Academic journal article Journal of Accountancy

Will There Be a Shortage of CPAs?

Academic journal article Journal of Accountancy

Will There Be a Shortage of CPAs?

Article excerpt

Should the accounting profession be concerned because the number of accounting graduates has declined over the past several years? By the year 2000, nearly all jurisdictions will require 150 semester hours of college education to take the CPA examination and be licensed. Will those factors combine and cause a shortage of new CPAs? A look at the number and types of students who will be attending college during the next 20 years and their attitudes about the profession provides some interesting answers.

Accounting degrees 1990-2010

The number of high school graduates has been falling for the past several years, but that decline will stop in 1992. By 2000, 12% more students will graduate from high schools than do today and those numbers will continue to grow well into the 21st century.

During 1990, universities will award just over 1,300,000 bachelor's and master's degrees. This number will decline by about 2% by 1998 and then climb slowly through the early years of the next century. Thus, there will be an ample number of people attending college, but that doesn't mean they will major in accounting.

The attitude of today's freshmen is a key indicator of the future supply of accountants. The news on that front is very good. During the fall of 1989, the American Council of Education (ACE), an organization of university administrators, surveyed 216,000 college freshmen. Accounting was the second choice out of 80 probable majors, chosen by 6.1% of freshmen. Business, the first choice, was chosen 6.5% of the time. These results belie the notion that accounting is an unknown or unattractive profession.

Impact of the 150-hour requirement

The 150-hour education requirement is not expected to deter many students from pursuing an accounting degree and will attract brighter students to the profession. The ACE study found a surprising 60% of freshmen intended to obtain graduate degrees.

As the 150-hour requirement goes into effect, an increasing proportion of new accounting graduates will hold graduate degrees. At the same time, employers--particularly major public accounting firms--will continue to hire large numbers of students with only baccalaureate degrees. Because there will be plenty of good jobs available, the total number of accounting degrees awarded is expected to remain constant at the current 45,000 annually.

How many new CPAs?

By the year 2000, the number of people sitting for the CPA exam will have dropped dramatically from the ] current 145,000 per year. However, because candidates will be much better prepared, the passing rate will have climbed sharply, resulting in 20,000 to 30,000 people passing all parts of the exam they attempt. …

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