Stay informed with free updates
Simply log in to Accounting myFT summary — delivered straight to your inbox.
A plan to reform the rules for qualifying as an accountant in the US could expose firms to discrimination lawsuits and add barriers to entry to the profession, according to the body that represents the nation’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 major firms — slammed the proposed reforms as “unnecessarily complex” and said they could “introduce unconscious bias” into the qualification process.
The CAQ’s intervention puts the big audit firms at odds with the two bodies that set the rules on how to qualify as a CPA — the American Institute of CPAs and the National Association of State Boards of Accountancy — over how to stem the decline in new hires.
The AICPA and Nasba proposed in September to eliminate the requirement that accountants complete five years of college education, one more than a traditional undergraduate degree, a rule accused of preventing young people from entering the profession.
The two bodies proposed an alternative route to qualification: replacing the fifth year of education with a requirement for a year of on-the-job training by companies, which would have to certify that the employee has acquired dozens of specific technical and professional skills.
Liz Barentzen, CAQ’s vice president, wrote in a comment letter submitted last month that the framework’s “comprehensive list of competencies, performance indicators and evaluation requirements creates an unnecessarily complex system that may be difficult to implement consistently across jurisdictions.”
And she added: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into assessment processes, potentially creating employment-related problems (eg claims of discrimination) that would not otherwise exist.”
A shortage of accountants has started to appear as a risk factor in some companies’ financial disclosures, and some small accounting firms have pulled out of niche jobs such as auditing for local authorities. Industry leaders have warned that larger companies could face recruitment problems if trends are not reversed quickly.
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 small increase last year, the AICPA predicts the decline will continue in the near term. The number of young people taking accounting courses at university has thinned out in recent years as they gravitate towards higher-paying entry-level jobs in finance or technology.
The CAQ argued that addressing the problem of shortages must include widening the appeal of accountancy to students from different backgrounds, for whom the cost of a fifth year of university can be particularly problematic.
The AICPA and Nasba have committed to publishing comments on their proposals in early 2025.
Sue Coffey, the AICPA’s executive director of public accounting, said it is “getting useful, diverse feedback” on its proposals.
“It is critical that licensing pathways are clear and convincing to students. Working with Nasb and various stakeholders, we will know more over the next month about what this looks like,” she said.
