Despite barriers identified, students are open to accounting and opportunities exist to drive them to pursue the degree
Washington D.C., July 24, 2023 – Amid a shortage of accountants, undergraduate business students report encountering obstacles to pursuing a degree in accounting, according to a recent report from the Center for Audit Quality (CAQ).
The report, Increasing Diversity in the Accounting Profession Pipeline: Challenges and Opportunities, July 2023, builds upon the CAQ’s research from January 2022. Specifically, the CAQ again commissioned Edge Research to gain deeper insight into why undergraduate business students do or do not choose accounting, and why accounting majors and graduates do or do not pursue CPA licensure.
Some of the interesting findings from the research include:
- While openness to accounting exists at the undergraduate business school level, the most significant reasons for not choosing accounting as a major included a lack of interest or passion for the major (driven in part by negative experiences with introductory accounting classes), higher starting salaries in other majors and students not wanting to pursue the 150 academic credit hours required for CPA licensure. The 150 credit hour requirement was more pronounced for Black and Hispanic accounting majors.
- The CPA license is highly regarded by both accounting majors and graduates. However, a variety of structural supports are correlated with plans to pursue the license, including encouragement of a professor/mentor and whether a student’s college offered a 150 credit hour program (i.e., an accelerated undergraduate program covering 150 credit hours or a 5-year Masters in Accounting program). Black and Hispanic majors and graduates reported less access to such structural supports.
- The research further shows that for majors and graduates who are planning to pursue CPA licensure and have already met the 150 credit hour requirement, the time required to study for the CPA exam and the difficulty of the exam content were the top obstacles. For those majors and graduates that have not yet completed the 150 hour requirement, the additional cost and time needed to reach it were the biggest obstacles to CPA licensure.
- For recent accounting graduates, overall work satisfaction shows room for improvement, with higher income earners, those in public accounting firms (including the Big 4) and those with the CPA license most satisfied, and those not pursuing the CPA license and lower income earners least satisfied. Black recent graduates were significantly less satisfied with organizational culture.
“In discussion with interested stakeholders, we sought to build on our prior research to better understand why business school students were – or were not – pursuing accounting and the obstacles to CPA licensure,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “It is important to understand the perspectives of students who were interested in accounting but ultimately did not pursue the career. We also need to recognize not all potential career accountants are starting from the same place.”
“This report is a part of our broader effort to increase diversity within accounting and highlight for our stakeholders actions that can be taken to attract new talent to the profession,” said Liz Barentzen, Vice President, Operations and Talent Initiatives, CAQ. “The data shows we have much more work to do around awareness and perceptions of an accounting career, and with our multi-year, collaborative, data-driven Accounting+ campaign, I am confident we can address this aspect of the continuing accounting pipeline challenges.”
Download the full report to learn more about these results.
About the Report
The CAQ once again partnered with Edge Research to conduct qualitative and quantitative research in two phases. In total, Edge Research heard from more than 1,800 students and recent graduates between October 2022 and May 2023.
In the qualitative phase, Edge Research conducted in-depth interviews (IDIs) with business students and recent accounting graduates. Within the business student groups, nine identified as Black, six as Hispanic, and nine as White/other. Out of these twenty-four students, seven were accounting majors while seventeen were non-accounting business majors. The recent accounting graduate group consisted of fourteen IDIs, of whose participants six identified as Black, six as Hispanic, and nine as White/other.
The quantitative phase consisted of a national survey sample of 1,400 business students at four-year and community colleges and 400 recent accounting graduates employed as accounting professionals.
About the Center for Audit Quality
The Center for Audit Quality (CAQ) is a nonpartisan public policy organization serving as the voice of U.S. public company auditors and matters related to the audits of public companies. The CAQ promotes high-quality performance by U.S. public company auditors; convenes capital market stakeholders to advance the discussion of critical issues affecting audit quality, U.S. public company reporting, and investor trust in the capital markets; and using independent research and analyses, champions policies and standards that bolster and support the effectiveness and responsiveness of U.S. public company auditors and audits to dynamic market conditions.