Enrollments in Undergraduate Accounting Programs Remain Strong: AICPA Trends Report

Enrollments in undergraduate and graduate accounting programs for the 2015-2016 school year totaled more than 250,000, maintaining the record high level from 2013-2014. This was driven primarily by an all-time high in undergraduate enrollments. On the demand side, accounting firm hiring of new graduates was down from the historic level seen in 2014, according to the 2017 Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits report, released by the AICPA.

“The high number of undergraduate enrollments in accounting programs bodes well for the goal of continuing a strong pipeline of talent entering the profession,” says Yvonne Hinson AICPA academic-in-residence, senior director, academic and student engagement.

While undergraduate enrollments were at an all-time high, the report found projected master’s enrollments in accounting returning to pre-2014 levels. The last several Trends reports found a sharp rise in the number of master’s enrollments and graduates. The CPA profession has significantly lower rates of unemployment than the broader economy – particularly during economic downturns – which may have been a factor in attracting both traditional students and those changing careers to earn their master’s in accounting.

“In my experience as an educator, economic turmoil is a strong motivator for people to seek out the stability that a career in accounting provides,” adds Hinson. “The uncertain job market in the years immediately after the recession may have driven a high number of career changers to return to school for a master’s in accounting. At the same time, we saw many students pursing their master’s directly after they earned their undergraduate degree to bolster their academic credentials, raising the overall numbers during that period.”

The number of undergraduate degrees awarded in the 2015-2016 academic year (57,119) remained strong, totaling the second highest on record and representing a 5% increase from 2013-2014. While master’s degrees awarded (22,405) saw a decline from the historic level seen in 2013-2014, they were also the second highest on record. Combined, there was an overall projected decrease of 2,258 accounting degrees awarded in 2015-2016.

The 2016 Bureau of Labor Statistics Occupational Handbook, found that employment of accountants and auditors was expected to grow at an 11% rate from 2014-2024 – which is faster than average and represents an additional 142,000 jobs. According to the BLS Handbook, solid demand for accountants may lead to good prospects for entry-level positions, with strong competition for jobs at the most prestigious accounting firms and businesses. The handbook also notes that the job prospects are particularly bright for accountants and auditors who have earned their CPA license.

The full Trends report is available on the AICPA’s website.

AWSCPA to Join AICPA

The American Woman’s Society of CPAs (AWSCPA), a professional organization representing women CPAs, has agreed to support an memorandum of understanding with the AICPA. The following is an excerpted letter from the AWSCPA:

The AWSCPA national board is pleased to announce that we have received and unanimously accepted a memorandum of understanding with the AICPA that will further the goal of supporting women in the profession.

For the first time since our inception, AWSCPA has the opportunity to showcase our strengths on a larger platform. The AICPA can provide the women of our organization the resources, knowledge and skills. This provides an opportunity for our members to connect with a vast community of professional women in all realms of the accounting world as mentors, role models and friends.

In exchange for assignment of the AWSCPA intellectual property (logo, name, etc.) AICPA will:

  • Create a new task force for AWSCPA under women’s initiatives executive committee
  • Provide discounted introductory AICPA membership dues for AWSCPA members who are not currently AICPA members
  • Develop communities and programming for women members of the AICPA, including former AWSCPA members, as the women’s initiatives executive committee deems appropriate

AICPA Acquires Accounting Pilot and Bridge Project

AICPA recently announced that it acquired the Accounting Pilot and Bridge Project (APBP) from Dan Deines. The APBP, a program that trains high school educators to teach a higher-level accounting curriculum, was founded in 2006 by Deines who will continue involvement with the program, providing direction and training to the instructors who teach educators.

The AICPA had been involved with the APBP as a sponsor, working with state CPA societies to expand the reach of the program. They will be providing additional guidance and support to strengthen the community of teachers who have been trained to teach the course. In 2016, the AICPA assisted with five training sessions with six state societies and plan to expand the program this year to 14 trainings, with 20 state societies, reaching over 350 high schools teachers.

“By bringing the Accounting Pilot and Bridge Project in-house at the AICPA, we now have a formalized path to recruit highly motivated, talented high school students into the accounting profession on a national level,” says Barry Melancon, AICPA President and CEO.

After going through the APBP program, teachers can use a curriculum that is considerably more advanced than what is generally offered at the high school level. It consists of a combination of financial and managerial accounting, and is comparable to a college entry level accounting course.

High school teachers who have completed APBP will receive support from the AICPA as they work to implement the course in their state, including:

  • Access to online teaching resources
  • Daily lesson plans and assignments
  • Pre-written exams with answer keys
  • A textbook, including teacher’s notes and Power Point presentations
  • Scholarships for high school students who took their accounting course from an APBP trained teacher

The potential impact of the APBP is substantial: Research conducted by the AICPA has shown that high school students’ first accounting course has a large impact on their decision to pursue accounting as a major and career choice. Their research has also found that 44 percent of high school students have either taken an accounting course in high school or plan on taking one.

“The level of enthusiasm I’ve seen from teachers interested in going through the training and high school students who are eager to take a more advanced accounting class is a clear sign that this program is effective. AICPA ownership will help grow the program and continue its success well into the future,” says Deines.

AICPA Chair Also Named Chair of International Association

Kimberly Ellison-Taylor

Kimberly Ellison-Taylor

Kimberly N. Ellison-Taylor has been named chair of the Association of International Certified Professional Accountants, a global accounting organization formed in 2017 by members of the Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA).

Ellison-Taylor brings extensive experience to the role, which she will hold for a one-year term. She currently works as global accounting strategy director for Oracle America and also serves as chairman of the AICPA. In her new position, she will work closely with David Stanford, the newly elected president of CIMA who has been named vice chairman.

On her appointment, Ellison-Taylor says, “Technological innovation is disrupting our society, spurring demand for the higher value strategic guidance that CGMAs and CPAs offer to clients and businesses everywhere. In these extraordinary times, the association has united and strengthened our profession, creating boundless possibilities for the accountants of today and tomorrow.”

The association represents 650,000 CGMAs, CPAs and students from 179 countries. The board is made up of CPAs and CGMAs responsible for overseeing strategies that advance the organization’s mission. The chairmanship rotates between the chairman of the AICPA and the president of CIMA. Ellison-Taylor succeeds Andrew Miskin, who is the immediate-past president of CIMA.

AICPA Launches Program to Spur Innovation

The AICPA and CPA.com are jointly sponsoring an initiative to accelerate the growth of early-stage companies that could have significant impact on the accounting profession. The goal is to promote innovation and give the profession early insight into disruptive technologies and services in finance and business.

The Association of International Certified Professional Accountants and CPA.com Startup Accelerator will look to support up to five early-stage companies over the next year.

It will focus on startups in two key areas: 1) Technology and Financial Information, which could include advances in artificial intelligence, automation of routine tasks and the application of blockchain/digital ledgers, and 2) Professional Competency Innovation, which can encompass machine learning to personalize professional education, collaboration tools for mentors and experts, and improvements in measuring professional competency, among other categories.

“The Association and CPA.com have a deep base of knowledge and resources to offer entrepreneurs looking to find a foothold in the accounting ecosystem,” says Lawson Carmichael, the Association’s executive vice president for strategy, people and innovation. “And for us, the startup accelerator offers a chance to ‘see around corners’ and take a more long-range view of opportunities in business transformation and innovation. There’s a compelling business case for collaboration.”

The startup accelerator will offer benefits to entrepreneurs in three ways:

  • Provide up to $20,000 in funding per finalist
  • Access to subject matter experts, including an advisory panel of thought leaders in the accounting technology field, who can provide coaching and mentoring on issues and opportunities unique to the profession
  • An opportunity to showcase their product or service next June at AICPA ENGAGE 2018, one of the largest accounting-related events in the United States.

Applicants from all global markets are eligible. Submissions by startups are due by Oct. 5. Interested companies who want more information can contact Greg Lafollette, a strategic advisor with CPA.com, greg.lafollette@hq.cpa.com, or Mark Brooks, a member of the AICPA’s innovation team, mark.brooks@aicpa-cima.com. To apply for consideration or learn more details about the startup accelerator, visit aicpaglobal.com/accelerator.

U.S. Business Executives Temper Strong Optimism on Economy, AICPA Survey Finds

Business executives are taking a more conservative view of what had been bullish optimism about both the U.S. economy and prospects for their own companies earlier this year, according to the second-quarter AICPA Economic Outlook Survey, which polls CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles.

Those who expressed optimism about the 12-month outlook for the U.S. economy dropped from 69% last quarter – a 13-year high for the survey – to 64%. Respondents also pulled back slightly on optimism about their own company’s prospects (66% to 64%, quarter over quarter) and their organization’s plans for expansion (67% to 64%). Optimists and pessimists alike noted more uncertainty in the economic climate.

On the hiring front, some 40% of business executives said they had too few employees. Nearly one-in-four (24%) said they planned to hire immediately, a significant improvement from the 19 percent expressing that view a year ago. Another 16 percent said they need more staff, but were hesitant to hire.

There is a growing perception of tightness in the labor market. Asked to list their top challenges, business executives put “availability of skilled personnel” at No. 2 on the list and “staff turnover” at No. 6. Those categories were No. 3 and No. 9, respectively, last quarter.

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. As a point of comparison, the U.S. Department of Labor’s May employment report, looks back on the previous month’s hiring trends.

Other key findings:

  • 16% of business executives said they expect the Trump administration’s proposal to lower federal corporate income taxes will be signed into law this year, while another 33% expect it to be enacted before the 2018 midterm elections.
  • 24% of business executives said a reduction in the rate of federal corporate income taxes to the 15-20% range would be “significantly positive” for their company’s bottom line, compared to 18% last quarter. Overall, 60% said a lower tax rate would be positive to some degree, compared to 51% last quarter.
  • The top category for investment of potential tax savings from a corporate rate reduction is increased capital expenditures (46%).
  • Revenue and profit expectations for the coming year fell, quarter over quarter. Business executives now expect revenue growth of 3.9% over the next 12 months, down from 4.3%. Profits are expected to grow 3.2%, down from 3.5% last quarter.

IT remains the strongest category for planned spending over the coming year, with an expected growth rate of 3.2%.

New AICPA Publication to Guide Reporting on an Entity’s Cybersecurity Risk Management Program

The AICPA has developed a new guide, “Reporting on an Entity’s Cybersecurity Risk Management Program and Controls,” to assist CPAs who are examining and reporting on an entity’s cybersecurity risk management program.

Reporting on a client’s description of its cybersecurity risk management program will help clients demonstrate to stakeholders, customers, vendors and others that they have sound cybersecurity procedures and practices.

The publication’s release follows last month’s introduction of two resources under a voluntary cybersecurity risk management reporting framework:

  • Description criteria – For use by management in explaining its cybersecurity risk management program in a consistent manner and for use by CPAs to report on management’s description.
  • Control criteria – Used by CPAs providing advisory or attestation services to evaluate and report on the effectiveness of the controls within a client’s program.

The 263-page publication includes chapters on Accepting and Planning a Cybersecurity Risk Management Examination, Performing the Cybersecurity Risk Management Examination; and Forming the Opinion and Preparing the Practitioner’s Report. It is available online and in print.

Meanwhile, in a new blog post, Susan S. Coffey, AICPA executive vice president, public practice, writes, “At the AICPA, we saw the emerging market need several years ago. We recognized that there hasn’t been a consistent, common language for describing and reporting on the cybersecurity risk management programs organizations put in place. This lack of transparency makes it difficult for stakeholders to determine whether an organization’s cybersecurity risk management plan effectively addresses potential threats.”

Visit aicpa.org/cybersecurity to learn more about the CPA profession’s cybersecurity activities.

New Version of CPA Exam Tests Critical Thinking, Analytical Ability

The AICPA, National Association of State Boards of Accountancy (NASBA) and Prometric have announced the successful launch of an updated version of the Uniform CPA Examination.

The next-generation exam, which began testing April 1, has added additional assessment of “higher-order cognitive skills that test a candidate’s critical thinking, problem solving and analytical ability,” the AICPA says. The exam also makes greater use of task-based simulations to assess these higher-order skills. Research shows that CPAs are now performing tasks that rely upon these skills earlier in their careers.

“The roles and responsibilities of newly licensed CPAs are constantly evolving, so it’s crucial for the CPA Exam to stay ahead of the curve. The CPA Exam now better reflects the knowledge and skills essential to today’s profession,” says Michael Decker, AICPA vice president of examinations.

Among the most important changes to the CPA exam:

  • Exam blueprints that contain about 600 representative tasks across all four exam sections are available on the AICPA website. The blueprints have replaced the Content Specification Outline (CSO) and Skill Specification Outline (SSO) as CPA candidates’ primary source of the content and skills that they will be tested on.
  • The exam remains composed of the four existing sections – auditing and attestation, business environment and concepts, financial accounting and reporting and regulation.
  • Any combination of passing exam sections prior to April 1 and passing exam sections on or after April 1 (within the 18-month window following passing one section) will count toward licensure.
  • Total CPA exam testing time increased from 14 to 16 hours – four sections of four hours each.
  • A new, 15-minute standardized break during each section that will not count against a candidate’s testing time had been added.

For candidate convenience, the 10-day extension of the testing window introduced in April 2016 will continue in the third and fourth quarters of 2017. The 10-day extension will not be available during the current April/May testing window to allow the AICPA to follow the standard-setting process and analyze exam results to set new passing scores. To provide sufficient time for the process, scores will be released only once following the close of each testing window.

In addition to the changes to the CPA exam that have already occurred, the AICPA is working on an improved user experience, which is expected to launch in 2018. More information on that project will be announced later this year.

Detailed information on the exam is available online at www.aicpa.org/cpaexam and https://nasba.org/exams/the-next-version-of-the-cpa-exam/.

AICPA Launches New Branding

The AICPA is rolling out new branding in conjunction with the Chartered Institute of Management Accountants and their joint venture, the Association of International Certified Professional Accountants.

The move will create unified branding for all three organizations, sharing the sphere logo and the same color palette. Currently only the logo for the association has been released; the rest of the rebranding will be announced in the coming weeks, and is expected to be completed by the end of 2017.

The rebranding was announced in a letter to members from institute chair Kimberly Ellison-Taylor and CIMA president and association chair Andrew Miskin.

“This new brand signals that we are part of one global family with a shared commitment to public and management accounting as we come together through the Association,” says Ellison-Taylor and Miskin. “The same logo, colors and other attributes will appear across our brands to represent a consistent beacon of quality and integrity around the world.” The new look was extensively tested with members and students, who described it as “professional, visionary, dynamic and influential,” they say.

Most Business Executives Prefer Repeal of Affordable Care Act, AICPA Survey Finds

Most business executives want to see the Affordable Care Act repealed, an AICPA survey of CEOs, CFOs and other senior-level CPAs found.

But they also expect their company’s health care expenses to rise this year and next, no matter what happens in Capitol Hill deliberations on the fate of the sweeping health care insurance law, the AICPA says.

Asked their preference for action on the Affordable Care Act, 61% of respondents to the first-quarter AICPA Economic Outlook Survey said they preferred “repeal and replace,” while another 10% said they wanted to see the health care coverage program repealed and not replaced. Almost one-in-five respondents (18%) said they preferred to leave the law as is. Ten percent said they weren’t sure which option they preferred. The survey questions were fielded before the Trump administration and congressional Republicans unveiled their own version of a health care coverage plan, the American Health Care Act, earlier this month.

Despite the uncertainty over health care reform, an overwhelming majority (80%) of business executives said they expected at least some additional expense for their employer-provided health care plans this year, with 43% saying they expected an increase in the range of 6% to 10%, and 26% estimating a rise in the 1% to 5% range.

“Business executives now cite ‘employee and benefit costs’ as the top challenge facing their companies,” said Arleen R. Thomas, managing director of Americas Market, Global Offerings & CGMA Exam, Management Accounting for the Association of International Certified Professional Accountants. “A year ago, that category was No. 6 on the list, and it’s clear health care costs are a major concern driving this upward shift.”