CPA route is too expensive and not worth the time for young talent: AI to the rescue?

Companies seeking accountants to replace or reinforce their workforces will continue to find themselves stuck between a rock and a hard place. The human reinforcements aren’t coming in sufficient numbers.

Fact: The number of candidates sitting for the certified public accountant (CPA) exam dropped by 33% from 2016 to 2021. 2022 saw the fewest number of CPA test takers since 2006, according to the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA).

Don’t expect those numbers to improve anytime soon. Potential CPAs say they can’t afford to pay for the courses and sitting fees on their own, according to a new survey by the Pennsylvania Institute of CPAs. Students who were considering the CPA route said their No. 1 concern was lack of financial support such as scholarships. Their additional concerns were “exam preparation support, a mentor or coach, assistance navigating the licensure process, help finding an internship and understanding the variety of careers available to CPAs.”

Previous surveys by the AICPA and CIMA find up to three-quarters of students with the aptitude and desire to become accountants say it’s too expensive. The 150 credit hours needed to sit for the exam is also a major turnoff.

Salaries for entry-level CPAs vary by state but top out at about $90K per year. Graduates currently average $37K in student loan debt.

AI tools can fill many gaps – but oversight is needed

The good news is AI is making it easier – and cheaper – to fulfill companies’ accounting needs. Software tools geared toward specific tasks like bookkeeping may be the answer for some.

The top-selling programs can help finance pros manage their companies’ invoices, sales records, accounts receivable and payable, you name it. We expect AI will be utilized increasingly to automate tasks like fraud detection, investment management, risk assessment and tax compliance checks.

As always, the latest and greatest technologies like AI need savvy people steering the ship. AI provides a wealth of advantages but it’s not perfect. For example, law firms are learning that using AI tools to write briefs can lead to liability headaches, like witnesses’ names and addresses not being redacted! AI systems like the popular ChatGPT can make up sources and facts if they’re asked to do too much.

Case in point: The American Accounting Association compared how accounting students answered more than 28,000 questions on accounting assessments and textbook tests with ChatGPT. The contest wasn’t much of a contest: ChatGPT scored a 56 while the students earned a 76.

Even worse, testing showed ChatGPT made up facts. “For instance, when providing a reference, it generates a real-looking reference that is completely fabricated … the work, and sometimes authors, don’t even exist.”