Back in October, we discussed whether the CPA exam would ever become an optional within CPA firms. The reason the topic even came up was due to the fact that while the number of accounting students continues to increase, the number sitting for the CPA exam hasn't kept up, either declining in some years or staying flat.
We noted what New York State Society of CPAs Executive Director Joanne Barry said at the time:
More students than ever before in New York State are studying accounting, and there is not enough space to accommodate all of them. “However those students are not sitting for the CPA Exam,” Barry added. “The number of exam takers has been flat for two and a half years now. Why? We don’t know for sure.”
The American Institute of CPAs and the American Accounting Association are doing research to find out why. “One thing we did find out is that the messaging from the managing partners and the senior partners in the firm is directly connected to the number of candidates who have the ability to sit for the exam and have the motivation to do so,” she said.
In an interview published earlier this week, AICPA President, CEO and Donald Trump's choice for IRS Commissioner, Barry Melancon confirmed that prospective CPAs are more likely to sit for the exam if their firms encouraged them to do so:
In 2015, we conducted independent research that told us a lot about prospective CPA candidates. This research is helping to shape our recruitment efforts. For example, we learned what influences students to major in accounting, pursue a career in the profession and take the CPA Exam. So, going forward, in addition to our current successful programs, we are enhancing our presence and engagement on college campuses, building a community college initiative and reinforcing our relationships with academics. The research also emphasized the important role firms play by having a pro-CPA culture that encourages their professional staff to sit for the CPA Exam. We’re working with firms to help them best support young accountants in taking the CPA Exam. Each of us can have an impact, and encouragement to take the exam has proven to be the number one factor driving a young professional to pursue the CPA.
Where this situation gets tricky is that some accounting firms are so desperate for talent that not only are they not requiring new employees to sit for the CPA exam, they are hiring more non-accounting majors, i.e. people who aren't even eligible to sit for the exam. To make matters only slightly worse, the AICPA is trying to hamfist its way into "emerging services" none of which require a CPA.
Call it a hunch, but if accounting firms continue to suffer a talent shortage, they aren't going to push (read: require) the CPA onto people, especially if those people are working in service areas that don't require a CPA.
In general, I'd say that The best thing for those firms to do is not to make getting a CPA mandatory but to incentivize it heavily. Nothing motivates people like a bonus. I'm not sure what kind of bonuses firms pay employees for getting their license these days, but I guarantee it's not enough to sufficiently tempt people to pursue it with any kind of fervor.
A person could argue that a generous CPA bonus won't work because it's a cost sunk directly into a person that might not provide future value to a client. You might be able to realize that cost back if you tack on a clawback period on the CPA bonus, but that comes with risks too.
Maybe a CPA bonus is a bad idea but an accounting firm that says, "We have a pro-CPA culture," is kinda like law firm saying, "We have a pro-Lawyer culture," or an advertising agency saying, "We have a pro-designer culture!" It just doesn't mean that much. And when people find out what it does mean, they might decide that culture isn't for them.
AICPA President & CEO Highlights Profession’s Successes and Future [AICPA Insights]