Students are not majoring in accounting because they lack passion for the subject and also because they perceive the 150-credit-hour requirement for a CPA license as a major cost and time barrier, especially for black and Hispanic students, according to a new study.
whose account Published Monday by the Center for Auditing Quality and Edge Research, the team surveyed nearly 1,400 undergraduate business students and recent graduates to reveal their attitudes toward accounting and the barriers they see entering the profession.
When asked about their experiences with introductory accounting courses, only one in three non-accountants who had considered accounting said the content was interesting or engaging. Among students who ultimately chose not to pursue accounting, the main reasons were a lack of passion, higher starting salaries for other majors, and a reluctance to put in the additional academic hours to become a CPA, specifically the 150 credit-hour requirement.
Courtesy of Center for Audit Quality
The study found that the 150 credit hour requirement was seen as a barrier, but it was more pronounced for black and Hispanic non-accounting students, particularly students who considered accounting but dropped out, meaning they considered accounting as a major but ended up going elsewhere because of the additional credit hour requirement. (For more data from the study, see “Barriers to Entry: Why Accountants Don’t Become Accountants.“)
“These students perceive the rule as an expensive, time-consuming requirement for future career advancement,” the report said. “To be sure, these students see the CPA license as a valuable credential. It’s just not ‘worth it’ for them to pursue.”
Accounting majors were the top group of business majors who said they chose a major before entering college, at 66%, followed by business administration at 62%, marketing at 49%, entrepreneurship at 46%, and finance at 44%.
For the majority of students who have already decided to major in accounting, CPA licensure is their ultimate goal 81%, with the expectation that obtaining a CPA license will facilitate career advancement and lead to higher income. But while 81% of all undergraduate accountants plan to pursue a CPA license, rates are significantly lower among blacks (68%) and Hispanics (72%).
The findings are consistent AICPA Trends Reportwhich found that the number of people taking and passing the CPA licensure exam declined by 36% between 2010 and 2021, falling sharply from 50,000 in 2010 to 32,000 in 2021.
Most students are positive about the CPA credential, with 82% of accounting majors who responded to the CAQ survey seeing the CPA license as extremely valuable or very valuable to their career goals. But significantly fewer accounting teachers reported confidence in their ability to pass the exam (58%).
When asked about obstacles to CPA licensure, among non-licensers (including those who are undecided), the additional cost and time required to achieve 150 credit hours was cited as the greatest obstacle. Among accounting majors who decided to pursue a CPA license, the time required to study for the CPA exam topped the list of concerns, followed by the complexity of the application and licensing processes.
While the time required for the CPA exam was seen as a major barrier across all demographics, the cost associated with meeting the 150 credit-hour requirement was perceived as the most significant barrier for black and Hispanic accounting majors.
CAQ found demographic differences among recent graduates as well. Those working for a public accounting firm reported higher levels of satisfaction. Recent graduates who work in public accounting and become CPAs are more likely to rate themselves as very satisfied with compensation, mentorship, advancement opportunities, and goals if they work for a Big Four.
On the other hand, graduates who are undecided or do not intend to pursue a CPA license report overall lower levels of job satisfaction. Black accounting graduates who reported lower levels of satisfaction with organizational culture were less likely to plan to pursue a career in accounting.
Get them early
The report recommends getting young people involved early in life and found that interest in accounting is likely to be sparked before a student enters high school and peaks after graduation.
“Enhancing opportunities for a diverse group of students to gain exposure to accounting before college will help not only increase the diversity of the accounting talent pipeline, but also increase the number of accounting majors overall,” the report said.
A survey of young people who have decided not to become accountants can lead to an understanding of how to change their perceptions of the profession.
“It is important to understand the perspective of students who were interested in accounting but ultimately did not pursue a career,” CAQ executive director Julie Bell Lindsey said in a statement. “We also need to recognize that not all potential accountants start from the same place.”
CAQ let it go Accounting+ campaign In recent years it has sought to attract more diverse and younger accountants and plans to publish more reports in the future with data to measure its progress.
“The data shows we have much more work to do around awareness and perception of accounting careers, and with our multi-year, collaborative, data-driven Accounting+ campaign, I’m confident we can address the continuing challenges of the accounting pipeline,” said Liz Barentsen, vice president of operations and talent initiatives at CAQ.
