Number of Accounting Grads Continues to Shrink

The number of students earning U.S. post-secondary accounting degrees fell sharply in the 2021-22 academic year, according to a biennial American Institute of CPAs (AICPA) report on trends related to accounting graduation rates, the CPA Exam and hiring demand by accounting firms.

Some 47,067 students earned a bachelor’s degree in accounting in the 2021-22 school year, down 7.8% from the previous year, according to 2023 Trends: A Report on Accounting Education, the CPA Exam and Public Accounting Firms’ Hiring of Recent Graduates. The number of students who earned a master’s degree in accounting, meanwhile, fell 6.4% to 18,238. In the previous Trends report, the comparative rates of decline were 2.8% and 8.4%, respectively.

Enrollment projections for the coming academic year are optimistic. Three-quarters of responding university bachelor’s programs and 78% of responding master’s programs expect enrollment in 2023-24 to be the same or higher as in 2021-22. That compares to 58% for both program categories in the previous Trends report.

“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, the AICPA’s academic in residence. “The AICPA remains focused on advocating profession-wide solutions to the talent shortage, and we saw increased mobilization and coordination in these efforts over the past year.”

The Trends report has been published since 1971, measuring both the supply of and demand for accounting graduates. This year, however, the response rate from accounting firms on their hiring practices was too low to be statistically valid – despite an extension of the time the survey was in the field – so the AICPA is unable to accurately project the number of graduates hired into public accounting in 2021. The organization is looking into a number of issues, including the survey’s timing, delivery methods and promotion, to ensure more complete data in the next report.

Other key findings of the survey include:

The gender ratio and racial-ethnic mix of accounting graduates remained similar to the previous Trends report, with two exceptions: Hispanic/Latino graduates increased by almost a percentage point and nonresident alien graduates decreased by a similar amount in both the 2020-21 and 2021-22 academic years.
Master’s degrees earned at private institutions fell 10.9% in the 2021-22 school year, while those earned at public schools decreased 3.3%.
For accounting firms who responded to the survey, hiring expectations are optimistic for new hires of accounting graduates, with 91% of respondents saying they expect to hire the same or more new graduates in the next year.
Sixty percent of surveyed firms reported they expect to have the same or higher number of CPAs on staff in 2023 compared to 2022.
The number of unique CPA Exam candidates declined from 72,271 in 2021 to 67,335 in 2022. 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, a new licensure model that focuses on building core competencies in accounting, auditing, tax, and technology while developing deeper expertise in one of three disciplines: information systems and controls; tax compliance and planning; or business analysis and reporting.

To help remedy the profession’s pipeline issues, the AICPA in the past year convened the National Pipeline Advisory Group, a multi-stakeholder group that is exploring data-driven approaches to address the talent shortage. The advisory group is expected to deliver a draft national strategy plan at the AICPA’s governing Council meeting in May 2024. The AICPA is also moving forward with its Pipeline Acceleration Plan, a series of initiatives that already have considerable consensus within the profession.

Accounting