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A plan to reform the foundations for qualifying as an accountant within the US may expose corporations to discrimination lawsuits and add limitations to becoming a member of the career, in keeping with the physique representing the nation’s greatest audit corporations.
In a non-public remark letter seen by the Monetary Instances, the Middle for Audit High quality — which represents the Massive 4 and different massive corporations — condemned proposed reforms as “unnecessarily advanced”, and mentioned they may “introduce unconscious bias” into the qualification course of.
The CAQ’s intervention places massive audit corporations at odds with two our bodies that set guidelines on tips on how to qualify as a licensed public accountant — the American Institute of CPAs and the Nationwide Affiliation of State Boards of Accountancy — over tips on how to stem a decline in new recruits.
The AICPA and Nasba in September proposed dropping a requirement that accountants full the equal of 5 years of college schooling, yet one more than a conventional undergraduate diploma, a rule that has been blamed for placing younger folks off getting into the career.
The 2 our bodies proposed another path to qualification: change the fifth 12 months of schooling with a requirement for a 12 months of on-the-job coaching by corporations, which must certify {that a} recruit had obtained dozens of specified technical {and professional} expertise.
Liz Barentzen, the CAQ’s vice-president, wrote in a remark letter submitted final month that “the framework’s in depth record of competencies, efficiency indicators, and analysis necessities creates an unnecessarily advanced system that could possibly be troublesome to implement persistently throughout jurisdictions”.
And she or he added: “Qualitative evaluation frameworks can introduce subjectivity and unconscious bias into analysis processes, doubtlessly creating employment-related points (eg claims of discrimination) that will not in any other case exist.”
A scarcity of accountants has begun to characteristic as a threat consider some firms’ monetary disclosures, and a few small accounting corporations have withdrawn from area of interest companies reminiscent of auditing for native governments. Leaders of the career have warned that greater corporations may face issues recruiting if the tendencies aren’t shortly reversed.
The variety of folks taking the CPA examination fell from a peak of greater than 100,000 in 2016 to a 17-year low of simply above 67,000 in 2022 and, after a small uptick final 12 months, are projected by the AICPA to renew their decline within the quick time period. The pipeline of younger folks taking accounting programs at college has thinned lately, as they gravitate in direction of increased paying entry-level jobs in finance or know-how.
The CAQ has argued that tackling the scarcity must contain extending accounting’s attraction amongst college students of various backgrounds, for whom the expense of a fifth 12 months of college will be particularly problematic.
The AICPA and Nasba have dedicated to creating feedback on their proposals public in early 2025.
Sue Coffey, the AICPA’s chief government of public accounting, mentioned that it was “getting useful, various suggestions” on its proposals.
“It’s important that licensure pathways are clear and compelling to college students. Working with Nasba and numerous stakeholders, we’ll know extra over the following month about what this appears to be like like,” she mentioned.
