Accounting in Peril: The CPA Crisis and Why it Matters to You
A perfect storm is brewing in the CPA profession. Enrollment in college accounting programs has been dwindling, as waves of experienced CPAs accelerate their retirement. This threat has the potential to send shockwaves through our financial world—and your financial well-being.
What is causing the crisis?
In the late 1980s, the CPA industry moved toward a 150-hour college requirement (vs. 120 hours for other degrees). This triggered a 20% decrease in accounting majors from 1996 to 1999, a decline that has continued.
As the supply of entry level accountants shrank, CPA firms began outsourcing basic accounting and tax work to India. Cheap labor relieved overworked professionals, but it came at a cost. Outsourcing foundational work to other countries, combined with fewer accounting college graduates, has left a void of young CPA talent ready to advance to higher levels.
This lack of trained workers—combined with regulatory changes, the impact of technology, and the complexity of tax laws—makes it nearly impossible for firms to hire enough staff. It is also causing experienced, burned out CPAs to retire.
Why does it matter?
Whether you’re a business owner or an employee, a decline in the accounting profession impacts you, whether you know it or not.
CPAs help businesses and individuals navigate tax laws and minimize their tax bills. If you use tax software to prepare your return, accountants are vital for creating, updating and providing customer service. For taxpayers facing an IRS inquiry, having access to an experienced tax professional is vital—but increasingly hard to find.
Entrepreneurs and small businesses rely on CPAs for financial advice and guidance. According a 2022 Forbes article, in the U.S. small businesses accounted for 62% of new jobs and 44% of the economy. Without vital accounting services, our economy would be in jeopardy.
Finally, objective oversight of government, banks, and publicly held companies are crucial for investor confidence. A strong CPA profession impacts stock and bond prices; a decline in the quantity and quality of CPAs would erode of the unseen accountability that underlies the stability of your investments.
How can you help?
I am a former CPA and enjoy referring high quality professionals via RVARealEstateResources.com. But I'm having a hard time finding accountants to add to my referral list. Help spread the word! November is Accounting Careers Month, and the Virginia Society of CPAs is providing teachers, schools and homeschool co-ops resources to equip teachers, parents and other adults to help students explore this career path. They also have a wide variety of resources to research the profession. Visit VSCPA.com.