The finance profession is in crisis. The number of accountants is dwindling, with fewer people pursuing qualifications globally. The Accounting Talent Index, released earlier this year by accountancy outsourcing firm Advancetrack, highlighted that undergraduate and postgraduate accounting enrolments have dropped by an average of 56% since 2010.
However, a proposed change to Certified Public Accountant (CPA) licensure requirements in the US will allow candidates to replace a fifth year of schooling with work experience. The proposal is part of a joint effort by the American Institute of CPAs and the National Association of State Boards of Accountancy to make licensure as accessible and appealing as possible.
The US currently requires 150 hours of college education to become a CPA, compared to the 120 hours typically needed for a bachelor’s degree. That additional 30 hours, which equates to two semesters of classes or an extra year of school, is not only increasing the financial burden on students, but delaying their entry into the workforce.
Accounting will become a dying profession if education doesn’t change
In the UK, the Institute of Chartered Accountants in England and Wales (ICAEW), the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Management Accountants (CIMA) offer similar routes into the profession. Candidates are required to take between 12 and 15 exams in total and the process can take up to five years.
All of these bodies are seeing a reduction in student numbers, which have fallen over a five-year period from 164,000 in 2017 to 155,000 in 2022, according to the Accounting Talent Index.
The exodus of talent in finance continues. New sign-ups are falling, while existing accountants leave the field in droves due to dissatisfaction with work conditions, low pay and the possibility of better opportunities elsewhere.
“Accounting will become a dying profession if education doesn’t change,” says Sarah-Jayne Martin, director of financial automation at accounting platform Quadient. “Accounting and finance roles simply aren’t alluring anymore. These roles were previously considered a safe profession, but graduates don’t value this in employment anymore. Why would a graduate want to spend three more years doing exams, when their peers are getting stuck into the working world?”
Employers and the industry as a whole urgently need to reassess what will attract graduates to pursue a finance profession. For example, are three years of study really necessary? Or could this lengthy period be condensed, so that new recruits can spend more time developing their practical skills?
A more attractive route to accountancy
“Less schooling is definitely the answer to getting Gen Z and Gen Alpha engaged in an accountancy career,” says Kevin Fitzgerald, a managing director at HR platform Employment Hero. “I know so many people who are put off by the quantity of studying and exams required.”
Fitzgerald trained as an accountant through the ACCA. During this time, he worked at a small accountancy firm to gain experience, but fitting this around his study schedule was difficult. “I liked the fact I could gain actual business experience,” he says. “The downside was the 16-hour days working and studying, which meant no real work/life balance, but more stress and a feeling of burnout. It’s certainly not for everyone.”
Reassessing the training process could also help the profession appeal to people from various backgrounds, says Lorraine Twist, director at recruitment platform Hays. Twist specialises in accountancy and finance and, in her view, reshaping the strict training and written exam requirements will prevent accountancy being perceived as an elitist profession.
“The pressure associated with intensive studying and performing well in multiple exams could be deterring individuals from going down the accountancy route, so prioritising work experience over an educational focus could mitigate this risk,” Twist says. For instance, individuals who are keen to switch up their career path and become an accountant as a second career may have more personal and financial commitments and be put off by long hours spent both working and studying.
Less study is not the answer
Others are less convinced. “Changing the requirements should, in theory, allow more people to gain licenses quicker,” says Vipul Sheth, managing director of accountancy outsourcing firm Advancetrack. “However, there is a risk that quality is compromised if the newly licensed professionals lack the appropriate skills to handle the responsibility that comes with them.”
Education provides a base of knowledge that is hard to replicate through work experience alone. Understanding concepts such as GAAP (Generally Accepted Accounting Principles), ethical standards or international tax laws takes more than just watching someone else do it. Trainees need structured learning to build that understanding. Without it, there’s a risk of lowering the overall skill level, which is a significant concern.
“The UK already suffers from having a very large group of unqualified accountants,” Sheth continues. “Reducing educational requirements is likely to impact the reputation of the profession detrimentally.”
He believes the industry should be focused on raising the bar, particularly in light of the recent reputational hit as a result of some high-profile audit failures. This year, Britain’s accounting watchdog fined KPMG £1.46m for “basic failings” in its audit of advertising company M&C Saatchi. Similarly, PwC and EY were fined a combined £9.3m for their failures in auditing the accounts of London Capital & Finance, an investment firm that operated as a Ponzi scheme.
The technical rigour and high standard of professionalism that is demanded of accountants means educational training and exams should not become a thing of the past, Twist stresses. However, she emphasises the need for accounting firms and finance leaders to work in partnership with accredited exam bodies. This would ensure they are aligned in the attraction and development of talent in a tough market. “Rethinking traditional routes into accountancy is a crucial part of this,” she says.
Twist posits a balanced approach where training and tests are woven into real-life scenarios during work experience. “This way, budding accountants can learn and grow on the job rather than being confined to a classroom,” she says.
Reviewing the qualification and how it is obtained is important, but it only scratches the surface of finance’s talent problem. Accountancy and audit are less appealing as career options than they once were. The profession is undergoing a crisis of confidence born out of recent high-profile corporate failures and speculation that AI will replace jobs. It is up to industry leaders to promote the profession in a more positive light.
