More students are seeking careers in accounting, but the numbers sitting for the CPA exam haven’t kept up. Those factors and others reflect a profession roiled by change—and filled with opportunity.
By Dennis Boone
The Mesopotamians are credited with what may have been the first use of money as a means of exchange, close to 5,000 years ago. And once money was part of the societal equation, accountancy was sure to follow. A great deal has changed in the ensuing five millennia, but it’s hard to imagine that any of that change has come faster, bearing the potential for more consequences, than the profession is witnessing today.
“There are more and more opportunities for accounting majors other than traditional careers.” — Keith Jones, director of accounting and information systems, University of Kansas
Technology, for example, is profoundly altering the way accounting operations are conducted, creating new methods for applying concepts of audit and analysis. As a consequence, there is a considerable and growing demand for accountants in many financial and consulting roles and disciplines. Against that backdrop, the profession has seen a decline in the numbers of degree-holders who go on to sit for the exam to earn status as certified public accountants. Tech-driven efficiencies—and the costs of trying to keep up with them—are fostering a wave of small-firm consolidations and acquisitions; the emergence of artificial intelligence in accounting could change the types of roles that require a human touch; and the new science of Big Data suggests that there will be more numbers than ever to crunch.
To the relative newcomer, that may be a lot to digest. To John Meara, whose firm of Meara Welch Browne has been tickling ledgers for 40 years, all of those factors represent business as usual. “What’s happening now has been going on for 20 years,” Meara says. “There are fewer, smarter people in a lot of mid-size and small firms because somebody who can manipulate a computer can massively do more than someone who can manipulate a pencil and piece of paper. It’s just a question of efficiency.”
Which is not to say a more efficient workplace doesn’t need bodies. According to the Association of International Certified Professional Accountants, CPA firms in the U.S. hired nearly 35,000 new degree holders—undergrad and master’s-level—in 2016, falling a bit from two previous high-water marks of roughly 40,000 and 44,000 hires. College enrollments are only slightly below the 2014-15 record of more than 253,000.
That, says Keith Jones, director of accounting and information systems at the University of Kansas, is to be expected at this point. “Enrollments in accounting ebb and flow with the economy,” he says. “Student interest is driven by employment opportunities. There are more and more opportunities for accounting majors other than traditional careers in audit, tax, and corporate accounting. Most of the public accounting firms have a significant consulting group that are increasingly hiring large numbers of accounting majors. Demand for accountants remains strong.”
One reason for the appeal to students, says Park University accounting professor Mohamed Abualhaija, is what they learn beyond the merely technical: “Accounting programs prepare students to become successful professionals and attractive employees who are trainable for different jobs in business and accounting,” Abualhaija says. “In addition to learning different accounting core skills, such as bookkeeping, personal and corporate taxation, auditing, costing systems, and financial reporting, accounting students learn and master valuable soft skills, including communication, information technology, critical thinking, analytical skills, decision making and teamwork. These skills make accounting graduates attractive candidates to employers.”
At the university of Missouri-Kansas City’s Bloch School of Management, senior associate dean Dave Cornell cites the ability to jump-start a career as a key attraction. “Most students want a degree that will lead to not only a career upon graduation, but the opportunity to start that career immediately without a prolonged job search or internship period after graduation,” he says. “This makes accounting attractive. Another aspect is the increased visibility of the Accounting profession through the efforts of the AICPA.”
Despite that interest, AICPA reports that the numbers of students sitting for the CPA exam fell by nearly 20 percent after a record of nearly 50,000 in 2010, inching back up slowly over the next four years. A big jump in 2016 brought the numbers back to more than 48,000 but in the interim, the job market lost tens of thousands of potential CPAs.
Some of that decline, says Jones, “may be due to the fact that one does not need to be a CPA to work in the profession. There is a general assumption that most accountants need to be a CPA. In fact, the only area of accounting that requires a CPA license is audit work.” Consultants, tax preparers, corporate accountants, forensic accountants and others, he said, do not require a CPA license.
That trend, Abualhaija said, puts an additional onus on academic programming. “A university’s role is no longer to just attract students and award them a degree at the end of their program; they go beyond that,” he said. “Accounting programs now are structured around the needs of employers who hire the university graduate,” and accounting faculty can help by advising students about the advantages of holding a CPA—income, job security and room for growth among them— etc.), and by introducing actual CPA problems in their classes.
On the technology front, Cornell sees little threat to accounting careers, even though Forbes ranked it as the profession with the greatest potential for job losses caused by artificial intelligence.
“I don’t see technology as a threat to accounting careers because there will always be a need for individuals with critical thinking, computer, communication and analytical skills,” he said. “An accounting degree begins the development of these skills in addition to the technical accounting skills. The practice of accounting enhances these skills and helps the practitioner develop professional judgment and expertise in business management. That will always be valued.”
It’s a familiar story, he said: While the advent of the computer age reduced the need for bookkeepers, “the demand for accountants, who audit, analyze, and use the data produced by the bookkeeping process in order to make business and investment decisions, has never decreased.”
Automation and AI will change the way accountants do their work and make them more efficient in the same way computers did during the digital age, Jones believes. “So much of the work that accountants do requires professional judgment and interactions with clients and other stakeholders that it cannot be easily automated.”
Accounting, he said, is no different than any other field: Low-level positions will be replaced by AI or automation; however, professional careers in accounting are not going away. “In fact, AI will likely increase the demand for professional services like traditional accounting and consulting,” Cornell said.
Hardware and software can store, process and present data faster and more accurate than humans do, Abualhaija said, but managers are demanding high-quality data and information to help them make optimal decisions that add value to their customers and shareholders. Because of that, “accountants will always be needed; new roles and jobs will be created with technology advancements and other jobs will be lost due to automation.”
For the good of the profession, it’s important to reach more students at earlier ages, said Brett Wilkerson, head of the accounting department at Kansas State University. “An accounting degree equips students for a wide breadth of business career opportunities, ranging from large multinational firms to small business, and government and the not-for-profit sector,” he said. In addition, it’s “remarkably versatile and offers students an amazing diversity of opportunities,” Wilkerson said. “It’s crucial that we help high school students who are exploring career opportunities to become informed about the options that an accounting education opens to them.”