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Letters to the Editor: A pipeline problem solution, and more

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Accounting Today’s readers often weigh in on our articles; some of their ideas and comments are below.

A proposal for accounting’s pipeline problem

I enjoyed your interview with Jennifer Cryder regarding future CPA licensure requirements. I have the solution. It’s really quite simple, but it would ruffle a lot of feathers: Abolish the education requirement. Let anyone take the CPA exam if they think they can pass.
 
As you know, the cost of college has gone up much faster than the cost of living. There are a number of reasons for that, but the reasons are really irrelevant for purposes of finding a solution to the CPA shortage problem.
 
Fewer people are becoming CPAs because they do a cost-benefit analysis. They know that they have other options. At least half of the courses students have to take to get a college degree are irrelevant for purposes of preparing for the CPA exam, and many of the liberal arts courses offered these days are more indoctrination than education at some universities.
 
Students only need about 15 classes to prepare for the CPA exam. That’s 45 semester hours. If the 150-semester-hour requirement were abandoned, they would be able to save 70% [(150-45)/150 = 70%] on their college education. And of course, we cannot forget the opportunity cost savings. Since they could enter the job market two or three years sooner, their lifetime earnings would increase by $100,000 or more.
 
University professors and administrators would scream at the thought, but so what? Students who want to earn a college degree would still be able to earn a college degree, but they would not have to. They would have a choice.
 

Technical (and business) certifications have proliferated in recent years. They serve a useful purpose. Students should not be forced to take English literature, poetry, biology, history or political science courses to qualify to sit for the CPA exam. If they have accumulated the knowledge they need to pass the CPA exam, it should not matter how they acquired the knowledge, or whether they have a college degree that is 50-75% irrelevant. Standards would not be adversely affected by abolishing the 150-hour requirement because the exam would remain the same. With more people entering the profession, competition would increase, which would be good both for the profession and for the general public.
 
Requiring 120-150 semester hours of college credit to sit for the CPA exam also has a disparate impact on poor and minority students, since they are the ones who can least afford a college degree. Abolishing the education requirement would be a big boost for them and would reduce the income inequality gap that now exists among the races.

 — Prof. Robert W. McGee 

Broadwell College of Business and Economics, Fayetteville State University

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Is accounting’s sun setting or rising?

In response to an editorial asking if the profession was on the rise or in decline, readers shared their thoughts.

There has been a shortage of doctors for years. The answer has become to allow “nurse practitioners.” If there aren’t enough CPAs, non-CPA accountants will be allowed to do certified audits.

Also, technology has changed all of the professions, not just CPAs. Doctors, lawyers and engineers are affected. Technology has allowed doctors to be more efficient and has taken away a lot of procedures that used to be done manually.

The Big Four are the leaders and had better wake up. CPAs require better pay to attract new professionals.

— Ronald Dearman, CPA

Treasurer/controller, Freedom Trucks LLC

Markets are made by supply and demand. The demand side of the profession is as strong as it’s ever been and I believe it will only get stronger. The supply side of the equation is where all the challenges are.

It is undeniable that interest in making a career in the profession is problematically impaired. The only way out is business model transformation to make a career in accounting a dream job again, so that people have the trusted advisors they need.

We think the ingredients for that are corporate governance, strong leadership, ambitious and well-resourced strategies, growth capital, innovative technology, effective outsourcing and modern currencies for rewarding your people. If you do not have these, I think your sun is setting. If you do, the future is very bright.

—David Wurtzbacher

Founder and CEO, Ascend

What unites accountants?

I’m responding to an article that asked what unites people who work under the (broadening) umbrella of the accounting industry. In my opinion, what unites people working in the accounting industry, with all kinds of different titles, and with all kinds of different backgrounds, is three-fold: 

  • A desire to help others. Whether in public accounting, public companies or in private firms, advisors seem motivated by serving others. To know that they have helped an entrepreneur, a family, or an organization brings meaning and purpose to their lives. I have found this by asking — a lot — why do you do this work? (I’m not an accountant, but have lived in a CPA firm most of my life, and I wonder … .)
  • More specifically, that “service” takes the shape of supporting decisions — whether clarifying information or evaluating options, they are often trying to help a business, business owner, or client with the decisions they are trying to make. I sometimes joke that we are “DSOs” — Decision Support Officers — for the companies we serve. Some of that is financial-related, but a lot of the support is for decisions that have very little to do with finances, and a lot to do with strategy, customers, family members, etc.
  • In addition to supporting decisions, my other observation is that what leaders are looking for, and what advisors (by whatever name) provide, is certitude. To help understand what happened, to forecast what will happen, to make recommendations about what could happen — all of that is united by a goal of providing an element of certainty into the planning, evaluation, and decision-making process. 

One other thing I think a lot about is the accounting-related advisor as the “most trusted” advisor. So many issues surround the financial aspects of business and personal lives, it puts the advisor with ties to accounting in a very important and trusted position. Many times, the root issues of a decision are not financial, but money is where the issues “show up.”
Whether it is friendship, fellowship, or feedback, advisors in the accounting industry help the people they work with feel a lot less lonely!  

— Lance Woodbury

Principal, Pinion

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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