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Plans to reform the rules for qualifying as an accountant in the United States could expose companies to discrimination lawsuits and increase barriers to entry into the profession, according to a group representing the nation’s largest auditing firms. .
In a private comment letter obtained by the Financial Times, the Center for Audit Quality, which represents the Big Four and other large firms, denounced the proposed reforms as “unnecessarily complex” and said they would He said it could “introduce unconscious bias.”
The CAQ’s intervention puts major auditing firms at odds with the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy, two groups that set rules for CPA qualifications, over how to stem the attrition of new employees.
In September, the AICPA and Nasva proposed eliminating the requirement that accountants complete the equivalent of five years of college education, one year more than a traditional undergraduate degree, a provision that discourages young people from entering the profession. is accused of being
Both organizations proposed alternatives to qualification. It would replace five years of education with a one-year on-the-job training requirement by companies and require hires to demonstrate they have acquired dozens of specific technical and professional skills. be.
“The framework’s extensive list of competencies, performance indicators, and assessment requirements creates an unnecessarily complex system,” CAQ Vice Chair Liz Barentzen wrote in a comment letter submitted last month. “It can be difficult to implement consistently across jurisdictions.”
She further argues that “qualitative evaluation frameworks can introduce subjectivity and unconscious bias into the evaluation process, which can lead to employment-related issues (such as discrimination claims) that would not otherwise exist.” There is,” he added.
The shortage of accountants is starting to be cited as a risk factor for some companies’ financial disclosure, and some small accounting firms are withdrawing from niche businesses such as local government audits. Industry leaders have warned that large companies could face recruitment problems if this trend is not reversed soon.
The number of CPA exam takers will decline from a peak of more than 100,000 in 2016 to a 17-year low of just over 67,000 in 2022, and after a slight increase last year, the number will decline again for the AICPA exam. I predict that it will turn to . short term. The pipeline of young people taking accounting courses in college has thinned in recent years, as they gravitate toward higher-paying entry-level jobs in finance and technology.
CAQ argues that addressing the shortage requires broadening the appeal of accountancy among students from diverse backgrounds, and that spending during the fifth year of university can be particularly problematic for students. I am doing it.
The AICPA and Nasba have committed to publishing comments on the proposal in early 2025.
Sue Coffey, director of public accounting at the AICPA, said she has “received useful and diverse feedback” on the proposal.
“It is important that the pathway to licensure is clear and attractive for students.We will be working with Nasva and various stakeholders to find out more about what this will look like over the next month. We will know,” she said.
