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US accounting qualification reform causes conflict within the industry


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According to the agency representing the country’s largest auditing firms, a plan to reform regulations on standards for accountants in the US could expose companies to discrimination lawsuits and create more. barriers when entering this profession.

In a separate comment letter seen by the Financial Times, the Center for Audit Quality – which represents the Big Four and other major firms – condemned the proposed reforms as “unnecessarily complex” and said know they can “introduce unconscious bias” into the quality assessment process.

The CAQ’s intervention puts major auditing firms at odds with the two bodies that set regulations on how to qualify as certified public accountants – the American Institute of CPAs and the National Association of Accountants – over How to prevent the decline in the number of recruits.

The AICPA and Nasba in September proposed eliminating the requirement for accountants to complete the equivalent of five years of college education, one year more than a traditional college degree, a regulation blamed for causing Young people do not want to enter the profession.

The two bodies have proposed an alternative route to achieving the qualification: replacing the fifth year of study with a requirement that companies have one year of on-the-job training, during which the business must certify that the employer The application has acquired dozens of specific professional and technical skills.

Liz Barentzen, vice president of CAQ, wrote in a comment letter sent last month that the framework’s “exhaustive list of capabilities, performance indicators, and assessment requirements creates a complex system.” unnecessary and may be difficult to implement consistently across jurisdictions.”

And she adds: “Qualitative assessment frameworks can introduce subjectivity and unconscious bias into the assessment process, potentially creating employment-related problems (e.g. : claims of discrimination) that would not otherwise exist.”

The shortage of accountants has begun to become a risk factor in the financial disclosure of some companies, and some small accounting firms have withdrawn from niche businesses such as auditing. for local government. Industry leaders have warned that larger companies could experience recruitment problems if the trend is not quickly reversed.

The number of people taking the CPA exam has dropped from a peak of more than 100,000 in 2016 to a 17-year low of more than 67,000 in 2022, and after a small increase last year, the AICPA predicts continued decline in short term. The number of young people taking accounting courses at university has been decreasing in recent years, as they move towards more entry-level jobs in finance or technology.

The CAQ has argued that addressing the shortage needs to involve broadening the appeal of accounting to students from a variety of backgrounds, for whom the cost of a fifth year of university can be prohibitive. can be especially difficult.

The AICPA and Nasba have committed to providing public comment on their proposals by early 2025.

Sue Coffey, executive director of public accounting for the AICPA, said that they “received helpful, diverse feedback” on their proposals.

“It is important that licensure pathways are clear and attractive to students. Working with Nasba and various stakeholders, we will know more over the next month about what this looks like,” she said.

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