Quick Overview

  • Deloitte, one of the Big Four accounting firms, has joined a growing industry chorus supporting an alternative path to CPA licensure that substitutes work experience for 30 of the 150 college credits typically required. The position was stated by a Deloitte spokesperson via email to CFO Dive.
  • "Attracting more CPAs is good for our profession and in the public interest," Deloitte said in an email Thursday. "Therefore, as an alternative to the current fifth-year education requirement for CPA licensure, Deloitte supports an experience-based path to licensure."
  • Deloitte clarified its position over the weekend, following KPMG, another Big Four firm, which had already expressed full support for the proposal gaining increasing traction within the industry. KPMG US Chair and CEO Paul Knopp said Wednesday that the accounting talent shortage is a "brewing crisis" that needs to be addressed in the "near term," CFO Dive previously reported.

Deep Dive

About a month before Deloitte and KPMG publicly weighed in, the American Institute of CPAs (AICPA) shifted its stance on the issue and formally moved forward with increasing pathways and flexibility for licensure to address the accounting talent shortage.

The accounting association had previously opposed reducing credit requirements, fearing it could lead to inconsistent licensing rules across states, potentially hindering CPAs from practicing across state lines, a concept known as "mobility." This concept is tied to the uniform licensing system widely adopted by states in recent decades, CFO Dive previously reported.

Deloitte emphasized the need to preserve mobility in its statement. "As a national firm, we also believe that any changes should support automatic mobility to ensure all CPAs, regardless of the path by which they obtained their license, can practice in all U.S. jurisdictions," it said.

Jack Castonguay, an associate professor of accounting at Hofstra University, said the support of the Big Four is crucial to advancing the initiative. He noted that a Minnesota bill to establish an alternative licensure path had stalled, and to his knowledge, it did not have the support of the Big Four. He said this in an email response to CFO Dive.

"This is significant," Castonguay said. "Without Big Four support, I doubt the AICPA and NASBA would have even issued an exposure draft. They need the support of these firms to make meaningful changes to the Uniform Accountancy Act."

He also said the 150-credit rule is costly for students, even though research shows the additional 30 credits have no impact on audit quality or the quality of CPA candidates. He added that it makes sense for firms to support fixing a system that has proven to be of no value yet significantly shrinks the talent pipeline.

"Also, it's essentially costless for the Big Four—supporting this doesn't add expense to their training model. Whether new hires come in with 120 or 150 credits, they still have to be trained," Castonguay said.

Separately, many in the industry are also pushing for higher starting salaries in accounting, which is key to leveling the playing field with other finance graduates, who often earn more in their early careers, CFO Dive previously reported. According to a report citing data from the National Association of Colleges and Employers, the average starting salary for 2022 graduates in accounting and related services was $60,698, the lowest among seven business-related majors.

Deloitte did not immediately respond to a request for further comment to clarify the specific scope of its support. PwC and EY, the other two Big Four firms, also did not immediately respond to requests for comment.