’re at with that. Your move, Biggie.

The post The Beef Between the AICPA and Minnesota Over the 150 Hour Rule Heats Up appeared first on Going Concern.

Quick thread to provide some additional info regarding changing the 150 credit hour rule.

Professional licensing is managed by each individual state. Dept of Labor and Licensing, State Board of Accounting is responsible for enforcing the licensing laws in that state

— Byron Patrick, CPA (@byron_cpa) February 20, 2023

To change the requirements to get licensed as a CPA, each State Govt must pass a law to make the change. This is not 1 person/department’s decision.

As a result, in order to make a change, a Bill must be sponsored and submitted to the state legislature.

At that point, the state legislature will prioritize the bills they will vote on in that session. They never get through all Bills.

Let’s be optimistic and say that the Bill is brought to the floor. We now must make a big lobbying push

State legislators won’t bother to show up to vote unless their constituents are advocating for or against the matter.

Keep in mind there will be arguments w/in the State against making the change. Specifically, higher education will be negatively impacted by the lost revenue.

Public colleges are State Employees. Let’s assume advocacy can overcome this resistance.

You get the votes to pass both sides of the govt, we now need a governor to sign the bill. Again the Gov needs to know there is support to prioritize signing the bill to make it a law.

Congratulations, requirements have been changed in 1 state. 51 additional jurisdictions to go.

If I recall it took nearly 10 years to get a critical mass of states to change to 150, due to the need to gain support in each state government to even care about making a change.

A country with different req for the CPA is a nightmare. A couple states might benefit because people from out of state get licensed in their state. However, holding yourself out as a CPA in other states will be an issue. How many CPAs work with clients only in 1 state?

There is a lot of frustration with the @AICPA that they aren’t listening to the members and supporting a change. Their purpose is to support, advocate and protect CPAs and the License. They have a vested interest in ensuring there are as many CPAs as possible.

They also have first-hand knowledge of how hard it is to make changes to the requirements to become a licensed CPA. They are not going to intentionally not take action on the pipeline challenges putting their membership, dues, and purpose at risk. We all have the same goal.

Finally, do not read this thread and assume I’m an advocate of 150 >120. I refuse to have that debate as you may as well argue that gravity is bad for earth. The reqs that are in place are not going to change. I am an advocate of influencing the things that we can change.

Such as:

• Creative approaches to achieving the ed reqs
• Financial support to help people achieve their ed reqs
• Advocating for firms to compete for talent w/ compensation & benefits
• Elevating firms and their practices that create environments that people want to be a part of
  

The passion and interest in easing the pipeline challenge is awesome. It is in our best interest that we continue to fight and advocate for people to choose a career in Accounting. There is no silver bullet and certainly, there is no simple answer.

People are going to be willing to do the work & check all the boxes if the outcome is worth the effort. Let’s find ways to make sure that outcome is worth it… because by today’s standards of overwork and underpaid for new/young accountants, even 120 won’t be worth the effort.

/end

Go debate or praise him on Twitter if you want or duke it out in the comments, up to you.

The post What You Should Know About Changing the 150 Hour Rule Before You Debate For or Against It appeared first on Going Concern.

To put things into perspective for the normies who may not understand that accountants’ work is critical to the entire foundation of our financial system, he likens accountants to referees, the order-keepers of sports:

“We may not always like the referees, but sports is a free-for-all without them,” he said. “Accountants and auditors are to business as those people in the black-and-white-striped shirts are to sports. We’re the referees of business.

“Without accounting and without finance, there are no rules to the game. It’s like playing a game, and you make up your rules as you go along. It keeps the system honest.”

To combat shortages, those in the accounting industry are working to attract more people to the field. Advancing technology in the sector, raising awareness about accounting careers, increasing diversity, and changing the profession’s image are some of the ways they’re tackling the challenge.

Beyond the aggressive PR and outreach campaign already underway, one other way to ease the shortage would be to completely eliminate accounting as a major. Wrote John “Jack” Castonguay, PhD, CPA in the August/September 2021 CPA Journal:

Even though the CPA Evolution Project is aligning the credential with practice, it is also underscoring that the value in the license lays not within the accounting curriculum that has existed for decades; the new value is the technology, the analytics, the systems, and the tax research. But I believe the curriculum realignment anticipated by the CPA Evolution Project will only lead to an even faster decline in enrollments if accounting remains siloed as a stand-alone major.

As the profession gets more specialized, the accounting curriculum is expanding to include more information, more courses, more skills, and more tracks—but students are less skilled at each one. It’s a cycle that can’t be fixed by repackaging existing courses. It can only be fixed by eliminating the accounting major and unlocking accounting’s interdisciplinary value and specialization within finance, information systems, or other departments.

Viewed through this lens, the decline in accounting majors isn’t a crisis at all, rather an opportunity to innovate and redefine what “entry level CPA” looks like. Now if only we can figure out how to make it literally and figuratively worth it to young people.

A shortage of accountants is pushing the industry to reboot its image to win over young talent: ‘You have to sell them’ [Insider]

The post Accountants Are the Referees of Business, Says Guy Who Would Know appeared first on Going Concern.

Ranked #259 on the INSIDE Public Accounting Top 500 with revenue of $16,392,083, Clayton & McKervey has partnered with U.S. News & World Report “Most Innovative School” in the Midwest Adrian College to offer matching scholarships that cut the cost of a master’s by half.

As you’ll see from the press release below, both the school and the firm hope that this perk will entice new recruits in an increasingly strained talent market:

Adrian College’s Dean of Graduate Studies and Institutional Effectiveness, Christine Knaggs, Ph.D., said when Clayton & McKervey hires an accountant who has yet to pass their Certified Public Accountant Examination, and possibly needs additional credits, they will offer the employee a scholarship incentive to attend Adrian College and get the qualifications and knowledge needed to pass the exam through its MS program.

“This has been a model that we have wanted to implement for a while now,” Knaggs said. “What we essentially offer is matching scholarships. They offer a scholarship, we offer a scholarship, which significantly reduces overall the cost of the entire program for staff accountants who are hired by Clayton & McKervey.”

With the combined scholarships, students see a savings of approximately 50% of the total cost of the MS degree.

Knaggs believes this specific partnership program will add two to five new students a year to Adrian College’s overall enrollment, but expects those numbers will grow in the future with more accounting firms wanting to join in to help educate and advance their employees to CPA status.

“It’s small numbers right now because this is a relatively small firm, but this is a great model we hope to bring to other accounting firms to say, ‘look, we do this, it works, would you like to do something similar?’” Knaggs said, adding that accountants are in high demand right now.

“Some of our students are getting offers before they get their undergraduate degree,” she said. “So, small firms like this are looking for any opportunity to incentivize. If they can say, ‘come to us, you can get your master’s degree, we’re going to discount it a great amount, and we’re also going to prepare you for your CPA exam,’ it’s a package they can use to recruit staff accountants potentially from a larger firm.”

“To me, when you’re coming into public accounting, what you should do is look for how well you’re being trained, how well you’re being coached,” Jim Biehl, Clayton & McKervey CPA, MST, Shareholder said in a web presentation. “That’s the currency that you need to look for when you’re looking for a job. It’s not how much money you make. [Ed. note: LOL] It’s how much you’re learning, because five years in, if you’ve learned what you should have learned, you’re very marketable and you can go anywhere you want to go.”

Knaggs explained that Adrian College’s MS program is a fully online degree designed for students working full-time in a firm, and wanting CPA credentials. Most of the program’s students are self-paced, but a majority complete the degree in one year. All of the classes are led by Adrian College professors.

“Because it’s fully online, we can partner with firms all over the state, all over the country, potentially,” Knaggs said.

“The classes are completely taught by our faculty, Donna Baker and Laura Bearden, the two who essentially created the program, and a wonderful collection of adjunct instructors as well that supplement and teach some of the other courses,” Knaggs said. “We have some of the best CPA passage rates in the state.” [Fact check: 64.7% of Adrian College MS Accountancy students pass the CPA exam (self-reported figure). This rate is 11% higher than the MI average and 14% higher than the national average]

Accounting firm partners with Adrian College to offer employees major discount in MSA program [Adrian College]
Adrian College [U.S. News & World Report]

The post The 259th Largest Accounting Firm Is Paying For Unlicensed Staff to Pursue a Master’s at the 87th Best Online Business School appeared first on Going Concern.

2022 was also the year the PCAOB handed out the largest civil money penalty against an individual in PCAOB history ($150,000). Will they beat their high score this year? The odds are pretty good. If you have caught any of PCAOB Chair Erica Williams’ speeches in the last 12 months, you know that she and the PCAOB are done playing around.

According to FT, all this fining might do some good. The PCAOB is planning “a big expansion” of its scholarship program for students this year.

Under the law that created the PCAOB 20 years ago, in the wake of the accounting scandal at Enron, the fines it collects are put in a scholarship fund and distributed to promising accounting students across the US to help cover tuition and other education costs.

The agency gave out 250 awards in 2022 and is planning as many as 325 this year, according to PCAOB chair Erica Williams.

“We have to make sure that investors are protected today, but we’re looking to make sure they’re protected tomorrow as well,” she said. “There is a decreasing number of people majoring in accounting, and this is our opportunity to pull more young people into the field and also to expand the types of young people who see it as a path for themselves.”

The PCAOB Scholars Program has handed out more than $18 million in scholarships since 2011. These scholarships are one-time awards and cover direct education expenses like tuition and books.

So yeah. The fines will continue until morale improves. Nice to know all that bad auditing is doing some good.

Related: KPMG Still Rocks at Having the Worst PCAOB Inspection Report Among the Big 4

The post Believe It Or Not, KPMG Is Helping to Fix the Accountant Shortage Through Its Terrible Audit Work appeared first on Going Concern.

Any time the discussion of Ivies and accounting comes up, people who aren’t accounting graduates like to remind the discussers that accounting is a trade (like these Quora users who say Harvard doesn’t offer accounting for the same reason they don’t offer hairdressing and cosmetology majors, ouch), in a way that makes “trade” seem like a dirty word. There’s nothing wrong with the trades, in fact if you do the math many plumbers make more per hour than early-career public accountants (ouch again). But the implication is that accounting is not part of some greater picture in the way the liberal arts should be, that it is a specific set of mechanical skills taught to people who will spend their careers repeating these skills.

Ms. Newman, a philosophy major who somehow ended up working for Grant Thornton an in-house attorney, acknowledges this immediately:

Yale should offer an undergraduate accounting major.

“But Yale is a liberal arts college. Accounting is a trade.” “Yale trains leaders — entrepreneurs, CEOs, heads of state. Accountants are ‘bean counters’ who wear pocket protectors and green eyeshades.”

I have been at the periphery of this profession for 15 years and not once have I seen a green eyeshade, much to my disappointment. I’m pretty sure there is no one alive today who has seen a green eyeshade other than as a Halloween costume. Surely no one believes this stereotype in current year?

There is apparently a single undergraduate accounting course offered at Yale: ACCT 270a, Foundations of Accounting and Valuation:

Modern accounting practices and their use in distinguishing value creation from value redistribution. Basic determinants of value and the techniques used to assess it; the creation of value through the production and delivery of goods or services; the conversion of that value into cash flows; basic financial statements, balance sheets, income statements, and cash flow statements, and the accounting mechanics with which they are built. Undergraduate enrollment limited to 50. Juniors and seniors only.

ACCT 270 is taught by William S. Beinecke Professor of Accounting at the Yale School of Management Rick Antle, who looks exactly how you expect a professor of accounting at a prestigious school to look.

Like many future accounting grads, Antle didn’t even want to go into accounting (he wanted to be a lawyer). It was a professor at Oklahoma State known for poaching students from other majors who convinced him to do it. From a December 2020 Yale Insights interview, Antle explains:

[Dr. Wilton Anderson, head of OSU’s accounting department] also recruited students from other majors. He got me that way. I’d been given a small scholarship my freshman year. It was a few hundred dollars, but that was enough to cover tuition. I made all As, but the scholarship was only for one year. When I told Dr. Anderson, first he said, “There’s no better training for a lawyer than accounting. A CPA-attorney will never have trouble finding work.” Then, he offered me a scholarship from funds he had raised from the accounting firms. So, basically, the answer to your question of “Why accounting?” is, I was bought for $400.

A tale as old as time really.

Back to Ms. Newman’s argument for an undergraduate accounting program at Yale (the AICPA is salivating at the thought, I’m sure):

The accounting field has changed since the 1960s when President Brewster declared Yale’s mission to train “1,000 male leaders a year.” Accountants today are not number crunchers relegated to the back office. Instead, professionals trained in accounting are called to lead in the private, public and nonprofit sectors. Yale could help to enhance and ensure integrity in the global business community by rigorously training undergraduates in accounting.

The profession has changed tremendously since then, too. What was once a straightforward, oft-boring calling for business majors has now evolved into one at the fringes of a technological revolution (the AICPA didn’t pay me to say that).  Next year, future CPAs will be tested on technology concepts that up until recently weren’t required to meet the standard of knowledge and skills that entry-level CPAs must possess to practice public accountancy. Who knows how different things will be in a decade.

Here are three reasons she gives for why undergraduates at Yale should, as she says, have the option to study this challenging and evolving field as a major and acquire deep accounting knowledge to benefit society as leaders:

• The modern study of accounting is consistent with a liberal arts education The Yale College Programs of Study states that a liberal arts education “aims to cultivate a broadly informed, highly disciplined intellect without specifying in advance how that intellect will be used.” The goal “is to instill knowledge and skills that students can bring to bear in whatever work they eventually choose” rather than “train students in the particulars of a given career.” The modern study of accounting aligns with this mission.

• Accounting is a truth-seeking endeavor that can serve the public interest Yale’s motto is “Light and Truth.” President Salovey has emphasized the University’s truth-seeking mission and urged undergraduates to “fine-tune your ability to sift fact from falsehood.” Accounting — in particular, the subfield of assurance — is consistent with this imperative.

• A major in accounting will complement the major in economics and provide career opportunities Economics is currently the most popular major at Yale [when Ms. Newman was an undergrad in the early 2000s, it was history]. An accounting major would complement both the economics and history majors, given accounting’s focus on telling the story of an organization through historical financial information. Just as economics and history majors conduct original research, undergraduates could conduct impactful research in accounting like that done by students in the School of Management. Indeed, accounting research has influenced the U.S. Securities and Exchange Commission’s rulemaking processes, which in turn impact capital markets and the goal of investor protection.

For a profession facing a potentially catastrophic shortage of entrants, this might be just the kind of thing that breathes new life into accounting as a career and exposes a whole new crop of students to the possibilities (the AICPA didn’t pay me to write that either). Feel free to argue for or against it in the comments.

NEWMAN: Yale needs an accounting major [Yale Daily News]

The post Yale Grad and Grant Thornton Lawyer Argues The Case For an Undergraduate Accounting Program at Yale appeared first on Going Concern.

In it, questions are tossed out about how accounting education will change along with the ambitious CPA exam overhaul, with concerns raised about the graduates who will apply their pre-Evolution education to a post-Evolution exam. All of that is super interesting and important and worth reading for people who care about those things but here on Going Concern we try to see the bigger picture which in this case is a chart that looks like a dick. Fitting really, as it encapsulates how boned the profession is.

What are we looking at? The authors compared accounting degrees to computer science degrees completed in the state of New York between 2010 and 2020 which is how we ended up with this chode.

According to NASBA, as of August 2022, there are 665,612 licensed CPAs covering 54 jurisdictions (NASBA 2022). As of January 1, 2022, 65,164 are licensed CPAs in New York State (see the New York State Education Department, Office of the Professions, http://www.op.nysed.gov/prof/cpa/cpacounts.htm). Between 2015 and 2020, the number of NYS licenses issued declined by approximately 20%. Licenses issued in 2015 and 2020 were 3,282 and 2,626, respectively; this decline in 2020 may be partially attributed to COVID-19 as well as pipeline decline; in 2019 and 2021, 2,796 and 3,092 licenses were issued, respectively, which each represent decreases of 15% and 6% compared to 2015. The clear conclusion is that there has been a declining trend in the number of accounting degrees awarded in New York over recent years. According to the Integrated Postsecondary Education Data System (IPEDS), for all not-for-profit institutions in New York State, the total number of accounting degrees (both graduate and undergraduate) awarded between 2015 and 2020 decreased by approximately 7% in New York. Master’s degrees awarded in accounting, which are programs that qualify for licensure, declined by 10% over the same period. (According to the NYS Inventory of Registered Program, as of May 6, 2022, there are 204 total licensure programs, of which 183 are at the master’s level, 20 are bachelors, and 1 advanced certificate; see http://www.nysed.gov/heds/IRPSL1.html.)

Conversely, from 2015 to 2020, the total number of computer science completed degrees in New York State increased by 130%. Master’s degree in computer science master’s programs increased 76% during the same period. Although in 2020 total accounting degrees completed exceeded computer science degrees by approximately 27%, this is much less than the 216% excess in 2015. Exhibits 2 and 3 illustrate these trends over time.

Exhibit 2 is the chode above. Here’s Exhibit 3 (SFW):

The authors say that these divergent trends in accounting and computer science degrees may be attributed to current salary levels for recent graduates. Let’s be real, that’s a huge reason.

Computer science graduates earn approximately over $100,000, IT auditors $96,000, and public accounting graduates $66,000 (RobertHalf, “2022 Salary Guide,” 2021, https://www.roberthalf.com/salary-guide). Normally, graduates of public accounting and IT auditors typically will have 150 hours of education upon employment; an undergraduate degree in computer science is generally required for entry-level positions.

Looks like the profession is screwed.

Evaluating the CPA Evolution Initiative [The CPA Journal]

The post This One Chart Shows Just How Boned the Accounting Profession Is appeared first on Going Concern.

Is the accounting major too difficult?

At many universities, accounting courses (especially Principles I & II) have some of the lowest GPAs compared to other disciplines.

Why? Are we deterring the next generation of accountants or upholding a needed standard? #accounting

— Dr. Josh McGowan, CPA (@Jmcgowan3838) November 15, 2022

I thought it was Intermediate that has the highest KD ratio of accounting classes?

Anyway, that’s the question. Jump in on Twitter if you have an opinion. Old-timers who fiercely oppose any change to education because that’s not how we did it back in their day are also welcome to shitpost in the comments.

This guy gets it:

I just don’t think its a good idea to dumb down our profession. We just need to charge more.

I get it that firms can’t find enough staff, but you have a revenue/compensation problem, not a too-educated problem IMO.

— Kevin Cameron (@KSCameron) November 16, 2022

Related:
Is Accounting an Obsolete Major?

The post Is an Accounting Major Too Hard? A Thread appeared first on Going Concern.

According to the SBA, small business generates about 44% of GDP in America and 2/3 of new jobs annually. These businesses have their financial advisory needs served by hundreds of thousands of small firm accountants and CPAs nationwide. Small business has unique needs for accounting services: primarily tax and advising, and secondarily day-to-day accounting needs to act as de-facto controllers and decision makers. The need for formal financial statements is rare because lenders realize the high cost of audited financials is not beneficial to either party, so usually a tax return or basic prepared or compiled financial statement is provided. Similar to most small firms, my firm stopped auditing over 20 years ago and stopped performing reviews over 10 years ago because of this lack of client or creditor demand.

Thus, small firms provide indispensable advisory services to small businesses that account for nearly all new job creation and ½ of GDP. This small business group of accountants is declining at an alarming rate because of aging, retirement and, primarily, lack of new entrants in the field. The lack of new entrants comes from two factors: first a nationwide decline in accounting students (none of whom get hired by small firms); and second because small firms charge too little for their services to be able to pay comparable salaries. Smaller firms cannot pay competitive salaries because the graduates must be expensively retrained in small business accounting needs.

The burgeoning problem is exacerbated by educators leading students to work exclusively in Big 4 firms, educating their students exclusively in Big 4 curriculum and educators that were employed in a Big 4 oriented educate-train-work-educate cycle. This “Circle of Death” has led to a rapid demise of the very firms advising small business, the most critical part of the American business growth cycle. This circle is caused by the power wielded by the Big 4 firms over educators in the form of accreditation in college accounting programs, administered by the AACSB. Educators themselves also bear great responsibility for their failure to address or inform students about small business providing so much to America. The AACSB only accredits those schools providing the Big 4 demanded curricula, eliminating from accreditation any school offering alternative small-business accounting education tracks to the exclusion of nearly ½ of American businesses.

The traditional Big 4 accounting firms in the United States are Ernst and Young; KPMG; Price Waterhouse Coopers(PwC) and Deloitte Touche. Examine any college curriculum, AACSB accreditation requirement or news headline and it is quite evident the Big 4 control the educators through curriculum requirements, the state board rule makers through their board membership and background, national lawmakers through their PAC funds, and the media.

Ask any college accounting major and they have “swallowed the juice” of their accounting program and are trained, lemming-like, to only look at Big 4 firms and curriculum as the be-all, end-all future employer choice. They have learned nothing about the needs of small business with minimal (if any) coverage of financial statement preparation without an audit, working for clients without an internal accounting department, or the realities of being a small business advisor. An accounting degree in 2022 ignores the needs of companies providing nearly ½ of American GDP and 2/3 of new job creation.

Before I address this problem, here are a few headlines about the people that make the rules. And as an introduction, let’s just get it out of the way now: College accounting programs are taxpayer funded training programs for the Big 4. There, I’ve said it. Ticked off people make changes and it is far past time to tick off some people.

Headlines

https://www.sec.gov/news/press-release/2022-176
September 29, 2022. The Securities and Exchange Commission today charged Deloitte Touche Tohmatsu Certified Public Accountants LLP (Deloitte-China), the Chinese affiliate of the Deloitte global network of accounting firms, with failing to comply with fundamental U.S. auditing requirements in its component audits of U.S. issuers and its audits of foreign companies listed on U.S. exchanges. Deloitte-China agreed to settle the charges by paying a $20 million penalty and agreeing to extensive remedial measures.

https://www.sec.gov/news/press-release/2022-114
June 28, 2022. The Securities and Exchange Commission today charged Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, and for withholding evidence of this misconduct from the SEC’s Enforcement Division during the Division’s investigation of the matter. EY admits the facts underlying the SEC’s charges and agrees to pay a $100 million penalty and undertake extensive remedial measures to fix the firm’s ethical issues.

https://www.goingconcern.com/pwc-canada-is-the-latest-big-4-firm-to-get-busted-by-regulators-for-employees-cheating-on-internal-training-courses/
February 15, 2022. The Canadian affiliate of Big Four firm PwC has agreed to pay nearly $1 million in penalties after regulators found widespread cheating on internal education courses.

https://pcaob-assets.azureedge.net/pcaob-dev/docs/default-source/enforcement/decisions/documents/105-2021-008-kpmg-australia.pdf?sfvrsn=81a97edf_4
September 12, 2021. The PCAOB fined KPMG $450,000 for cheating on internal continuing education courses. By the way, I read about this at www.goingconcern.com.

https://www.sec.gov/litigation/admin/2019/34-86118.pdf
June 17, 2019. The Securities and Exchange Commission assessed KPMG with a $50 million penalty for using inside information to cheat on firm inspections, the agency also found that auditors were using inside information to cheat on internal training exams meant to reinforce professional work standards.

These are the companies leading our education programs. These are the companies that drive accreditation. These are the companies that taxpayers support through state budgets in accounting programs. Many will claim these are isolated instances. Absolutely not, these are indicators of a pervasive mixing of auditing with consulting under the pressure of profits from the very rule-makers and industry-leaders themselves. These cases are examples of the actions of companies willing to ignore rules. Yet, these very companies drive education, accreditation and training with taxpayer funded training programs.

Let’s look at a few of the filter down industry requirements from the Big 4.

• The classic 150 hours of education requirement that has decimated new student entry to the field,
• The audit independence rules that have eliminated any small firm in America from auditing financial statements. This is not a bad thing. But, after reading the above cases do you need any further proof that it should also be required in Big 4 firms? The AICPA effectively eliminated competition for the Big 4 firms with the necessary independence rules, but conveniently wrote the rules in a manner to permit the Big 4 to work both sides of the audit fence.
  • Auditing itself has become a farce for small businesses that must consider multiple expensive disclosures for items that are not present in the business, but for which the accountant could be reprimanded or censured for not disclosing. Between necessary independence requirements and unnecessary disclosure requirements the AICPA has effectively shut out any small accounting firm from performing audits and has forced creditors to abandon the need for outside accountant’s reports whose cost exceeds their benefit to the client or creditor.
• The AACSB accrediting agency for college programs that is so clearly run by the Big 4 that they are essentially a division of the amalgam EYPWCKPMGDT.
• A required college curriculum that ignores small business to the tune of lunacy. There is no education for lesser-than-audit level reporting; payroll; sales tax; nexus; property tax; small accounting software; client advising, bank reconciliation; individual income tax (1 practice case doesn’t cut it); or the myriad small business issues that occur daily. A single finance course discussing buying vs. leasing provides more useful information for small business than any auditing course.
• Media input: Let us show you how ridiculous it is for the media to quote someone from a Big 4 firm about individual or small business taxes by asking a simple question: How many small firms have Fortune 500 clients and how many clients do they have earning hundreds of millions of dollars annually? That would be none, but small firms don’t try to answer media questions about how a new law affects Fortune 500 clients, while the Big 4 are happy to talk about how a new law affects the “average American”. Ludicrous.

The accounting industry is facing a major dilemma caused by the last five year’s crop of new students being so small. It is so small because of the 150-hour rule, the work them to death plan at Big 4 firms, and the perception of unethical behavior that these headlines instill. Few of these graduates will consider working for a small firm-it has been instilled in them from the beginning that Big 4 is the only option. Small business and small accounting firms are totally ignored in our current AACSB-mandated education system and small business and small firms are the canary in the mine of accounting students. The dilemma has been caused solely by the Big 4 and their heavy-handed control of college educators, rule makers and PAC-influenced politicians.

Small business and small firm accountants have already passed the tipping point, they are caught in an avalanche of aging and retiring (or dying) accountants, a paucity of new hire interest, an overwhelming lack of recognition by the media, a failure by their state Boards to recognize anything about small firm problems, and an education system that is worthless for small business.

What intelligent business owner would hire a new graduate for $75,000 annually that is so incompetent in small business that they can’t even fill out a W-4 to start working? Frankly, the new graduates don’t even know what a W-4 is or what it is used for or how our tax system works.

Suggestions

My limited suggestions for improvement for small firms follow, and they are sure to tick off the pointy-heads.

• Immediately, now, yesterday do away with the AACSB accreditation rules for all national accounting programs.
  • Add a new small business component requirement. You could make room for this by dropping all ethics courses for AACSB Big 4 curriculums since they don’t get followed anyway.
  • Cut off all state/university funding for accounting schools until a small business component is added and the AACSB actually talks to someone doing accounting and modifies its Big-4 curriculum requirements.
• Require accounting professors to have relevant work experience (in the last 5 years) in the field, including 2 years or more in smaller firms. How can you teach this stuff if you’ve never done it? If the professor’s only experience is in a national firm auditing department, limit them to teaching those courses and general accounting courses. Replace “publish or perish” evaluation rules in accounting education with “practice and perform” reviews.
• Drop this insane 150-hour requirement in all states so that we can get students interested in a field that does not require a master’s degree. We aren’t Doctors.
• Educate the media about small business. Hello, McFly-the AICPA should be all over this. Media quotes for how laws affect small business should come from small business accountants.

As a 40+ year licensed CPA (Indiana) I long ago figured out that I did not need to be a CPA to work with small businesses. Bankers don’t want audits anymore from small business; they are happy with tax returns, and I don’t need to be a CPA to do what I do. Most of my small-firm peers have come to the same conclusion that without many of these changes, small firm accounting is dead.

Accounting degrees now have minimal value for practicality in small business, so we now recommend that everyone interested in small business become an IRS Enrolled Agent (I have been for 12 years) and possibly a CFP® (I was for over 30 years) for the practical side. The training requirement to become an EA or CFP is much more practical than any accounting degree, and a whole lot cheaper. Both are much more useful than being a CPA for the businesses that generate 44% of American GDP. Hire a math major or a manager at Wendy’s and train them in the practical side of taxes and financial advising through a tax bootcamp or a CFP® training program.

Give this to your elected representatives and potential students. There is a place for Big 4 firms, without a doubt, and my experience with the old Coopers & Lybrand was incredible. The Big 4 need to recognize however that without small business feeding the pipeline, there would be no big business for them, and the current model has totally failed.

Bob is a 40+ year experienced practicing small-firm CPA and 20+ year former university accounting professor. He has spoken to tens of thousands of tax professionals in a 35 year career as President and founder of Taxspeaker as a fiercely independent and US-owned national education company. Bob is the author of dozens of manuals and articles, as well as the author of several books about Social Security and Financial Planning as a former CFP.

The post College Accounting Programs Are Taxpayer-Funded Training Programs for the Big 4 and Other Such Muckraking appeared first on Going Concern.

Alright, let’s see what happened.

The first mistake OP made — if we don’t count interviewing with Grant Thornton as a mistake which we should — was cancelling five interviews after HR said a job offer was on the way. You should be shopping around, especially now when competition for talent is so high. Your future in public accounting hinges on your team and firm culture, not fitting in will make your already hellish life even worse. Granted, “firm culture” is a nebulous term firms enjoy trotting out for self-congratulatory press releases but it also has a huge impact on your day-to-day. By interviewing with several firms you’ll get a feeling for the firm and figure out if you’re a good fit. Trust your gut on this, if a firm you interview with gives you a bad feeling keep looking. When you’re shopping for a new pair of shoes and don’t know exactly what you want do you grab the first pair you come across when you Google “shoes”? No, you check a few out. Unless you are a sub 1 GPA student on parole who flunked Intermediate seven times, you are in demand. There is no reason to take the first offer that comes your way.

The second mistake was counting on a verbal offer. For all you know HR was rolling on molly that day (people get crazy when they’re working from home, ya know) and thought you were the greatest candidate ever to apply to the firm, doesn’t mean they actually want to hire you. We aren’t seeing offers getting pulled en masse yet but if the economy gets any worse that’s certainly a possibility so it’s more important than ever to remember that offers can and do get pulled, especially verbal ones. Keep your options open until you’re onboarded. Hell, always keep your options open.

As you can see from the edit OP clarifies that they applied online and not on campus but the advice to bring this to the school stands. Your school is a valuable source of talent for any firm, it would behoove them not to burn bridges like they are always warning you all not to do.

Anyone have field reports on campus recruiting to share? You know what to do. Best of luck to OP, I’m sure they’ll find something even better soon.

The post Young Accountant Narrowly Misses the Tragedy of Working For Grant Thornton appeared first on Going Concern.

Financial Times wrote about Accounting+ recently which is how it got on our radar. Read:

Its website emphasises how technology and artificial intelligence has automated many old accounting tasks, opening up avenues for more creative work such as data analysis, advising on business decisions and hunting down fraud. (The site also offers quizzes and astrological advice on which type of accountant youngsters may want to become. Gemini, Libra and Aquarius are the “thinkers, communicators and doers of the zodiac” who “analyse, synthesise, and probe” and “would thrive in a forensic accounting internship program”, for example.)

The Accounting+ campaign echoes Warren Buffett in calling accounting “the language of business”.

“We believe this is a tie for students of colour, that it is the language of business and provides a pathway to entrepreneurship,” said Liz Barentzen, vice-president at the CAQ. The group believes that increasing the numbers coming into the profession depends on widening its appeal to diverse communities.

“There is a generation coming up that places a premium on a diverse and inclusive workforce, but we do not have that story to tell yet,” Barentzen said.

Perhaps we are just bitter elderly millennials (I am) to find this whatever the opposite of effective is but is this the best we can do? What Kind of Accountant Should You Be quizlets?

Anyway I guess this is what we’re doing now. Accounting may be the language of business but starting salaries tell us that accounting isn’t very fluent which is why analytics, finance, and tech are winning the competition for young talent thus far. Hey, at least there’s job security.

The post We’re Going to Solve the Accounting Pipeline Shortage With 2013 Buzzfeed Quiz Results, You Guys appeared first on Going Concern.

This is Steve Rock, associate professor of accounting and chair of the Professional Effectiveness Division at Leeds School of Business at the University of Colorado Boulder:

Rock said students need 150 credit hours to qualify to take the exam to become certified public accountants, or CPAs, a key certification to advance in the field. If they aren’t coming in with college credits completed in high school, that can add an extra year of study. With the wage premium that accounting used to offer shrinking or going away, more students are doing a cost-benefit analysis and choosing other business majors.

“Accounting students typically earned the highest salaries coming out of the business programs. All other programs have been increasing their salaries. There is no longer that salary premium,” Rock said.

Accounting firms also had a reputation for hiring the strongest business school graduates and working them hard to see who would emerge from that “tournament,” Rock said. But those survivors, once they developed expertise in a given company or industry, are highly sought after in the corporate world. A job at an accounting firm often serves as a stepping stone to bigger and better things rather than a career destination.

And we wonder why firms are having trouble hiring.

The post Accounting Firms Can No Longer Hold Sadistic Survivor-y Competitions For Talent, Says Guy Who Sounds Disappointed About That appeared first on Going Concern.

The abstract:

Popular culture portrays accounting as a miserable job. Accounting research evaluating the boring “beancounter stereotype” argues that it is wrong and costly because it reduces the appeal of accounting to high quality students and exacts a psychological toll on accountants who are thus stereotyped. In this study, we empirically test the basic question: is accounting a miserable job? We use data from a variety of sources that enable us to measure workplace misery and model it as a function of work tasks and personal characteristics of workers across occupations. We find that accounting work is particularly sedentary, rigid, repetitive, constrained, and rules-centric; characteristics that are consistent with the accounting stereotype and that prior work outside of accounting has shown are associated with workplace misery. However, we find that accounting is not a miserable job. In univariate and multivariate tests, we find that accounting has misery values that are either near the average or are better than average for comparison jobs. This apparent paradox could be a positive consequence of accounting stereotypes, which may facilitate the matching of potentially miserable work with people who are most prepared to tolerate it. Indeed, we present longitudinal evidence suggesting that accounting attracts people with personalities suited to repetitive and rules-centric work and who have psychosocial histories that make them robust to stress. Workplace misery is costly to workers, employers, and society and accounting stereotypes have value if they facilitate informed career selection.

The introduction opens with this quote from Monty Python:

“…our experts describe you as an appallingly dull fellow, unimaginative, timid, lacking in initiative, spineless, easily dominated, no sense of humour, tedious company and irrepressibly drab and awful. And whereas in most professions these would be considerable drawbacks, in chartered accountancy they are a positive boon.”

Misery is “a state of suffering and want that is the result of poverty or affliction” per Merriam Webster. It can also describe “a circumstance, thing, or place that causes suffering or discomfort” or “a state of great unhappiness and emotional distress.” In the study, researchers used “workplace misery” to refer to suffering that is the result of workplace afflictions. Just so we’re clear on definitions and what misery is exactly in the context of this paper.

Alright, let’s get caught up on earlier research mentioned in the paper:

Accounting work has long been portrayed in popular culture as boring, rigid, and monotonous (Allen 2004, Beard 1994, Richardson et al. 2015, Smith and Briggs 1999, Smith and Jacobs 2011, Warren and Parker 2009). A branch of accounting literature argues that such stereotypes are costly to the profession because they reduce the number, quality, and diversity of people selecting into accounting careers (Baldvinsdottir et al. 2009, Beard 1994, Briggs et al. 2007, DeCoster and Rhode 1971, Friedman and Lyne 2001, Jeacle 2008, Smith and Briggs 1999), and that accounting careers are more interesting and compelling than the stereotypes suggest (Belski et al. 2003, Chen et al. 2012, DeCoster and Rhode 1971, Jeacle 2008, Warren and Parker 2009). However, other accounting literature suggests that accounting jobs are miserable. A majority of accounting educators and practitioners would not major in accounting if they “were completing their education over again” (Albrecht and Sack 2000, Ch. 4) and CPA firms have exceptionally high employee turnover (CPA Journal 2018). These problems are potential consequences of a widespread “burnout culture” in accounting that, in the early 2010s, caused “crisis level attrition” and a “rebellion” among junior staff at PwC (Nusca 2018, Purtill 2018), and of a mismatch between the personality traits that lead to success in accounting degree programs and those that lead to success in accounting firms (Briggs et al. 2007). Whether accounting is a miserable job is an empirical question that has not been carefully evaluated previously.

In the study, authors modeled workplace misery across occupations as a means of testing whether accounting is particularly miserable relative to available alternatives, comparing accountants against other workers and also against a subset of workers more closely matched with accountants in terms of education. To make empirical evaluations of misery in accounting as exhaustive as possible, they evaluated it in three settings, each of which enabled them to measure misery and its potential causes in distinct ways using large samples of random Americans. What they found after evaluation will come as a shock to Going Concern readers: their evidence suggests that accounting is not a miserable job and, by some measures is significantly less miserable than other jobs and less miserable than would be expected given its characteristics.

Essentially the paper suggests that accounting may in fact be miserable to outsiders were they to pursue a career in accounting however those who are attracted to accounting careers may be better equipped than those people to tolerate these conditions. That’s right, you all are resilient and uniquely built to survive stressors that others would perceive as miserable. Well, that’s one potential explanation anyway:

To summarize, we show that accounting is a job that, because it is sedentary, rigid, and repetitive, has the potential to produce high rates of misery. Yet it does not, at least not according to accountants. A potential explanation is that people choose accounting careers from a menu of options, likely with foreknowledge of accounting stereotypes (Haslam et al. 1998). Given that accounting stereotypes are accurate to a degree, they may protect against misery by facilitating informed career selection. This explanation is supported by two prominent theories of workplace misery. The first posits that misery is a function of the degree of person-environment fit (Caplan 1987). If people believe accounting stereotypes are accurate, those who are relatively tolerant of rigid and monotonous work should be more likely to pursue accounting careers, to find that their accounting job is a good fit and, therefore, to experience relatively little workplace stress. The second posits that misery is a consequence of initial illusory idealism about a job followed by disillusionment after exposure to work’s realities (Freudenberger 1974, 1975). Given evidence that students selecting into accounting degree programs are particularly unlikely to choose accounting because it is interesting to them (Madsen 2015), accountants may be protected against disillusionment because they were never illusioned to begin with. These explanations have the practical implication that accounting stereotypes likely have significant upsides for accountants and their employers, and efforts by the profession to counter these old stereotypes, if they were successful, would likely have negative unintended consequences (Briggs et al. 2007, Jeacle 2008).

LOL: “accountants may be protected against disillusionment because they were never illusioned to begin with.”

All this time we’ve wondered if students are being scared away from the profession by certain cynical accounting blogs and negative Reddit posts and people on Fishbowl complaining about how burned out they are. And yet this research says the exact opposite: the stereotypes — which are mostly true — recruit well-informed individuals who thrive in this environment. The takeaway here is that you all need to step up your meme game and make sure students considering the accounting track are fully aware just how miserable your job is. Hope the AICPA is reading this!

Read the whole paper: Is Accounting a Miserable Job? [PDF]

The post In 2019, Academic Researchers Tried to Answer the Question ‘Is Accounting a Miserable Job?’ appeared first on Going Concern.

Accounting industry. We all agree there numerous issues & major changes are needed. The ultimate question is even with all the issues, why are ppl not willing to overcome all of them & either enter or stay in the profession? Its about the industry as a whole. WTF am I missing?

And a follow up thought to that:

For example, is the industry not dynamic enough or ppl don’t see the opportunities? Are they being scared away or driven away? Why isn’t the goal for the industry to tell ppl it’s worth it?

— KeithKauffman (@KeithSKauffman) June 15, 2022

A few thoughts:
Sunk cost can sometimes make people endure situations they should have removed themselves from long ago; 13 years circling the profession like a evening news traffic copter looking for a crash has taught me that unhappy, underpaid, overworked accountants are not anything new. Go up to any current or inactive CPA over the age of 65 and mention how many hours you worked this past busy season, guarantee he (and it is most likely a he) will blow your ears out with stories of even longer hours under far more hostile conditions than we enjoy today. But it’s like some of you just end up here almost by accident and don’t ever consider walking away because change is hard or something. You accept that it sucks because you’ve been told it just does, end of story, oh well, guess this is my life now.

On a related subject, have any of you spoken to a CPA today? Or in the last 20 years? Of the hundreds or maybe thousands of you I have met since 2007 not a one of you exudes happiness. OK that’s not true, Tom Hood comes off as genuinely happy. Everyone else though… In other words, accountants are not very good billboards for accounting. Firms can use as many stock photos of young people paragliding across nondescript scenic landscapes as they want in recruitment brochures, we all know the “exciting world of public accounting firm travel” is hotel after hotel in such exotic destinations as Omaha and maybe upstate New York if you’re lucky, and anyone other than recruiters at Meet the Firms will tell you this. Where’s the draw? Where’s the thing that makes young people sit up and think to themselves “ooh, I wanna do THAT!”? Because we know it’s not the money.

I won’t even get into the money because it’s been done to death. OK, I’m going to get into it briefly. The accounting profession has a critical value proposition problem — it has consistently failed year after year to demonstrate that it offers enough perks to make up for the downsides. The profession asks students to commit five years of their life plus however long it takes to study for a difficult professional licensing exam oh and also you’re going to be doing 70 hour weeks in a good week while living with four roommates for the first couple years but don’t worry, one day you’ll make some good scratch. You just have to get through a very unpleasant gauntlet first. If you express any discomfort about this process, you’re labeled a punk who can’t hack it in public by people who also can’t hack it because no one can but they do it anyway and say nothing because their university professor told them if they don’t shut up and take it they’ll be marked unemployable for the remainder of their career.

The profession set up a giant sausage grinder to run accounting graduates through and then wonders why no one wants to get ground up? And then people who do decide to go through said grinder anyway get spit out and end up writing stuff like this:

To anyone thinking about joining big 4, DO NOT. I ignored warnings for years thinking if people were so unhappy they should just leave and stop complaining. Do not ignore this. They will fuck you in the ass then toss you in the dumpster with a checklist of things to complete before they haul you away to the fucking landfill.

Tldr: FUCK BIG 4. I worked myself to death, I worked through deaths in the family, I was ignored, bullied, and thrown away. If you are recruiting, GO SOMEWHERE ELSE. You are nothing to them. You are a number. They will grind you up and spit you out. We’re all just another brick in the fucking wall. Fuck your [colored shape].

I protected the identity of the grinder in question. They’re all the same anyway.

To directly answer Keith’s question: “Why isn’t the goal for the industry to tell ppl it’s worth it?” BECAUSE PEOPLE CAN SEE WITH THEIR OWN EYES IT IS NOT. Accounting is in direct competition with better paying industries (tech), more prestigious industries (medicine, law), and better work-life balanced industries (grave digging, government work, any minimum wage job that caps you at 32 hours a week so they don’t have to pay for your health insurance). As it stands, the profession has not sufficiently demonstrated to students that it is worth it both literally and figuratively. Simply telling them “no but it is” is an ineffective strategy as we can see. Making shinier brochures and forcing smiles on exhausted faces is not going to fix the problem. Fix the value proposition problem and you might get somewhere.

Anyway, just my $0.02.

Looks like Keith has been collecting some good responses so far. If you’re on Twitter go over there and give him your own. Or drop them in the comments below, whatever.

Follow up on why, here is what I have heard so far:
Comp to low for skills
Overworked/underpaid
C-suite undervalues
Work/life bal sucks
Can’t see Opportunities
Accting Ed not aligning with real world
Churn & Burn still
I am sure there are many others
Now, for the next question:

— KeithKauffman (@KeithSKauffman) June 15, 2022

Update: r/accounting had a lively discussion about this article, you should check it out. Shout-out to this person in particular:

This is the most ignorant and poorly written pseudo-antiwork article on the accounting profession I’ve ever seen.

Just doing my best here buddy, thanks for noticing.

Also going to add a bit of related reading: What Exactly Is the Profession’s ‘Pipeline Problem’ and Why Should You Care? published here July 2021.

The post Why is the Accounting Profession Scaring Everyone Away? appeared first on Going Concern.

The workshop takes place at the Wigwam resort in Litchfield Park, Arizona October 12-14, 2022 and aims to strengthen students’ professional skills and understanding of the limitless possibilities and benefits of the career and earning the CPA credential. Participants will participate in learning sessions and panel discussions covering a wide array of topics such as developing leadership skills and the CPA exam. Participants will also have the opportunity to interact with CPA professionals who will share priceless knowledge regarding career opportunities in accounting and the value of networking. [Note: the preceding paragraph was copied directly from the AICPA hence the flowery language. We’ll give them a pass because the pipeline is a critical issue; if no one wants to be a CPA we’ll have nothing to write about]

Eligibility requirements are as follows:

• Be a declared accounting major, or have interest in joining the accounting profession
• Be a college freshman, sophomore, junior, senior, 5th year, or graduate student
• Be actively involved in campus and community activities
• Have not attended a past workshop
• Be an ethnic minority (i.e., Black or African American; Hispanic or Latino; Native American; or Asian, etc.)
• Be a U.S. citizen or Permanent Resident (green card holder)
• Be a Student Affiliate Member of the AICPA
• Be able to provide the name and email address of two references who have agreed to provide a recommendation on your behalf. The reference must be from a faculty member.

Link to apply here. Current CPAs are not eligible to attend this event. Questions can be directed to diversity@aicpa.org.

For tons more scholarship opportunities, visit the This Way to CPA to search national scholarships.

The post YSK: AICPA Accounting Scholars Leadership Workshop Application Period Ends June 15 appeared first on Going Concern.

When you really think about it, there’s a strong parallel between the imaginary drug pushers of ’80s anti-drug PSAs and the world’s largest accounting trade organization. Both want to get kids started young. And while the AICPA isn’t giving out drugs (neither were the non-existent creeps lurking in the bushes outside of elementary schools we were warned about TBH), they are giving out a ton of scholarships which frees up your own money for drugs. Then you have your accounting program professors telling you about how cool Big 4 life is and how you’ll end up a big fat loser if you don’t go there, much like the schoolyard bullies of ’80s PSAs threatening to nuke your social life if you don’t take a little puff of their dirt weed.

Oh, and the peer pressure! One of the tenets of D.A.R.E. is learning how to resist peer pressure; coincidentally, peer pressure happens to be one of the tenets of Big 4 firms, what with low-level grunts pressuring each other to eat hours, stay late, skip family functions, and definitely don’t leave the firm during busy season you big chicken BAWK BAWK. If anyone ever suggests you’re a chicken for washing out of a Big 4 firm, tell them you’re not a chicken, they’re a turkey. You know what … don’t do that. That’s the dumbest shit I’ve ever heard. What a dork. I can’t believe that guy wanted to waste his weed on a dork like that.

AND THEN when you finish up your degree and start your career in public accounting, people will offer you actual drugs to help you manage the long hours. Granted these people are usually doctors and the drugs are prescription stimulants.

Look, we’re not saying no one should pursue accounting. But we’re not saying no one should do drugs either. Honestly I don’t know what we’re saying, really I just wanted an excuse to post this radical 1987 relic and remind the kids to JUST SAY NO.

Oh and for any fellow olds nostalgic for the classic “this is your brain on drugs” eggs, here you go. And remember, in most cases providing CPA services to legal marijuana clients is not considered an act discreditable. Suck on that, McGruff.

The post If the AICPA Offers You a Career In Accounting, Just Say No appeared first on Going Concern.

“In my view, the future of the CPA profession is at risk,” writes Yigal Rechtman, CPA, CFE, CITP, CISM in a letter to the editor published by The CPA Journal. Time to whip out an ancient Game of Thrones meme here:

The 2021 AICPA Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits report released a couple weeks ago tells us that the number of accounting graduates trended downward in the 2019–2020 academic year (most recent data available), with decreases of 2.8% and 8.4% at the bachelor’s and master’s levels, respectively; accounting grad numbers have been trending downward since 2015-16 with the 2019-20 number showing the most significant drop-off of recent years (3,391). Can we blame the pandemic for some of that? Maybe. We’d be wise to wait for the 2023 AICPA Trends report to see if the trend continues before getting too worked up about it.

The issue of the accounting pipeline problem has been discussed here ad nauseam but this is accounting so we really have so few things to talk about, why not throw a few more ideas into the flaming dumpster fire? Here are the reasons Rechtman gives for why the future of the CPA profession is at risk, an issue that could potentially cripple capital markets and therefore our capitalist system entirely:

• Lack of mission or purpose To counter this perception, the accounting profession could be rebranded as a foundational force of social stability and progress, and not just as “a job” with long hours and low return on investment (ROI) on education.
• A narrow focus on numbers Accounting provides a golden toolkit of critical thinking and information brokering that can work in both traditional and innovative ways. For example, every startup would benefit immensely from having a CPA among its founders.
• An exclusive brand. There is another way of putting this: Accounting is a profession whose brand has not been diluted. For example, the AICPA’s idea of expanding its membership by opening the certified in financial forensics (CFF) certification to non-CPAs runs counter to the exclusivity of the CPA brand.
• The pay isn’t worth the educational investment Here we need to make changes to the ROI calculus of education costs. The “fifth-year” experiment has had the unintended consequence of costing prospective entrants a 20% premium just for the chance of passing the CPA exam. With a 40% pass rate, this is a tough sell. It’s time to drop the fifth-year requirement.

Let’s talk about that last point. While it may be a tough sell, the AICPA has tried to sell it anyway. Here’s a list of reasons why a traditional four-year undergraduate program is no longer adequate for obtaining the requisite knowledge and skills to become a CPA (in their words):

• Significant increases in official accounting and auditing pronouncements and the proliferation of new tax laws have expanded the knowledge base that professional practice in accounting requires.
• Business methods have become increasingly complex. The proliferation of regulations from federal, state, and local governments requires well-educated individuals to ensure compliance. Also, improvements in technology have had a major effect on information systems design, internal control procedures, and auditing methods.
• The staffing needs of accounting firms and other employers of CPAs are changing rapidly. With more sophisticated approaches to auditing now in use, and with the increase in business demands for a variety of highly technical accounting services and greater audit efficiency, the requirements for effective professional practice have increased sharply. The demand for a large quantity of people to perform many routine auditing tasks is rapidly diminishing.

These bullet points may be true — the expansion of the entry-level CPA’s knowledge base certainly is, and will only be larger when the redesigned CPA exam launches in 2024 — but none of them make any mention of the value to the student who may be wondering if a master’s is literally and figuratively worth it (spoiler: it is literally not).

OK so the AICPA sucks at selling the fifth year requirement, whatever. Problem is the fifth year requirement sucks at selling itself, too.

A 2018 paper by John M. Barrios at University of Chicago Booth School of Business shows us that the 150-hour rule reduces the supply of accountants (you know, that whole pipeline thing everyone is worried about) AND doesn’t do much to improve the quality of the supply who are required to meet said rule:

Although the Rule reduces the number of entrants into the profession, an analysis of labor market outcomes shows that accountants subject to the Rule are more likely to be employed at a Big 4 public accounting firm and specialize in taxation. However, accountants subject to the Rule have the same likelihood of promotion, the same duration until promotion, and exit public accounting at faster rates than their non-Rule counterparts. Moreover, Rule accountants earn a wage premium relative to non-Rule accountants. These findings suggest that restrictive licensing laws reduced the supply of new CPAs and increased rents to the profession without drastically improving quality in the labor market.

Many years back when not all states required 150 hours, the state — sorry, Commonwealth — of Virginia realized that its then-extraordinary 150 hour requirement was causing the state to lose CPA candidates to other, less restrictive states, a side effect that was costing them money. “The Commonwealth doesn’t want to lose its valuable CPA candidates and wants to retain those Exam takers. In addition, reducing the requirement would have a positive impact on Virginia’s budget,” said the Virginia Society of CPAs. The issue was so urgent that then-governor Tim Kaine signed emergency legislation in May of 2009 allowing Virginia CPA exam candidates to sit for the exam with just 120 hours. So that’s a consideration too, the time and financial investment necessary to meet the 150 hour requirement could be partially contributing to the gap between high numbers of accounting graduates and mostly steady or even declining CPA exam candidate numbers. That decline means fewer application and exam fees collected by The Powers That Be (a.k.a The Dark Triad of the AICPA, NASBA, and Prometric along with individual state boards of accountancy), an issue that should certainly get their attention.

“Filling” the CPA pipeline is one of the AICPA’s primary strategic initiatives in 2022 and when we look at the list of things they’re doing toward this goal we see the bulk of it is marketing and PR. From the Trends report:

To address the US CPA pipeline’s downward trend, we collectively need to promote:

• K-12 and high school students interest in accounting
• University students majoring in accounting and other related majors
• University students deciding to sit for the CPA Exam
• CPA candidates securing the CPA license
• Young professionals further exploring sitting for the CPA Exam
• The promotion of the accounting profession and the CPA license globally

If the profession is that worried about the future (it ought to be), it’s time to have the difficult conversation about self-imposed barriers to the profession. Pushing for accounting to be classified as a STEM field and initiatives to plant the seed in kindergartners’ minds of accounting as a career may not be enough.

If things get really dire we could just abolish the CPA exam altogether but let’s maybe try some less extreme measures first, maybe starting with getting better at demonstrating the value of a career in accounting (firms, this is where you start paying people better) and justifying the burden of a fifth year of education for licensure. Yeah, that should do for a start.

Photo by cottonbro

The post 4 Reasons Why the Profession Is Struggling to Convince Students to Become CPAs, #4 Will Not Shock You appeared first on Going Concern.

This latest iteration of the report covers university data reported to the Integrated Postsecondary Education Data System (IPEDS) for the 2019–20 academic year in addition to abbreviated university responses regarding enrollment expectations for both the 2019-20 and 2020-21 academic years. Firms data presented in this report are a mix of statistical projections and descriptive statistics calculated from firm survey responses. I borrow the previous two sentences from AICPA Academic in Residence Jan Taylor, CPA, CGMA, Ph.D who penned the report’s introduction. As we consider this data, let’s all remember that 2020 was an extraordinary year and we are still feeling the effects today. I guess I didn’t need to remind you of that. Whatever, the pandemic screwed a lot of things up.

Ready to find out how things shook out the last couple years? Let’s go.

Accounting enrollments

The late aughts and early ’10s were kind to accounting programs, strong in part due to the 2008 financial crisis and the resulting rise in accounting enrollments that came about when unemployed people on the brink of foreclosure found out that accounting was one of the few industries with a relatively low unemployment rate. By 2014 however, the benevolent overlords at the AICPA noticed a troubling statistic: despite record enrollments, this abundance of accounting students did not appear to be pursuing the CPA exam as expected. In other words, more people than ever were graduating with accounting degrees but CPA exam candidate numbers stayed the same. Said AICPA President, CEO, and cross-stitch enthusiast Barry Melancon in 2014:

We have had about six consecutive years of record numbers of people majoring in accounting. That’s a great thing. For the last three years, however, we’ve basically had a level number of people taking the CPA exam. So there is a gap that’s building.

This concern has since been added to the laundry list of complications collectively called “the pipeline problem,” a maelstrom of issues that alone wouldn’t have much impact on the profession but in the aggregate and occurring all at once are quickly leading to an accountant shortage. Some of the larger of these issues are:

• Low CPA exam candidate numbers
• A worsening accounting professor shortage
• Baby Boomers — who make up 47% of AICPA membership — are retiring en masse, accelerated by the pandemic
• Ongoing difficulty recruiting diverse candidates to the profession, thereby missing out on an entire pool of potential accountants

Additionally, the profession has been struggling with a value proposition as students weigh the demands of a career in accounting — mainly at Big 4 firms — with salary and benefits not fairly compensating for said demands. There are a few other minor pipeline issues that fall within the purview of perception problems but we’ll save the graphic details of those reputation issues for another day.

So how are we doing on filling that pipeline?

Accounting graduates trended downward in the 2019–2020 academic year, with decreases of 2.8% and 8.4% at the bachelor’s and master’s levels, respectively. Accounting programs are optimistic about enrollments for the 2021–2022 academic year — 58% of both bachelor’s and master’s programs respondents reported that they expected enrollment for that academic year to be the same or higher than the 2020–2021 academic year. (Note: IPEDS data for 2020–2021 has not yet been released at the time of this publication).

According to the chart on page 17, total accounting degree completions from 1994-2020 peaked in 2015-16:

The breakdown of the total supply of new accounting grads for 2019-20 is as follows:

• Associate’s: 11,625
• Bachelor’s: 52,481
• Master’s: 20,442
• Doctorate: 39
• Certificate: 18,298
• Total: 102,885

Hiring trends

The 2019 Trends report revealed an interesting shift in accounting industry hiring trends: 31% of new hires at accounting firms were non-accounting graduates. Increased demand for technology skills, particularly in the audit function, was credited as the reason behind this shift. Two years later, the number of non-accounting new hires is up by more than 10%. In the 2021 report, 42.7% of new hires are non-accounting grads. It is this writer’s humble opinion that this number will only continue to rise going forward as traditionally tech-averse accounting firms continue to embrace technology, especially as firms struggle to recruit and retain talent where technology solutions exist to replace tasks and processes previously performed exclusively or predominantly by humans.

Total hiring of new accounting graduates in 2020 has decreased by 10%, however there was a 2% increase in master’s graduate new hires. New non-accounting graduates hired into accounting and finance functions have increased by 10 percentage points. The hiring mix continues to shift, with 57.3% of new graduate new hires being accounting graduates and 42.7% being non-accounting graduates. New accounting graduate new hires are increasingly being assigned to audit — a shift of 11.5 percentage points from 2018. Of firms that hired one or more accounting graduates in 2020, 74% expect to hire the same number or more in 2022 as compared with 2021. Eighty-nine percent of all U.S. CPA firms expect to have the same number or more CPAs on staff in 2022 in comparison with 2021.

We continue to hear about a worsening auditor shortage at large firms which could perhaps be part of the reason why Audit made up such a large chunk of new accounting graduate hires by service line:

Diversity, Equity, and Inclusion

While the profession continues to struggle with diversity — less than 1% of the 658,267 actively licensed CPAs in 53 of the 55 licensing jurisdictions are Black, a percentage that has remained mostly unchanged in 40 years — some progress has been made.

In 2020, diverse hiring of new bachelor’s and master’s of accounting graduates into accounting/finance functions of U.S. CPA firms increased by almost five percentage points (includes multiethnic hires). Asian or Pacific Islander, Black or African American, and Hispanic or Latino new graduate new hires in accounting have all increased by near one or more percentage points (1.9, 0.6, 1.6 percentage points, respectively). These three groups comprise their highest (or very near their highest) percentage of the whole of new graduate new hires in the history of Trends’ data collection.

We will cover the details of the AICPA’s ongoing diversity initiatives and the impact they have in a later article.

CPA Exam Numbers and The Pandemic

More than any other data point in the 2021 Trends report, CPA exam candidate numbers were most affected by the pandemic due to test center closures, government lockdown restrictions preventing in-person testing, and candidates quarantining after exposure to coronavirus or avoiding in-person testing entirely due to virus concerns. The CPA Evolution project will see the launch of a fully transformed and refined CPA exam in 2024, no doubt “artificially” inflating new candidate numbers in the next few years as we saw happen ahead of the launch of CBT-e in 2010/2011. The sweeping change will mean a flood of candidates who might otherwise have waited to take the exam if taking it at all, a thought that should be comforting to Barry Melancon as he lies awake at night trying to figure out why no one is taking the CPA exam. Should candidate numbers remain where they are or dip even lower in the next Trends report despite the massive CPA exam change in 2024 ahead we have a big, big problem. Let’s not think about that for now.

The number of new CPA Exam candidates entering the CPA pipeline decreased anomalously in 2020 due to short-term closings and the various restrictions at Prometric® test centers, with overall COVID concerns carrying forward into 2021. As such, while new CPA Examination candidates decreased less than 0.5% between 2018 and 2019, there was a 17% decrease between 2019 and 2020. A 6% increase occurred between 2020 and 2021. The number of CPA Exam candidates who passed their fourth section of the exam decreased 11% between 2019 and 2020 after a 2% decline between 2018 and 2019. The number of successful candidates decreased 5.5% between 2020 and 2021.

So that’s the gist of where we’re at. There is so much more in the report worth reading if you’re into this stuff, and we’ll be putting together some more detailed snapshots of this data in the weeks ahead. To view the full 2021 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits report, just head to this link to download it from the AICPA.

Photo by Lukas

The post State of the Accounting Profession 2022 Via the AICPA Trends Report appeared first on Going Concern.

Allow me to refer back to this quick video put out by the Illinois CPA Society last year that offers just a few reasons why today’s accounting students are choosing not to head straight for the CPA as has been tradition since the dawn of (billable) time:

• They feel they can take off in their anticipated or chosen careers without it.
• They believe that any value the CPA credential holds is outweighed by its lack of relevance to their personal endeavors and the time commitment necessary to obtain it.
• They don’t see the personal or financial return on investment.
• Their employers or prospective employers aren’t supporting or requiring it.
• They see other experiences as being more valuable.

I’d like to add a data point to that list. I found this today in my “crap worth writing about on Going Concern” file, which is really just a bunch of screenshots littered throughout my pile of cat pictures and maybe a couple links buried in my 108 open Chrome tabs. It’s only a single screenshot but why waste time say lot word when few word do trick. This is from a CNBC article on master’s degrees that give the best salary boosts:

That’s $1,982. The government gave people more than that in stimulus checks in 2020. You can’t even purchase this (obviously) used 1995 Buick LeSabre I found on Cars.com for that:

I mention this as a tie-in to the ongoing issue of lower CPA exam candidate numbers because both issues are directly related to a single pervasive issue: perceived lack of value. You’re accountants after all, of course you’re going to consider more than anyone else whether or not something is worth it.

As we work our way through the AICPA Trends report data, I guess we’ll find out just how many people have decided 4% isn’t worth investing all the time, effort, and student loan debt into a master’s. While a master’s isn’t technically required for licensure, it’s historically been a good option to meet the 150-hour rule which some have pointed out is yet another deterrent to licensure after you get past that whole “not getting paid what I’m worth” bit, but that’s a topic for another day.

We’ll update this space with the Trends report master’s graduate numbers shortly.

Photo by Jeff Weese from Pexels

The post Accounting Bottoms Out the List of Master’s Degrees That Offer the Best Salary Boost (Read: It Doesn’t) appeared first on Going Concern.

So who has the edge in tonight’s match-up? You could say Kansas because they are a No. 1 seed, had more regular season wins than the Tar Heels, and won their conference (UNC didn’t). However, North Carolina is on a high after beating Duke and could carry that momentum into tonight’s game. But forget about their records. Forget about which teams they beat to get to the championship game. And forget about which team was seeded lower than the other. The team who has the edge in tonight’s game is the one with … the most players majoring in accounting.

But after scanning both teams’ rosters this morning, there are a grand total of zero players on both Kansas and North Carolina who are majoring in accounting. OK, how about finance or even business? You know the tall forward with the longish hair and bushy beard on the Tar Heels, Brady Manek? He was a graduate student transfer this season. Manek was a four-year starter at the University of Oklahoma and graduated with a degree in business administration/management. So that’s one for North Carolina? Does it even count because Manek didn’t get his bachelor’s degree from the University of North Carolina?

It doesn’t even matter. Kansas has two players—guard Michael Jankovich and forward Dillon Wilhite—who are majoring in finance, while guard Charlie McCarthy is a business major with an emphasis in finance.

Edge: Jayhawks. Who do you got winning tonight’s game?

The post Team With No Accounting Majors Takes On Another Team With No Accounting Majors For Men’s College Basketball Supremacy appeared first on Going Concern.

They include:

• AICPA Foundation Scholarship for Future CPAs $3,000 – $10,000
• AICPA Scholarship Award for Minority Accounting Students $3,000 – $10,000
• AWSCPA Scholarship Award $5,000
• AICPA John L. Carey Scholarship Award $5,000
• AICPA Foundation Two-year Transfer Scholarship Award $5,000

Each scholarship has its own requirements but if you qualify for more than one you don’t need to apply twice, you’ll be considered for any scholarships you qualify for as long as you apply to one. One requirement all Legacy Scholars program scholarships have in common is that you have to be a Student Affiliate Member of the AICPA to qualify. If you aren’t already a member, you can apply here (it’s free, don’t worry).

“What is the Legacy Scholars program?” I hear you not asking. Glad you didn’t ask! The AICPA Legacy Scholars program is designed to help students of different backgrounds become CPAs by assisting with the cost of their college education. The program also provides scholars with educational and professional development opportunities throughout the year. (I stole that passage straight from This Way to CPA. Sorry, guys, I didn’t feel like paraphrasing) The AICPA Foundation awards more than $1 million a year to hundreds of students, and with inflation at 6.2% you should absolutely try to get any part of that cool million you might be qualified for (the average award is $5,000 according to the AICPA).

If none of the above scholarships tickle your fancy, you can also do a national scholarship search on the This Way to CPA site to see if there’s one (or more!) right for you. Several scholarships listed on that page have closed for applications; however, The Accounting Doctoral Scholars Program opens for applications on March 1, and the 2022 AICPA Foundation William (Bill) Ezzell Scholarship — which awards $10,000 to five recipients — is open until March. There are several pages to scroll through with all kinds of state scholarships as well so click on through and see if there are any you qualify for. Hey, it’s free money for school! If you qualify, that is.

If you have any questions that aren’t answered by This Way to CPA resources, reach out to the nearest adult accounting program faculty at your school and they should be able to guide you. Now go get that money!

AICPA scholarships can support your accounting education [AICPA]
AICPA Legacy Scholarships [This Way to CPA]

Photo by Alexander Mils from Pexels

The post ICYMI: The AICPA Legacy Scholarship Application Period Is Open Until March 1 (IOW Free Money For School) appeared first on Going Concern.

Debit Does Dallas heh. The textbook author who came up with that deserves a raise.

In case you didn’t know, Rule 501 of the AICPA Code of Conduct is a bit controversial due to its completely open nature. The code itself outlines only a few obvious instances of CPA malfeasance like not filing your own taxes or obtaining unreleased CPA exam questions from an illicit source (as if sims are being sold on the dark web) while the rest is open to interpretation.

If you feel like reading today, there’s an interesting December 2000 research paper that bravely opens this can of worms. From Can Sexual Acts between (or among) Consenting Adults be Considered an Act Discreditable to the Profession under AICPA Code of Professional Conduct Rule 501? A Philosophical Look at a Practical Ethical Question [source]:

Rule 501 of the AICPA’s Code of Professional Conduct prohibits acts that are discreditable to the profession. The rule states: “A member shall not commit an act discreditable to the profession.” Basically, a discreditable act might be anything that would cause embarrassment to at least one member of the accounting profession. Rule 501 doesn’t say that, but the rationale behind the discreditable act provision is to avoid embarrassment to members of the accounting profession. Once you allow such a vague term to be used, there is no logical stopping point. It is theoretically possible for something to be classified as an act discreditable to the profession if it causes embarrassment to even one accountant. However, some acts have a higher probability of being so classified than others.

Like accounting firm partners participating in and videoing gangbangs? I imagine so …

Obviously public accountants have their own firm’s ethics rules to abide by, and we’re guessing Big 4 firms strongly frown upon their staff appearing on Pornhub but hey, if you run afoul of firm side hustle rules you could always leave and “be an accountant” full-time. Were you to choose this route, you would not be the first CPA to leave your public accounting firm to do porn for a living.

AICPA Code of Professional Conduct [AICPA]

The post TIL Doing Porn Is (Probably) Not Considered an Act Discreditable to the Profession (Side Hustle, Anyone?) appeared first on Going Concern.

Well, in the spirit of gettin’ em started when they’re young, a pair of senators have introduced a new bill that hopes to get kids hooked on accounting in grade school. Let’s check it out:

Today, U.S. Senators Jacky Rosen (D-NV) and Susan Collins (R-ME) introduced their STEM Education in Accounting Act, bipartisan legislation that would designate accounting as a STEM (science, technology, engineering, and math) subject, strengthening education and career pathways for the accounting profession and promoting diversity within the field.

The bill would amend the Every Student Succeeds Act to add accounting education programs as an allowable use of K-12 grant funding and promote high-quality accounting instruction for members of groups underrepresented in accounting careers. This bipartisan legislation comes at a time when the accounting profession, like many sectors of the economy, is struggling with a shortage of talent to fill available jobs. While the pandemic has exacerbated the problem in many sectors, the accounting profession has long faced such a shortage.

The Every Student Succeeds Act replaced the notorious No Child Left Behind law of the Bush era and was signed into law by President Obama in 2015. Here is a thorough read on what it means for K-12 public education in the United States should that be something you’re interested in learning more about on a quiet Monday before Christmas.

Including accounting in STEM education is a no-brainer, according to Senator Collins, because math. You know, the M in STEM. Also known as that thing most of you never do at work but whatever, let’s roll with it anyway.

“Mathematics is a critical skill that can help students unlock countless doors to high-paying, in-demand fields. One of those doors leads to the accounting profession whose work plays a key role in providing capital markets with confidence and assurance in financial reporting,” said Senator Collins. “Our bipartisan bill would designate accounting as a STEM subject. I encourage all of my colleagues to join me in promoting accounting education, improving students’ finance skills, and strengthening the pipeline of future accountants, who play such a vital role in our financial system.”

High-paying you say? That’s about as believable as the lie about shady drug dealers passing out joints on the playground. But I digress …

You’ll note the accounting pipeline shoutout at the end there. Which leads us to this comment from the AICPA gleefully rubbing their hands together at the idea of exposing kids to accounting:

“For years, the AICPA has championed the inclusion of accounting in STEM programs and we are grateful to Senators Collins and Rosen for their leadership in recognizing the connection between accounting and technology,” said AICPA President & CEO Barry Melancon, CPA, CGMA. “The technological skills CPAs learn help them make informed decisions, solve complex problems and enhance the delivery of services throughout the audit, finance and tax arenas. As the profession continues to evolve its services in areas like cybersecurity, information integrity and systems controls and its use of emerging technologies and techniques, such as blockchain and data analytics, the integration of this knowledge with quantitative reasoning skills enhances accountants’ value to their clients, to the profession and to the finance and tax industries. This bipartisan legislation is a recognition of the value the accounting profession provides and will help to diversify and expand the profession.”

Comments like these are exactly why the “Smithers, Fetch Me the CGMAs” meme exists.

As fun as it is to point and laugh at the AICPA’s desperation to stuff the pipeline with warm bodies, there’s nothing wrong with introducing kids to accounting when they’re young. Surely there are worse things to expose them to. Like … you know what, let’s not go there.

A similar bill was introduced in the House earlier this year. We’ll keep you posted on any developments. Personally I’m looking forward to the potential for T account coloring pages!

Further reading:
AICPA Supports STEM Education in Accounting Act [CPA Practice Advisor]

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Accounting — at least as an independent field of study — is becoming obsolete in today’s technology- and analytics-focused world. Its value lies in its interdisciplinary applicability and position as a foundational business curriculum. In recognition of that reality — and to maintain a pipeline of candidates open to CPA licensure, increase the number of engaged accounting students, and keep the profession relevant to the next generation — this author believes that colleges and universities should eliminate the accounting department as a stand-alone department and reorganize accounting under finance and information systems departments.

It’s long been established — and we here at Going Concern have nearly 13 years of evidence littered throughout our archives to prove it — that the accounting profession has a recruitment problem. A decade ago, the profession’s efforts were honed in on increasing diversity, but nowadays it’s about getting people in the door.

The most recent AICPA Trends report [PDF] — published in 2019 — tells us that accounting enrollments are down overall, though it does look like there’s some positive movement on the diversity side:

Total projected accounting enrollments are down 4% from the highs of 2016, but are still among the highest on record. Master’s enrollments are down 6% from 2016. Racial/ethnic diversity has increased in the 2017-18 academic year. Universities have reported increases in Hispanic or Latino enrollees of 3 and 8 percentage points at the bachelor’s and master’s levels, respectively. Seventy-two percent of bachelor’s of accounting programs and 65% of master’s of accounting programs expect to have the same or higher enrollment in 2019.

We are anxiously awaiting the newest AICPA Trends report, which is published every two years and therefore should show up anyday now. Until then, we can only guess on what the next batch of numbers will look like and hand-wring over the data we do have.

The Bureau of Labor Statistics forecast employment of accountants and auditors to grow 13.1% from 2012 to 2022; current BLS data projects 7% growth for this segment from 2020 to 2030, about as fast as the average for all occupations.

About 135,000 openings for accountants and auditors are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Let’s talk about retirements while we’re on the topic. A few years back, the AICPA estimated that a whopping 75% of its members (read: CPAs) would be eligible for retirement in 2020. When you combine this figure with waning interest in accounting as a major, more and more accounting graduates foregoing the CPA exam, an accounting professor shortage, and the pressures of a traditionally reactionary profession to take proactive steps to adapt to new technology, well, it doesn’t look pretty.

The CPA Evolution project aims to address that last issue, and the AICPA and NASBA recently released a revised CPA Evolution Model Curriculum upon which university accounting programs can build their curricula but are by no means required to. I’m hearing grumblings from deep within the bowels of academia that some professors are less than thrilled about this project, but no one is willing to go on record, so if you’re an accounting professor with an opinion on CPA Evolution good or bad and willing to put your name on it, please do reach out.

The problem with this approach, writes Castonguay, is that the new curriculum fails to address the “jack-of-all-trades” problem; early-career accountants in particular are expected to know a little bit about a lot of stuff, essentially.

Even though the CPA Evolution Project is aligning the credential with practice, it is also underscoring that the value in the license lays not within the accounting curriculum that has existed for decades; the new value is the technology, the analytics, the systems, and the tax research. But I believe the curriculum realignment anticipated by the CPA Evolution Project will only lead to an even faster decline in enrollments if accounting remains siloed as a stand-alone major.

As the profession gets more specialized, the accounting curriculum is expanding to include more information, more courses, more skills, and more tracks—but students are less skilled at each one. It’s a cycle that can’t be fixed by repackaging existing courses. It can only be fixed by eliminating the accounting major and unlocking accounting’s interdisciplinary value and specialization within finance, information systems, or other departments.

In order to better recruit future accountants (or should we start calling them accounting analysts?), Castonguay suggests a total rehaul of accounting education, rolling existing accounting curriculum into other departments. This, he says, is preferable to trying to cram technology content into existing accounting programs instead, which seems to be the current plan.

[T]he accounting department itself should be eliminated and reorganized predominately under finance and information systems departments. In the author’s opinion, this approach will unlock the value in the fast-evolving accounting roles that accounting firms and future employers seek from graduating students.

So what do we think? Is accounting a dead major? Is the solution to the profession’s pipeline problem as easy as parasitically latching onto other business majors hoping to snag a couple future CPAs with the captivating glitter of accounting fundamentals?

I’ll say this: the next few years are going to be very, very interesting.

Photo by Ana Arantes from Pexels

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In a press release, CPA Canada threw some applause [and then everyone clapped?] at successful writers:

Chartered Professional Accountants of Canada (CPA Canada) applauds the 5,912 individuals who successfully passed the September sitting of the profession’s Common Final Examination (CFE).

“The achievement for these dedicated individuals represents an important milestone on their way to becoming a member of our profession,” says Charles-Antoine St-Jean, CPA Canada’s president and CEO. “The commitment displayed in studying and writing against the backdrop of a pandemic gives us glimpse of the next generation of CPAs: strong, focused and unshakeable under pressure.”

So dramatic. But nice of them to acknowledge how rigorous and stressful pursuing professional licensure can be. More important than recognition and virtual applause, however, is that top CFE performers also get CASH. Deloitte earns some bragging rights as well for cranking out two of the four recognized writers.

Following each CFE, the profession recognizes the CFE writers who achieved the highest standings on the exam. Chloé Bourgault-Bourassa, from Vérificateur général du Québec in Quebec City, is the recipient of the September 2021 Governor General’s Gold Medal Award as the September 2021 CFE’s top writer. In addition to the award, she also receives a cash prize of $5,000 [$3,947.50 in Freedom Bucks].

Regional gold medals that came with a $2,500 [$1,973.76 U.S.] cheque were awarded to three other students who topped the ranks of CFE writers in their part of the country. They were:

• Western Canada – Sarah Wang, Deloitte LLP, Vancouver, British Columbia
• Ontario – André Caissie, Deloitte LLP, Ottawa
• Atlantic Canada – Stacey Bailey, Morgan & Associates, , St. John’s, Newfoundland and Labrador

There is no such monetary reward for winning the Elijah Watt Sells Award — given to top performers on the CPA exam with a cumulative average score above 95.50 across all four sections — though some firms do give a bonus. A certain Big 4 firm used to offer a generous bonus but last we heard no longer does.

Since September 2020, CFE writers have been taking their exams in individual hotel rooms due to coronavirus as cramming 1,200 people into a gymnasium in the middle of a pandemic didn’t seem like a good idea to CPA Canada. While many professional examinations have gone virtual, administrators of the CFE did not feel online testing would allow the necessary monitoring. Instead, they rent something like 10,000 hotel rooms into which they cram aspiring CPAs while proctors prowl the hallways. The exam is offered twice a year in May and September, though May 2020’s CFE was cancelled due to … well, you know.

Congrats to the successful writers, and to those who missed the mark this time around, better luck next time.

CPA Canada congratulates 5,912 successful CFE writers [Cision]

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Where you go after graduation is no longer as clear as it was for the class of 1990; today’s grads are expected to enter the profession with a greater understanding of the work versus those who came before that mostly learned on the job. The CPA Evolution Model Curriculum aims to solve this problem, and in the meantime, recent and soon-to-be accounting graduates should be aware of the single, highly-desired skill that will set them apart in the marketplace: critical thinking.

There was an interesting article in the AICPA’s Extra Credit newsletter the other week that may have flown under your radar if you aren’t an accounting educator since that’s who this was written for. So let’s read it together and see what we can learn.

Today’s accounting graduates will enter a very different profession than those who began their careers 20 or even 10 years ago. In many cases, employers will demand more from them. They’ll be tasked with learning new technologies at a more rapid pace, dealing with larger datasets, and solving more complex problems earlier on in their careers than their predecessors did.

See? Further evidence the profession is changing. Just the fact that this is being discussed and that an entire task force exists to address it should be proof enough, as we know the profession to be traditionally reactive rather than proactive. The profession’s eagerness to head this issue off at the pass rather than wait and see how it turns out signals an uncharacteristic willingness to adapt that is no doubt driven by the urgency of said issue.

New accounting hires today “start at a higher level” than those of a decade ago, said Mark Rocca, CPA, an audit partner at EY’s Boston office, speaking at the 2021 AAA Annual Meeting. “Audits of the past were more procedural and task-focused,” he observed. “Today, using data, analytical tools, and technology, in many cases we can look at all transactions from a company. We are asking our people to do more thoughtful and insightful analysis than I had to do when I started 18 years ago.”

That, he acknowledged, places “more pressure” on new graduates. “They’re a much more important part of the thought leadership of their teams than when I started out,” he said. “We throw all this data at them. It can be overwhelming.”

Shout-out to Mark for co-signing the claim I made three paragraphs ago. You’re appreciated, Mark.

So first, a little good news for you rabble-rousers out there. In today’s workplace, unquestioning allegiance to authority may actually be a detriment in the evolving firm environment.

The same mindset that can earn a diligent student high grades — obediently following directions, pleasing authorities, and not asking too many questions — can cause a graduate to struggle in a workplace where critical thinking is valued. To succeed in the accounting profession today, practitioners said in several panel sessions at the Annual Meeting, new hires need to acquire a different set of skills.

What skills, you asked? Here’s the shortlist:

• Curiosity and a willingness to ask questions
• The ability to know when they need more information to solve a problem
• The ability to acquire the information they need
• Comfort with ambiguity
• Digital flexibility

On the surface, most of these boil down to “know how to Google” but it’s obviously more complicated than that. And it’s difficult to teach these skills, especially in an industry that attracts people who thrive in an environment jam-packed with rules and guidance and more rules. We might wonder if firms’ burning desire for this particular skill set might be behind the trend of non-accounting graduates making up 31% of new hires (up from 20% two years prior). Accounting graduates who can bring this kind of out-of-the-box thinking to their early years at the firm will surely have a leg up on their classmates who shine in rigid, rule-based environments but fall short in the abstract.

Critical thinkers, now is your moment. Stop wasting those skills on picking apart strawman arguments in Reddit threads and go make a difference in the world. Or something.

The abilities employers seek from accounting graduates [AICPA]

Photo by Ivan Bertolazzi from Pexels

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The second-year accounting student and the first sophomore head drum major at Ohio State University since 2010 was hyped to run out onto the field at Ohio Stadium on Saturday before the No. 4-ranked Buckeyes took on the No. 12-ranked Oregon Ducks in the first football game at the stadium with fans in attendance since 2019.

Bowman told the Newark Advocate in June about his excitement for the Buckeyes’ first home football game on Sept. 11:

“I can only hope and pray it will be a full stadium,” said Bowman, also a four-sport athlete at Lakewood [High School], joining Josh Halter (2008-09) and Kyle West (2012-13) as Lancer OSU drum majors. “But whatever it is, 100 percent full, 75 percent, 50 percent, it will be crazy,” he said. “It will be great. Running down that ramp for the first time, on game day, I can’t fathom what it will be like, but I know I will have some great bandmates, friends and family right there with me.”

With his bandmates waiting in the endzone, it was Bowman’s time to shine in front of a full stadium of fans, just as he had hoped. He would sprint out of a tunnel in the north end of the stadium to lead the OSU band onto the field.

And then this happened:

https://twitter.com/AdamJardy/status/1436722232781381632

Bowman told the Columbus Dispatch:

“It was like you were going down the stairs, but it’s dark and you don’t know where the bottom step is and you want to keep going down more steps but there’s level ground there,” Bowman said. “That’s basically what happened, and I just lost my balance and kept flying forward.”

Other than some bloody knuckles, Bowman was fine and his routine after the faceplant went flawlessly.

But Bowman’s tumble out of the gate may have been a bad omen for the Buckeyes. OSU lost to the Ducks 35-28.

The good news is Bowman probably has a bright future at a Big 4 firm. They love accounting students who fall head over heels for them.

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The new version of the CPA exam based on the three core competencies of the CPA Evolution model is expected to roll out in 2024, which means today’s accounting students need to be prepared for it because three years isn’t that far away. Hence the CPAEMC and the months-long effort to rehaul accounting education to ensure future CPAs aren’t bumbling around with technology like your Boomer uncle trying to figure out how to set the time on his oven.

This is all good, right? Who could possibly have an issue with this monumental effort to transform accounting education for the greater good of the entire profession? Well, turns out someone does. The IMA.

In a June 9 press release, the Institute of Management Accountants lashed out at the CPA Evolution model for its noticeable lack of management accounting content. In other words, they’re pissed they got left out:

In light of proposed changes from AICPA and NASBA to the curricula for accounting majors that pursue a CPA track (the CPA Evolution model), IMA® (Institute of Management Accountants) has provided feedback regarding the proposal in a new IMA Briefing.

Authored by Raef Lawson, Ph.D., CMA, CSCA, IMA vice president of research and policy and professor-in-residence; and Roopa Venkatesh, Ph.D., CMA, chair of IMA’s Committee of Academic Relations, the Briefing expresses IMA’s concerns regarding the negative impact dropping managerial/cost accounting from the required curriculum for CPAs proposed in the CPA Evolution model will have on the ability of the accounting profession to protect the public and serve the public interest.

“The challenges that CPAs will have to answer important cost-based questions will only increase as technology transforms business models and the CPA profession,” wrote Lawson and Venkatesh in the Briefing. “The ability of the CPA to serve as a trusted business advisor must include an effective grasp of cost systems, behavior, and causality, which can only be most directly gained in management accounting courses.”

They go on to suggest that the AICPA and NASBA are literally killing management accounting, in a world where management accounting does just fine scaring off accounting students on its own. This, says the IMA, is a terrible idea and will only end in disaster:

“In this time of uncertainty and lower enrollments, many academic accounting departments are facing faculty retirements, hiring freezes, and budget cuts. The lack of managerial accounting topics required for the CPA exam can dangerously serve as a reason to further eliminate the managerial accounting offerings in introductory managerial, intermediate cost, and advanced managerial/cost courses,” the authors continued.

The Briefing also states that students who do not learn about management accounting will not be set up for long-term success. The authors note that most students that enter public accounting eventually leave their firms to work in management accounting and corporate finance so the skills learned in management accounting courses will be beneficial to the students’ careers.

The IMA is asking for the AICPA and NASBA to renounce this huge oversight and “publicly commit to the importance of management accounting curricula.” We expect this isn’t the last we’ll be hearing about certain segments feeling some kind of way about the future of accounting education.

IMA Briefing: Concerns for the CPA Evolution Model [Institute of Management Accountants]
CPA Evolution Model Curriculum [This Way to CPA]

The post The IMA Is Beefing With the AICPA and NASBA Over the Future of Accounting Education appeared first on Going Concern.

The average starting salary for accounting undergrads this year is projected to be $58,508, up from $52,734 in 2020. That 10.9% increase is quite the jump over last year, when the average starting salary was expected to increase by only 0.4% for the class of 2020.

And here’s some more good news for accounting grads: Accounting is the major most in demand at the bachelor’s degree level among the 139 employers surveyed, according to the NACE:

And we’d be remiss not to mention the average starting salary for MBA grads since we wrote about MBA-holders’ estimated lifetime earnings yesterday. According to the NACE, class of 2021 master’s degree graduates in business have projected average salaries that will closely resemble those of their class of 2020 counterparts:

[T]heir average overall salary projection ($75,461) is approximately 1% higher than last year’s projection ($75,197). However, specific M.B.A. graduates will fare better, with an average salary projection of $87,966, which is up 11.3% from last year’s average of $79,043. This large bump in their average salary projection may be due to the reported salary projections by finance, insurance, and real estate employers that average $95,000. M.B.A. graduates are also second on the list of top majors in demand at the master’s degree level.

Accounting is also among the top 10 in-demand majors at the master’s degree level:

So … more than 58 grand a year after college. Even though it was a big increase over last year’s salary projection, it seems like it should be much more, given that seven years ago the NACE projected the annual starting salary for accounting grads to be $52,900. Hopefully accounting grads in the classes of 2022 or 2023 will be the beneficiaries of starting salaries that at least eclipse 60 grand.

Related article:

Number of the Day: $5.7 Million

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But as one class departs, another one will begin. And behind those college freshmen are high-schoolers who dream of capital market servitude and will start looking at and visiting colleges and universities that will help them achieve that dream—and make a decent living.

That decent living part is pretty important to most, if not all, people, so here’s an interesting report from the website Best Accounting Software on the best colleges for accountants based on earnings potential.

Best Accounting Software used the U.S. Department of Education’s College Scorecard tool to figure out all of the colleges that offer bachelor’s degrees in accounting, then rated the colleges based on the median total debt students have, the monthly loan repayments students can expect, the college’s graduation rate, and how the average salary accounting students will receive after graduation compares to the state’s average salary for accountants.

Here are the top 10 colleges ranked by highest median earnings:

The report also notes that students who graduate from colleges in the District of Columbia have another advantage:

When it comes to average graduating salaries for accounting students and the annual mean wage for experienced accountants, the District of Columbia comes out on top for both.

Students graduating from colleges in the District of Columbia can expect to earn the highest graduating salaries with a state average starting salary of $55,700. Plus, they’ll enjoy the highest annual salary as their career progresses thanks to an annual mean wage for all accountants of $103,930. This means DC graduates could see their earnings almost doubling throughout their careers.

All told, Best Accounting Software ranked the median earnings of 598 colleges that offer bachelor of accounting degrees. You can find the entire list here.

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And here in this dystopian nightmare glorious future, technical aptitude is in high demand. Perhaps for an earlier generation of accountants “technical aptitude” meant being able to set the clock on your VCR and delete your own browser cookies, but here in the actual future, data analytics rule. This is no more evident than in the ambitious CPA Evolution project, an overhaul of the CPA exam the likes of which hasn’t been seen maybe since the exam went computerized 17 years ago. Expected to launch in 2024, the “new” testing model under CPA Evolution is intended to better reflect the realities of practice, “requiring deeper proven knowledge in one of three disciplines that are pillars of the profession.”

So here’s the problem. The place bright-eyed and bushy-tailed soon-to-be CPAs get their knowledge from (college, obvs) might not be doing its job and preparing said untainted future CPAs for the new reality. In other words, accounting students might be missing out on the technology-focused education they’ll need to compete in the workplace.

From a March 17 AICPA press release:

There are major gaps in college accounting education today, with fewer than half of all programs teaching emerging topics, such as IT governance and cybersecurity, according to a new report by the American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA).

Accounting Program Curriculum Gap Analysis Report found mixed results for coverage of emerging and technology topics. While more than 60 percent of collegiate accounting programs are teaching topics like data analytics and IT audit, fewer programs cover cybersecurity, predictive analytics or System and Organization Controls (SOC). Each of these topics could be covered more in-depth on the CPA Exam in 2024, pending the results of the current Exam Practice Analysis.

“The accounting profession is becoming increasingly reliant on the use of emerging technologies, information systems and data analytics. Businesses are increasingly seeking technology-related services and advice and it’s important for newly licensed CPAs to be adept in their knowledge, usage and skills,” said Sue Coffey, CPA, CGMA, CEO – Public Accounting, AICPA. “Accounting programs have a responsibility to assure their curricula and course offerings are setting students up for success in the profession.”

The news isn’t all bad, as you can see. Some schools are keeping up, while others are kind of keeping up but missing critical components necessary to mold well-rounded accountants.

From the AICPA’s Do colleges prepare future CPAs? Three key insights:

These topics are often taught as only a part of one or two class sessions rather than a dedicated course or unit of study. For example, system and organization controls (SOC) engagements are a rapidly growing practice area for CPA firms. But, among those surveyed, only 32% of accounting programs with over 100 undergraduate accounting majors cover the topic in their curriculum. At smaller schools, the percentages are less. Some future CPAs may not be learning what they need to compete in the job market as firm services become more technology-focused.

What’s the solution? “The answer is clear,” says the AICPA. “Smaller schools must enhance their offerings or consider other options that will give their students greater exposure to these topics. Due to the demands of the profession, as well as the CPA Exam requirements, faculty at schools of all sizes must assess their capabilities to teach these technologies and commit to evolving so they can more effectively deliver the education students need.”

The AICPA plans to provide a model curriculum sometime this summer that will help accounting educators ensure their graduates are not only prepared for the CPA exam changes three years from now but also for the rapidly-changing profession. I know the profession doesn’t have the best track record for proactively adapting but let’s try to be hopeful here and just wait to see how everything shakes out. Interesting times, that’s for sure.

While we’re on the topic of the future, I’m just gonna leave this here.

The post AICPA Report: Accounting Education Is Lagging Woefully Behind Necessary Real-World Skills appeared first on Going Concern.

Not kidding

I’m not exaggerating—at least 15% to 20% of the people who were in our class dropped it halfway through the semester. Hardly anyone, including me, could even pass the quizzes let alone part one of the two-part midterm. The only thing that kept me going (I think) was that I had a buddy who was also struggling pretty badly. The two of us had been studying together and I think there was an unspoken plan to do our best or fail trying.

Read the chapter

One thing that our professor kept hammering into our heads was that we really needed to read the chapter of our textbooks where the lessons were focused. As far back as I can remember, I rarely did this in any class. I was a “pay attention, take notes, and work the practice problems” kind of person.

That had to change

After bombing our first midterm in early March, the idea that I needed to change something finally sunk in. Plus, the professor really did keep telling us to read the chapter, especially during office hours whenever we went to beg him for the secret to at least a “C.”

Next wave was coming

There were about two weeks until the second midterm. Scratch that, more like a week and a half to account for a few days to recover from the first one. My classmate and I figured it couldn’t hurt to block out two or three hours to finally read the chapters it covered.

For me at least, this was more challenging than it looked. Because I have one of those squirrel brains, I also had to put in ear buds with the best motivational speeches I could find to avoid zoning out after reading two sentences. It worked well enough and I managed to read through all the material, although it didn’t seem like I absorbed much.

It wasn’t looking great

We also did the standard practice problems, practice test, and reviewed notes from class during the next few days. When the exam rolled around, I felt about the same as I had for any of the other ones. The clock started and I was stuck pretty early on problem No. 1.

Then I was stuck on problems 2, 3, and 4. Not good. But something happened later on in the test. Toward one of the last problems (after skipping a bunch) I actually got an answer that was correct. Then another one and another after that.

The tide was turning

Pretty soon, I was jumping back to the first questions that seemed impossible and others I’d skipped. It was like I took some magic accounting pill before the test and it was just kicking in. I was OK with that. A few days later, our scores came back. *Dun dun dun*

A lot of people still bombed it, unfortunately, but mine came back a 95%. It was a bit of a step up from the 30%-ish I got on the last one.

It’s tough to say if the reading made a difference, but doing the same thing for the rest of the semester pulled me up from a D- to a B+ by the end. It also worked for the guy I was studying with.

According to Paul Reber, a professor of psychology at Northwestern University, the human brain’s memory capacity is practically limitless. It does have a limit, but it’s close to something like a million gigabytes of space. That makes me think that even though I can’t remember it now, all the content from that managerial accounting book is probably still somewhere in my head to this day.

I know it was just my experience, so take it for what it’s worth. But you might see a better score if you just read the chapter!

About the author: 

Bob Buckley is a 2021 CPA exam candidate who likes writing about business in his spare time.

Related article:

Why Pretty Much Everybody Should Major In Accounting

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I grew up at Deloitte, the same as Joe Ucuzoglu. Joe is the CEO of Deloitte and we worked together. Months ago, I started noticing Joe posting equity, diversity, and inclusion (EDI) articles on LinkedIn. Joe is one of the smartest CPAs I know.

What I find interesting is that Deloitte, while preaching EDI, has not recruited from our campus in decades. PwC and EY have also not recruited from our campus or maintained a presence on our campus. Our campus is one of the largest HSIs in our state. We have more students of diversity than any other in the state. This spring, partners from the local Deloitte office showed up and ostensibly started to take an interest in our students. I thought that was a great development. But I’m also an auditor and know when I and my fellow faculty members are being glad-handed.

To understand what I am about to say, we have to go back to the mid-to-late 1990s. It was then that the recruiting strategy of the Big 4 (Big 6 at that time) changed. Prior to the 1990s, most Big 6 firms recruited from almost all colleges within their state. They would have alumni of those colleges attend Beta Alpha Psi meetings and get to know and recruit top students. Then in the mid-to-late ’90s, the Big 4 changed their strategy to target top schools like the University of Texas-Austin, University of Southern California, University of Chicago, etc. They largely gave up on local colleges. I know because I recruited from those top schools when I was in the Big 4.

Ask yourself, how can you preach EDI and only recruit from schools where the tuition is over $300,000 for an undergraduate education? The significant majority of students who attend those colleges are from families that do not need EDI programs. Most of those families pay in cash.

The auditor in me started to become skeptical. Is this EDI initiative from Deloitte and the other Big 4 firms real or is it just corporate bullshit that they have to do to check a box mandated from the leadership of their firms to appear competitive among the Big 4? I believe it is the latter.

I sent résumés of my top students to the partners from the local Big 4 offices and I started hearing from students that they were being “ghosted.” I am old enough not to know what the hell that meant, so after I looked it up, my suspicions were confirmed. I believe that the Big 4 are seeking out HSIs to glad-hand and appear to be good corporate citizens while in reality, they are making offers to students at the same top accounting institutions and ghosting students at HSIs.

My favorite example is that when Deloitte did not follow up with one of my students, who I personally recommended, I complained to the audit partner, and that same day, the recruiter reached out to my student and made excuses that did not pan out. In other words, they lied to me.

So, for students who are at HSIs, here are questions to ask recruiters and partners of the Big 4 who interview you:

• What have you done personally to support EDI apart from your job as a CPA, apart from your role in the firm?
• Can you give examples of EDI initiatives your firm engaged in before it became in vogue?
• Are your firm’s EDI initiatives done for corporate purposes or are they socially motivated? Ask them from the perspective of professional skepticism as though you were already an auditor. In other words, ask for sufficient appropriate evidence for what they say.
• Ask for specific articulable examples of their EDI achievements and Google when they began talking about EDI. Was it when their competitors started talking about EDI? If it does not add up, walk away. Find local and regional firms.

Finally, I will say to my former colleague, Mr. Ucuzoglu, and the CEOs of the other Big 4 firms, either have your partners and recruiters be sincere in EDI initiatives or leave my students the hell alone and stop fucking glad-handing me and my fellow faculty just to check a box off on fulfilling EDI goals for your annual evaluations. Otherwise, to quote the Bard, “Thou art the son and heir of a mongrel bitch.”

Anonymous university accounting professor

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The post The Big 4, Equity, Diversity, and Inclusion: Is it Just Corporate BS? appeared first on Going Concern.

Recruiting season is anxiety-inducing enough in the most normal of times: making small talk, promoting yourself without coming off as self-absorbed, and let’s not even get into worrying about your lunch lingering in your teeth. As Covid drove the working world indoors and into their respective home offices, it also meant that in-person recruiting events were just one more thing instantly vaporized by the virus. For the time being, anyway.

Here’s the good news: it may be the strangest recruiting season in history (and might stay that way depending on how things shake out in the next year or so) but many of the same tips for mastering Meet the Firms that have been around for ages are still relevant. Whether you’re totally new to recruiting or back in the mix with a recruiting season under your belt, here’s how to make the most of this, the weirdest virtual recruiting season ever.

Make Some Space

First thing’s first. It goes without saying but the first thing you want to do is ensure you have an appropriate space for virtual meetings. Ideally, this is a quiet, private, well-lit space free from clutter. As 2020 has taught us, we don’t always live in an ideal world. As you’re probably a college student, we’re just going to go ahead and assume you don’t have a private study in which to conduct your video conferences like those guys constantly doing interviews from in front of their expansive bookcases for news programs. Don’t worry, they hand those out when you make partner.

In the meantime, make the most of whatever space you have, even if it’s just a corner of your room. Your anime posters and Funko Pop collection may be a source of pride to you but try to keep your video conference space as uncluttered — and professional! — as possible. In a pinch, you can always throw a sheet up behind you (plain and washed, obvs) to create a blank canvas.

Just before your event, get everything set up so you’re not surprised by those obnoxious spontaneous Windows updates with the mandatory reboots that always seem to pop up at the most inconvenient of times. Test your video and microphone, close out any excess tabs and apps you may have open in the background, and turn off notifications so you aren’t dinging the entire time you’re trying to talk to recruiters.

Alright, so your space is all set. Now what? Let’s talk attire.

The Clothes Make the Man (or Woman)

From the dawn of time until now, recruiting events have always been conservative. Although most of us have been living in sweatpants and T-shirts for far too many months, you are still expected to don your best business attire for virtual recruiting. If you don’t know what counts as business attire, find your nearest adult and ask. And yes, you should wear pants even though no one is going to see your bottom half. Keep the accessories to a minimum, stick with muted colors, and do your best to not look like a person who has been locked inside without human contact since spring. That quarantine beard? Get rid of it, or at least give it a very neat trim.

You’re going to get a little more leeway with grooming than you would under regular conditions but there’s still no reason to look like the wild-haired guy that hangs out downtown with a ‘The End is Nigh’ sign just because you haven’t been able to get a haircut in a few months.

Alright, so your video conference space is clean and you brushed your hair, what next?

Back to Basics

First, review these tips on networking for CPAs. Although some may not apply (you won’t be physically handing out business cards any time soon), still others like drafting and perfecting your virtual elevator pitch will always be a good idea.

Many schools are using Handshake to help connect their students to employers, think of it as LinkedIn for students. The big benefit to you if your school is one of the many requiring Handshake registration prior to attending virtual events is that attending employers are all listed, giving you a chance to research before your event. This is important as you might be asked “why do you want to work for our firm?” and “I’m sick of living off ramen and I heard you guys give new hires the best phones” isn’t generally considered an appropriate answer.

Take the time to familiarize yourself with the firms attending your recruiting event and once you’ve identified your top targets, go find out what you can about their clients, leadership, and other positive newsworthy things the firm is up to. No one is expecting you to be able to recite the firm’s entire history, but you should at least be able to make small talk about what sets that firm apart from others.

One bright side to virtual recruiting is that it may be easier to get one-on-one time as all campus virtual recruiting events we’ve seen are offering both group and 1:1 sessions. So no longer do you have to claw your way through a crowd of hungry classmates to get five minutes with your firm of choice, neat! And those of you with weak handshakes or perpetually sweaty palms are making out like bandits here too, no one will ever know about that limp wrist of yours. See, there had to be something good to come from all this.

Connecting with recruiters is an area many accounting students struggle with so don’t feel bad if the idea of small talk fills you with existential dread as you’re definitely not alone. Many of the people you’ll talk to at recruiting events were once in your shoes, so let them lead if you get tongue-tied and have questions in mind to ask.

If you’re having trouble coming up with questions on your own, here are some suggestions to get you started from Jared Bleiler, Sales Director, University at Becker CPA Review:

• 1. What skills are you looking for in an intern/new hire?
• 2. What are the expectations of an intern/new hire?
• 3. What do you like about working at your company?
• 4. What is the company culture like?
• 5. What learning and development opportunities does your company provide?

Professional communication takes practice and very few people are naturally good at it, let the fact that your classmates are equally as nervous as you be a comfort. Don’t overthink it, you’d be surprised how far a genuine smile will get you. Being prepared ahead of time will help, of course.

At the end of the day, it’s important to keep in mind that recruiting events are as much an audition for you as they are for the firm. Both sides are trying to figure out if it’s a good fit. While it may feel like all the pressure is on you to make a good impression, remember the firm wants to make a good impression on you as well. And why wouldn’t they, you’re awesome!

Accounting and finance industry professionals and leading firms around the globe count on Becker for the help they need to raise their game, plus the ongoing expertise necessary for continued achievement. As the industry originals, we have helped more than one million candidates prepare for the CPA Exam and continue to advance the industry through our relationships and resources.

Learn more about Becker’s CPA Exam Review.

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The post How to Absolutely Kill It at Virtual Recruiting and Interviews appeared first on Going Concern.

According to a report in The Korea Times, the Big 4 firms on that side of the world — Samil PwC, Samjong KPMG, EY Hanyoung and Deloitte Anjin — are hiring far fewer CPAs this year:

The four were able to offer jobs to all 1,009 new CPAs last year, when they collectively posted nearly 2 trillion won ($1.7 billion) in sales due to growing demand for external audits and consulting. Their 38 executives also earned annual salaries of over 500 million won each that year.

This year, the four firms plan to hire around 770 new CPAs of a total 1,100.

Samjong [KPMG], which hired 380 last year, recently recruited 267 new CPAs. Samil [PwC] decided to reduce the number of CPAs to hire to 220 this year from 279 last year, citing its digitization. Anjin [Deloitte] and Hanyoung [EY] each plan to hire less than 200.

Two suspects are to blame for reduced demand for new CPAs, one old and one new: increased automation in this sector (a.k.a. the robots that are coming for your job) and COVID-19’s impact on firm bottom lines and demand from clients for professional services. As we’ve learned this year, there’s literally nothing you can do about the ‘rona and its innumerable and far-reaching effects however you can at least prepare yourself for the robot takeover by keeping your tech skills sharp. And even then the ‘rona might still win out when it comes to finding a job (or basically everything but let’s not go there).

The news of Big 4 job shortages in Korea has led the Korean Institute of Certified Public Accountants to call on its licensing body to reduce the number of new CPAs. The Financial Services Commission (FSC) is considering doing just that, reducing the number of new CPAs in 2022 to 1,050, down from 1,100 this year. Just for comparison’s sake, there were 23,941 newly-licensed CPAs in the United States in 2018, according to the most recent available AICPA data.

The post Talent Crunch: There Are Far More CPAs in Korea Than Big 4 Firms Have Jobs appeared first on Going Concern.

As we did last year, we looked at IPA’s most recent ranking of the top 200 firms, which names the current CEO, chairman, or managing partner for each firm. We’ve had to update our list because there have been leadership changes at several firms over the past year, as well as new firms entering and leaving the top 200.

Here are the firms in the top 200 that had changes in leadership the past 10 to 12 months (former CEO or MP/current CEO or MP):

• KPMG: Lynne Doughtie (Virginia Tech)/Paul Knopp (University of Texas-Austin)
• Grant Thornton: Mike McGuire (Bowling Green State University)/Brad Preber (University of New Mexico)
• CohnReznick: Frank Longobardi (University of Connecticut)/David Kessler (University of Maryland)
• UHY Advisors: Anthony Frabotta (Wayne State University)/Steven McCarty (Walsh College)
• The Bonadio Group: Thomas Bonadio (St. John Fisher College)/Bruce Zicari (Syracuse University)
• MCM CPAs: Diane Medley (University of Louisville)/Brad Smith (University of Kentucky)
• Aldrich CPAs + Advisors: Martin Moll (University of Oregon)/John Lauseng (Oregon State University)
• PYA: Edward Pershing (University of Tennessee)/Martin Brown (University of Tennessee)
• Arnett Carbis Toothman: Steven Robey (West Virginia University)/K. James Hunt (Grove City College)
• Cotton & Co.: Matthew Johnson (University of Oregon)/Steven Koons (Alvernia University)
• MarksNelson: Mark Radetic (Benedictine College)/Josh Beck (Westminster College)
• Berntson Porter & Co.: Robert Berntson (University of Washington)/Mary Actor (Gonzaga University)
• Mueller Prost CPAs: Mike Prost (University of Missouri-St. Louis)/Doug Mueller (University of Missouri-St. Louis)
• James Moore & Co.: Carol Villemaire (University of Florida)/Suzanne Forbes (Stetson University)
• Abbott Stringham & Lynch: Raymond Scheaffer (San Jose State University)/Carol Wagner (Lubbock Christian University)
• Dembo Jones: Walter Pennington (University of Maryland)/James Green (University of Maryland)

Here are the firms (and current CEO or MP) new to the top 200 in 2020:

• BerganKDV: David Hinnenkamp (St. Cloud University)
• Thomas Howell Ferguson: Winston Howell (University of West Florida)
• Haynie & Co.: David Peterson (University of Utah)
• GreerWalker: John Norman (University of South Carolina)
• Global Tax Network US: David Kolb (Minnesota State University)
• Delap: Earl Pierce (Brigham Young University)
• Duffy Kruspodin: Thomas Duffy (San Diego State University)
• Wegner CPAs: Glenn Miller (University of Wisconsin)
• Hancock Askew & Co.: Michael McCarthy (Auburn University)
• Bernard Robinson & Co.: A. Wade Pack (Appalachian State University)
• Lauterbach & Amen: Ron Amen (University of Nebraska)
• Calvetti Ferguson: Jason Ferguson (Texas A&M University)
• Hawkins Ash CPAs: Abe Leis (University of Wisconsin-La Crosse)

Here are the firms (and current CEO or MP) that dropped out of the top 200 in 2020:

• Genske Mulder & Co: Craig Mayers (University of Washington)
• Smolin Lupin & Co.: Theodore Dudek (William Paterson University)
• Saville Dodgen & Co.: Clint Pugh (Texas A&M University)
• Gerson Preston Klein Lips Eisenberg & Gelber: Steven Klein (New York University)
• Redpath & Co.: Mark Gibbs (University of St. Thomas)
• EFPR Group: Kevin Hill (St. John Fisher College)
• Sensiba San Filippo: John Sensiba (San Jose State)
• Perkins & Co.: Jared Holum (Pitzer College)
• HHM: Donnie Hutcherson (University of Tennessee)
• Peterson Sullivan: Chris Russell (Idaho State University)*

* Peterson Sullivan merged with BDO USA in November 2019.

In all, we looked at bachelor’s degree information for more than 200 public accounting firm leaders, as 10 firms have either co-CEOs, co-chairmen, or co-managing partners.

So which academic institution has the most accounting firm CEO or managing partner alums? For the second straight year, it’s the University of Maryland with seven, one more than last year:

• Jacqueline Cardello, Gelman Rosenberg & Freedman
• Joel Chazen, Hertzbach & Co.
• Larry Davis, Aronson
• David Goldner, Gross Mendelsohn
• James Green, Dembo Jones
• David Kessler, CohnReznick
• James Kokolas, Calibre CPA

Here are the rest of the schools that have produced the most leaders of top 200 public accounting firms:

1. University of Maryland: 7
2. (tie) University of Southern California: 4
2. (tie) Indiana University: 4
2. (tie) University of Georgia: 4
5. (tie) University of California-Los Angeles: 3
5. (tie) University of Tennessee: 3
5. (tie) Syracuse University: 3
5. (tie) University of Wisconsin: 3
5. (tie) University of Florida: 3
5. (tie) Bentley University: 3
5. (tie) Auburn University: 3
5. (tie) University of Texas: 3
5. (tie) Brigham Young University: 3

Related article:

These Colleges Have Cranked Out the Most Public Accounting Firm CEOs and Managing Partners

The post These Colleges Have Cranked Out the Most Public Accounting Firm CEOs and Managing Partners (2020) appeared first on Going Concern.

My experience

To clarify, I didn’t struggle in accounting classes and then throw in the towel because of that. I actually struggled about the same amount as friends of mine who went to midsize or Big 4 firms. A lot of them have been successful and earned their CPA license since we graduated in June 2017. The main reason was that I worked in two internships during college—one was sales and marketing for a startup, and the other was in accounting with a large company.

Performance

In a nutshell, I did well in the sales job and had a lot of trouble getting my head around simple tasks in the accounting one. There were definitely some external factors at play, but I still don’t think I would have made it six months in public or corporate accounting if I’d done that right out of school. The other thing was that I did want to try a full-time sales gig and figured it would always be easier to transition from sales into an accounting job rather than accounting to sales.

The language of business

Anybody who has ever majored in business has probably at some point heard how “accounting is the language of business.” Well, it’s true. More accurately, accounting is the language of any entity that deals with money or other mediums of exchange. Understanding the basics of accounting is key to fully understanding how a place of work functions. Chances are if you don’t completely understand the place where you’re employed, that might reflect negatively on your reputation (eventually).

Job security

As a retired partner (also my tax professor) once said, “Bad economy or good economy, everybody still needs accountants.” I know there’s lots of outsourcing happening and some jobs are being cut because of the pandemic, but most people who work for firms or do any kind of complex accounting work are probably safe. At least the non-bottom 10% are safe.

Entrepreneurship

I’m pretty sure CLA’s website used to say “we want the entrepreneurs” in their career section or something like that. Not what I’m talking about. For some reason, it seemed like the second I cracked open my first accounting textbook sophomore year, I’ve since been seeing business opportunities everywhere. That was, like, six years ago and it hasn’t stopped.

Projects

This is where you’ll think I’m fully insane. I swear on my 2017 copy of Becker’s FAR that whenever I need to get over a hurdle with one of my business-attempt projects, I read a couple pages out of one of the CPA books. I’m literally studying for the exam (an outdated version of it at least) because it’s helping me get closer to making money online at some point. Almost every major design or tech milestone I’ve cleared with building my main project always seems to come after I rip through 30 pages and a few practice problems (so far with FAR). I genuinely don’t think I’d be filing a patent soon if it wasn’t for reading these $10 books off Amazon.

How will it affect you?

Even though everybody’s different, it still wouldn’t hurt to study accounting. If you don’t have a plan and no major really sticks out in school, it’s like, what’s the worst that could happen? You could major in one of those ones where no real jobs exist, that’s what.

I get that there probably aren’t many undecided college students reading Going Concern. Fine. Please send this to your 19-year-old cousin who’s still scared of accounting from that time they saw you on April 16.

About the author:

Bob Buckley is an account executive with a major legal book publisher. He’s been getting into writing and blogging more to stay sane during the quarantine.

The post Why Pretty Much Everybody Should Major In Accounting appeared first on Going Concern.

The AICPA announced this week a new AICPA Foundation scholarship to benefit accounting students who “experienced extenuating circumstances such as job loss, internship loss, etc. due to COVID-19.” The AICPA COVID-19 Student Hardship Grant will provide up to $2,000 for 25 qualified students who complete an application before Aug. 31, 2020.

The full list of requirements and necessary documents, along with the application, can be found at This Way to CPA but the gist of it is:

• Current accounting student who is not currently a CPA but plans to pursue licensure.
• Not a current AICPA Legacy Scholar or AICPA Foundation CPA Exam Scholarship recipient.
• Have personally experienced hardship due to COVID-19 and need some help with school expenses.

There are a few more, including a minimum GPA requirement of at least 3.0, so head over to This Way to CPA to see the full list. As with other AICPA Foundation scholarships, you’ll also have to submit a personal statement, transcripts, and in this case supporting documents if your hardship came in the form of employment or internship termination.

Applications are being accepted until the end of the August so get working on that 1,000-word essay on why Rona is the worst and how you can use $2,000 to continue your educational goals while the world is crumbling down before us.

The post Attention Accounting Students, the AICPA Is Giving Away Money Because COVID-19 Was Such a PITA appeared first on Going Concern.

The Wall Street Journal reported over the weekend that three of the Big 4 have confirmed that yes, seniors, your existing offers still stand [paywall]:

Major accounting and consulting firms together hire tens of thousands of newly minted graduates every year through a fall recruiting process that can make many seniors’ spring semester a worry-free one. Company spokespeople for Ernst & Young, Accenture PLC, PricewaterhouseCoopers LLP and KPMG LLP confirmed that the employers plan to honor offer letters already extended to graduating seniors for 2020.

The WSJ doesn’t have a ton of details so we’re not sure if “seniors” means strictly actual seniors or includes graduate program students with offers as well. We’ll see if we can get some clarification on that. Additionally, you’ll notice Deloitte missing from that list; we’ve reached out to them to see if they’ll jump on the bandwagon regarding new hire offers.

We did manage to scrape up a discussion on Fishbowl including comment from someone at Deloitte, so take that for what it’s worth until we get more official information.

Even without the reassurance from our favorite assurance firms, it has always been a pretty safe bet to assume that new hire offers were safe at least for the foreseeable future. We can’t picture a scenario in which firms would risk their hard-earned relationships with the schools they recruit from, unless things go full-on Fallout in which case you’re going to be worrying more about feral ghouls than tie-outs. Fun!

The post Three Out of Four Big 4 Firms Have Pledged to Honor New Hire Offers For 2020 Grads appeared first on Going Concern.

We’ll skip the pleasantries and get right to the ranking:

1. University of Texas at Austin (McCombs School of Business)
2. University of Illinois at Urbana-Champaign (Gies College of Business)
3. University of Pennsylvania (Wharton School)
4. Brigham Young University (Marriott School of Business)
5. University of Chicago (Booth School of Business)
6. University of Michigan (Stephen M. Ross School of Business)
7. New York University (Leonard N. Stern School of Business)
8 (tie). Stanford University (Graduate School of Business)
8 (tie). University of Southern California (Marshall School of Business)
10 (tie). Ohio State University (Max M. Fisher College of Business)
10 (tie). University of North Carolina at Chapel Hill (Kenan-Flagler Business School)
12. Indiana University (Kelley School of Business)
13. Texas A&M University-College Station (Mays Business School)
14 (tie). Duke University (Fuqua School of Business)
14 (tie). Massachusetts Institute of Technology (Sloan School of Management)
14 (tie). University of Notre Dame (Mendoza College of Business)
17 (tie). Boston College (Carroll School of Management)
17 (tie). Carnegie Mellon University (Tepper School of Business)
17 (tie). University of California-Berkeley (Haas School of Business)
20 (tie). Arizona State University (W.P. Carey School of Business)
20 (tie). Columbia University New York (Columbia Business School)
20 (tie). Fairfield University (Dolan School of Business)
20 (tie). Harvard University (Business School)
20 (tie). University of Florida (Warrington College of Business)
25 (tie). CUNY Bernard M. Baruch College (Zicklin School of Business)
25 (tie). Gonzaga University (School of Business Administration)
25 (tie). Loyola Marymount University (College of Business Administration)
25 (tie). Loyola University Maryland (Sellinger School of Business and Management)
25 (tie). Northwestern University (Kellogg School of Management)
25 (tie). Seattle University (Albers School of Business & Economics)
25 (tie). University of Washington (Michael G. Foster School of Business)
32 (tie). Cornell University (Samuel Curtis Johnson Graduate School of Management)
32 (tie). Emory University (Goizueta Business School)
32 (tie). Michigan State University (Eli Broad Graduate School of Management)
32 (tie). Pennsylvania State University (Penn State)-University Park (Smeal College of Business)
32 (tie). Rice University (Jones Graduate School of Business)
32 (tie). University of Rochester (Simon Business School)
32 (tie). University of Scranton (Kania School of Management)
32 (tie). University of Virginia (Darden School of Business)
40 (tie). Fordham University (Gabelli School of Business)
40 (tie). Georgetown University (McDonough School of Business)
40 (tie). Saint Louis University (Richard A. Chaifetz School of Business)
40 (tie). University of California-Los Angeles (Anderson School of Management)
40 (tie). University of Texas at Dallas (Naveen Jindal School of Management)

The University of Texas at Austin goes back-to-back as the No. 1 graduate accounting school in the U.S. Nos. 1-4 stayed the same as last year, but the University of Chicago bumped the University of Michigan out of the fifth spot this year.

New to the ranking this year are:

• Carnegie Mellon University
• Emory University
• Rice University
• University of Rochester
• Fordham University
• Georgetown University

Dropping out of this year’s ranking are:

• University of Georgia
• Wake Forest University
• Loyola University Chicago
• Creighton University
• Marquette University
• University of Arizona
• DePaul University
• Bentley University
• Xavier University
• University of Iowa
• Vanderbilt University

Note: There were 51 schools ranked in last year’s U.S. News list.

There really hasn’t been much good news lately, so if your alma mater is ranked by U.S. News, congrats. Take a minute to revel in the glory. Give yourself a high-five. Then wash your damn hands.

The post The Latest U.S. News Best Graduate Accounting Schools Ranking Will Take Your Mind Off of Coronavirus For a Minute appeared first on Going Concern.

This year, they have more than $650,000 in total scholarships available with an open application period to March 1, 2020. According to an AICPA press release, “these scholarships provide support to students with a variety of backgrounds, including liberal arts majors pursuing a graduate degree in accounting, minority and female scholars or those transferring from a two-year to a four-year institution.”

$10,000
AICPA/Robert Half Student Scholarship Award
This scholarship award, provided by the AICPA and Robert Half, grants financial assistance to outstanding full-time undergraduate or graduate-level accounting students who demonstrate potential to become leaders in the CPA profession. Applicants must have a GPA of at least 3.0 (on a 4.0 scale) and be a U.S. citizen or permanent resident.

$5,000
AWSCPA Scholarship Award
This award provides financial assistance to outstanding female students majoring in accounting or an accounting-related field. The AICPA Foundation, the AICPA’s Women’s Initiatives Executive Committee, and its AWSCPA task force sponsor the AWSCPA Scholarship Award to support the success of women in the accounting profession.

$5,000
AICPA Foundation Scholarship for Future CPAs
This scholarship award provides financial assistance to undergraduate or graduate degree students interested in pursuing the CPA license after graduation. Recipients will be considered based on their overall potential and commitment to becoming licensed CPA professionals after graduation. Applicants must be enrolled as a full-time student and be a U.S. citizen or permanent resident.

$5,000
AICPA John L. Carey Scholarship Award
This scholarship award provides financial assistance to liberal arts and non-business undergraduate degree holders who are pursuing both graduate studies in accounting and CPA licensure. Applicants must be enrolled as a full-time graduate student and be a U.S. citizen or permanent resident.

$3,000 – $5,000
AICPA Scholarship Award for Minority Accounting Students
This scholarship award provides financial awards to full-time minority students pursuing an undergraduate or graduate degree in accounting or an accounting-related major. Applicants must have a GPA of at least a 3.0 (on a 4.0 scale) and be a U.S. citizen or permanent resident.

$5,000
AICPA Foundation Two-year Transfer Scholarship Award
This scholarship award is available to students looking to transfer from a two-year college to a four-year institution to complete their degree in accounting or an accounting-related field. Applicants must have a GPA of at least 3.0 (on a 4.0 scale) and be a U.S. citizen or permanent resident.

As always, even if you don’t qualify for any of the above, you can do a national scholarship search to see if there’s one out there that’s a better fit.

For more information and/or to apply, get thee to This Way to CPA. And good luck!

The post The AICPA Is (Still) Giving Out Free Money For Education, Here’s How to Get Yours appeared first on Going Concern.

According to the AICPA, “attendees will participate in learning sessions and panel discussions covering a wide array of topics such as developing leadership skills and passing the CPA exam. Students will have the opportunity to interact with accomplished CPA professionals who will share priceless knowledge regarding career opportunities in accounting and the value of networking.” So yeah. Rub some elbows, get some tips, and enjoy some free grub. Nice deal, yeah?

Interested in applying? Just follow this link. You’ll need to provide unofficial transcripts, two letters of recommendation (at least one must be from either a faculty member or a licensed CPA), a video essay (up to two minutes), and a motivational quote. If anyone needs help with quotes, give us a holla.

via GIPHY

On second thought, don’t ask us for help on that.

To qualify, you have to meet the following:

• Be a declared accounting, finance, or tax major who intends to pursue the CPA credential.
• Be a sophomore, junior, senior, 5th year, or graduate student for the 2019-2020 academic year.
• Have maintained a minimum 3.0 GPA.
• Be actively involved in campus and community activities.
• Have not attended a past workshop.
• Be an ethnic minority (i.e., Black or African American; Hispanic or Latino; Native American; or Asian, etc.).
• Be a U.S. citizen or Permanent Resident (green card holder).
• Be a Student Affiliate Member of the AICPA.

The application period is open until January 20, 2020, so if you want to go, you should probably get on that.

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So I took a look at INSIDE Public Accounting’s ranking of the top 200 firms in 2019, which names the CEO, chairman, or managing partner for each firm. Then I creeped on their LinkedIn profiles (if you see that I recently viewed your page, you’ll know why) or looked on their bios online to find out where they graduated from college. I only looked at bachelor’s degrees, not master’s degrees.

In total, I got bachelor’s degree information for more than 210 public accounting firm leaders, as 11 firms have either co-CEOs, co-chairmen, or co-managing partners.

Of the top 12 undergraduate accounting programs ranked by U.S. News & World Report, nine have graduated leaders of top 200 firms (number in parenthesis):

• University of Texas at Austin (2)
• Brigham Young University (2)
• University of Illinois at Urbana-Champaign (2)
• Indiana University (4)
• University of Michigan (1)
• University of Pennsylvania (1)
• University of Southern California (4)
• New York University (3)
• University of Florida (4)

The University of Notre Dame, Ohio State University, and Boston College aren’t represented in IPA’s top 200 firms list. Also shut out were the University of California-Berkeley, University of Texas at Dallas, University of Chicago, and the University of Iowa.

There are 28 colleges or universities that have graduated two public accounting firm leaders in the top 200. Besides the schools listed in the bullet points above, some others include Babson College, University of North Carolina, Virginia Tech, University of Wisconsin, University of Arizona, Arizona State University, University of Oregon, Auburn University, University of Alabama, and the University of Washington.

But according to my analysis and counting skills (I’m no mathlete, as you know), here are the schools that have produced the most leaders of top 200 public accounting firms (in descending order):

7. (tie): University of St. Thomas (3)

• Steve Behrns, Boulay
• Mark Gibbs, Redpath and Co.
• Cory Parnell, Boeckermann Grafstrom & Mayer

7. (tie): UCLA (3)

• Stephen Milner, Squar Milner
• David Neste, Prager Metis CPAs
• Michael Novogradac, Novogradac & Co.

7. (tie): New York University (3)

• Steven Klein, Gerson Preston Klein Lips Eisenberg & Gelber
• Stuart Kotler, Berdon
• Harry Moehringer, Marks Paneth

7. (tie): Bentley University (3)

• Laurie Austin, DiCicco Gulman & Co.
• James DeLeo, Gray Gray & Gray
• Carla McCall, AAFCPAs

2. (tie) University of Southern California (4)

• Philip Holthouse, Holthouse Carlin & Van Trigt
• Rick Parent, Gumbiner Savett
• Joe Ucuzoglu, Deloitte
• Stephan Wasserman, Gursey Schneider

2. (tie): University of Tennessee (4)

• Jeff Drummonds, LBMC
• James Hutcherson, Henderson Hutcherson & McCullough
• Edward Pershing, PYA
• Chris Schellman, Schellman & Co.

2. (tie): Indiana University (4)

• Ted Dickman, BKD
• Robert Minkler Jr., Anders CPAs + Advisors
• David Resnick, Katz Sapper & Miller
• Alan Whitman, Baker Tilly

2. (tie): University of Georgia (4)

• V. Hanson Borders, Mauldin & Jenkins
• Jeffrey Eischeid, Bennett Thrasher
• Gregory Hayes, Moore Stephens Tiller
• Sean Taylor, Smith & Howard

2. (tie): University of Florida (4)

• Louis Cohen, Caler Donten Levine Cohen Porter & Veil
• Timothy Devlin, Daszkal Bolton
• Bert Mills, Moore Colson CPAs and Advisors
• Carol Villemaire, James Moore & Co.

1. University of Maryland (6)

• Jacqueline Cardello, Gelman Rosenberg & Freedman
• Joel Chazen, Hertzbach & Co.
• Larry Davis, Aronson
• David Goldner, Gross Mendelsohn
• James Kokolas, Calibre CPA
• Walter Pennington, Dembo Jones

All you Terps, feel free to gloat in the comment section.

The post These Colleges Have Cranked Out the Most Public Accounting Firm CEOs and Managing Partners appeared first on Going Concern.

For this list of the 50 best online accounting degree programs, ADR selected and ranked programs based on publicly available information regarding reputation and prestige, student satisfaction, and affordability and value. In addition, all of the online accounting degree programs in ADR’s ranking are from regionally accredited colleges and universities.

The only good thing I can say about this ranking is I’ve had it open in a tab on Google Chrome for about two weeks, and now, thankfully, I can finally close it.

Here’s ADR’s ranking of the top 50 online accounting degree programs for 2019:

1. Colorado State University-Global Campus
2. University of North Carolina-Chapel Hill
3. George Mason University
4. University of Scranton
5. University of Illinois Urbana–Champaign
6. Rider University
7. Auburn University
8. University of Michigan-Flint
9. University of Missouri
10. Rutgers University
11. University of Connecticut
12. University of Texas at Dallas
13. University of Massachusetts, Amherst
14. California State University, Sacramento
15. University of Alabama-Birmingham
16. University of Arizona
17. University of Miami
18. Florida Atlantic University
19. National University
20. Syracuse University
21. Georgia Southern University
22. SUNY Polytechnic Institute
23. Indiana Wesleyan University
24. University of Massachusetts, Lowell
25. University of South Dakota
26. Seton Hall University
27. Texas A&M Commerce
28. Maryville University
29. St. John’s University
30. Emporia State University
31. Bellevue University
32. DePaul University
33. Boise State University
34. Liberty University
35. Western New England University
36. Tennessee Technological University
37. Nova Southeastern University
38. Champlain College
39. Edgewood College
40. Golden Gate University
41. Shorter University
42. Stetson University
43. Albertus Magnus College
44. Saint Joseph’s College of Maine
45. Western Governors University
46. American Public University System
47. Southern New Hampshire University
48. Post University
49. Saint Leo University
50. Brenau University

Head down to the comment section to engage in a petulant or petty quarrel about these rankings and tell us how much better your school is than Post University.

Related articles:

Here Are the Top 25 Online Graduate Accounting Degree Programs In 2019, According to Some Site
Here Are the Best Graduate Accounting Programs as Ranked By U.S. News & World Report
Here Is Another Top 50 Accounting Schools In 2019 List for You Guys to Debate
Where Did Your Alma Mater Rank In This List of the Top 50 Accounting Schools In 2019?

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