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A plan to overhaul rules for qualifying as an accountant in the United States could expose companies to discrimination lawsuits and add barriers to joining the profession, according to the body that represents the country's largest auditing firms.
In a private comment letter seen by the Financial Times, the Center for Audit Quality – which represents the Big Four and other large firms – condemned the proposed reforms as “unnecessarily complex” and said they could “lead to unconscious bias” in the onboarding process. .
The CAQ's intervention puts large audit firms at loggerheads with two bodies that set rules on how to qualify as a certified public accountant — the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy — over how to stem the decline in the number of new hires.
The AICPA and Nasba in September proposed eliminating the requirement for accountants to complete the equivalent of five years of college education, one year more than a traditional college degree, a rule that has been blamed for keeping young people away from entering the profession.
The two bodies proposed an alternative path to qualification: replacing the fifth year of education with a one-year on-the-job training requirement by companies, which would have to certify that the recruit has acquired dozens of specific technical and vocational skills.
“The framework’s extensive list of competencies, performance indicators, and assessment requirements creates an unnecessarily complex system that may be difficult to implement consistently across jurisdictions,” CAQ Vice President Liz Barentzen wrote in a comment letter filed last month.
“Qualitative assessment frameworks can introduce subjectivity and unconscious bias into assessments, which can create employment-related issues (such as claims of discrimination) that would not otherwise exist,” she added.
The shortage of accountants has begun to appear as a risk factor in some companies' financial disclosures, and some small accounting firms have withdrawn from specialized work such as auditing accounts for local governments. Profession leaders have warned that major companies could face recruitment problems if trends are not quickly reversed.
The number of people taking the CPA exam has fallen 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 uptick last year, the AICPA is expected to resume its decline in the short term. The numbers of young people taking accounting courses at university have dwindled in recent years, as they gravitate towards better-paid jobs in finance or technology.
The Accounting Quality Committee has argued that tackling the shortage should include broadening the appeal of accounting among students from diverse backgrounds, for whom the cost of the fifth year of university can be a particular problem.
The AICPA and Nasba have committed to providing public comments on their proposals in early 2025.
Sue Coffey, the AICPA's chief public accounting officer, said she is “getting useful and diverse feedback” on her proposals.
“It is important that licensure pathways are clear and compelling to students. Working with NSABA and various stakeholders, we will learn more over the next month about what this will look like,” she said.
