Declining CPA Candidates and Accounting Graduates

The pipeline of new accountants in the U.S. has been shrinking in recent years. Fewer students are choosing accounting majors and even fewer go on to become CPAs. In the 2021–2022 academic year, about 47,070 students earned a bachelor’s degree in accounting, a 7.8% drop from the prior year – the biggest one-year decline in accounting graduates since at least 1994​norstrem.com. Master’s degree completions in accounting also fell by 6.4% that year​norstrem.com. This decline in graduates has translated to fewer candidates for the CPA exam. The American Institute of CPAs (AICPA) reported that only 72,000 candidates sat for the CPA exam in 2023, compared to over 100,000 annually a decade earlier​softwareoasis.com. That represents a sharp drop (approximately 17% fewer exam takers between 2019 and 2023 alone)​softwareoasis.com.

Several factors are driving this waning interest. A key issue is the 150-credit hour requirement (effectively a fifth year of education) needed for CPA licensure, which many prospective accountants see as a costly hurdle given the returns. This extra education and exam process can deter students, especially when other careers don’t require additional schooling​kiplinger.com. In fact, research shows fewer than half of accounting graduates pursue CPA licensure, often citing the high cost and time commitment of the certification process​softwareoasis.com. Meanwhile, other fields like finance and tech are drawing talent away with higher starting salaries and lower barriers to entry. A survey by the Center for Audit Quality found that higher starting pay in other majors was the top reason students who considered accounting ultimately chose different careers​starkmontfinancial.com. For example, young financial analysts (age 25–29) earned a median salary of about $74,000, compared to $56,000 for their peers in accounting – a significant gap that makes accounting less attractive to graduates​starkmontfinancial.com.

Another concern is the aging workforce of CPAs, which is thinning the ranks faster than new CPAs can replace them. The AICPA has noted that a large portion of current CPAs are approaching retirement age. 75% of today’s public accounting CPAs will reach retirement age within 15 years​kiplinger.com​kiplinger.com. Baby Boomer retirements, at a rate of about 10,000 Americans turning 65 each day through 2029, are hitting accounting hard​kiplinger.com. This “graying” of the profession means many seasoned accountants are exiting the workforce, further widening the talent gap when combined with the shortage of incoming young professionals. The result is a broken pipeline: not enough new accountants are entering the field to backfill the retirees and leavers, creating a net decline in the talent pool.

Industry Burnout and High Turnover

The accounting profession is also struggling to retain those already in the field, due in large part to burnout and heavy workloads. Public accounting in particular is known for demanding hours, especially during peak periods like tax season or year-end audits. These long hours and high-pressure deadlines have taken a toll on work-life balance. Burnout is a real issue for accountants – what used to be a badge-of-honor “grind” is now driving many away from the industry​ifac.org. A global survey in 2023 confirmed that younger professionals view long hours and insufficient work-life balance as major deterrents to staying in accounting​ifac.org.

Turnover data highlight the severity of the problem. Between 2020 and 2022, over 300,000 U.S. accountants and auditors left their jobs, a 17% drop in the total number of accountants in just two years​ifac.org. This exodus isn’t only due to retirements – many are mid-career or early-career professionals. In fact, accountants in their 20s and 30s have the highest turnover rates. A 2023 study by the Institute of Management Accountants (IMA) and Robert Half found turnover among 18–36 year-old accounting/finance professionals was 39% over the prior two years, and 26% of respondents in that age group planned to leave their current employer within the next year​accountingpipeline.org. Alarmingly, 8% of young accountants surveyed said they were considering leaving the accounting profession entirely in the next year​accountingpipeline.org. Many new graduates enter public accounting only to quit after a couple of years due to the stress and lack of work-life balance​kiplinger.com. This churn of young talent exacerbates the shortage – firms are losing the very people who were supposed to become the next generation of CPAs.

Several burnout drivers are frequently cited by those leaving:

• Grueling Hours and Seasonal Crunch: Accountants often work well over 40 hours a week during busy periods, leaving little time for life outside work​kiplinger.com. Consistently long hours lead to exhaustion and are unsustainable for many, especially younger professionals who prioritize balance.
  
  
• Stress and Pressure: The combination of tight deadlines, complex regulations (e.g. constantly changing tax codes), and high stakes financial reporting creates a stressful environment​kiplinger.com. Over time, this chronic stress without adequate relief drives people out.
  
  
• Early Career Expectations: Newer generations of accountants (Millennials and Gen Z) have different workplace expectations than their Gen X or Boomer managers. They seek meaningful work, reasonable hours, and mental well-being. When those expectations aren’t met – for example, being asked to sacrifice personal life for the job – they are more willing to walk away​kiplinger.com.
  
  

The outcome is a vicious cycle: heavy workloads cause burnout and attrition, which in turn increases the burden on the remaining staff, leading to further burnout. This cycle has raised serious retention concerns for the profession. In a 2023 Illinois CPA Society survey, accounting firms cited “too many hours leading to burnout” as a top reason employees were leaving, second only to salary considerations​accountingpipeline.org. If burnout continues unchecked, the profession will keep losing experienced talent faster than it can bring in new hires.

Stagnant Salaries and ROI Concerns

Compensation is another critical factor undermining the accounting talent pipeline. Many accountants feel that the financial rewards of the career do not match the effort and costs required to enter and stay in the profession. Compared to alternative careers in business or tech, accounting salaries have been relatively stagnant. The median inflation-adjusted pay for young accountants has barely grown in recent years, according to a Wall Street Journal analysis​starkmontfinancial.com. As noted above, a young accountant might earn in the mid-$50,000s, whereas peers in finance or consulting can start significantly higher​starkmontfinancial.com. This pay gap makes accounting a less appealing choice for talented graduates who have other options. Simply put, many conclude that “it doesn’t pay to become a CPA” in today’s environment​kiplinger.com.

The return on investment for becoming a CPA has been called into question. Aspiring CPAs often must get a master’s degree or extra college credits (to meet 150 hours), spend hundreds of hours studying for a difficult four-part exam, and potentially take lower-paying entry jobs to accumulate the required experience. Yet starting salaries for new accountants have not kept pace with these rising prerequisites. For example, some entry-level accounting roles have offered salaries in the low-$40,000s or even $30,000s, which is scarcely livable for a college graduate with additional schooling​kiplinger.com​kiplinger.com. While those figures vary by region and firm size, the perception is widespread that accounting pay is low relative to the education and workload. One accounting professor bluntly noted that after tallying extra coursework and licensure costs, the math often “might not be worth it” for becoming a CPA​kiplinger.com.

Moreover, salary growth within the profession can feel limited. Many accountants start in public firms where the path to higher income (e.g. making manager or partner) is long and uncertain. In industry roles, accountants sometimes see a ceiling unless they move into finance management. Dissatisfaction with pay was highlighted in a major global talent survey as a top concern, especially as high inflation in recent years has eroded real wages​ifac.org. Women in accounting also face a gender pay gap (earning about 91 cents on the dollar compared to men as of 2022) which can add to the frustration in terms of equal reward for equal work​kiplinger.com. All these salary and growth concerns are pushing current and potential accountants to rethink their career choice. Many young professionals are lured by industries that promise faster or higher compensation, contributing to the decline in new CPAs. Notably, when accounting firms and corporations started feeling the talent crunch, they began boosting pay – in one case, starting salaries for new accounting graduates jumped ~30% in a single year (from 2022 to 2023) due to the supply-demand imbalance​nonprofitcpa.com. This recent spike is a reaction to the shortage, but it underlines how far salaries had lagged behind market demand. Unless pay continues to adjust upward and show a clear ROI for the CPA track, attracting and keeping talent will remain an uphill battle.

Work-Life Balance, Flexibility, and Other Challenges

Beyond pay and hours, shifting workplace expectations and the culture of accounting firms have played a role in the talent pipeline problem. Younger professionals today place high value on flexibility, remote work opportunities, and a positive office culture. The accounting industry has been slower to adapt on these fronts compared to other sectors. A 2024 Deloitte survey found that 68% of accountants prefer hybrid or fully remote work, yet only about 45% of firms offer those flexible work options​softwareoasis.com. Many accounting employers have been urging staff to return to the office post-pandemic, even for roles that can be done remotely, which creates friction with employees who have grown accustomed to more flexibility​ifac.org. Firms that remain inflexible risk driving talent away to companies (or other industries) with more progressive work-from-home policies.

The culture and image of the profession also pose challenges. Accounting has long been seen as a stable but perhaps “boring” career by students. Tasks like ticking and tying numbers or dealing with tax code intricacies don’t spark the imagination of many young people, especially when compared to fast-growing fields like technology, entrepreneurship, or data science. This perception issue means accounting struggles to compete for bright students’ interest. The profession is aware of this branding problem – the president of IFAC noted that the accountant’s image is often negatively stereotyped, and there’s a need to promote a more appealing narrative to attract young talent​ifac.org​ifac.org. Additionally, the profession has been criticized for a lack of diversity. Compared to tech or healthcare, accounting has historically had lower representation of minorities in its ranks​starkmontfinancial.com. A less inclusive image can discourage some candidates who don’t see people like themselves succeeding in the field.

Technology and automation present a double-edged sword for accounting careers. On one hand, the rapid pace of tech change means accountants must continuously learn new software, data analytics, and AI tools – which can be daunting for some and a turn-off for those who expected more traditional work​ifac.org. Older accountants in particular may be retiring partly because they’re uncomfortable with new systems and constant change​ifac.org. On the other hand, there’s a narrative (not entirely accurate, but persistent) that AI and software will replace many accounting jobs, potentially dissuading new entrants who fear the long-term viability of the profession​ifac.org. While experts doubt that human accountants will become obsolete anytime soon, the chatter about automation can make accounting seem like a less secure career choice relative to other paths.

In summary, the talent pipeline is being squeezed from multiple angles: a perceived poor work-life balance, insufficient flexibility, an image problem, and concerns about the evolving nature of the work. These softer factors, combined with the hard issues of pay and workload, have created an environment where fewer people want to enter the profession and many who do enter end up leaving.

Impact on Businesses

The current accountant shortage is not just a staffing issue; it’s having real consequences for businesses and the economy. Companies of all sizes are feeling the pinch of not being able to hire and retain the accounting talent they need. One immediate impact is that accounting and finance positions are staying open for much longer, as qualified candidates are scarce. Some organizations have reported searching for many months to fill key roles like controller or staff accountant, with job openings remaining unfilled for over a year in some cases​nonprofitcpa.com. This hiring difficulty can slow down a company’s operations – routine tasks like closing the books, paying vendors, and preparing financial statements become challenging when teams are understaffed.

Alarmingly, the accountant shortage has begun showing up in companies’ financial statements. In 2023, a number of U.S. public companies disclosed “material weaknesses” in their internal controls due in part to a lack of accounting staff​beckershospitalreview.com. For instance, firms like Advance Auto Parts and Joby Aviation noted that staffing shortfalls contributed to control problems in their finance departments​beckershospitalreview.com. Such material weaknesses are serious red flags that indicate potential errors or oversight failures in financial reporting. Indeed, about 600 U.S.-listed companies reported personnel-related control weaknesses in the first half of 2023 – up 40% from 2019 (pre-shutdown), illustrating how the staffing gap has grown​beckershospitalreview.com. When companies can’t find enough experienced accountants, they may end up assigning less-experienced employees to critical financial tasks, increasing the risk of mistakes or even fraud​beckershospitalreview.com. This is a direct hit to the reliability of financial information that investors and regulators rely on.

Businesses are also facing higher costs as a result of the talent crunch. The classic supply-demand imbalance has driven accounting wages upward. Many companies have had to raise salaries, offer signing bonuses, or improve benefits to attract scarce talent. As noted, some employers saw entry-level accounting salaries jump by 20–30% in one year recently to stay competitive​nonprofitcpa.com. Even with higher pay, some companies struggle to lure candidates, so they increasingly turn to outside help or automation. For example, businesses might outsource more accounting work to external firms or implement new software to cope with staff shortages. However, outsourcing comes at a premium, and implementing technology is not a quick fix for missing personnel in critical roles.

Small businesses and nonprofits are particularly vulnerable. They often cannot afford to match the salary increases larger corporations or big firms are offering, which leaves them short of needed accounting help. Some CPA firms, facing their own staffing challenges, have started turning away work or dropping smaller clients because they lack the capacity​nonprofitcpa.com. This means some small businesses are finding it harder to secure an external accountant or auditor, potentially leaving their finances in limbo. Even individuals may feel the impact – for instance, a shortage of tax preparers and CPAs in certain regions has made it harder for consumers to find someone to help with their tax returns​kiplinger.com. The IRS itself has cited staffing issues on both the public and private side; a lack of accountants contributes to backlogs in processing and auditing, affecting taxpayers awaiting refunds or issue resolutions​kiplinger.com.

In essence, a robust accounting workforce underpins timely financial reporting and compliance. When that foundation is weakened, businesses may encounter delays in closing their books, difficulties in obtaining loans (due to delayed financial reports), or qualified opinions from auditors if internal controls suffer. Over time, if the shortage persists, we could see higher risks of financial misstatements in the corporate sector and higher costs of financial services across the board. It’s a headache for CFOs and audit committees: the talent gap is now a business risk that must be managed.

Impact on the Accounting Profession

For the accounting profession itself, the talent shortage is a wake-up call with wide-ranging implications. Accounting firms, especially in public practice, are facing unprecedented staffing pressures. Many firms have had to increase salaries significantly to retain and hire employees, squeezing their profit margins​nonprofitcpa.com. With labor costs up and too few hands to handle client work, firms have been forced to make tough choices. There is evidence of firms raising their fees for services to cope with increased staff costs and workloads​nonprofitcpa.com. Clients are seeing higher billing rates as a result, which could price some of them out of necessary services. Furthermore, firms are selectively trimming their client lists – in some cases declining new engagements or even terminating relationships with smaller, less profitable clients – because they simply don’t have the bandwidth to serve them​nonprofitcpa.com. This is a stark change from the past, where accounting practices would rarely turn away business. It underscores how strained capacity has become in the profession.

The shortage is also reshaping career dynamics within accounting. With so many experienced Baby Boomers retiring and fewer juniors to promote, the traditional apprenticeship model (where young accountants gradually take over from older ones) is under strain. Some older practitioners looking to retire or sell their firms are finding no buyers or successors to take over their book of business, leaving clients in the lurch​kiplinger.com. This succession crisis means valuable knowledge and client relationships can be lost if a firm simply dissolves due to lack of next-generation leadership. Meanwhile, the CPAs and accountants who remain are often overloaded with work, which can diminish the quality of mentorship and training that new entrants receive. In public accounting, partners and managers are stretched thin trying to deliver work with fewer staff, making it harder to properly train newcomers – another feedback loop that can hurt development of future leaders.

On a broader level, the profession’s role and attractiveness are at stake. If accounting cannot replenish its talent, its influence could wane in cross-functional business decisions as other professionals (like data analysts or AI tools) fill the void. Professional bodies like the AICPA are acutely aware of these threats and have convened task forces to address the pipeline problem​softwareoasis.com​accountingpipeline.org. We’re already seeing initiatives to modernize the CPA exam and licensure pathways (for example, discussions about allowing 120 credit hour CPA routes with added experience instead of 150 hours​kiplinger.com). There is also a push to improve the image of accounting careers – showcasing the variety of work (such as advisory, analytics, and strategy, not just bookkeeping) and the value accountants bring in safeguarding businesses. The hope is that by making the profession more flexible, tech-forward, and better compensated, it can attract new talent and retain current professionals, reversing the decline.

In the near term, the accountant shortage is forcing the profession to evolve. Automation and outsourcing are being leveraged more heavily to handle routine accounting tasks, freeing up scarce human accountants for higher-level work. Firms are also re-examining their work cultures – many are implementing burnout prevention measures, offering remote work options, and promoting mental health, in direct response to the retention crisis. The rise in salaries for accountants is likely to continue as a market adjustment, which might gradually make the field more competitive with other careers​beckershospitalreview.com. As one expert noted, “higher salaries are coming for in-house accountants whether management likes it or not,” given the talent shortfall​beckershospitalreview.com​beckershospitalreview.com.

Overall, the broken talent pipeline has sent shockwaves through both industry and the accounting profession. Businesses are encountering real financial reporting challenges and higher costs, while the profession is at an inflection point, working to reinvent itself to appeal to a new generation. If the underlying issues – declining interest, burnout, pay disparities, and work-life balance – are not addressed, this talent shortage will persist and could undermine the reliability of financial information and the growth of firms. Conversely, tackling these challenges head-on (through educational reforms, cultural change, and better incentives) will be key to restoring a healthy pipeline of accounting talent in the U.S.​ifac.org​kiplinger.com.