Rebranding the CPA

October 6th, 2023.

I’m eating dinner in my office, just a few days away from the October 15th tax deadline. My phone buzzes with a notification from the Wall Street Journal: "Why No One’s Going Into Accounting.” I dive into the article and see the same narrative I've encountered in various news outlets since I started working in June 2022. Some truths, some myths.

I’m not here to argue the specifics. The facts are clear: there’s a shortage of accountants, college enrollment in accounting programs is plummeting, and interest in the CPA? Barely a pulse.

Now, approaching the two-year mark in my career, I find myself enjoying the work, learning on the job every day, feeling reasonably compensated (as much as that will always be the case), and gaining exposure to the financial services industry that I never expected at this stage. This is the side of public accounting that never gets shown in the media or advertised to students choosing their career paths in college. Accounting isn’t for everyone—that’s clear. But as an industry, we need to market the pros and cons more transparently. Instead of trying to recruit as many people as possible, we should focus on attracting the right people.

I believe that with proper education about what the accounting industry can offer, realistic expectations about the work required to succeed, and support for early success in pursuing the CPA license, we can "rebrand" the CPA profession. This rebranding can help boost the accounting pipeline and attract individuals whose career goals align with what the accounting industry can provide.

While accounting may not boast the glamour of some career paths or initially attract the most interest from college entrants, my two years in the industry have shed light on several overlooked aspects.

Firstly, industry compensation is often unfairly criticized. Additionally, the abundance of postgraduate opportunities is under-advertised, as is the career mobility and flexibility that accounting offers in its early stages. These nuanced facets deserve greater attention and recognition.

I frequently come across articles and criticisms suggesting that the accounting industry has lagged behind in terms of compensation. This sentiment is echoed in the WSJ article mentioned earlier (Link) and in the most recent Accounting Talent Solutions Draft Report, which features the table below (Entire PDF report here).

When comparing the accounting industry to sectors such as investment banking, private equity, and other financial services roles, it's evident that accounting significantly lags behind in terms of initial compensation. However, there are important nuances to consider.

Firstly, the level of competition and availability of opportunities in public accounting differ markedly from these other financial services sectors often cited. While hiring has slowed in many public accounting firms post-pandemic, and some layoffs have occurred, access to the industry remains more open compared to other high-end financial service sectors. Unlike industries with a select group of target schools, public accounting sees consistently high demand year after year, making it feasible for individuals with strong academics from any background to competitively pursue positions at any of the leading accounting firms globally.

Furthermore, the pay structure in public accounting differs from many other sectors. While other financial service sectors may offer higher compensation, public accounting provides stability and consistent compensation growth year after year, a feature not commonly found in industries closely tied to market fluctuations.

These comparisons are often drawn to some of the highest-paid positions across all sectors, not just financial services. However, when compared to entry-level positions in other business sectors or common post-graduate careers, public accounting typically offers higher initial compensation, even before considering its substantial year-over-year growth. There are indications that the industry is becoming more competitive in this aspect too. For example, a recent article mentions that a firm has increased entry-level pay for client-services graduates three times—by a total of $12,000—since January 2022 to attract young recruits (Full WSJ article here).

There is a wealth of opportunities available to those interested in an accounting-related career directly out of undergraduate studies. Traditional pathways such as audit and tax roles in public accounting remain the most prevalent for accounting majors, as firms of all sizes continually seek to hire new graduates with limited to no experience.

The landscape of opportunities within the accounting field is continually expanding, as evidenced by insights provided by the US Bureau of Labor Statistics (BLS). According to the BLS's 2023 report, employment prospects for accountants and auditors are projected to grow by 4 percent from 2022 to 2032. Over the course of a decade, an estimated average of 126,500 job openings for accountants and auditors are anticipated annually (Research here).

Moreover, the discourse surrounding ongoing technological advancements, particularly in the realm of artificial intelligence (AI), underscores the evolving nature of the accounting profession. The BLS indicates that technological progress, including the widespread adoption of cloud computing, AI, and blockchain, is expected to influence the role of accountants in the coming decade. While certain routine accounting tasks, such as data entry, may be subject to automation, the overall demand for accountants is not foreseen to diminish. Rather, automation is poised to enhance the efficiency of accountants, thereby elevating the significance of their advisory and analytical functions.

These advancements signify a dynamic shift within the accounting domain, wherein technological innovations are seen as augmenting rather than replacing the role of accountants. This evolution is accompanied by an increased demand for their services, highlighting the enduring significance and indispensability of their expertise. This evolution positions accountants to assume a central role in driving strategic decision-making and providing invaluable insights to businesses and organizations.

In addition some opportunities are emerging that were not historically accessible immediately out of college. As highlighted in a Wall Street Journal article, "graduating accounting students are receiving more opportunities and choice in the entry-level roles in professional services than they had in previous years, for example advising on mergers and acquisitions," said Joseph Ugrin, head of accounting at the University of Northern Iowa. One master’s candidate was offered a starting salary of $99,000 at a Big Four firm’s Denver office, a figure previously unheard-of (Full WSJ article here). This trend reflects the evolving landscape of the accounting profession, where new graduates increasingly find themselves with a broader range of entry-level roles and more competitive compensation packages.

Flexibility is another aspect of the accounting profession that has grown significantly in recent years. This flexibility encompasses options for remote work and enhanced work-life balance benefits. The pandemic, combined with the need to attract talent, has accelerated the adoption of remote work within the accounting industry. While some firms have scaled back their fully remote policies, it remains common for employees to work from home two to five days a week. This shift acknowledges the productivity and viability of remote work arrangements.

Additionally, firms are placing greater emphasis on work-life balance benefits. Many have expanded company holidays, increased paid time off (PTO), and introduced unlimited PTO policies. Wellness benefits have also been enhanced, providing employees with resources to maintain their health and well-being. Overall, the accounting profession is adapting to meet the needs of its workforce by offering more flexible work environments and better support for work-life balance.

The accounting profession offers significant flexibility in terms of locality. Remote work is becoming increasingly prevalent and a viable option for most employees. Alongside this, firms of all sizes—large, medium, and small—have office locations in cities across the United States and globally. This geographic flexibility allows accountants to explore working in different markets throughout their careers.

The mobility of the CPA license further enhances this flexibility. Compared to other professional licenses, the CPA credential is highly portable. Most states only require an application process to obtain a CPA license in a new state, and in some cases, an additional ethics exam. Crucially, there is no need to retake any of the four initial CPA exams to become licensed in another state, which is a significant benefit for professionals looking to relocate.

The final benefit of flexibility that accounting offers is career versatility. While certain areas, such as tax, may lead to more specialized career paths, fields like audit, financial planning and analysis (FP&A), consulting, and managerial accounting provide a wide array of options for career advancement.

Public accounting itself offers a promising career path for the right individual, regardless of whether their ultimate goal is to become a partner. In recent years, firms have introduced initiatives to attract and retain talent, even for those who may not be interested in the traditional partner track. One notable initiative is the implementation of Employee Stock Ownership Plans (ESOPs), but ultimately not everyone will want to stay in public accounting for their entire career.

Accounting serves as the language of business, and starting your career in one of these areas equips you with a comprehensive knowledge base. This knowledge base is highly transferable and can be applied to almost any industry or role in the future.

For instance, professionals with experience in audit, FP&A, or financial reporting are in high demand across various sectors, especially within financial services. To understand the breadth of opportunities available, consider exploring job posting websites like LinkedIn, Indeed, or Handshake. You'll find numerous positions seeking individuals with accounting-related experience, highlighting the value and versatility of this career path.

To wrap this up, "rebranding" the CPA profession isn’t going to turn accounting into the latest craze. But there's a golden opportunity to show how lucrative and fulfilling this career path can be for the right person.

Here's the deal: we need to be transparent about the workload, commitment, and nature of the work. However, we must also highlight the immediate and long-term benefits of choosing this path. The accounting industry has to be forward-thinking, leveraging new tech and AI to automate repetitive tasks. This shift will enable accountants to focus on being trusted business advisors, boosting their productivity and value.

Everyone in the industry, from entry-level employees to seasoned executives, need to take an active role in recruitment. Currently, partners and executives bear too much of this responsibility. Their experiences, often decades removed from today’s realities, don’t resonate with fresh talent. Aspiring professionals want insights from those currently in the trenches—people like me.

By addressing these points, we can attract the right candidates to the profession. Let’s be transparent about the challenges and highlight the substantial rewards that come with a career in accounting. This will help validate the truths and dispel the myths surrounding the industry.