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US Public Accounting Firm Hiring Model Shifts: AICPA ‘Trends Report’

Rapid advances in technology continue to impact the accounting profession. As US CPA firms shift their hiring models to focus more on technology skills, non-accounting graduates now comprise 31% of all new graduate hires in public accounting. That’s an increase of 11 percentage points from 2016 to 2018, according to the 2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, released by the AICPA.

The biennial report, published since 1971, provides statistical projections and expectations based upon university responses for the 2017-2018 academic year and firm responses for the 2018 calendar year. This data provides a snapshot of the profession, set against the current economy, and the ability to forecast future trends.

“Increased demand for technology skills is shifting the accounting firm hiring model. This is leading to more non-accounting graduates being hired, particularly in the audit function,” said Barry Melancon, CPA, CGMA, AICPA president and CEO, and CEO of the Association of International Certified Professional Accountants. “CPAs have an unmatched reputation for trust and integrity, earned through decades of working in the public interest. However, to play this vital role in the future will require an increased focus on technology.  It is incumbent upon the profession to ensure accounting graduates and newly licensed CPAs have these skills and expertise needed to support the evolution of the audit.”

The percentage of new accounting graduate hires assigned to audit-related work is increasing. This area now comprises 56% of new accounting graduate hires. That’s up four percentage points from 2016 and nine percentage points from 2014.

Overall CPA firms hired about 11% fewer accounting graduates in 2018 than they did in 2016, and nearly 30% fewer than in 2014. As firms continue to embrace technology and evolve their approach to the audit, they are seeking employees with data science and data analytics skills. They are largely filling those needs with non-accounting graduates, though there is anecdotal evidence from firms to suggest that some of this technology-specific hiring is occurring at the experienced hire level.

On the supply side, enrolments in undergraduate accounting programs stand at the second highest level on record after pulling back slightly from their all-time high in 2015-2016.

Nearly 208,000 projected students were enrolled in undergraduate accounting programmes during the 2017-2018 school year, topping 200,000 for the fourth Trends report in a row. More than 33,000 projected students were enrolled in master’s programs in 2017-2018. This reflects a 6% decline from 2015-2016 but remains comfortably above any level pre-recession. Declines in graduate student enrolment is due largely to more students opting to enter the workforce in lieu of pursuing an advanced accounting degree.

There were nearly 55,000 projected bachelor’s and more than 21,000 projected master’s degrees earned in 2017-2018. This reflects a decline of 4% each from the previous report. However, the combined 76,542 degrees remains above pre-recession levels.

After a significant increase in the number of new CPA Exam candidates in 2016, largely attributed to the new version of the exam launching in 2017, the number of candidates and newly licensed CPAs in 2018 dipped to the lowest level in 10 years. CPA candidates fell 7% to 36,827, while newly licensed CPAs fell 6% to 23,941.

The report also found that racial/ethnic diversity has increased, with the highest percentage of non-white enrolees to date. Enrolment by gender is nearly even at both the bachelor's and master’s levels. 

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