CPA firms are turning to nonaccounting graduates in increasing numbers, a new AICPA survey reveals. Nonaccounting graduates constituted 31% of all new graduate hires in public accounting in 2018, an increase of 11 percentage points over 2016, according to the 2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits report released in August.
The Trends report is issued every two years and has been published since 1971. The 2019 report is based on university responses for the 2017—2018 academic year and firm responses for the 2018 calendar year.
While overall hiring of new accounting grads is down, the portion of new accounting graduate hires assigned to audit-related work rose to 56% in 2018. That's up 4 percentage points from 2016 and nine percentage points from 2014.
But CPA firms hired about 11% fewer accounting graduates in 2018 than in 2016, and approximately 30% fewer than in 2014.
"Increased demand for technology skills is shifting the accounting firm hiring model," Barry Melancon, CPA, CGMA, AICPA president and CEO and the CEO of the Association of International Certified Professional Accountants, said in a news release. "This is leading to more nonaccounting graduates being hired, particularly in the audit function."
The AICPA is seeking to address this trend through the CPA Evolution project in partnership with the National Association of State Boards of Accountancy. This project is an effort to make sure CPAs continue to have the skills needed to support the accounting profession.
As technology plays an increasingly important role in audits, firms are turning to nonaccounting graduates with data science and data analytics skills on audit teams, although there is anecdotal evidence that some of this technology-specific hiring is occurring at the experienced-hire level.
"CPAs have an unmatched reputation for trust and integrity, earned through decades of working in the public interest," Melancon said. "However, to play this vital role in the future will require an increased focus on technology. It is incumbent on the profession to ensure accounting graduates and newly licensed CPAs have the skills and expertise needed to support the evolution of the audit."
Nearly 208,000 students — the second-highest number on record — were enrolled in undergraduate accounting programs during the 2017—2018 school year, according to projections in the report.
Almost 55,000 bachelor's degrees and more than 21,000 master's degrees were projected to be earned in 2017—2018, a 4% decline in each figure from the previous report. But the combined 76,542 projected degrees remains above prerecession levels.
Diversity is increasing in accounting education, as the portion of nonwhite enrollees in accounting bachelor's degree programs rose to 44%, an all-time high.