CPAs looking to hire talented young accounting grads as well as students preparing to graduate need to know what their competition looks like. The AICPA’s 2011 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, which was released in May, identifies key trends in accounting enrollment and graduation at colleges and the demand for those prospects by accounting firms of all sizes.
The report contains the results of two separate surveys—one is for colleges, and the other is for hiring firms. The surveys have been conducted on an ongoing basis since 1971. The information contained in this report is based on surveys conducted at the end of 2010.
On the demand front, hiring is back on the upswing after decreasing from 2007 to 2008. In 2007, the total number of accounting hires was 36,111. That dropped to 25,488 in 2008 but climbed to 33,321 in 2010. A large portion of that increase was in firms with fewer than 10 CPAs on staff. Firms of that size increased their hiring projections from 11,432 in 2008 to 16,342 in 2010 (see Exhibit 1).
In terms of the types of positions CPA firm new hires were recruited to fill across firms of all sizes, accounting and auditing still commanded a narrow majority at 51%; followed by taxation at 25%; other at 16%; and information technology at 8%.
The accounting and auditing share of new hires was down from 60% in 2007, with the declines coming from firms with 50 or more CPAs. Hiring of new CPA graduates likewise decreased for information technology (down 5 percentage points from 13%). Tax showed a slight increase (2 percentage points) with the strongest gains coming from firms with fewer than 10 CPAs, while the largest growth since 2007 was in the “other” category.
The percentage of overall firms expecting to hire the same or more new accounting graduates than last year also is up—to 89% from 74% when the question was asked in 2008.
There is some bad news for interns, however. The percentage of firms hiring summer and/or winter interns decreased from 62% in 2008 to 44% in 2010. Only 26% of firms anticipate eventually turning 91% to 100% of those interns into full-time employees, and 54% plan to bring on more than half of their interns full time (see Exhibit 2). These numbers should be a wake-up call to students who assume they will be offered a job from the firm where they interned, warned Scott Moore, AICPA senior manager–College & University Initiatives. Interns should be more proactive during their internships to show their accounting abilities, drive and communications skills, he said.
INCREASED ENROLLMENT, REJECTIONS
Overall, accounting student enrollments were up 6%, from 212,834 in 2008 to 226,108 in 2010. This is a sharp increase from 10 years ago, when total enrollment was 152,885.
One noteworthy change is the increase in the percentage of qualified students that AACSB (Association to Advance Collegiate Schools of Business) accounting-accredited colleges rejected based on limitations in available seats—from 16% in 2008 to 20% in 2010.
“That tells us the schools have a capacity issue. Students want to attend those schools, but we don’t have the classes for them to sit in,” Moore said. “This tells a story of why it is important for us to do things to help fuel the pipeline of accounting professors. We can encourage people to go into the profession, but those efforts are fruitless if there’s no one there to teach them.”
While the percentage of women among accounting graduates earning either a bachelor’s or master’s degree had been slightly higher than men in the past two reports, men were once again in the majority in 2010 at 52%.
The number of students enrolled in master’s degree programs continues to rise—to 29,464 in 2010 from 22,291 in 2008. This has led to a corresponding increase in the share of new employees with master’s degrees hired by firms—37% in 2010 compared with 26% in 2008. This has grown steadily from a 14% share for master’s graduates in 2000 (see Exhibit 3). The trend toward hiring master’s graduates is strong among firms of all sizes (see Exhibit 4).
Moore attributes this trend to the 150-hour education requirement that has been adopted by most states and is encouraging many schools to offer master’s degrees in accounting. While a master’s degree is not necessary to meet this requirement, many students find it more attractive because it takes one year to complete a master’s in accounting versus two years for an MBA. Graduates with master’s degrees receive starting salaries that are approximately 10% to 20% higher than the starting salaries of those with only bachelor’s degrees. Moore also said that evidence shows that promotions to manager and partner and to corporate managerial positions are increasingly going to individuals with master’s degrees.
In general, it seems as though the CPA pipeline is continuing to grow, along with the level of education new hires are bringing to the table. Firms and new grads alike can arm themselves with this knowledge to determine the best way to stand out either as a candidate or a prospective employer.
A full copy of the report is available at aicpa.org.
Alexandra DeFelice is a JofA senior editor. To comment on this article or to suggest an idea for another article, contact Kim Nilsen, editorial director, at email@example.com or 919-402-4048.
More from the JofA:
Find us on Facebook | Follow us on Twitter | View JofA videos