Charting the CPA pipeline

The pool of accounting graduates continues to shrink, according to the biennial 2023 Trends report from the American Institute of CPAs (AICPA), “A Report on Accounting Education, the CPA Exam and Public Accounting Firms’ Hiring of Recent Graduates.” However, colleges and universities are projecting enrollment will flat line or increase slightly this academic year, providing a bright spot in the data. 

The report breaks down trends in accounting graduate supply and demand, as well as the CPA Exam. Notable insights include the following. 

Supply: Downward trend since 2015–2016 

Approximately 47,000 students earned a bachelor's degree in accounting in the 2021–2022 school year, down 7.8% from the previous year. This is a steady decline of 1 to 3% per year since 2015–2016. And while the number of students earning a master's degree in accounting dropped 6.4% to 18,238, the percentage decline is significantly less than in 2019–2020. 

Breakdowns by gender continue to hold steady. Graduates who are women made up 52.1% of the 2021–2022 total, similar to last year. The racial/ethnic mix of candidates also remained steady with two exceptions. The number of Hispanic/Latino graduates increased by almost a percentage point, while nonresident alien grads decreased by almost a percentage point year over year. Black graduates rose slightly from 6.8% to 7.1%. 

"We're still on a downward trajectory for accounting graduates, although it's worthwhile to note U.S. university enrollment and earned degrees collectively shrank during this period," said Jan Taylor, CPA, CGMA, Ph.D., the AICPA's academic in residence. 

From 2012 to 2021, undergraduate enrollment regardless of field dropped 13%. The academic community is watching these trends closely, with a looming higher education enrollment cliff beginning in 2025 due to lower birth rates starting in 2008. 

But, there is reason to be slightly optimistic when it comes to future enrollment. A majority of colleges and universities expect higher enrollment in 2023–2024. Forty-four percent of bachelor’s programs expect increased enrollment (and 31% expect numbers to remain the same), while 45% say enrollment will increase in master’s programs and 32% say it will remain steady. 

These projections could demonstrate that the CPA profession’s concerted effort to encourage accounting careers to students nationwide are beginning to have a positive effect. 

Demand: New grads still wanted 

Data is lacking in demand statistics. The report states that due to a lack of responses, the total number of new grad new hires could not be projected with confidence for 2021, and new hire and firm demographics are not reported. 

But, among CPA firms that hired new graduates in 2021 into accounting and finance functions, hiring is optimistic. Ninety-one percent say they will hire the same number or more in the next year, and 60% expect to have the same or higher number of CPAs on staff in 2023 compared to 2022. 

CPA Exam: Candidates needed! 

The number of unique CPA Exam continues its downward slide. From the most recent high in candidates in 2016 of 102,291, numbers have declined every year to 67,336 in 2022. Only 18,847 candidates passed their fourth section in 2022, down from 19,544 in 2021. 

The number of Exam sections taken in 2023 is on the upswing, in part because test takers are looking to complete their requirements before the 2024 onset of CPA Evolution. 

With academia optimistically projecting increased or steady accounting enrollment next year, the challenge for the profession is crystal clear: Students must be educated on the benefits of sitting for the Exam and receiving the lifetime career value of the CPA credential.