The number of college accounting graduates took a big dip in the 2021–22 academic year, but projections for the coming academic year are trending upward, according to an AICPA report released Thursday.
The report, 2023 Trends: A Report on Accounting Education, the CPA Exam and Public Accounting Firms' Hiring of Recent Graduates, found that about 47,000 students earned a bachelor's degree in accounting in the 2021–22 school year, down 7.8% from the previous year. The number of students earning a master's degree in accounting slipped 6.4% to 18,238.
Enrollment projections for this academic year are more positive. Three-quarters of responding university bachelor's programs and 78% of responding master's programs expect enrollment in 2023–24 to be the same or higher as in 2021–22. That compares to 58% forecasting the same or more enrollment for both program categories in the previous Trends report, which included data through the 2019–20 academic year.
Other key findings in the report include:
- The gender ratio and racial-ethnic mix of accounting graduates remained similar to the previous Trends report, with two exceptions: the number of Hispanic/Latino graduates increased by almost a percentage point, and nonresident alien graduates decreased by a similar amount in both the 2020–21 and 2021–22 academic years.
- Master's degrees earned at private institutions fell 10.9% in the 2021–22 school year, while those earned at public universities decreased 3.3%.
- For accounting firms that responded to the survey, hiring expectations are optimistic for new hires of accounting graduates, with 91% of respondents saying they expect to hire the same number or more new graduates in the next year.
- Of the firms surveyed, 60% reported that they expect to have the same or higher number of CPAs on staff in 2023 compared to 2022.
- The number of unique CPA Exam candidates declined from 72,271 in 2021 to 67,335 in 2022. The number of Exam sections taken in 2023 is on the upswing, in part because test takers are looking to complete their requirements before the 2024 onset of CPA Evolution, a new licensure model that focuses on building core competencies in accounting, auditing, tax, and technology while developing deeper expertise in one of three disciplines: information systems and controls; tax compliance and planning; or business analysis and reporting.
"We're still on a downward trajectory for accounting graduates, although it's worthwhile to note U.S. university enrollment and earned degrees collectively shrank during this period," Jan Taylor, CPA, CGMA, Ph.D., the AICPA's academic in residence, said in a news release. "The AICPA remains focused on advocating profession-wide solutions to the talent shortage, and we saw increased mobilization and coordination in these efforts over the past year."
The biennial Trends report, first published in 1971, measures both the supply of and demand for accounting graduates. This year, however, the response rate from accounting firms on their hiring practices was too low to be statistically valid, despite an extension on the time the survey was in the field. As a result, the AICPA is unable to accurately project the number of graduates hired into public accounting in 2021. The organization is looking into a number of issues, the news release said — including the survey's timing, delivery methods, and promotion — to ensure more complete data in the next report.
Enrollment declines go beyond accounting
From the 2012–13 school year to the 2021–22 school year — the 10 most recent years of available data — the number of accounting graduates dropped 16.9%. However, it is important to keep in mind:
- Over a comparable span (fall 2012 to fall 2021), undergraduate enrollment regardless of field of study dropped 13%. That is according to the National Center for Education Statistics (NCES), the primary statistical agency of the Department of Education.
- The NCES projects that its collective data for each of the next seven school years (fall 2022 to fall 2028) will show a 6.3% increase in undergraduate enrollment regardless of field of study. Each year on average is forecast for a 200,000-person increase, with the estimate for student population in 2028 set at 16.8 million. That would mark the largest student population since 2017.
That projected growth presents an opportunity for the talent pipeline. Taylor recently provided an update on the AICPA's Pipeline Acceleration Plan, an ongoing strategic effort by stakeholders to strengthen the appeal of the profession.
There are encouraging signs even in the midst of a challenging labor market across the board.
Nearly half of the university accounting departments surveyed in 2023 Trends said they expect their program enrollment to increase in 2023–24 versus 2021–22 enrollment rates. And, while the number of new CPA candidates and the number of candidates who completed their fourth and final CPA Exam section fell in this latest round of data, Taylor stated in the report that with a new CPA Exam model just around the corner in 2024, "we have noted an increased number of candidates sitting for the Exam in 2023 compared to 2022."
A number of initiatives are in place to capitalize on those trends in education. They include the following:
- The AICPA recently brought together stakeholders to form the National Pipeline Advisory Group, featuring a broad spectrum of accounting leaders focused on executing the Pipeline Acceleration Plan.
- The 2023 Trends report touches on many areas of focus for the group, which is helping implement initiatives like the Experience, Learn and Earn program and is spearheading efforts to encourage business model transformation to attract the next generation of college students.
- Firms are attracting recent graduates and upskilling current employees through the AICPA's Registered Apprenticeship for Finance Business Partners, a rapidly expanding program benefiting from a recent $1 million Maryland Works grant awarded to the Institute for American Apprenticeships.
- Firms willing to try outside-the-box talent solutions that could make an immediate impact are considering work culture changes that could boost productivity of current talent overnight.
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.
