Day: October 30, 2021

The CPA Credential and the Profession Are in a Race For Relevance, Says ICPAS CEO Todd Shapiro

Christina Lane

Interest in the CPA credential has been down significantly since at least 2016, and we have discussed this issue to death so I don’t need to link you to the evidence (but here’s some anyway). The problem here is that talking about it isn’t solving it, thus we will continue talking about it and hope it all works out somehow.

Fewer people taking the CPA exam on its own isn’t a huge problem (well, the AICPA might say it is but they’re slightly biased), especially when you consider the trend toward accounting firms hiring more non-accounting graduates than they used to. We fully expect that trend to continue and it’s not the worst thing in the world since the future is upon us and said future consists of piles and piles of data in need of analyzing. But the raw CPA exam numbers aren’t the only problem. There are multiple issues hitting the profession at once from multiple fronts, like the fact that the AICPA estimates 75% of CPAs will retire in the next 15 years and that there is a serious shortage of accounting professors. Interest in accounting programs is still there, but this September 2019 CPA Journal article suggests that while accounting program enrollment data looks good on its face, there may be trouble ahead — a “current disenchantment” they called it. All of these taken together could mean a critical shortage of CPAs in the near future.

So we’ve established what pressures exist and why they should be concerning, but the profession continues to wonder out loud why people aren’t drawn to the CPA credential like they used to be. The following short video just put out by the Illinois CPA Society has some ideas:

CEO Video Series: Putting Destination CPA Back on Accounting Students’ Radar from Illinois CPA Society on Vimeo.

I know you all are very busy so in case two minutes and 26 seconds is more time than you have to spare, here are the reasons ICPAS President and CEO Todd Shapiro gives for why people might choose not to pursue the CPA credential these days based on feedback they’ve received researching this problem:

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.

A few of these fall under the “no time” category which is something we’ve addressed before; however, as anyone who has ever camped out in line overnight on new iPhone release day will tell you, most people can make time to do something when they’re sufficiently motivated to do so. And in the case of the CPA, it seems like more and more accounting graduates are deciding that the personal investment required for licensure is too great a trade to make in exchange for the potential benefits.

This is not an argument about “is the CPA worth it” because we know it is. And we should not extrapolate any information about its value from the fact that fewer accounting graduates are taking it these days. But the profession needs to do some serious reflection on the why of this issue and what it can do to address it. What will it take to convince tomorrow’s accounting graduates that their personal and financial investment is worth it? In other words, how can the profession fully convey the credential’s value? You’d think that would be an easy question for a bunch of accountants to answer but alas, here we are.

Further reading:
A CPA Pipeline Report: Decoding the Decline [Illinois CPA Society]

Photo by Lukas Hartmann from Pexels

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Did you miss our previous article…
https://www.digital-accountants.com/?p=248

Friday Footnotes: A Very Guilty Accountant; Beware Audit Independence; Grant Thornton a Thing | 10.29.21

Christina Lane

Wealthy retired accountant is found guilty of murder [Daily Mail] The pregnant daughter of a wealthy retired accountant who was today jailed for life after stabbing her husband to death has told the court of her heartbreak, saying: ‘I lost my dad but I’ve also lost my mum.’ Isabelle Potterton said on Friday that her mother Penelope Jackson – who murdered her retired colonel husband David, 78, on her 66th birthday and calmly told police ‘I should have stabbed him more’ as he lay dying – is ‘not the person I knew’.

SEC Acting Chief Accountant urges scrutiny of auditor independence in current environment [JD Supra] This week, Acting Chief Accountant Paul Munter issued a statement regarding the importance of auditor independence—a concept that is “foundational to the credibility of the financial statements.” The responsibility to monitor independence is a shared one: “[w]hile sourcing a high quality independent auditor is a key responsibility of the audit committee, compliance with auditor independence rules is a shared responsibility of the issuer, its audit committee, and the auditor.”

New Deloitte report explains how tech companies have to change to be more ethical [TechRepublic] The report released on Wednesday, “Beyond good intentions: Navigating the ethical dilemmas facing the technology industry” spells out the contradictory forces at work. In a survey of tech professionals, 82% strongly agreed that their company was ethical. In the same survey, only 24% strongly agreed that the tech industry takes an ethical approach to the products and services that it creates.

EY report: Fortune 100 companies boost audit transparency, including on ESG [Compliance Week] “Our examination of proxy disclosure data for 2021 demonstrates that companies continue to provide voluntary disclosures in audit-related areas of interest to investors and other stakeholders, typically going beyond the specific areas of required disclosures,” EY stated. In addition to providing required disclosures about the functions, policies, and procedures of audit committees, many companies are also shedding new light on “the type and degree of oversight exercised by audit committees.”

PwC upskills business workforce to leverage automation opportunities [SiliconANGLE] PricewaterhouseCoopers LLP has developed a new software product, called ProEdge, which focus on identifying the skills needed for the future, teaching those talents, and helping to scale the usage of the skills across the organization, according to Kevin Kroen, partner, PwC Advisory, intelligent automation and digital upskilling leader at PwC.

Grant Thornton commits to net zero greenhouse gas emissions by 2030 [Business Wire] Grant Thornton plans to achieve its net zero goal by reducing business travel, better using its office space and increasing energy efficiency across its operations. The firm may also use carbon credits and other investments in the future to account for any residual carbon emissions.

FASB addresses contract assets, liabilities acquired in a business combination [Journal of Accountancy] Acquiring entities are required to measure contract assets and liabilities acquired in a business combination in accordance with FASB’s Topic 606 revenue recognition guidance, according to a new FASB standard issued Thursday. To eliminate diversity in practice, FASB issued Accounting Standards Update No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers.

Hunting for Money, Democrats Rush to Rewrite Tax Code [New York Times] Lawmakers are racing to finalize legislation to pay for new spending initiatives. The process usually takes months, but they are trying to do it in days.

Photo by Tranmautritam from Pexels

The post Friday Footnotes: A Very Guilty Accountant; Beware Audit Independence; Grant Thornton a Thing | 10.29.21 appeared first on Going Concern.