Key Takeaways

  • A biennial report from the American Institute of Certified Public Accountants (AICPA) shows that the number of undergraduate and graduate accounting graduates in the U.S. for the 2023-2024 academic year fell 6.6% year over year, a narrower decline compared with the 9.6% drop in the prior academic year and the 7.4% decline in 2021-2022.
  • Citing provisional data from the Integrated Postsecondary Education Data System (IPEDS) under the U.S. Department of Education, the report noted that the number of accounting master's graduates plummeted 15% during the period, while undergraduate accounting graduates fell only 3.3% year over year.
  • "While the supply of accounting graduates continues to contract, it is encouraging that the rate of decline has slowed each year," Jan Taylor, academic in residence at AICPA, said in a statement accompanying the report on Monday. "This suggests that some of the initiatives the profession has implemented in recent years are beginning to show results."

Deep Dive

The graduate data comes as multiple initiatives launched by the accounting profession to address years of talent shortages and reverse the decline in the supply of accounting graduates are gradually taking shape. Meanwhile, countervailing forces such as corporate overseas hiring and automation are also easing demand pressures.

To reverse the talent decline, industry leaders have pushed to eliminate the hard requirement that Certified Public Accountants (CPAs) complete 150 college credit hours, offering new licensure pathways instead. These new pathways typically substitute a second year of work experience for the semester credit requirement equivalent to five years of higher education—which has been seen as one of the major barriers preventing more students from entering the profession. To date, at least 23 states have modified rules to allow alternative CPA pathways, with more states expected to follow next year, CFO Dive previously reported.

College students may already be taking note of these changes, the report shows: according to data from the National Student Clearinghouse Research Center, the number of students enrolled in college accounting programs rose 12% year over year last year. Looking ahead, demand for accounting graduates is growing, with 75% of employers that hired new accounting graduates in 2024 expecting to maintain or increase hiring this year.

However, the report also presents a mixed outlook. Those hoping to see more signs of a strengthened talent pipeline found little comfort in the report's data on students who passed the fourth section of the CPA exam in 2024. Last year, a total of 13,070 students passed the fourth section, a significant decline from 19,382 in 2023.

The report attributes the "significant decline" in the number of CPA exam candidates passing to recent changes in reporting methodology, noting that most candidates' fourth-quarter scores will be counted in the first quarter of 2025. "This impact will be mitigated in 2025, as the AICPA will resume releasing scores to NASB on a rolling basis throughout the year," the report said.