The ongoing shortage of accountants, specifically in the US, is starting to impact businesses' financial statements, the Wall Street Journal reports. This shortage is impacting financial statements for U.S.-listed companies like Advance Auto Parts, Joby Aviation, and Evotec, which have disclosed material weaknesses in their internal control over financial reporting (ICFR) due to a lack of accounting staff.
Data from the U.S. Bureau of Labor Statistics supports this narrative. There were about 1.65 million accountants and auditors in the U.S. in 2022, down 15.9% from 2019, according to the Bureau of Labor Statistics’ current population survey. More than 300,000 accountants quit their jobs between 2019 and 2021.
This decrease in professional accountants doesn’t appear to be an anomaly but rather a legitimate concern for a shared services organization or GBS overseeing in-house accounting. In order to better understand the current accountant shortage, this article is going to explore possible causes. If you have your own thoughts on causes or even solutions to bring in more accountants, let us know in the comments below.
Retirement
A large number of accountants are baby boomers, who are now reaching retirement age. According to the American Institute of CPAs (AICPA), nearly a quarter of CPAs in the U.S. are over the age of 55. As more accountants retire it has become more difficult to replace them with younger workers who are interested in more lucrative industries like tech or banking.
Low Wages
While accounting has been typically seen as a stable career, it is not seen as high-paying for recent graduates also considering careers in fields such as consulting. John Coffee, a professor at Columbia Law School, told the WSJ he believes a solution for the current accountant shortage could be as simple as paying them more.
“Higher salaries are coming for in-house accountants whether management likes it or not,” John said.
Burnout
The accounting profession is known for long working hours, especially during tax season. Some individuals may be deterred from pursuing a career in accounting due to concerns of burning out or struggling to strike a meaningful work-life balance.
Advancements in Technology
Automation and accounting software have streamlined many routine accounting tasks. While this has increased efficiency, it has also led to concerns about job displacement among entry-level accountants, potentially discouraging people from entering the field.
New Skills for Accountants
The accounting field has evolved, and there's a growing need for accountants who possess not only traditional accounting skills but also expertise in areas like data analytics, information technology, and business strategy. Finding candidates with these diverse skills can be challenging.
The silver lining amongst all these challenges is that smart people and organizations are working to make accounting more desirable. The AICPA, for example, is offering scholarships and other programs to encourage students to pursue accounting degrees. Additionally, this summer, the National Association of State Boards of Accountancy (NASBA) also announced an amendment to the Uniform Accountancy Act (UAA) Model Rules regarding the Uniform CPA Examination. The amendment extends the amount of time candidates have to complete remaining sections of the exam without losing credit, this alleviating some of the burden of finishing every part of the exam within 18 months.