By Michael D. Colgan, PICPA CEO and executive director
The PICPA frequently reports on how rapid advances in technology are impacting the accounting profession. In August 2019, the AICPA released a report addressing this issue, and the results are telling. In its 2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, the AICPA shows how CPA firms are shifting their hiring models to focus more on technology skills. In fact, nonaccounting graduates comprise 31% of all new graduate hires in public accounting, an increase of 11% from 2016 to 2018.
The increased demand for technology skills is shifting the firm hiring model, so it is incumbent upon the profession to ensure that accounting graduates and newly licensed CPAs have the skills needed to support, for example, the evolution of the audit, among other services. One of the ways the AICPA is seeking to address the trend is through the CPA Evolution project, a partnership with the National Association of State Boards of Accountancy. The project strives to ensure that CPAs continue to have the competencies needed to support an accounting profession that plays a critical role in protecting the public interest. The percentage of new accounting graduate hires assigned to audit-related work is increasing. This area now comprises 56% of accounting graduate hires, up 4% from 2016 and 9% from 2014. Anecdotally, I have been encouraged by accounting educators who have shared at various meetings that their curricula are incorporating technology-related courses into their accounting programs.
On the supply side, enrollments in undergraduate accounting programs stand at the second-highest level on record after pulling back slightly from their all-time high in 2015-2016. Nationally, there were nearly 208,000 projected students enrolled in undergraduate accounting programs in 2018, topping the 200,000 mark for the fourth Trends report in a row. However, the number of candidates and newly licensed CPAs in 2018 dipped to the lowest level in 10 years. CPA candidates fell by 7% to just below 37,000, while newly licensed CPAs fell 6% to just below 24,000. Some of this decline may be attributed to recent accounting graduates entering the rapidly growing advisory services area or gaining employment in the private sector. It will be imperative to address this disturbing trend, particularly considering the demographic trends that show a decline in new college-age students of about 12% per year over the next 10 years.
I am thankful that PICPA leadership had the foresight several years ago to create the Pennsylvania CPA Foundation to focus our resources on recruiting new students into the accounting pipeline in Pennsylvania and providing them with the support, resources, and tools to get them across the finish line to the CPA credential. The results of our efforts in the early going have been encouraging, and the investment by many of our members and firms in the Foundation’s mission has been critical to those results. In the next month, we will host a record number of Accounting Career Days. Thousands of high school students across Pennsylvania will learn about the benefits of pursuing an accounting major in college. If you are not familiar with the strategy of the Pennsylvania CPA Foundation and our programs, I encourage you to view our initiatives as well as our 2018-2019 Annual Report.
The issue of recruiting talent will remain a top priority for the profession and the PICPA in the coming years. I welcome your investment in the mission of the Pennsylvania CPA Foundation, and together we can pay-it-forward for the next generation of CPAs in Pennsylvania.
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