A negative impression many have of accounting coupled with equal or better pay in other professions have resulted in fewer Arkansans entering the accounting field.
“The CPA passage rate is about the same, but the number of people sitting for the exam has dropped,” said Barbara Angel, executive director of the Arkansas Society of CPAs.
“There is some thought that that is due to Arkansas’ requiring 150 hours of education to sit for the exam, which essentially means a master’s in accounting. But in California, they still require only 120 hours, and the number of people sitting for the exam there is down, too.”
Fifteen years ago in Arkansas, some say, 600 would sit for the exam.
But James George, CPA, the executive director of the Arkansas State Board of Public Accountancy, said 297 is the largest group that sat for any one part of the most recent exam.
“Approximately 53 completed the section of the exam they needed to become CPAs,” George said. “Considerably fewer passed all four parts in their first sitting.”
George is one who believes the 150-hour requirement adopted in May 1998 is “one of the main contributing factors to the dropoff.”
“The dropoff has been considerable nationwide. There are other factors. The job market and especially information technology come into it because they can have more lucrative pay without having to sit for a strenuous professional exam,” he said.
“There are doctoral dissertations and magazine articles being written on the dropoff and why it it happening. People are also looking at the passage rate, trying to decide whether the 150-hour requirement has helped passage rates.”
But Bill Foster, a partner with Jones & Co. Ltd. in Jonesboro, agreed with Angel that the 150-hour requirement was not to blame for the drop in new CPAs over the past several years.
“I don’t think it has any bearing,” Foster said. “The American Institute of CPAs conducted independent academic studies and concluded that 150 hours is not a factor in the number of people taking the exam. Overall, there has been an increase in the number of students getting 150 hours … but they’re doing it in other fields.”
Foster considers the higher requirement “a good thing for the profession because we need more well-rounded people … with general business knowledge, communication skills, and a host of attributes out there that these kids should be picking up with the extra hours and experience.”
Don R. Smith of Thomas & Thomas CPAs in Little Rock said the 150-hour requirement had had a short-term impact on the number of candidates sitting for the exam because it “took out a certain group of people.”
Angel said fewer were sitting for the CPA exam because accountants hadn’t explained their job well.
“A lot of people think of accountants wearing a visor, crunching numbers behind a desk all day and doing taxes,” Angel said. “They think it’s a pretty boring job. But CPAs do a lot more than that. There are CPAs in law enforcement, the legal profession, corporations and all sorts of different jobs.”
To combat the myth of accountant as bookkeeping slave, the Arkansas Society of CPAs and the American Institute of CPAs are reaching out to high school and college students through television commercials and classroom presentations.
In each of its 12 chapters, Angel said, the Arkansas Society of CPAs’ liaison appoints CPAs to make presentations to high schools, using recruitment materials from the American Institute of CPAs.
“We’re concentrating on the high schools now,” Angel said. “In the past, we concentrated on colleges more. But we’ve found that high school students haven’t made their minds up yet about what they’re going to do.”
With the advent of computers, Foster said, the accounting field is much more than number crunching.
“Computers have allowed us to free up our time to do all these other services for our clients instead of having to sit and add up columns of numbers,” he said.
The shortage of new accountants means the profession is having to pay more, Foster said.
“We have to pay incoming CPAs more now than we used to. I would guess that the minimal entry-level salary for a CPA is $30,000. And with fewer graduates coming out, they are able to command a higher fee coming in.”
Thomas & Thomas’ Smith pegged the entry-level CPA’s salary at $28,000-$36,000.
“A new CPA’s salary depends on the applicant and where they are going,” Smith said. “There has not been rapid growth that there has been in the past. Dallas right now is really a sellers’ market. Very few national firms pay overtime now, so the $28,000-$36,000 that I might pay will be more with overtime.”