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A plan to reform accounting qualification rules in the United States could expose firms to discrimination claims and create barriers to entry into the profession, according to the panel representing the country’s largest accounting firms.
In a private comment letter seen by the Financial Times, the Center for Audit Quality – which represents the Big Four and other large companies – condemned the proposed reforms as “unnecessarily complex” and said they could introduce “unconscious bias” into the qualification process.
The CAQ’s intervention puts major accounting firms at odds with two bodies that set rules for accountancy qualifications – the American Institute of CPAs and the National Association of State Boards of Accountancy – over how to stem the decline in new hires.
The AICPA and Nasba proposed in September to eliminate the requirement that accountants complete the equivalent of five years of university education, one year more than a traditional bachelor’s degree, a rule blamed for discouraging young people prevents people from entering the profession.
The two panels proposed an alternative route to qualification: Replace the fifth year of training with a requirement for a year of on-the-job training by companies, which would have to certify that a recruit has acquired dozens of specific technical and professional skills.
Liz Barentzen, the CAQ’s vice president, wrote in a comment letter filed last month that the framework’s “extensive list of competencies, performance indicators and assessment requirements creates an unnecessarily complex system that may be difficult to implement consistently across jurisdictions.”
And she added: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into assessment processes, potentially creating employment-related issues (e.g. claims of discrimination) that would not otherwise exist.”
The shortage of accountants has increasingly become a risk factor in some companies’ financial reports, and some small accounting firms have withdrawn from niche businesses such as auditing for local governments. Industry leaders have warned that larger companies could face recruiting problems if the trend doesn’t reverse quickly.
The number of people taking the CPA exam fell from a high of more than 100,000 in 2016 to a 17-year low of just over 67,000 in 2022 and is expected to rebound after a slight increase last year, according to the AICPA be declining in the short term. The number of young people taking accounting courses at universities has thinned in recent years as they opt for higher-paying, entry-level jobs in finance or technology.
The CAQ has argued that tackling the shortage must involve making accounting more attractive to students from diverse backgrounds, for whom the cost of a fifth year of study can be particularly problematic.
AICPA and Nasba have committed to publishing comments on their proposals in early 2025.
Sue Coffey, director of the AICPA’s public accounting department, said she has received “helpful and diverse feedback” on her proposals.
“It is critical that licensing pathways are clear and compelling for students. “Working with Nasba and various stakeholders, we will learn more about what this looks like over the next month,” she said.
