America's most boring job is on the brink of extinction
By: Emmalyse Brownstein (Business Insider via MSN)
So, a CPA has become far more valuable than an MBA? Yeah, we may not use dusty ledgers any more but, at the end of the day, the accounts still have to balance.
S E E D E D C O N T E N T
For most of his youth, Bryan wanted to be an astrophysicist.
He was obsessed with the Hubble telescope, and his bedroom ceiling was dotted with plastic glow-in-the-dark stars. When the Scholastic Book Fair came to his library, he'd beg his parents for cash to buy NASA photo books. To him, space science seemed the pinnacle of innovation, excitement, and existentialism.
So when, as a sophomore in college, he told his parents he was going to major in accounting, they gave him what Bryan (which isn't his real name) could describe only as "a look."
"An accountant?" he remembers his mother saying. "Why would you want to be an accountant?"
Certified public accountants have long been cast as penny-pinching list checkers with vanilla personalities and a zeal for taxes, but that stereotype seems to turn off Gen Z more than any previous generation. That perception plus the industry's actual hurdles and pitfalls have compounded in the past several years to create a nationwide accountant shortage .
The American Institute of Certified Public Accountants says about 65,000 students in the US completed bachelor's or master's degrees in accounting in the 2021-22 school year, 18% fewer than a decade earlier. Of those who study accounting, only a portion become certified public accountants . About 30,000 people took the CPA exam in 2022, compared with nearly 50,000 people in 2010.
Meanwhile, longtime accountants' ranks are dwindling fast: Three-quarters of CPAs in the US were thought to be at or near retirement in 2019.
It's hard to overstate the consequences of a lack of accountants. It's not just the neighborhood CPA taking longer than usual to finish your tax return — we've already started to see it can mean financial mistakes and discrepancies at the highest levels of corporate America. Last year, for example, Advance Auto Parts said turnover of accounting staff was a cause for "material weakness" in its financial reporting via a filing extension request to the Security and Exchange Commission. Container maker Tupperware recently had similar delays in filing because of "significant attrition" and "skill set gaps" in its accounting department.
Accountants have become an endangered species , and that's endangering the financial ecosystem. But bolstering their ranks is no easy feat.
"The pay is crappy, the hours are long, and the work is drudgery," said Richard Rampell, a retired accountant in South Florida. "And the drudgery is especially so in their early years."
Can America's most boring profession get sexier, stat?
The archetypal accountant, the dull quant wasting away in a cubicle, is far from a fantasy. Though CPAs can do plenty with their skills — forensic accountants working at the FBI, auditors helping a Fortune 500 company analyze the books of a hotshot business it's considering acquiring — the stereotype seems unshakable. Even the American Institute of CPAs has a video titled "Accounting: It's not what you think."
"I always joke that nobody dreams of being an accountant when they're in the sandbox," said Amal Shehata, an accounting professor at New York University's Stern School of Business who worked at PricewaterhouseCoopers for 10 years.
But the stereotypes exist for a reason. "It's hard to put lipstick on a pig," Rampell said. He started his career at Ernst & Young (EY) in the late 1970s, then ran his own CPA firm in West Palm Beach for 45 years. "The truth is that there's not a lot of glamour in accounting," he said. "You can go out and have good, interesting clients, but that can take five or 10 years to know enough to get to that point."
It's hard to put lipstick on a pig. The truth is there's not a lot of glamor in accounting. Richard Rampell, retired CPA
Accounting was never sexy, per se. But young people have never been more put off by unsexy careers.
A job used to be as good as the long-term security it could guarantee. But now, many Gen Zers are hesitant to pursue jobs their peers consider overly safe or predictable. "I think there was a greater appeal to the industry in a previous era, when certainty and maintaining a job at one place for your entire career was seen as the ultimate goal," said Bryan, who's 23. "Now it's not."
In a recent survey by Deloitte, 86% of Gen Z respondents said that having a sense of purpose was important to their overall job satisfaction and well-being. Deloitte's report also describes them as "increasingly willing to reject assignments or employers who don't align with their values." (Deloitte is also a Big Four accounting firm, along with EY, KPMG, and PwC. The company declined a request from Business Insider to discuss its efforts to counter the accountant shortage.)
Gen Z is also, notably, the first generation to have truly grown up with social media. They spent their childhoods watching a stream of what everyone else does with their lives, and many have become convinced that that's much better than whatever they're doing with their own. In this way, social media has incentivized them to focus on doing things their peers deem interesting or exciting. And, well, accounting isn't readily Instagrammable.
Then there's the double-whammy problem of becoming an accountant, which is both harder to achieve and pays less than other finance jobs. A CPA candidate usually needs to get a master's in accounting to satisfy the requirement that they take 150 credit hours. After that comes the CPA exam: four grueling four-hour tests that must be passed within 18 months. And before they can officially get the title, candidates need to spend a year working under a licensed CPA.
Bryan finished his graduate program in May and is set to begin his first job as an audit associate at a Big Four accounting firm in October. He's taken one of the CPA tests, which he described as "beastly," and he spends most of his free time studying for the other three. "I think that it's necessary, but at the same time, it is definitely a substantial burden," he said.
Students can get higher-paying and arguably more exciting finance jobs right out of college without doing all that. That's what Bryan almost did. After a particularly tormenting high-school calculus class crushed his astrophysicist dreams, he considered pursuing investment banking. Most of his friends and classmates were going into finance, he said. And it's no wonder why.
Entry-level investment bankers can make more than $100,000 in base salary plus annual bonuses in the tens of thousands their first year out of undergrad. Bryan says he'll make $72,000 in his first year at his firm — one of the largest, most prestigious, and best-paid public accounting firms.Though junior investment bankers tend to work heinous hours and toil over pitch books, the field is widely seen as more posh. Bankers get to work on deal teams that advise the world's top executives on market-moving mergers and IPOs. They also tend to have direct access to other fancy Wall Street jobs at hedge funds and private-equity firms.
Everyone I talked to agreed that the first thing to do to get more accountants is to pay them more.
"Raise the pay a lot, pay as much as the investment-banking firms," Rampell said. "So as long as there's demand for accounting services, tax preparation, auditing, and financial-statement preparation, there will be people that will rise to do that work. The firms will have to pay to meet the demand."
Fewer accountants means those who are around have larger workloads, and those people are more likely to quit, which could perpetuate the shortage.
Rampell worries that if salaries don't go up, the shortage could become a "vicious cycle": Fewer accountants means those who are around have larger workloads, and those people are more likely to quit because of the long hours and low pay.
As someone who ran a CPA firm for decades, Rampell said that paying employees more than his competitors was worth the cost. "I got more productive people, I got smarter people, I got harder-working people — people that were more ambitious and wanted to go places as opposed to people that just wanted work 9 to 5."
There are some signs that some firms are responding to calls for salary changes. Margaret Burke, the talent acquisition and development leader at PwC, said in a written statement that the firm has increased entry-level salaries for audit and tax associates "over the last several years," but declined to say by how much. She also pointed out that PwC gives performance-based raises and bonuses "at all levels."
Shehata, of NYU, said she also hopes alumni at top firms will help provide scholarships to make the cost of an extra year in grad school less exclusionary. "As academic director, one of my priorities is really trying to find funding for the students who want to do the master's degree," she said. "The expense can be prohibitive."
The way accounting is taught could also help stanch the shortage, Shehata said. "It's up to us as academics to make the curriculum exciting and interesting," she said. "To me, that means it's relevant and it's timely." For example, she recently taught a class about the intersection of the blockchain and accounting.
"What I try to encourage students to consider is the long game," she added. "Yes, there are hoops and obstacles and expenses to getting the credentials, but ultimately it pays off. It's not always the first job; it's later in life that those credentials and those skills can really pay off and benefit."
She said that's particularly true for those students who aren't sure what they want to do in the long term, because accounting is a skill you can draw upon in many types of industries. Shehata said some of her former accounting students, for example, were at places like Google and Apple in fraud detection. "Accounting is everywhere," she said.
Perhaps the most important class to improve is the first one students take, Principles of Accounting. In May, the National Pipeline Advisory Group published an 88-page report on "talent solutions" for the field, which included reworking the intro course, given its "potential to shape a student's perception and ignite interest in an accounting career." Bryan described this introduction as critical. The 101 classes "don't really do very much to convince you that accounting is more than bookkeeping," he said. "I think that if you were to change the way that those courses are taught to make it more applicable and less 'Here's how to do this transaction,' I think you'd do a pretty good job of dismissing people of that notion."
The report's suggestions included "placing highly engaging instructors" in those classes, "incorporating gamification and other technology" to "stoke engagement and demonstrate the vital role technology plays in the accounting profession," and exposing students to "more real-life accounting practitioners in a range of career vocations."
The report underscored another way to bolster accountants' ranks: make it easier to become one. It recommended easing the 150-credit-hours requirement by "measuring competency versus just academic experience" through "experiential learning that earns college credit" — that is, less time in the classroom.
Some firms have piloted similar models. EY has a Career Path Accelerator program, essentially an alternative to a master's-degree requirement, and Burke, of PwC, pointed to its work-for-credit program at Saint Peter's University.
Rampell thinks that while supply and demand will naturally work itself out, in the meantime, "there'll be a lot of pain." The shortage, he added, is "sort of like when you want to find a doctor but you can't make an appointment for three months because they're so busy."
Shehata said a shortage costs companies themselves and the investors who put their trust and money into them.
"If you're running a business, you need to be able to make educated, informed decisions. How do you make informed decisions if you don't have the accounting data?" she said. "We want to make sure that we have trust in our capital-market system. People make decisions based on financial reporting — there are people's livelihoods and investments in that."
Emmalyse Brownstein is a reporter on Business Insider's finance team. Her coverage is focused on Wall Street culture and careers.
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Certified Public Accountant may not be a glamorous job. But the job does seem to be attainable and does provide long term job security. Seems like it should be possible to get a good paying job without becoming buried by student debt.