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A plan to overhaul the rules for qualifying as an accountant in the United States could expose companies to discrimination lawsuits and add barriers to joining the profession, according to the body that represents the country’s largest audit firms.
In a private comment letter seen by the Financial Times, the Center for Audit Quality (which represents the Big Four and other large firms) condemned the proposed reforms as “unnecessarily complex” and said they could “introduce “unconscious bias” in the rating process.
The CAQ’s intervention puts big auditing firms at odds with two bodies that set rules for how to qualify as a certified public accountant (the American Institute of CPAs and the National Association of State Boards of Accountancy) over how to stem a decline in new recruits.
In September, the AICPA and Nasba proposed eliminating the requirement that accountants complete the equivalent of five years of college education, one more than a traditional college degree, a rule that has been blamed for deterring young people from entering the profession. the profession.
The two agencies proposed an alternative path to qualification: replacing the fifth year of education with a requirement for one year of on-the-job training by companies, which would have to certify that a recruit has obtained dozens of specific technical and professional skills.
Liz Barentzen, vice president of the CAQ, wrote in a comment letter sent last month that “the framework’s extensive list of competencies, performance indicators and evaluation requirements creates an unnecessarily complex system that could be difficult to implement consistently across all countries.” jurisdictions.”
He added: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into assessment processes, potentially creating employment-related issues (e.g., discrimination claims) that would not otherwise exist.”
The shortage of accountants has begun to appear as a risk factor in some companies’ financial statements, and some small accounting firms have withdrawn from specialized businesses such as auditing for local governments. Leaders in the profession have warned that larger companies could face problems recruiting staff if trends are not quickly reversed.
The number of people taking the CPA exam fell from a high of more than 100,000 in 2016 to a 17-year low of just over 67,000 in 2022, and after a small rebound last year, the AICPA projects it will resume. decline in the short term. The pipeline of young people taking accounting courses in college has shrunk in recent years, as they gravitate toward higher-paying entry-level jobs in finance or technology.
The CAQ has argued that addressing the shortage requires broadening the appeal of accounting to students from diverse backgrounds, for whom the expense of a fifth year of college can be especially problematic.
The AICPA and Nasba have committed to making public comments on their proposals in early 2025.
Sue Coffey, the AICPA’s executive director of public accounting, said she was “receiving diverse and useful comments” on her proposals.
“It is essential that licensing pathways are clear and attractive to students. “Working with Nasba and various stakeholders, we will know more over the next month about what this will look like,” he said.
