The pipeline problem has also hit state and local governments, making it difficult to find CPAs to prepare critical financial information or outside firms to conduct audits, according to a joint report by the AICPA and the National Association of State Auditors, Comptrollers and Treasurers (NASACT).
The report calls for a multi-faceted approach that includes educating legislative bodies about the value of the CPA, offering competitive salaries for CPAs in government and fees paid to outside auditors, and reviewing the thresholds that trigger certain kinds of audits, the report concludes.
“We have a talent shortage in accounting that affects business as a whole, and many of the pipeline initiatives the profession is putting in place will help the public sector as well,” said Susan Coffey, AICPA’s CEO of public accounting. “But accountants who do government work face unique challenges that require more specialized solutions. The public deserves to know its tax dollars are being spent as intended – and that requires strong government finance teams and experienced auditors.”
One key issue is that government and private sector accounting and auditing standards often differ, so CPAs working in the public sector require specialized expertise. Yet salaries and audit fees are often well below those offered in the private sector, the report found. State and local governments also don’t always understand the value CPAs bring to finance teams and the audit process, so hiring is often driven by a cost-savings approach, rather than a focus on the qualifications that an experienced staff accountant or outside auditor may bring.
Among the report recommendations:
- Make government salaries more competitive with the private sector.
- Minimize differences in accounting and audit standards for the government and private sectors, and standard-setters should more routinely sound out smaller governmental entities on the impact of proposed standards.
- Provide support for local governmental entities.
- Get accounting graduates interested early in government work.
- Get buy-in from audit firms.
“We’re urging a renewed investment in public-sector accounting and auditing by state and local governments and CPA firms,” said Kinney Poynter, NASACT’s executive director. “Trust in government requires governments to prepare clear, consistent financial data that is backed by a strong audit function. It’s essential we make this a priority.”
Besides its work with NASACT, the AICPA is pursuing several initiatives to address the CPA pipeline. Earlier this year, an independent panel convened by the AICPA, the National Pipeline Advisory Group, delivered a series of recommendations on addressing the accounting talent shortage.
