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Rick Telberg

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Keeping CPA exam candidates on track. What are firms doing to help?
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August 4, 2008
by Rick Telberg/At Large

It's too early to celebrate, but there are signs that the profession's talent shortage may be poised to ease.

A record number of new graduates are flowing into the profession, CPA firms are hiring more employees than ever and the number of CPA exam candidates is returning to historical levels. To be sure, the talent pinch remains acute and the forecast for headcount growth could yet be clouded by the economic slowdown.

But 203,000 college students are majoring in accounting today, up 19 percent from three years ago, according to the AICPA. Last year, more than 64,000 students graduated with a bachelor’s or master's degree in accounting, about two-thirds of those graduates, some 43,000, went to work at public accounting firms. Many colleges and universities are churning out accounting grads as fast as they can, hobbled only by the next shortage — a shortage of instructors.

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Meanwhile, the number of CPA exam takers, which cratered in 2004 with the upgrade to a computer-based test, appears to be bouncing back. By some estimates, the number of exam takers could hit 85,000 candidates this year, almost twice the 2004 level and on track toward parity with historical levels. Passing rates are now running a healthy 40 percent, up from 20 percent to 30 percent before computer-based testing.

But, the profession seems to be struggling to incorporate the new exam system into its routines and traditions. What gives?

Overcoming human nature is the first hurdle.

Jay J. Moeller, a partner at Battelle & Battelle LLP in Dayton, Ohio, says, "Everyone knows how easy it is to fall into the trap of procrastination. While the computerized exam is a great step forward, the continuous nature of it makes it too easy for candidates to delay sitting." Jay should know: he has served on the AICPA’s Standards Settings for Uniform CPA Examination Committee and also is a question contributor to the Uniform CPA Examination.

Unlike in years past, when the pencil-and-paper exam was given en masse twice a year, the new computer-based exam is available at local testing centers five days a week for the first two months of every quarter. To pass the exam, candidates must clear all four parts, taken within an 18-month period. To also qualify for licensure, CPA candidates generally need two years of experience or one year’s experience plus an extra year of college.

CPA firms are working hard to do what it takes. "At Brady Ware," says Rita Keller, shareholder at another Dayton, Ohio, firm, "we did a complete reengineering of our performance management and advancement policies and procedures. One aspect is that accounting graduates entering the firm have two years from their employment date to pass the CPA exam."

“We are a CPA firm, we need CPAs,” says Brady Ware managing director Gary Adamson.

Still, many firms could be doing better, according to L. Gary Boomer, CPA, CITP and CEO of Boomer Consulting, Inc. in Manhattan, Kan. "The one thing firms should communicate is that a CPA can have the 10 to 20 lifetime jobs talked about by the generational experts. They can even be with the same firm," Boomer says. "The CPA certificate provides a multitude of opportunities."

In an effort to help firms, the AICPA has put together a list of strategies, including the following:

  1. Paid study time during business hours
  2. Paid time off to sit for the exam
  3. In-house study groups, with the firm providing meeting space
  4. Making exam passage a requirement for promotion to senior or manager
  5. Bonuses for passing on time
  6. Reimbursement for review courses and exam fees, and free review materials

And state CPA societies are taking a leading role. Pennsylvania, for instance, was one of the first to launch a dedicated Web site. New Jersey has featured a real-life blog from an exam candidate on its Web site. California is working to attract more CPAs into education.

And Maryland is starting a new tradition with a high-profile swearing-in celebration. Check out the video.  "It still gives me goose bumps," says Maryland state society chief executive Tom Hood.

SOUND-OFF: What's the profession doing to help more people sit for the CPA exam? Join the survey; get the results.

COMMENT: Rants, raves, ideas and questions? Contact Rick Telberg.

WATCH: Tune in to see Rick’s latest Video Snacks about this topic.

MORE ABOUT THE CPA EXAM: Uniform CPA Examination Web site and the PCPS CPA exam guide for firms.

Copyright © 2008 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.

About Rick Telberg

Rick Telberg is editor at large/director of online content.

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Disclaimer: Any views expressed in this article do not necessarily reflect the views of the AICPA or CPA2Biz. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.