‘Time is of the essence’: Next steps after the NPAG report release

The National Pipeline Advisory Group published its final report on talent solutions for the accounting profession, and the group’s chair, Lexy Kessler, CPA, CGMA, joins the Journal of Accountancy podcast to hit on the high points.

Kessler is AICPA vice chair and also mid-Atlantic leader for the firm Aprio.

In this episode, she shares next steps for the profession.

What you’ll learn from this episode:

• An overview of the six major themes of the report.
• How a “plethora of perspectives” came together to address solutions for the pipeline issue.
• Details about addressing the time and cost of education.
• An explanation of the three E’s that represent the components of CPA licensure.
• What’s next as the recommendations move from paper to practice.
• How CPAs and educators can take the Pipeline Pledge.

Play the episode below or read the edited transcript:

— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.

Transcript

Neil Amato: Welcome to the Journal of Accountancy podcast. This is Neil Amato with the JofA.

The National Pipeline Advisory Group published the final version of a report that outlines plans to improve the talent pipeline for the accounting profession. On today’s episode, we’re going to explore some of the details of that plan, as well as next steps with the chair of the National Pipeline Advisory Group, or NPAG, Lexy Kessler. That’s coming up after this brief sponsor message.

Welcome back. Joining me now is Lexy Kessler. Again, she is the chair of NPAG. She is also AICPA vice chair and mid-Atlantic leader for the firm Aprio. Lexy, we look forward to learning more about the NPAG report in today’s discussion. Thank you for making time to be on the JofA podcast.

Lexy Kessler: Thank you, Neil. I appreciate the opportunity to talk to you today.

Amato: Now, for review, NPAG’s report offers a pipeline strategy based on six major themes. Those themes are not ranked in order of importance. Could you go over those themes briefly first? They didn’t change any from the initial draft of the report released in May to the final draft released July 31st.

Kessler: That’s correct, Neil. We did continue to gather survey results and incorporate that into our final report. But the six things, as you said, it’s correct that they have not changed from the draft report.

Those again, in no particular order, are about, first, making the academic experience more engaging and really focusing on that entry-level accounting class in college as well as intermediate accounting and changing the philosophy to, instead of a weed-out to pull through. For the introduction to accounting, it is making it more whether it be case study-oriented and really helping to educate students about what our professional truly is about. It’s not just debits and credits, that’s just a foundational concept. Expanding beyond that and making it more engaging.

Addressing the time and cost of education: That’s a big one. I’m sure we’ll be talking a little bit more about that shortly. That’s that piece of it where it’s working with how do we have some programs in place already that can help address it. It really helps to build into our ultimate solution for future-proofing the license.

Growing support for the CPA exam candidates, whether it’d be through review classes, helping with exam fees, paying for time off to study, giving them possibly loans ahead of the fact that taking the exam, because it is expensive. Also the concept of exploring. Can we, when students finish taking a class in college or certain classes in college, or meet certain requirements or competencies, that they can then sit that part of the exam. For example, if you took audit and you’re studying for your final, why not be able to take audit when you’re done is an example.

Expanding access for underrepresented groups: Currently, our profession does not match our population and demographics. We need to address that. Focusing on getting the word out about what even the profession is to communities. One example of how we can help with that as really helping with the transition from community college to a four-year college and educating people about what is accounting.

Enhancing the employee experience: That’s another big one where there was alignment between the students surveys and the profession ecosystem survey, as far as looking at the job satisfaction, work/life balance, starting salaries.

And, tell a more compelling story: This is the one that I speak about so much because every single one of us can do something about this. Changing the words and the language of how we talk about what we do and celebrate the results of what we do as opposed to the hours that went into it. If you’re passionate about it and can make a difference, let’s focus on the difference that we’ve made.

Amato: That’s great, and on that concept of telling a better story, I feel like I’ve heard a lot of our guests tell really good stories about the profession recently, so that storytelling continues.

Now, again, the themes didn’t change between the draft version released in May and the final release in July. During that time, you continued to hear from stakeholders, as you mentioned, in several ways – at Council, other events, through the survey data. What did the survey and also the conversations tell you and the NPAG committee?

Kessler: The survey data continued to validate what we had incorporated within our draft findings. But since May, what we have been doing is we did receive feedback from over 60 individuals that submitted comments on the draft report.

Then we’ve also been speaking at conferences, in-person meetings across the country to over 15,000 individuals, including employers, educators, and regulators that participate in the briefing sessions and listening to what their comments were and their feedback. Through reviewing all of that feedback and wherever possible, we incorporated into either the final strategy report or into the discussion about our next steps.

Amato: You mentioned “we.” The NPAG committee is not a committee of one. It’s 22 people, including you. Can you say a little more about that group, because it’s not just you doing this?

Kessler: Absolutely. It’s 22 very dedicated individuals to our profession that really represent a cross-section from our ecosystem. Not everybody in our ecosystem, but we did our best to incorporate as many perceptions and perspectives into the conversation.

That is ranging from state society CEOs to regulators to academia, business and industry, public accounting — a plethora of perspectives that came into the conversation. NPAG, to remind everybody, was created on a resolution out of May 2023’s Council meeting, which was to look to address solutions and strengthening our accounting pipeline, assessing the hurdles of what’s keeping people from earning a CPA license, also maintaining the rigor of the public trust, rigor of the exam. It’s very important. Providing flexibility for students of all backgrounds. Really focusing on the root causes, what’s causing the pipeline leakages and engaging the entire profession, which we have done between different forums, surveys, and polls that have occurred since May to get the feedback that created this report.

By the way, all this was while we’re preserving mobility, too — no easy task, but it is to preserve mobility for our profession that we enjoy today, so that’s in essence who is NPAG and what our charge was to do.

Amato: That’s great. Now regarding the theme of addressing the time and cost of education, the report says that NPAG recognizes some candidates need a cost-effective way to earn the final 30 credit hours for licensure. What are some of the concepts outlined by NPAG on this topic, and does it mean that there’s a shift toward a competency-based model?

Kessler: Yes, there absolutely is. To give some background on it, in the survey data, there was 69% of the stakeholders that are non-students, they agreed that changes needed to be made to the required components of the CPA licensure, which currently are the three E’s, which is education, examination, and experience. It confirms what we’ve been hearing in meetings across the country.

We were looking at different trends and things that we can control, things that we can’t control, that are happening in our world. For example, the possibility that the bachelor’s degree will go to 90 credits, as opposed to 120 credits. So what does that mean for the language that we use for the requirements of the exam? That was really an a-ha moment of, we really need to think bigger, long-term, about how do we future-proof this license.

We have three scenarios; now, near, and next.

The first two are really two experiential learning solutions for educational requirements needed post-bachelor’s degree — one that is on the transcript, and one that is off the transcript. Because if it’s on the transcript, right now, it preserves mobility, barring any other state actions. The third one, which is the long-term one that we’re talking about, is a competency-based model. We envisioned that involving that license model does include a common competency framework as the foundation for these three solutions, where we are focusing on outputs rather than on inputs.

Focusing on validating the knowledge that individuals have, whether it be through work experience, whether it be through education, whether it be through somebody that, and this is a work experience, but a career changer – somebody that has a college degree, that got on-the-job training, that really knows what they’re doing but maybe needs some classes to supplement their education, but are very competent in what they can do.

Our recommendation was to go to this competency-based model, and it’s starting to work towards that in our three scenarios of now, near, and next, moving forward. But that’s the core of it.

Amato: That’s great, and thank you for the explanation of now, near, and next, in particular. What else should listeners know about the final version of the report, and the next steps for NPAG, the National Pipeline Advisory Group?

Kessler: Sure. I think that it’s important to know that this is not something that we’re doing, and we want to have sit on a shelf — a virtual shelf, in this case. Currently, there is a subgroup of NPAG, and a subgroup of a task force within NASBA, that are actually working together currently. They are discussing changes that are needed to enable experiential learning off the transcript. That is already happening as we speak now. In addition to that, there is the beginnings of the development of what a framework would look like so that we can begin to have some things concurrent.

And NPAG acknowledges, in the sense that we have our three steps that we’ve talked about, but as we go through to identify, what can we do for the next step? Which is to have the experiential learning, possibly off the transcript. The “next” may evolve and morph to what we’re talking about today, and that’s OK. This is a framework and a concept that we want to continue to build upon in going forward. The next steps for NPAG is working with that, having stakeholders turning to prioritizing the impactful first-year solutions, because we understand that time is of the essence.

But yes, we want to be cautious at the same time, in the sense of public trust is critical in this. We want to make sure we’re being thorough, and prudent, deliberate, and intentional, in the approach that we’re taking, so that it comes to the solution that works for our entire profession.

Amato: I think that’s a great way to end, but anything else you’d like to add in closing, Lexy?

Kessler: One more next step for NPAG, which I think is important, that there is being coordinated now, a multi-stakeholder roundtable that is going to be convened Sept 23, by the American Accounting Association, the AICPA, [the National Association of Black Accountants], and the National Commission on Diversity & Inclusion. The participants are going to be working collaboratively, to build an accounting talent strategic road map of detailing, exactly, how their respective work will be accomplished. So, beginning to frame out how this will happen.

It seems to be more when we’re speaking to folks, I respect this, it’s great that we’re thinking out of the box and being bold in our ideas, but what does that look like? For me to say I’m OK with this, I need to understand more. CPAs are like that. We need to have the understanding of what it looks like before we move forward. We are working currently through different, again, pulling in folks from the ecosystem, being inclusive in this approach, to start to outline and create that road map that can be communicated for people to understand where we’re going forward.

Then before we leave, I do want to mention that there is also the Pipeline Pledge that we are asking folks to take, which goes back to my comment, where we talk about enhancing the image of our profession, how we talk about our profession. This is a pipeline pledge, it’s on our website, which is accountingpipeline.org/participate, and it’s an individual commitment to take ideas from the report, and further them within your organization or your community.

It’s something as simple as going into an accounting class at college, going to career day in your local high school, or where you went to high school, doing things like that, changing what you post on LinkedIn. Talk about the busy hours of tax season, talk about what you accomplished in that tax season. You helped a client go through, from a tax strategy, optimizing their tax strategy relative to the exit of a company, the sale a company. Here are these individuals whose life became complex, and how did you help them? Tell those stories and celebrate it. Please, if we all come together, I truly believe we can make this work. I truly, truly do believe that.

Amato: Lexy, thank you very much. You mentioned some of the resources, thank you for that URL. We will include other resources, our Journal of Accountancy coverage, as well as other pipeline-related resources. Again, Lexy Kessler, thanks for being on the JofA podcast.

Kessler: Thanks, Neil. I appreciate it.