New research by the Pennsylvania Institute of CPAs (PICPA) shows that the time students devote to earning the 150 credit hours required for CPA licensure is a bigger barrier than the cost.
In a survey of 763 business administration students and accounting majors enrolled at U.S. colleges and universities across 47 states, PICPA also found that it’s possible to change students’ minds about becoming a CPA but reducing the educational requirement to 120 hours is not in the top five reasons.
“It is possible, then, that modifying the education requirement will not drive as much transformation of the pipeline as some have suggested,” the white paper said. Added PICPA CEO Jen Cryder, in an interview, “It’s definitely a piece of the puzzle but it’s only one piece.”
Business model changes within accounting firms, such as better work-life balance and increased starting pay, could have a bigger influence on students’ decision-making. In fact, work-life balance improvements came out as the top factor. “If they had written off CPA licensure, that’s the No. 1 thing that would change their minds,” Cryder said. “We’ve got to listen to that data, it’s speaking loudly.”
The survey was designed to better understand students’ perception of the accounting profession and the roadblocks they perceive to becoming a CPA. The white paper, released today, also outlines actions firms can take to address the unprecedented pipeline challenges.
The time needed to become a CPA was cited most often as a disincentive by all groups, but non-white respondents cited their second most popular reason as “the cost to prepare for and take the CPA Exam is not worth the financial investment.”
The entire journey of higher education, CPA course prep and the exam itself can be a burden, especially on diverse students. Cryder said a review course can cost $5,000 and sitting for each section of the exam can cost $500 each. While firms oftentimes will cover those costs, it’s not a guarantee. The research showed that more than 73% of the surveyed students relied on some form of external financial support.
The survey also shows that the profession can control some of the factors that are turning students away from accounting as a whole and earning their CPA:
- Understand that there are two pipelines of professionals and build unique solutions for each. The first is the pipeline of high school students who become accounting majors. The second is the pipeline of accounting majors who become CPA candidates. Cryder called this one of the most surprising outcomes of the survey. “Until you really pick apart the pieces you can’t really effectively build solutions.” More than 44% of business administration majors indicated that they chose their major before college enrollment. “That was one of the real ‘aha’ moments that emerged for us in the research.”
- Focus on building awareness of the profession and the accounting major in high schools with the right messages delivered the right ways. Cryder says the profession must appeal to students emotionally, not just intellectually. “They care so much about the impact that their work can have, and our profession has an incredible story to tell here. CPAs power trust, growth and opportunity. I think that we can tell that story unlike any other profession.”
- Maximize the return on time investment by changing firm business models and creating expedited pathways to licensure. Students are looking for higher long-term earning potential and more opportunities for career advancement, among other things, and additional exam scholarships and time off to study could put CPA licensure within reach.
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