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Mistakes continued to pile up this earnings season in the wake of Lyft<\/a> Inc.\u2019s market-roiling typo: Planet Fitness Inc., Mister Car Wash Inc. and Rivian Automotive Inc.\u00a0all had to correct their quarterly earnings statements. These types of errors shake investor confidence and in extreme cases can result in heavy fines from the US Securities and Exchange Commission.<\/p>\n While it\u2019s unclear what exactly led to the mistakes in each of these cases, one major risk factor has reached crisis levels: a shortage of certified public accountants.<\/p>\n Seasoned practitioners are retiring while the profession\u00a0isn\u2019t\u00a0drawing the next generation of workers entering the labor market. The lack of help means current accountants\u2019 hours and workloads can be grueling, upping the odds of mistakes and burnout.\u00a0<\/p>\n \u201cIf the people preparing the financials are overworked, or there\u2019s not enough of them, you will have errors,\u201d said Joshua Khavis, assistant professor of accounting and law\u00a0at the University at Buffalo School of Management, whose research has documented links between auditor turnover,\u00a0long working hours and mistakes.<\/p>\n Last year more than 720 companies, from Advance Auto Parts<\/a> Inc. to online legal services provider LegalZoom.com Inc., cited insufficient staff in accounting and other departments as a reason for potential errors. That\u2019s up 30% from 2019, according to an analysis by equity research firm Hudson Labs for Bloomberg News.<\/p>\n Yet despite the plentiful\u00a0job openings,\u00a0students aren\u2019t racing to major in accounting. For many,\u00a0the typical entry-level job\u00a0doesn\u2019t pay enough to make the needed fifth year of college tuition worth it.<\/p>\n Accountant jobs\u00a0are\u00a0now the second-most posted on student placement site Handshake, doubling since 2020 and outnumbered only by general administrative support positions, according to a new report shared exclusively with Bloomberg News. While the\u00a0share of accounting majors on the platform has ticked up recently after several years of\u00a0declines, experts say this won\u2019t be enough to solve a worsening\u00a0shortage.<\/p>\n This could come down to simple cost-benefit analyses: Aspiring accountants essentially need five years of college to earn a Certified Public Accountant license. That requirement, the \u201c150-hour rule,\u201d has become increasingly expensive to satisfy given steadily rising tuition costs.<\/p>\n For many 22- to 27-year-olds, known as Generation Z, their average student debt of more than $20,000\u00a0and the lure of\u00a0higher-paying\u00a0Wall Street and Silicon Valley firms\u00a0means the\u00a0time and effort required to become a CPA doesn\u2019t pencil out.<\/p>\n Last year, the median salary for full-time entry-level accounting jobs was roughly $62,500, up from about $50,000 in 2020, according to Handshake data. The median pay advertised for entry-level management consulting and financial analyst roles, by contrast, was $70,000 and $75,000, respectively. For software engineers, the median entry-level pay was $93,000.<\/p>\n To attract people to accounting,\u00a0the profession must \u201cown up\u201d\u00a0to stagnant wages,\u00a0Paul Munter, chief accountant to the SEC, told an American Institute of CPAs conference\u00a0in December.\u00a0 \u00a0 \u00a0 \u00a0<\/p>\n The demand for fresh talent has become\u00a0so intense that Jacqueline Burke, a professor of accounting at Hofstra University\u2019s Zarb School of Business, says more and more firms are turning to undergraduates to bridge gaps, leading to many students taking on full-time internships on top of their full-time studies. \u201cThe number of students doing that \u2014 it\u2019s unheard of,\u201d she said.<\/p>\n Burke said employers constantly email her for guidance on how to fill their open roles. Her first piece of advice: raise starting salaries. \u201cI tell them, \u2018You\u2019re just not going to compete with what you\u2019re offering,\u2019\u201d she said.<\/p>\n Companies have also experimented with other ways to defray certification costs. Consulting firm PricewaterhouseCoopers<\/a> LLP, for example, is piloting a program with Saint Peter\u2019s University in New Jersey to allow students to count full-time, paid work at the firm toward their credit hours. Isainay Richardson, a participant in the pilot and a first-generation college graduate, said the opportunity to save money and start her career right away was a definite draw.<\/p>\n Though Richardson is\u00a0passionate about film and art, she was drawn to accounting as a way to maximize her future career opportunities. \u00a0Stability and the ability to give back to her family and community were important considerations.\u00a0\u201cAlmost every company or organization needs someone with financial skills, so I know that my accounting background can help me if I ever want to explore a career in the creative industry,\u201d\u00a0she said.<\/p>\n More students\u00a0are drawn to the profession\u2019s reputation of stability,\u00a0especially as half of US college graduates\u00a0struggle\u00a0to find suitable jobs. And more tech majors are now applying for accounting roles as\u00a0layoffs continue to dominate headlines in that field, according to Handshake data. \u00a0<\/p>\n But some employers are looking for other ways to broaden their appeal to Gen Z. A\u00a0growing share of job openings\u00a0emphasize the positive social impact accountants can make,\u00a0from supporting\u00a0sustainability efforts to engaging with local communities,\u00a0according to Handshake. The tactic is effective: listings that do so draw 80% more applications, on average.<\/p>\n Recent graduate and career-changer Melinda Barnes\u00a0was excited to get an offer from AT&T Inc. to join its newly created Accounting Leadership Development Program. The flexibility to work while continuing to study for her CPA exams was appealing. Barnes also liked the idea of having the chance to network and explore\u00a0contributions she could make in different kinds of roles. \u201cI want to be able to make some sort of impact,\u201d she said.<\/p>\n Ultimately, though, some experts argue\u00a0the best way to get more young people into the profession is to drop the 150-hour requirement entirely, especially since research has shown the requirement doesn\u2019t necessarily lead to better accountants.\u00a0<\/p>\n \u201cYou\u2019re talking about the opportunity cost of working full-time for a year and the cost of tuition,\u201d said Ralph Polimeni, an accounting professor at Hofstra. \u201cIf I were entering now into the profession, I don\u2019t think I would\u2019ve gone into accounting.\u201d<\/p>\n<\/div>\n\nThe strain on CPAs<\/h2>\n
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