The accounting industry is grappling with a growing workforce shortage, prompting states and professional organizations to rethink traditional pathways to becoming a Certified Public Accountant (CPA). In an effort to attract more candidates to the profession, several states are considering allowing aspiring accountants to bypass a fifth year of education—a long-standing requirement that many see as a significant barrier to entry.

Addressing the Talent Crisis

Under a new proposal by two major national accounting organizations, CPA candidates could substitute a fifth year of school with an additional year of work experience. The change would still require candidates to hold a bachelor’s degree, pass the CPA exam, and complete at least one year of relevant work experience. This initiative aims to provide greater flexibility for candidates to meet the CPA requirements, while demonstrating the same professional and technical competencies through hands-on experience rather than classroom instruction.

The proposal comes in response to a sharp decline in the number of accounting graduates, a trend that has been accelerating in recent years. Companies, audit firms, and professional groups, as well as state accounting boards, have been exploring new ways to make the profession more attractive to potential entrants amid a competitive labor market and a high rate of attrition. Many professionals are leaving the field for better-paying, less stressful positions in other industries, further exacerbating the shortage.

Industry Leaders Support Change

The push to modernize CPA licensing requirements has gained support from some of the profession’s most prominent voices. Paul Knopp, U.S. Chairman and CEO of KPMG, became the first leader of a Big Four accounting firm to publicly endorse eliminating the fifth-year education requirement. Speaking to the Financial Times, Knopp highlighted the urgency of the situation:

“We have a brewing crisis right now, with the number of students going to college and the number going into accounting, and we need to absolutely address it in the very near term. I can’t over-emphasize, it’s not just the Big Four. We need more accountants in corporations and outside of the Big Four. The industry that we are in is systemically important to the functioning of the capital markets.”

Potential Impacts on the Profession

Relaxing educational requirements could make the CPA designation more accessible to a broader pool of candidates, helping to close the workforce gap. However, the proposal has sparked debate within the profession, with some stakeholders concerned that reducing educational standards might dilute the expertise of future CPAs. Others argue that real-world experience can be equally, if not more, valuable in preparing candidates for the demands of the profession.

The shift towards greater flexibility could also set a precedent for other regulated professions, many of which face similar challenges in attracting and retaining talent. As states evaluate the proposal, the outcome could lead to significant changes in the structure of accounting education and certification, paving the way for more innovative approaches to professional licensing.

A Way Forward

For now, the accounting industry is at a crossroads. With fewer students enrolling in accounting programs and more professionals leaving for different career paths, the need for reform is clear. Whether through changes to educational requirements, increased compensation, or improved work-life balance, the profession must evolve to remain viable and sustainable.

The coming months will be crucial as states deliberate on the proposal. If adopted, this shift could reshape the pathway to CPA licensure, making it more responsive to the needs of both candidates and employers. As these discussions progress, the profession must balance maintaining high standards with ensuring that it remains an attractive and accessible career option for future generations.

* * *

Attorney Advertising—Anderson P.C. is a U.S. law firm and provides this information as a service to clients, prospective clients, and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.

Anderson P.C. is a boutique law firm dedicated to defending clients in government investigations and securities enforcement actions initiated by the SEC, FINRA, DOJ, and other regulatory bodies. We provide focused, strategic counsel and regulatory guidance across the full spectrum of federal laws and regulations affecting broker-dealers, investment advisers, banks, asset managers, private funds, public companies, senior executives, and digital assets. Our deep expertise allows us to navigate complex legal challenges and deliver results-driven solutions tailored to our clients' unique needs.

If you have any questions or need legal assistance related to government investigations, securities enforcement actions, or regulatory compliance, please don't hesitate to contact us. Our team at Anderson P.C. is here to provide the expert guidance and support you need to navigate these complex challenges.