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A plan to change the rules for qualifying as an accountant in the US could expose companies to discrimination lawsuits and increase barriers to joining the profession, according to the body that represents the largest country audit firm.
In a private comment letter seen by the Financial Times, the Center for Audit Quality – which represents the Big Four and other major firms – condemned the proposed reforms as “unnecessarily complicated”, and said they could they “introduce unconscious bias” into the qualification process.
The CAQ’s intervention puts the big audit firms at odds with the two bodies that set the 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 whether how to prevent the decline of new recruits.
The AICPA and Nasba in September proposed removing a requirement that accountants complete the equivalent of five years of university education, rather than a traditional undergraduate degree, a rule blamed for putting young on entering the profession.
The two bodies proposed an alternative path to qualification: replacing the fifth year of education with a requirement for one year of on-the-job training in companies, which must prove that a recruit has obtained several specific technical and professional skills.
Liz Barentzen, CAQ’s vice-president, wrote in a comment letter submitted last month that “the framework’s extensive list of competencies, performance indicators, and evaluation requirements creates a unnecessarily complex system that would be difficult to implement consistently across jurisdictions”.
And he added: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into assessment processes, potentially creating work-related issues (eg, claims of discrimination ) that should not exist.”
The shortage of accountants began to appear as a risk factor in some companies’ financial disclosures, and some small accounting firms withdrew from niche businesses such as auditing. local governments. Professional leaders have warned that big companies could face recruitment problems if the trends are not reversed quickly.
The number of people taking the CPA exam has fallen from a peak of more than 100,000 in 2016 to a 17-year low of more than 67,000 in 2022 and, after a slight uptick last year , the AICPA plans to continue their decline in the short term. The pipeline of young people taking accounting courses at university has thinned in recent years, as they gravitate toward higher-paying entry-level jobs in finance or technology.
CAQ argues that tackling the shortage should include widening the appeal of accounting to students from diverse backgrounds, where the cost of a fifth year at university can be particularly problematic.
The AICPA and Nasba have committed to making public comments on their proposals in early 2025.
Sue Coffey, the AICPA’s chief public accounting executive, said it was “getting helpful, diverse feedback” on its proposals.
“It is critical that the license paths are clear and attractive to students. Working with Nasba and various stakeholders, we will know better next month what it looks like,” he said.