is everything we think we know wrong?
by 卡塔尔世界杯常规比赛时间 research
for years, the accounting industry has been suffering from a chronic shortage of qualified professionals. decreasing numbers of students are majoring in accounting while increasing numbers of accountants ditch the profession in search of better pay, less stress, or just plain retirement.
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but what if the problem was simply about supply and demand? what if there wasn’t enough demand for accounting talent to maintain supply? two university researchers have a new theory that could upend everything we think we know about the so-called staffing shortage.
advocates for the profession, especially the aicpa’s national pipeline advisory group, have been trying to figure out why this is happening and how to plug the “pipeline leak.”
the suggested solutions have been the obvious:
- pay higher salaries, especially at entry levels.
- ease the requirements for certification.
- educate students about the true glories of the profession.
the npag has been implementing or advocating some of these solutions, but it’s too soon to know if they are working. so far, there’s been little if any improvement in the pipeline outflow.
meanwhile, two academics – ray ball, of the university of chicago, and andrew g. sutherland, of massachusetts institute of technology – have trained their scholarly eyes on the situation and come up with “three alternative options for reforming entry to public accounting, with the goal of reducing the cost of entry without compromising quality and, in doing so, increasing economic welfare.”
their paper, “the market for and licensing of public accountants: a review of the aicpa’s pipeline report,” approaches the problem from a different angle.
“the criterion we adopt when addressing these questions,” their paper says, “is maximization of economic welfare – essentially, what public accounting contributes to the economy as a whole.” (bold added.)
it’s the economic welfare, stupid
by looking at the situation through a filter of maximizing what accounting does for the economy rather than the filter of maximizing the number of accountants in the economy, the authors come to different conclusions.
one thing they object to is “the pipeline pledge” that the npag report calls for. the pledge is meant to express individual commitments to activities that will positively impact the talent pool.
to which ball and sutherland say, “we are skeptical of the npag’s approach. collectivist solutions invite rational free-riding. flag-waving might be of marginal assistance but is unlikely to alter the basic facts about accounting careers that have led to the decline in entrants to the profession: both higher entry costs and lower compensation than in other college majors, followed by the need to study for and pass the cpa exam.”
the professors believe that the situation can be better understood by viewing the dribbling pipeline as “an equilibrium outcome, driven by the distinct supply and demand forces affecting accounting in recent decades.”
so much for the pledge
this equilibrium, they say, is the result of supply forces – unproductive educational requirements and licensing restrictions – meeting demand forces – the emergence of automation technology and the potential for offshoring work.
in other words, accounting firms don’t need so many recent grads because firms are satisfying their clients with tech and offshore staff. salaries, therefore, are lower than they would be if demand were higher.
with salaries below those of related professions, and with the burden of 150 college credits and then the need to pass the cpa exam, students naturally opt for business or finance majors.
sure, employers could fulfill their pledge with higher salaries, but would that last for long if the resources were better invested elsewhere, such as technology or offshore labor?
the academics’ three solutions to maximize the general economic welfare:
- abandon the 150-hour rule, an experiment they say has failed, increasing the cost of entering the profession without a commensurate increase in benefits. as the authors put it, “we do not see the ‘pipeline’ problem being resolved without a substantial reduction in the cost of entry to the profession.”
- make the cpa exam the sole requirement for obtaining a cpa license. if it doesn’t “thoroughly test applicants’ knowledge and their ability to apply that knowledge, perhaps it should be revised.”
- establish a certification regime option to accompany the legal licensing regime. both could exist, but many consumers of accountancy (e.g., small private firms) would be able to fulfill their needs without the cost of unneeded expertise.
and with that, the ball’s back in the npag’s court.