The accounting profession, once considered one of the most stable and prestigious career paths, is now facing a number of challenges that have resulted in a significant accountant shortage across the United States. Nowhere is this more acute than in New York, a global financial hub that relies heavily on a strong accounting workforce to drive business decisions and ensure fiscal accountability. The growing difficulties make it abundantly evident that New York requires a radical change in the way accounting is viewed, carried out, and maintained.
The accounting profession, once considered one of the most stable and prestigious career paths, is now facing a number of challenges that have resulted in a significant accountant shortage across the United States. Nowhere is this more acute than in New York, a global financial hub that relies heavily on a strong accounting workforce to drive business decisions and ensure fiscal accountability. The growing difficulties make it abundantly evident that New York requires a radical change in the way accounting is viewed, carried out, and maintained.
The statistics paint a grim picture for the future of accounting. Nationwide, fewer students are pursuing accounting degrees, and the number of CPA exam takers has been steadily declining. According to the AICPA’s 2021 “Trends Report,” first-time CPA exam candidates dropped by a staggering 33% between 2016 and 2021—from 48,004 to just 32,188. The number of exam takers fell to its lowest level in 17 years by 2022.
The profession also has to deal with an ageing workforce and declining enrolment. The industry’s capacity to meet rising demands is threatened by an impending talent shortage, as approximately 75% of AICPA members are at or close to retirement age.
Accounting firms from some developed countries are facing a limited supply of qualified talent amid high recruitment demands.
If this issue persists, the Securities and Exchange Commission (SEC) expressed that it could “increase the risk of serious financial reporting deficiencies across businesses. (The CPA Journal, 2022)
New York’s need for accountants to support Wall Street, big businesses, and its growing tech and startup industries makes this shortage particularly worrisome.
The situation is further compounded by declining accounting program enrollments. At the bachelor’s level, enrollment dropped by 2.8%, while master’s programs saw an even sharper decline of 8.4% in the 2019–2020 academic year. Like the rest of the country, New York universities, especially private ones, have reported much greater declines. The enrollment cliff that is predicted to occur in 2025 as a result of falling birth rates will only make these issues worse.
New York is unique as a global financial centre because it houses Wall Street and serves as the headquarters for major corporations and financial institutions. The state’s economy depends on accountants, who not only audit billion-dollar transactions but also assist startups in securing venture capital from firms.
But New York’s prominence makes the accounting shortage even more urgent. Lack of accounting personnel exposes businesses to missed chances for strategic financial planning, problems with compliance, and delays in financial reporting.
Many small businesses and startups, supported by incubators like Techstars NYC, are facing an existential threat as a result of the shortage. Considering that they rely on accountants for essential services like tax compliance and financial forecasting.
New York cannot afford to ignore the lack of qualified accountants in a state where financial accuracy and efficiency are vital. The state’s continued dominance of the international financial system depends on finding a solution to this problem.
The 150-hour CPA licensing requirement is one of the most contentious entrance requirements in the accounting field. The purpose of this rule is to improve the profession’s reputation and better prepare students by requiring 30 more credit hours than a typical bachelor’s degree. But critics argue that because of the additional time and expense required, the requirement has not succeeded in achieving its objectives and instead discourages prospective applicants.
According to studies like Barrios’ 2022 study, there is no discernible difference between accountants with and without 150 hours of education in terms of performance or quality. For students, the opportunity cost, an extra year of tuition and a postponed start to the workforce, is a major turnoff, especially in New York, where educational costs are among the highest in the country.
Accounting has long struggled with its reputation as being boring and repetitive. The stereotype endures despite notable developments in the field, such as the use of cutting-edge technologies like blockchain and artificial intelligence.
“Think accounting is boring? That outdated stereotype is costing our industry future talent.
Let’s face it—accountants have a serious image problem, so many young professionals are turned off by outdated perceptions of the industry. There is so much potential in this profession, yet, we haven’t properly communicated the vast opportunities available in today’s world.”
Joanna Perry, Senior Client Advisor at Altus Financial
Many young professionals are discouraged from considering accounting as a viable career path because of this unfavourable perception, especially in a state like New York where lucrative, dynamic careers in technology and finance are more alluring.
Starting salaries for accountants are lower than those in related fields like technology and finance. This disparity is particularly noticeable in New York, where living expenses are extraordinary.
Mean starting salaries for accounting and related services majors in 2022 stood at $60,698, the lowest of seven business-related majors cited in the report, while computer and information sciences majors topped out the rankings with mean starting salaries of $86,964.” – Jack Castonguay, Accounting Professor
Despite the competitive pay for entry-level accountants, talented people are frequently drawn to other careers by the demanding requirements to become a certified public accountant (CPA) and the perception of lower compensation.
The accounting profession has been impacted in a cascading manner by the nationwide drop in higher education enrolments. There is a shortage of future accountants in New York, where enrolment declines at private universities have been more pronounced. There is a risk that this crisis will worsen due to the projected enrollment cliff in 2025, which is caused by falling birth rates.
The accounting profession is currently facing a “perfect storm” that needs to be addressed on an urgent basis. The stakes are very high in New York, a state that is closely associated with the global financial market. Accountants are not only tasked with ensuring regulatory compliance but are also pivotal in providing strategic financial insights that fuel corporate growth and innovation.
Think about the aftermath of well-known scandals like the 2008 Lehman Brothers failure, where poor accounting supervision and dubious financial practices were a major contributing factor to one of the biggest financial meltdowns in history.
The scandal cost the world economy trillions of dollars and caused a huge loss of jobs by exposing systemic shortcomings in risk management and accounting transparency. Similarly, the Enron scandal in 2001 revealed how dishonest accounting practices could ruin entire industries, investors, and workers. As a result, Arthur Andersen, one of the biggest accounting firms at the time, went bankrupt.
Severe accounting fraud was revealed in 2017 with the collapse of Steinhoff International. It was a multinational retailer with major operations in New York but a base in South Africa. Their collapse wiped out nearly $12 billion in market value and shattered investor trust. The company’s leadership was accused of inflating profits and falsifying financial statements, leading to years of litigation and financial instability.
Let’s just not forget the “2020 Wirecard scandal,” which involved the collapse of a large German fintech company and attracted attention from the financial industry in New York. With more than $2 billion in “missing” money, it showed how difficult it is for audits conducted today to find fraud, even in tech-savvy businesses.
Firms like Goldman Sachs, PwC, and even smaller businesses depend on precise and timely accounting services to uphold regulatory compliance and ensure seamless operational efficiency. Public confidence in the entire financial system would be damaged if these gaps are not filled, putting the profession at risk of another financial disaster.
The accounting profession runs the risk of becoming less dependable and relevant in a state that dominates global finance if these issues are not resolved. It is impossible to overestimate how urgently transformative action is needed, New York’s financial future depends on it.
One of the biggest obstacles to getting into the accounting field is still the 150-hour rule. Two potential reforms could help address this issue:
It is very important to reposition accounting as a dynamic, technologically advanced field. National organisations such as the AICPA and NASBA should invest in marketing campaigns. These market campaigns should focus on opportunities for accountants, such as using AI for tax optimisation and guiding businesses through complex mergers and acquisitions. Partnerships between accounting firms, universities, and media outlets in New York could help to highlight the profession’s importance to the state’s economy.
Accounting firms must raise starting salaries and provide compelling benefits packages in order to compete with high-paying industries such as finance and technology. Entry-level accountants in New York typically earn between $55,000 and $75,000 per year, which is lower than starting salaries in technology or investment banking, which can exceed $100,000.
Given that the average rent in Manhattan will exceed $4,000 per month in 2023, firms may introduce housing stipends to close the gap. Programs for student loan repayment and specialised opportunities for professional growth, like collaborations with NASBA for continuing education, may also increase the profession’s appeal.
Ernst & Young and PwC have tried mentoring and tuition assistance initiatives to attract and retain top talent. Such initiatives can help to rebrand accounting as a viable and rewarding career option, even in a competitive market like New York.
The incorporation of AI and other advanced technologies is proving critical in combating the accountant shortage. Tools like AccountsGPT have revolutionised tasks such as tax preparation, auditing, and financial analysis. These advancements streamline workflows by automating repetitive processes like data entry and error detection, which used to take countless hours.
According to a 2023 Deloitte study, firms adopting AI tools for reconciliation can cut down up to 70% of time used in this area. By leveraging such technologies, accounting firms can significantly reduce workloads, boost accuracy, and create opportunities for higher-value strategic planning. Additionally, positions requiring cutting-edge solutions are attracting more and more tech-savvy professionals, which helps to resurrect the talent pool and revitalise the industry.
New York’s distinct role as a financial centre necessitates customised solutions. Programs like apprenticeships, internships, and collaborations between accounting companies and colleges can all contribute to the development of a more robust talent pool. Furthermore, state regulators ought to look into tax credits or tuition subsidies for students pursuing accounting degrees.
The accounting profession in New York is at a crossroads. The challenges, such as declining enrollment and outdated perceptions, are significant, but so are the opportunities. By lowering entry barriers, rebranding the profession, and leveraging technology, New York can maintain its position as an accounting industry leader.
The profession is at a turning point. Companies, academic institutions, and legislators must collaborate to put the reforms required to revitalise accounting in New York into effect. The time for change has come, and the profession’s future depends on it.
New York’s financial ecosystem relies heavily on accounting, but the profession’s current direction jeopardises its ability to continue playing this role. With decisive investments and audacious reforms, New York can take the lead in bringing accounting back to life. The state should continue to be a shining example of innovation.
How long does it take to change to an accountant?
Changing accountants is a simple process that can take anywhere between a few days and a few weeks, depending on the complexity of your financial records. The timeline includes finding a new accountant, transferring documents, and ensuring that the new accountant has a thorough understanding of your financial situation. Businesses with large accounts may require a longer onboarding period to ensure a smooth transition.
What is a change in the accounting period?
A change in the accounting period refers to an adjustment in the timeframe used to report financial performance. Businesses typically use either a calendar year (January to December) or a fiscal year (a 12-month period ending in a month other than December). Shifting from one accounting period to another frequently necessitates IRS approval and involves updating financial records to ensure continuity and compliance.
Why is there a shortage of accountants in the USA?
There is a lack of accountants in the United States for a number of reasons:
What is the 150-hour rule?
The 150-hour rule is a CPA licensure requirement that requires candidates to complete 150 credit hours of postsecondary education, which is 30 more than the standard bachelor’s degree. This rule was implemented to improve the quality of the profession, but it has been criticised for creating financial and time barriers. While the extra hours were intended to keep up with the increasing complexity of accounting, studies show little correlation between them and job performance. This requirement has been identified as a significant contributor to the declining number of CPA candidates.
Top quality ensured or we work for free
