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A plan to overhaul the rules for qualifying as an accountant in the US could expose firms to discrimination lawsuits and increase barriers to joining the workforce, according to a body that represents the country's largest firms.
In a private comment letter seen by the Financial Times, the Auditing Standards Institute – which represents the Big Four and other major firms – condemned the proposed reforms as “unnecessarily complex”, and said they could “introduce instability” to the qualification process.
The CAQ's intervention puts the big auditing firms at odds with the two bodies that set the rules on how to qualify as a certified public accountant – the American Institute of CPAs and the National Association of Financial Boards – on how to prevent a decline in new hires.
The AICPA and Nasba in September proposed dropping the requirement that accountants complete the equivalent of five years of university education, one more than a bachelor's degree, a law that has been accused of putting young people out of the profession.
The two organizations proposed an alternative path to certification: instead of the fifth year of education and the requirement of a year of on-the-job training carried out by the factories, which would have to ensure that the employee has acquired a set of defined technical and professional skills.
Liz Barentzen, CAQ's vice president, wrote in a letter of explanation filed last month that “the broad range of competency frameworks, performance indicators, and testing requirements creates an unnecessarily complex process that may be difficult to implement consistently across jurisdictions”.
And he added: “Standardized assessment guidelines can introduce subjectivity and impartiality into assessment processes, which can create employment-related issues (eg discrimination claims) that would not otherwise exist.”
A shortage of accountants has begun to be seen as a threat to some companies' financial reporting, and some small accounting firms have withdrawn from niche businesses such as local government audits. Industry leaders have warned that large firms could face recruitment problems if the trend is not changed soon.
The number of people taking the CPA exam fell from a peak of more than 100,000 in 2016 to a 17-year low of just over 67,000 in 2022 and, after a small uptick last year, is predicted by the AICPA to resume their decline. short term. The pipeline of young people taking accounting courses at university has shrunk in recent years, as they look to higher-paying jobs in finance or technology.
The CAQ has argued that tackling the issue of shortages should include widening the appeal of accounting among students from diverse backgrounds, for whom the cost of a fifth year at university may be more of a problem.
The AICPA and Nasba have committed to commenting on their proposals publicly by early 2025.
Sue Coffey, the AICPA's executive director of accounting, said it was getting “helpful, mixed responses” to its recommendations.
“It is important that the procedures for obtaining a license are clear and binding on students. “Working with Nasba and various stakeholders, we will know more next month about what this looks like,” he said.