The 150-hour rule for obtaining a CPA license may not be the only reason for the shortage of accountants, a recent study found; it could also be increasingly complicated accounting standards that are deterring students from becoming accountants.

“I explore the role that accounting rules ... have played in the declining supply of accountants. I find that when exposure to restrictiveness is high, there are fewer students majoring in accounting, fewer CPA exam candidates, and fewer accountants and auditors overall,” wrote Columbia University accounting doctoral student Anthony Le in Accounting Rules and the Supply of Accountants, referring to rules from the Financial Accounting Standards Board (FASB), and to U.S. Generally Accepted Accounting Principles (GAAP).

"The study looks at how growing regulation within accounting and the increase in accounting rules issued by the FASB have changed the accounting profession and the role of the accountant," Le told Accounting Today. "I find that when accounting standards become more restrictive (i.e., place more restrictions on the choices/judgments accountants can make), the types of jobs available for accountants have less focus on tasks such as applying judgment, thinking creatively, and thinking critically, and more focus on determining compliance. I find that this leads to fewer students majoring in accounting, fewer CPA exam candidates, and fewer accountants and auditors overall. The reason for this decrease is that the new type of job (i.e., compliance and rule-following) is inherently less interesting to prospective and current accountants than a job that allows accountants to [employ] professional judgment and creative thinking."

"My research design focuses on the impacts of GAAP restrictiveness on accountants relative to other occupations and majors," Le wrote in his study. " I find that higher exposure to restrictiveness significantly reduces the number of accountants and auditors within a state. In all tests, I also control for the effect of the 150- hour rule to ensure that the implementation of this rule does not confound the results. I find similar results when assessing the impact of restrictiveness on CPA exam candidates and the number of accounting students. Altogether, the results suggest that greater restrictiveness reduces the number of prospective and existing accountants."

His study also found that the overall demand for accountants does not decrease when exposure to restrictiveness is higher, but the nature of the demand for accountants changes. 

“The overall demand for accountants does not decrease when exposure to restrictiveness is higher—however, the nature of the demand for accountants changes,” he wrote in his abstract. “There is less focus on tasks such as applying judgment, thinking creatively, and thinking critically, and more focus on determining compliance. Despite the decrease in the number of accountants, earnings for accountants do not increase, and the wage distribution becomes more compressed.”

In a survey-based field experiment he designed to supplement his study, Le found that restrictiveness deters students from entering the profession due to their inability to use creative and critical thinking.  He wrote, "I surveyed 1,000 undergraduate students on the factors that deterred them from becoming an accountant. Consistent with the archival findings, the results from the survey suggest that the inability to express creativity and apply critical thinking is a key reason for students’ disinterest in accounting."

"Overall, the findings suggest that restrictive regulation can shift the task content of occupations and reduce the pool of individuals interested in the profession," he wrote in the concluding sentence of his abstract.

Accounting Today noted that while accounting standards may seem to be intimidating, many of the FASB's standards have sought to simplify the rules, especially for private companies and nonprofits.

Another recent study found that the 150-hour requirement for obtaining a CPA license has led to a decline in Black and Latino CPAs of up to 26 percent. The study also found a 13 percent greater entry decline following the requirement's enactment for minority than nonminority CPA candidates by effectively adding a fifth year of study when the number of required credit hours went from 120 to 150 hours. 

The AICPA’s 2023 Trends report found that the number of students who earned a bachelor's degree in accounting in the 2021-22 school year was down 7.8 percent from the previous year, and the number of students who earned a master's degree in accounting declined 6.4 percent from the previous year.