Is the CPA Exam outdated? Or worse yet, has it become unnecessary in today's accounting landscape?
The National Association of State Boards of Accountancy reported that 95,654 candidates sat for the 2017 CPA Exam (71,199 of which were new candidates) in its 2017 Candidate Performance on the Uniform CPA Examination report. This stands in comparison to surging enrollment numbers in bachelor's (216,482) and master's (29,429) programs in accounting during the 2015-2016 academic year, according to the American Institute of CPAs' 2017 Accounting Graduates Supply and Demand Report. The CPA Exam, it seems, is not seen as a necessity by a significant percentage of young professionals.
A roundtable hosted by CPA Exam prep course company Surgent, "Is the CPA License Losing Its Luster?" explored this question earlier this month. The session was moderated by Elizabeth Kolar, chief knowledge officer at Surgent, who noted that "earning your CPA license used to be an expectation for virtually all accounting majors" before asking panelists whether they think that this view is true anymore.
Panelist Susan Crosson, director at the Center for Advancing Accounting Education, said that the exam was traditionally a "way to validate your college experience to say that you were job-ready, regardless of the job. Today's college students are much more varied; they have more choices to validate that accounting baseline of knowledge, and I wonder sometimes if the CPA Exam is sometimes viewed more narrowly because its original scope was to prepare people for the audit profession, and maybe that could be one reason why less students are taking the exam."
Mark Mayberry, strategic initiatives director for the Assurance Office of Tomorrow at Top 10 Firm BDO USA, agreed: "With the introduction of the 150-hour requirement a few years ago, people are now studying for five years and perhaps there isn't enough incentive for people [to do that]. When I took the exam, it was a right of passage ... but now with the Internet, they can research and read about what public accountants do. And unless they're going into public accounting and auditing, maybe there isn't enough incentive to really pursue the CPA [license] anymore. It used to be the thing to get, and I don't think it is anymore."
Rick David, chairman of Top 100 Firm UHY International and COO of UHY Advisors, viewed the value of the CPA Exam as changing from a means to the end of joining a partnership, to merely an option for only some graduates. "Back in the old days, you wanted to work your way to partner," he said. "These days, college graduates come into the firm not with the partner expectation or desire. They want a different approach to their careers and we need to adapt to that.”
Chuck Kovach, national director of learning at Top 100 Firm CohnReznick, echoed this claim: "The gap. we think, is growing between young people coming out of school and the traditional value proposition of accounting firms, meaning the long-term view of what it means to build an accounting career," he said. "We feel we’re getting less and less traction on the [mentality of] 'work hard for 12 years and you may become a partner and your career will then be so much better.' I think that raises a lot of questions for our younger people … to the extent that the exam is a long-term process and what it leads to. We just think maybe that's some of the reasons that some people aren’t motivated to sit for that exam."
Necessary, but not extraordinary
Other panelists viewed the test as a solid resume-builder, even if it's not the most exciting credential anymore.
"The quicker you can get it out of the way, the better," said Dan Black, global recruiting leader at Big Four firm EY. "You’re not getting less busy as you go through [an] organization. I’m a CPA, and I don't do accounting anymore, but what I learned through being a CPA and the exam ... is still something I still use daily, so that kind of education is what’s important. Too many people are stuck in the antiquated ‘Do it because I said so’ way ... and that's not effective." Black also noted that CPA licensure is necessary for some promotions within EY, making it a necessary building block to a long career.
Agreeing with other panelists on the changing significance of the CPA license, Steven Maex, a Ph. D. candidate of accounting at Temple University, still felt that, "The goal [of the CPA license] is to signal to future employers that you are capable of working, learning, operating in a way that's going to make you a successful accountant in whichever field you ultimately pursue. In order for the CPA to stay relevant, you have to continue to credential the skillsets that define the successful accountant of the future. I think we are coming to an era where there are problems with that ... because the knowledge base required to make an accountant successful has expanded so vastly. So it might be time to start thinking more creatively if a one-size-fits-all-exam is the right answer."
Maex added that there could potentially be a baseline credential in the future that could work in traditional firms, but also leaves the door open to additional skills needed as a career progresses. "I think it just requires a rethink of what the CPA Exam means and how do you credential those [newer] skillsets to allow some sort of differentiation within the accounting field since that’s certainly where the industry is going," he added.
BDO's Mayberry also questioned the value that a traditional CPA plays in today's accounting landscape: "The value of the CPA has changed," he said, explaining how when he earned his license, it was seen as an impressive feat. “Now, today, it’s like, ‘What else do you do?’ It’s a baseline of what you do."
Mayberry added that in the beginning of their careers, young professionals' "first or second year of staff work is all automated, so what are you going to have [young CPAs] do? They have to solve complex problems … analyze data. How do you teach that judgment and decision-making? It’s going to take a different approach over the years … [and] on-the-job training."
Learning beyond the exam
CPA licensure might not be viewed with the same end-all, be-all reverence it used to receive, but what it could signify is the beginning of a lifelong learning for professionals.
"We’re getting a lot of non-traditional students — we’re hiring them throughout their experiences and maturity levels," said UHY's David. "We have a much wider group, and how they learn is different now, too. Because people recognize what a CPA is doing inside a firm environment has experiential aspects to it that you can’t find elsewhere.”
Citing states that allowing micro-courses for CPE, David added, "Learning on-demand is there. In this day and age, your learning never stops. New industries are created from when you start college to when you end college. The big thing you need to get out of a college experience is how to learn. And that’s going to last your career."
"You can start gathering credentials even before you sit for the CPA Exam,” said the CAAE's Crosson, citing LinkedIn badges such as being a Tableau Desktop specialist or advanced Excel training. “That will lead to jobs because that’s how employers search for candidates for jobs they have. I would encourage you to start now … to validate to the world what you know and how you’re capable of helping them. You can do a lot of things to demonstrate your knowledge levels."
Adaptive learning, and firms offering on-the-job training, have also proven to engage young professionals after college.
“Our younger people are really showing a tendency towards learning methods that are high engagement — pure coaching, mentorship, involvement in solving firm problems — [and] differently from the traditional education methods the Exam is built around," said CohnReznick's Kovach. "People want to connect to purpose. If we can find a way to have very involved learning activities … that connect to their values … we found we got a lot more higher engagement. 'Is what I’m learning helping me connect to something beyond this job?'"
"What motivates students today is different from 10 years ago; forget 20 or 30," said EY's Black. "People are looking for shorter chunks of experience and not necessarily a long career. We've done a lot of research on this ... and found that [young people] are looking for things that will help them learn and develop on Day 1, almost at a constant click. To the extent that you can provide those learning and development opportunities early and often ... that's an expectation we've been seeing."
"I think people are looking beyond the CPA; it's 'CPA plus' at this point," said BDO's Mayberry. "The CISA is very complimentary to CPA ... and there are a lot of credentials coming out of the vendor community as well. What we see today isn't necessarily what's going to be there in five years, but I think you just have to be flexible and look for opportunities as they come up."
First step of a long journey
So while the reputation of the CPA Exam might not be what it once was, it still offers young professionals a foundation for their careers and teaches them that the educational requirements needed to pass are actually lifelong skills, instead of a temporary hardship.
"Being a first-generation college student ... the CPA Exam opened doors for me," said Crosson, "It allowed other doors not to be shut in my face ... and it allows you to be everything you want to be for your life."
"The rigor [of the exam] can sometimes serve as a deterrent," added Black. "The intent was to produce a well-rounded … future-proof professional. We want to ensure we’re continuing [to do that] and that requires some tweaks along the way."
