The accounting field is currently facing a pipeline crisis, with fewer students choosing to pursue careers as CPAs despite high demand in the industry. Today, we’re going to delve into this issue, examining why this trend is occurring. A key question arises in this context: should the path to becoming a CPA be made easier for students? This is a crucial consideration in addressing the current challenges in the field of accounting.
The term “pipeline crisis” in a professional context, such as accounting, refers to a significant issue in the supply chain of qualified professionals entering the industry. It’s called a “pipeline” crisis because it’s likened to a pipeline that should continuously flow with new talent entering the profession. When fewer students or young professionals are choosing to enter a field or obtain specific qualifications (like becoming a Certified Public Accountant, CPA), the flow in this pipeline gets disrupted. This can lead to a shortage of qualified professionals in the future, impacting the industry’s capacity to sustain and grow. The crisis not only concerns the current lack of entrants but also the potential long-term effects on the profession and the industries it serves.
Changing the Certified Public Accountant (CPA) requirements from 150 hours to 120 hours involves a significant shift in the educational prerequisites. This change can have various pros and cons.
Pros:
- Accessibility and Inclusivity: Reducing the hours to 120 makes the CPA designation more accessible to a broader range of candidates, including those who might be deterred by the cost and time commitment of an additional 30 hours.
- Faster Entry into the Workforce: Candidates can complete their education and begin working in their chosen field sooner. This can be particularly beneficial in a fast-paced industry where early career start is advantageous.
- Reduced Educational Costs: Fewer required hours can lead to lower educational expenses, alleviating financial strain on students and potentially reducing student loan debt.
- Adaptability to Industry Changes: A 120-hour requirement could be seen as a more adaptable approach, reflecting the changing nature of accounting and the various paths through which relevant knowledge and skills can be acquired.
Cons:
- Potential Dilution of Expertise: The additional 30 hours typically include specialized courses and training. Reducing this requirement might lead to a perceived or actual decrease in the depth of expertise and preparedness among new CPAs.
- Impact on Professional Standards: The 150-hour standard is often seen as a benchmark for professionalism in accounting. Reducing the requirement could potentially lower the perceived value and prestige of the CPA designation.
- Mismatch with International Standards: If the international accounting community adheres to higher educational standards, U.S. CPAs might find themselves at a disadvantage in the global marketplace.
- Effect on Accreditation and Educational Institutions: Universities and colleges might need to overhaul their accounting programs to align with the new requirements, potentially affecting accreditation and curriculum design.
In summary, reducing the requirement to 120 hours could make the CPA designation more accessible and reduce costs for students, but it also risks diminishing the depth of expertise and the perceived value of the certification. This decision should strike a balance between maintaining high professional standards and being accessible and flexible to keep up with changes in accounting.
Many of today’s most esteemed CPAs originally qualified with only 120 hours of study, proving that school hours alone don’t define competence. I earned my CPA in New York under the 120-hour requirement and when I moved to California in 2013, I got my CPA license there without 150-hours because I was grandfathered in before they officially changed the requirement.
I’m convinced that through appropriate education, continual professional development, and staying abreast of industry trends, one can be fully capable and proficient as a CPA in this field, with 120 credits or with 150 credits.
I think that ultimately, as with everything else in life, it’s a person’s drive to improve and succeed that matters most.