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The CAQ’s intervention puts large audit firms at odds with two bodies that set rules on how to qualify as a certified public accountant — the American Institute of CPAs and the National Association of State Boards of Accountancy — over how to stem a decline in new recruits.
The AICPA and Nasba in September proposed dropping a requirement that accountants complete the equivalent of five years of university education, one more than a traditional undergraduate degree, a rule that has been blamed for putting young people off entering the profession.
The two bodies proposed an alternative path to qualification: replace the fifth year of education with a requirement for a year of on-the-job training by firms, which would have to certify that a recruit had obtained dozens of specified technical and professional skills.
Liz Barentzen, the CAQ’s vice-president, wrote in a comment letter submitted last month that “the framework’s extensive list of competencies, performance indicators, and evaluation requirements creates an unnecessarily complex system that could be difficult to implement consistently across jurisdictions”.
And she added: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into evaluation processes, potentially creating employment-related issues (eg claims of discrimination) that would not otherwise exist.”
A shortage of accountants has begun to feature as a risk factor in some companies’ financial disclosures, and some small accounting firms have withdrawn from niche businesses such as auditing for local governments. Leaders of the profession have warned that bigger firms could face problems recruiting if the trends are not quickly reversed.
The number of people taking the CPA exam fell from a peak of more than 100,000 in 2016 to a 17-year low of just above 67,000 in 2022 and, after a small uptick last year, are projected by the AICPA to resume their decline in the short term. The pipeline of young people taking accounting courses at university has thinned in recent years, as they gravitate towards higher paying entry-level jobs in finance or technology.
The CAQ has argued that tackling the shortage needs to involve extending accounting’s appeal among students of diverse backgrounds, for whom the expense of a fifth year of university can be especially problematic.
The AICPA and Nasba have committed to making comments on their proposals public in early 2025.
Sue Coffey, the AICPA’s chief executive of public accounting, said that it was “getting helpful, diverse feedback” on its proposals.
“It’s critical that licensure pathways are clear and compelling to students. Working with Nasba and various stakeholders, we will know more over the next month about what this looks like,” she said.
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