Despite overwhelming demand, the number of students interested in entering the accounting profession continues to decline, The Wall Street Journal reported.
“The need for tax accountants has never been stronger,” Rod Adams, PwC's’ talent acquisition and onboarding leader, told the Journal. Yet more than 300,000 U.S. accountants and auditors have left their jobs in the past couple of years, a 17 percent decline, according to the Bureau of Labor Statistics. Some experienced accountants are moving into new roles in finance and technology, recruiters told the Journal. As many as three quarters of CPAs will be retiring or are close to retiring in the next 15 years, according to the AICPA.
In addition top-rated university accounting programs have witnessed declining student interest in accounting careers. Even many students who enter as accounting majors don’t begin their postgraduate lives in accounting positions.
Low pay for the amount of education required and work involved may also be factors. The median graduate working in accounting had a starting salary of $66,504 in 2021, compared with $97,562 in data science and $101,401 in technology, according to the Burning Glass Institute, a nonprofit that researches employment trends.
“I would attribute a large portion of that national decline in accounting enrollments to the general reluctance of public accounting firms to significantly increase starting salaries,” Michael Donohoe, head of the accounting department at the University of Illinois Urbana-Champaign, who had previously worked at PwC. “Over the last eight to 10 years, starting salaries have not kept pace with these really cool emerging fields, like data science.”
KPMG has adjusted starting salaries for accounting graduates by about 26 percent over the past five years, above historic norms, vice chair of talent and culture Sandy Torchia told the Journal. Although median starting salaries for accounting jobs increased by 14 percent from 2010 to 2021, Burning Glass Institute reported, they have not kept pace with median starting salary increase for data science (30 percent) and tech (40 percent) over the same period.
Yet three of the Big Four firms have also cut jobs, the Journal reported.
Torchia also cited the 150-hour requirement and the CPA exam as barriers to entry. “That is a really important element of our industry, but is a barrier that other industries don’t have,” she told the Journal.
Connor Verrett, an economics major and entrepreneurship minor at Washington & Lee University who expects to graduate this month, cited this requirement in forgoing an accounting career. “It just seems like a lot of studying for a year for a big test,” he said, opting for investment banking.
“Working in the Big Four seems to be more limited to just like, CFO or chief finance type roles, he told the Journal. “Optionality for different careers later on was probably the No. 1 thing.”
But another Washington & Lee senior, accounting major Kyle Clarke, disagreed. He will be starting as an audit accountant for Ernst & Young in Boston after graduation. “Even if you’re not interested in accounting, it opens up a lot of doors,” he told the Journal, saying that investment banking interview questions are often about accounting.