Ready, Set, Sit!

Keeping CPA exam candidates on track. What are firms doing to help? Join the survey; get the results.

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 market, 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 bachelor or master’s degrees 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.

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.

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 passed, 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 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: http://cpazone.org. 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 at http://macpamedia.org/media/video/SwearingIn08.wmv.  “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.

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. First published by the AICPA.

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Posted at August 4, 2008
Filed Under BSG [CPA TRENDLINES] | 8 Comments

Comments

8 Responses to “Ready, Set, Sit!”

  1. Warrren P. Bedminster CPA on August 4th, 2008 2:03 pm

    Rick,

    All of these efforts are good. But I think it really comes down to us, ourselves, as practicing CPAs. We must accept the responsibility of stewardship that being a member of a learned profession requires. To that point, we must treat our firms, our colleagues and our legacy as if we want our kids to go into the profession. That’s the question, Do you want your kids to go into the profession? If so, what kind of profession do you want for them?

    Just my two cents.

    Keep up the good work, Rick. Always interesting!

  2. Tom Hood on August 5th, 2008 5:51 am

    Rick,

    I agree with Warren and would like to add to his comments – What seems to be missing is the rituals and culture that we had developed in the old paper-based world of May & November. Remember when partners and even CPAs in Indusry would come around and ask who is sitting? That does not happen much if any now. In fact we are now a Profession where most of our senior members adn leaders (partners & CFOs) do not know the new rules and procedures to advise young people on how to become a CPA.

    Think about what impact that must have on young candidates?

    We need a stronger sens of stewardship and a commitment to reinstitute new rituals and celebrations that will make the CPA exam special again.

  3. Tim Bowman, CPA on August 5th, 2008 7:33 am

    Rick,

    A forty percent pass rate? Are we dumbing down the requirements to alleviate the shortage?

    Tim Bowman, CPA
    Controller
    Biltmore Construction

  4. Linda Wedul on August 15th, 2008 11:34 am

    Hi Rick,

    Read your post titled Ready, Set, Sit. Thanks for mentioning state societies that are helping CPA candidates navigate the exam process. I couldn’t help passing on to you that the Minnesota Society of CPAs has a Web based tool to help the exam candidates and their employers track their progress. It is called ExamTracker.

    http://www.mncpa.org/career/ExamTracker/login.asp

    We have had it for 2 years now and have had 455 accounts set-up since we launched it. Besides helping the candidate track their progress, there is also firm administrator component built into ExamTracker. A firm administrator can see the employees of their firm who have an ExamTracker account, view the scheduled test dates, and score expiration dates. Besides helping the candidate, we felt it was equally important to help the employer be supportive during the exam process.

    lw

    Linda Wedul, CAE Director of Member Relations and Marketing
    Minnesota Society of CPAs
    Bloomington, MN

    http://www.mncpa.org

  5. Donald Meyer on August 18th, 2008 3:57 pm

    Rick,

    Thanks for your post about keeping CPA Exam candidates on track. I agree with Tom that the best way to encourage these young professionals is simply by talking to them. Asking an exam candidate “when are you sitting” may be the best way to motivate them to take the next step.

    By the way, here’s a link to NJ’s CPA Exam Cram blog that Rick mentioned in his post – http://njscpa.typepad.com/examcram/. 20,000 page visits and counting.

  6. Lynda M. Dennis on September 8th, 2008 2:16 pm

    To get exam candidates motivated and on track to sit for the exam, you have to begin in the undergraduate classroom. Many faculty are probably more unaware of the exam process today than the partners/managers and executives in public accounting and the private sector, respectively. An emphasis in the classroom of the importance of the CPA brand is crucial in helping students differentiate between an “accounting degree” and the “accounting profession”. Helping students understand the importance of accounting as a profession will motivate them to seek the CPA brand. Once motivated, candidates will be eager to take on the “exam” phase of our professional credentialing process. In turn, they will demand prospective and ultimate employers provide them the resources they need to be successful in this endeavor.

  7. Warren on September 9th, 2008 3:36 pm

    Lynda: And how, exactly, do you expect CPA firms to get college professors on board? As far as I’m concerned, accounting professors are the biggest waste of time I’ve ever seen. IMHO.

  8. Lynda M. Dennis on September 10th, 2008 10:07 am

    I agree with Warren that many faculty are not connected with practitioners or the “real world”. Unfortunately, many of them spent little or no time working in public accounting or private industry. Many faculty are also not CPAs or have not kept their licenses active which is a real shame. To get accounting faculty engaged, perhaps firms and companies could create learning opportunities for faculty via on campus student organizations such as Beta Alpha Psi or the Student Accounting Society. Other options might be to get state societies involved in reaching out to and educating the academic community. For example, in Florida, the FICPA volunteer leadership has made it a priority this year to reach out to the academic community in an effort to have them more involved in FICPA activities and committees.

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