The accounting profession in the United States is facing a concerning trend: a significant decline in the number of students completing accounting degrees. According to the AICPA 2023 Trends Report, the number of bachelor’s degree completions in accounting dropped 7.8% from 2021 to 2022, continuing a steady decline of 1-3% per year since 2015-2016. This trend has also impacted master's degrees in accounting, with a 6.4% decline in completions during the same period. Although some universities are optimistic about future enrollment, the current data paints a clear picture: fewer students are entering the accounting profession, signaling a potential crisis for businesses that rely on skilled accountants.
Why Are Accounting Degrees Declining?
Several factors have contributed to the shrinking number of students pursuing accounting degrees, and understanding these trends is crucial for addressing the issue.
1. Increased Complexity of the CPA Path
Becoming a Certified Public Accountant (CPA) has always been challenging, but recent changes in the exam and education requirements have made it even more difficult. The CPA examination process requires candidates to pass four rigorous sections, which demand not only a deep understanding of accounting principles but also the ability to apply them in complex, real-world scenarios.
The AICPA 2023 Trends Report highlighted a concerning trend: “The data reflects a noticeable decline in the number of CPA candidates passing their 4th section of the CPA Examination in recent years, indicating a potential shift in candidate success rates.” This heightened difficulty, coupled with the financial and time investments required for exam preparation, has discouraged many students from pursuing accounting as a career. As the path to becoming a CPA becomes steeper, fewer students are willing to embark on the journey.
2. Competition from Emerging Professions
The allure of new, fast-growing industries like financial technology (fintech), data analytics, and cybersecurity has pulled potential students away from traditional fields like accounting. These industries offer lucrative starting salaries, rapid career growth, and the chance to work on cutting-edge technologies. For many, the excitement and perceived impact of working in fintech or cybersecurity outweigh the relatively conservative career paths that accounting offers.
Moreover, the rapid pace of innovation in these fields creates a sense of dynamism that contrasts with the perception of accounting as a static or repetitive profession. As a result, many bright students who might have chosen accounting a decade ago are now opting for careers in data science or finance that promise faster advancement and higher salaries.
3. Negative Public Perception of Accounting
Public perception of accounting as a “boring” profession has been a persistent issue, despite the critical role accountants play in shaping business strategies and ensuring financial integrity. This stereotype, often perpetuated by media portrayals, discourages many young people from considering accounting as a career option.
The problem is compounded by the fact that many high school and college students are unaware of the variety of career paths available within accounting. From forensic accounting to audit, tax strategy, and even entrepreneurship, the profession offers far more than the traditional image of balancing spreadsheets. However, these exciting opportunities are not always communicated effectively to students.
4. Technological Disruption
The rise of automation, artificial intelligence (AI), and machine learning is transforming the accounting profession. Many routine tasks, such as bookkeeping and data entry, are being automated, leading to concerns that fewer entry-level jobs will be available for new graduates. While these technologies can increase efficiency and accuracy, they have also created uncertainty about the future role of human accountants in an increasingly automated world.
This uncertainty, coupled with the perception that automation could replace jobs, has likely contributed to the decline in accounting degree completions. Prospective students may fear that their career opportunities will diminish as technology takes over more of the tasks traditionally handled by accountants. Although technology will likely enhance, rather than replace, the role of accountants, these concerns are still influencing students’ career decisions.
The Talent Shortage: A Perfect Storm
The decline in accounting degrees is exacerbating an already pressing issue: the accounting talent shortage. The Virginia Society of Certified Public Accountants recently described the situation as “a perfect storm” facing the profession. The combination of fewer degree completions, a shrinking pool of CPA candidates, and the retirement of experienced professionals has created a serious shortage of qualified accountants.
“We’re seeing the confluence of several forces at once—declining student interest, increasing retirements, and rapid technological change,” the VSCPA article states. “Firms are struggling to find qualified accountants, and many are facing significant staffing challenges.” This shortage is especially problematic for small and mid-sized firms, which often cannot compete with larger organizations for the limited talent available.
As the demand for financial transparency, compliance, and strategic decision-making continues to grow, businesses are finding it harder to attract and retain skilled accountants. The result is a growing gap between the supply of qualified professionals and the demand for their services, which is putting strain on businesses across industries.
Outsourcing as a Solution: Why RedHammer Can Help
With the decline in accounting degrees and the ongoing talent shortage, many businesses are turning to outsourcing as a practical solution. RedHammer, a leader in accounting and consulting services for the construction industry, offers an innovative approach to solving this problem.
RedHammer specializes in providing expert accounting services, including accounts payable, payroll, financial reporting, and job costing, tailored to meet the needs of construction companies. By outsourcing these essential functions, companies can ensure their accounting is handled accurately and efficiently without the challenges of hiring and retaining in-house staff.
Benefits of Outsourcing to RedHammer:
- Access to Expertise: RedHammer’s team consists of seasoned professionals with deep industry knowledge. Their expertise allows businesses to receive top-tier accounting services without the burden of finding and training new hires.
- Cost-Effective: Hiring and training in-house accountants can be costly, particularly given the current talent shortage. Outsourcing allows companies to control costs while maintaining the high quality of financial reporting and compliance.
- Scalability: As companies grow, their accounting needs become more complex. RedHammer offers scalable solutions that can grow with your business, ensuring you always have the right level of support.
- Focus on Core Business: Outsourcing accounting functions allows businesses to focus on what they do best—running their operations—while leaving the financial management to experts.
RedHammer's ability to provide comprehensive, reliable, and industry-specific accounting services makes it an ideal solution for construction companies facing these talent shortages. As the AICPA 2023 Trends Report shows, the path to becoming an accountant is becoming more challenging, but the demand for these professionals remains high. Outsourcing provides a viable solution for companies grappling with these challenges, ensuring their financial operations are in capable hands.
Conclusion
The decline in accounting degrees is a troubling trend that has broad implications for businesses across the country. As firms struggle to find qualified accountants, many are turning to outsourcing as a solution. RedHammer offers a reliable and cost-effective way for businesses to navigate this talent shortage, ensuring their financial operations are handled efficiently and accurately.
By partnering with an outsourced accounting provider like RedHammer, companies can mitigate the challenges of the accounting talent gap and maintain their financial health in an increasingly competitive market. The AICPA 2023 Trends Report illustrates the growing difficulty in attracting new talent to the accounting profession, but by embracing solutions like outsourcing, businesses can continue to thrive despite these challenges.
