The Alabama Board of Public Accountancy voted on Friday to expand the timeframe for individuals to complete certified public accountant exams in what is just the latest effort by the board to reverse the trend of fewer people pursuing the profession.
Much like the rest of the country, Alabama is struggling to grow, or even maintain the number of accountants it certifies on a yearly basis. Nationally, approximately 101,000 people took the CPA exam in 2010. In 2021, that number was 72,000, and in 2022, 67,000.
“For 2024, I’m going to give you my predicted number: 40,000,” said Boyd Busby, executive director of the ABPA. “It’s going to be dire I think in 2024.”
In an effort to reverse that trend, the board voted unanimously to extend the timeframe for people to complete CPA exams from 18 months to 30 months. The CPA exam consists of four sections, with applicants given 18 months to complete the remaining three after completing the first.
Busby said the new initiative will roll out this fall, and will hopefully give aspiring CPAs more flexibility in completing the exam. Carrying a 55% pass rate, ABPA Chair Wim Schaffers told Alabama Daily News that the exam was the “hardest professional exam you can take.”
The cause for the shrinking number of people taking CPA exams is multifaceted, though some experts in the field have blamed stagnant salaries compared to careers in tech and data science.
During the meeting Friday, board members noted candidates wanting higher salaries as one potential factor in the shrinking number of applicants, though suggested there could be generational factors.
“It’s not an accounting pipeline issue, it’s a young people issue,” said board member Steve Grice.
“Don’t want to work,” Schaffers added.
While the ABPA has no authority to increase salaries for CPAs at accounting firms, the board has made efforts over the years to encourage more people to take the exam, including waiving fees.
“Another piece that I get tons of comments about is the fact that we have eliminated the fees for sitting for the exam; that hurts us financially by about $50,000 or $60,000 a year, but that was well-received by the candidate community when the board took that action,” Busby said. “We’re the only state out there that has eliminated fees to sit in the exam and is taking on that financial burden ourselves.”
Following the meeting, Schaffers elaborated on why he felt younger individuals were less inclined to accept CPA starting salaries, which according to the Accounting Institute for Success, ranges from $46,000 to $68,000.
“For years and years it’s been pay your dues, work hard and you’ll get success,” Schaffers told ADN. “Now, the students coming in want immediate success; they want the higher salaries and that’s something that the firms have been dealing with.”
Schaffers, a retired accountant for Ernst & Young, said he made a starting salary of $27,000 a year in 1990. In today’s dollars, that would be just over $64,600, placing his income at the time within the range of today’s starting salaries for CPAs, though near the higher end.
A growing number of retiring CPAs also poses a problem for the future, with around 75% of today’s CPAs set to retire within the next 15 years.
“We are licensing enough to keep us even, and we have the exact number retiring at the same time,” Busby told ADN. “We were building for years, but now the number of retirements have really kicked in.”