How academia is tackling the accounting talent shortage

University and college accounting programs are changing their teaching approaches.  Fundamentals courses are becoming showcases for the profession’s opportunities.  And in some places the focus is shifting from weeding out students to giving them a second chance to deepen comprehension and pass tests without lowering quality and rigor.

The changes come at a time of — and in some cases are in response to — declining student interest and enrollment.  In some cases, enrollment dropped severely and then rebounded, but not to prepandemic levels.

In the past decade, accounting programs have faced growing competition from other business majors, as well as long-term demographic changes that are eroding college attendance overall. Even in accounting programs with strong enrollment, like Brigham Young University’s, professors are adapting to the changing learning styles and interests of a new generation.

Melissa Larson, CPA, Ph.D., the E. Dee and Patricia Hubbard Professor at BYU’s School of Accountancy, could tell something was wrong when she noticed students’ engagement and grades decline over the past decade.

“I just knew students were not the same,” Larson said.  “I couldn’t do the same things.”

The need for change is also driving more comprehensive reform efforts.  The September 2023 American Accounting Association (AAA) and NABA Inc. pipeline symposium, called the Future Accountant Stakeholder Symposium, led to the creation of a working group to address the pipeline shortage by revitalizing the accounting principles courses. Other working groups resulting from the symposium are exploring needs and resources in the areas of high school, community college, and branding of accounting.

Then there’s the work of the National Pipeline Advisory Group (NPAG), a coalition of nearly two dozen leaders from public accounting, business and industry, professional associations, the regulatory community, and academia.

“For every nine business majors, only one chooses an accounting major,” said Jennifer Wilson, cofounder of ConvergenceCoaching and the independent facilitator of NPAG.  Most business students are saying, “No, thanks,” to an accounting major, either before or after taking core introductory courses.

A new report from NPAG sets out a multiyear vision for addressing the accounting talent shortage, with suggestions ranging from small adjustments to long-term changes to the licensure model itself.

Strategies for improving the academic experience are integral to a successful talent strategy, Wilson said, because academics are “closest to the front end of the talent pipeline, the future leaders in our profession.  Who learns about Gen Z first?  Academia, not the employers.” (See the sidebar, “3 Ways Academia Can Better Support Students.”)

DECLINING ENROLLMENTS AND DEGREE COMPLETIONS

As business schools attracted more students with expanded options such as supply chain management and business and marketing analytics, the accounting profession as a whole wasn’t making a competitive case for students to pursue accounting, said the AAA’s CEO, Yvonne Hinson, CPA, Ph.D.

As a result, the number of accounting degree completions in the United States fell 17% from academic year 2017–2018 to academic year 2021–2022, according to the 2023 AICPA Trends Report.

Enrollment at some accounting programs fell by 50%, Hinson said, before beginning to rebound in the past couple years.

There are some positive signs in baccalaureate accounting enrollment, With year-over-year increases being reported for the fall 2023 and spring 2024 semesters by the National Student Clearinghouse Research Center.  Spring 2024 saw an increase of 6.3% in accounting enrollment at four-year institutions, the Clearinghouse’s estimates show. But accounting enrollment has not returned to pre-pandemic levels.

Enrollment challenges for all majors are likely here to stay. Declining birth rates in the United States and abroad will result in significantly fewer young people coming of age in the years ahead.

Why were students not selecting accounting as a major?  A report from the Center for Audit Quality (CAQ), which is affiliated with the AICPA, and Edge Research found that the top issue was a lack of interest or passion, followed by higher starting Salaries in other majors.  A lack of desire or financial resources to pursue the 150 credit hours needed to take the CPA Exam was about as important a reason as a lack of math skills (see the chart, “Reasons for Not Choosing Accounting as a Major,” below).

4 TACTICS TO SUPPORT STUDENT SUCCESS

At BYU, the most troubling signs were the number of students getting the worst grades or simply withdrawing from courses.

“Maybe our enrollment wasn’t down, but our withdrawal rates were up,” Larson said.  In some years, as many as 12% of students withdrew from the introductory courses.  Some were giving up, while others would still have to come back and finish the course so they could complete a nonaccounting business major.

Second chances

As part of her Ph.D. research, Larson decided to experiment with a more forgiving and supportive approach to testing.  She would conduct an experiment that allowed students in one year’s section to retake midterms and finals.  The retake tests had different questions, but they provided a second chance.

“What I wanted was exams to be learning experiences.  I wanted you to have opportunities to fail,” she said.

It worked.  Students in the experimental course with the “second chance” exam policy didn’t just stick with the course at higher rates.  They also performed better the first time they took exams, compared with the control group.  The improvements were most marked among women, with the changes erasing the gender gap that previously had women trailing men in test scores.

“Research would say females are harder on themselves, and so the anxiety and stress build up,” Larson said.  Simply knowing that they could have a second chance appears to have removed a significant source of stress.

Larson has also changed the format of her class.  Every lecture is broken up into multiple work sessions focused on “smaller bites,” especially group exercises and work that includes real-world examples from a variety of sectors and businesses.

In the years since, the change has been implemented more broadly.  And the rate of failures and withdrawals in BYU’s large introductory courses has fallen from 20% to just 5%, and enrollment increased 26%, Larson said.

Helping hands

After suffering a 30% enrollment decline between 2017 and 2022, the University of South Florida’s Lynn Pippenger School of Accountancy implemented similar changes to boost student engagement.

The director of the program, Mark Taylor, formed task forces focused on growing enrollment, retaining students, and adding data analytic skills and artificial intelligence to the curriculum.  Along with adding cross-functional skills, the faculty also rebranded course names. Auditing II, for example, became Advanced Auditing: Regulation, Technology and Analytics.

Amid the changes, USF’s year-over-year fall 2023 accounting enrollments grew by more than 11%. USF’s year-over-year spring 2024 accounting enrollments grew by more than 18%.

Much like at BYU, a core goal at USF has been to reduce failure and withdrawal rates, starting with the first intermediate accounting course, while maintaining academic rigor.

“I don’t think that any of our instructors were seeking to weed students out purposefully, but it happened by not supporting them, by not supporting the at-risk students,” Taylor said. “The challenge was to change the culture around that class.”

The faculty collectively came up with a few significant changes, including:

• Changing the role of teachers’ assistants (TAs): Previously, these master’s students were employed to support the professors with grading and other tasks. In the new model, the TAs’ goal is to support students with a focus on at-risk students.
• Using a diagnostic test to identify at-risk students: This test of fundamental accounting knowledge is given early in the course. Students with lower scores are flagged for extra check-ins from the instructor and the TA.

Those adjustments have yielded dramatic improvements in the failure and withdrawal rate, which shrank from more than 30% to about 10% in one year, without reducing the rigor of the course. In the process, that rate has become a key focus for many faculty members, said Taylor, who is the AAA’s president and was a member of NPAG.

At BYU, enrollment in Larson’s introductory accounting class has leapt by several hundred students in recent years.

“The biggest thing we found is the love students have for this class because they feel like we’re advocating for them, like we want them to be successful,” Larson said.

At USF, Taylor is hearing something similar as enrollment rebounds. “What’s interesting is the chatter in the halls. Instead of ‘Intermediate 1 is going to kill me,’ you’re hearing comments about the support they received from both the TAs and the instructors,” Taylor said.

Peer-to-peer learning

At Schoolcraft College, a community college near Detroit, accounting professor Michelle Randall, CPA, CGMA, encourages students in her classes to turn and help their neighbors if they finish early.

“Having a student who just had that lightbulb turn on explain to another student, it creates a win-win,” said Randall, who also served as an NPAG member. “It’s tutoring the other student with someone they’re familiar with, and then it reinforces the learning for both students.”

This investment in mentorship and support also must include a focus on success for students from diverse backgrounds, Hinson said. Leaders should ask how and whether their programs are serving people across the lines of race, ethnicity, gender, sexuality, disability, and more. This may come in the form of training for staff, ensuring a diverse teaching and support staff, and tracking specific outcomes and metrics for demo graphic groups, among other strategies.

“We cannot have a conversation about the pipeline without a discussion around diversity,” Hinson said.

Taking the message to middle and high schools

This effort to attract students to accounting doesn’t have to wait for college. Randall, the Schoolcraft professor, is taking the message to middle and high school students.

“Enrollment was down, so where am I going to get students from?” she said. The answer: “High schoolers who are thinking about their next step.”

She doesn’t lecture the kids. She invites them to play an in-depth lemonade stand roleplaying game. Based on the book The Accounting Game: Learn the Basics of Financial Accounting, the low-tech simulation indirectly teaches students how accounting underlies each business decision, from taking out a loan to buying supplies like sugar and cups and selling your product to customers.

“They get to walk along the journey and learn how to tell a story,” Randall said. “Accounting is the art of business storytelling. Knowing and understanding that story allows for better decision-making in running a business. That’s really what I’m talking about in the classroom.”

WHAT IT TAKES TO CHANGE

These kinds of changes won’t happen on their own. Larson credits BYU’s administration for allowing her the time and resources to redesign her course.

“You do need time to redesign, to think about it. Otherwise, it’s just business as usual,” she said. Senior faculty possess the best experience and exposure to craft a big change, she said.

Adopting significant changes also may require new training and skills for faculty. At USF, professors are learning about data and analytics from faculty members with specialized skills in those topics.

“You have to help faculty get those skills,” Taylor said.

Randall agreed that peer-to-peer learning is key for faculty, not just students. She suggested academics enroll in courses outside of accountancy, so they can experience other educators’ approaches.

“Especially if you’ve been doing this a long time, make yourself a student again, so you know how to walk in their shoes,” she said.

Practitioners have a role to play, too, the academics said, in visiting classrooms and talking about accounting’s diverse career paths. Greater involvement by accountants in the classroom as guests or mentors is among NPAG’s recommendations.

“Get involved, and just make sure you’re doing what you can to link the academics with the real-life work experiences,” said Betsy Krisher, CPA, chairman of Maher Duessel CPAs and an NPAG member.

BEYOND ACADEMICS: A ‘COMPETENCY’ PATH?

The NPAG report also raises a possibility of change that goes beyond any classroom or institution: What if the requirements for CPA licensure were fundamentally expanded?

At present, licensure generally requires 150 credit hours of higher education, memorialized on a transcript. That amounts to as much as an extra year of schooling. The time and cost of education are among the reasons that students choose not to pursue accounting, the NPAG report found.

“The extra 30 hours required to sit for the CPA Exam, it’s not a deal breaker, but there is a cost, and if we don’t properly help students understand the value proposition of an accounting education, they have a hard time processing that,” Taylor said.

NPAG has proposed the profession consider expanding the licensure model to include an experiential learning, off-the-college-transcript path post-baccalaureate and a competency-based path. A joint working group that includes NPAG members, firms’ representatives and state societies, and members of a licensure task force formed by the National Association of State Boards of Accountancy is studying an experiential learning post-bachelor’s degree offered by employers. The off-transcript learning would follow a consistent competency map that would be equivalent to the 30 hours.

“Making a dynamic classroom, at a base level, is developing a relationship with your students, so you care about what they’re learning and want to support them. That can go a long way,” Randall said.

As she often tells her students: “Class, I want to try something new.”

3 ways academia can better support students

The National Pipeline Advisory Group’s (NPAG’s) suggestions for academic accounting programs focus on the idea that schools can better support students and that educators and professionals must give prospective accountants a clear picture of how and why they’ll succeed in the profession. To accomplish these goals, NPAG recommends:

• Upgrading fundamentals courses: A range of strategies, such as the use of gamification and simulations, as well as a focus on real-world examples and appearances by practitioners, could make introductory and intermediate courses more engaging.
• Enhancing guidance for students: High rates of students failing or withdrawing from classes is a sign of trouble, not a badge of honor. NPAG wrote that educators “must instead guide students through by offering them enhanced support while still maintaining the integrity and rigor of the program.” That could include mentorship, greater access to help from teachers’ assistants, and the use of assessments to identify at-risk students.
• Addressing the time and cost of education: The working group found that the high credit-hour requirement for CPA certification is a common deterrent for prospective students. NPAG suggested that the profession at large consider a range of short- and long-term solutions, including a potential shift to a model of licensure that examines competency in various areas that could eliminate or reduce credit-hour requirements.

About the author

Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.

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AICPA & CIMA MEMBERS RESOURCES

Articles
“NPAG Recommends Solutions to the Talent Shortage,” JofA, May 14, 2024
“What Top Accounting Academics Suggest to Attract Talent,” JofA, Jan. 25, 2024
“Pilot Program Set to Help All Stakeholders Along the Talent Pipeline,” JofA, June 21, 2023
“How Students View the Accounting Profession,” JofA, June 1, 2023
“How Universities Are Working to Boost the CPA Pipeline,” JofA, April 3, 2023
“How Faculty Can Address Declining Accounting Enrollments,” JofA, Sept. 14, 2022

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