Accounting
Why accounting firms are bleeding talent
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The talent shortage facing the accounting profession is well known at this point, as graduates with accounting majors are deterred by stagnant wages and a lack of education on career paths — while existing accountants leave the field entirely. Amid this identity crisis, firms are starting to look inwards for solutions.
Data from the most recent
But many in the field say the hurdles to becoming a licensed CPA, including the test itself, are simply not worth the payoff.
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“Tuition costing six figures, 150 credit hours just to sit for the exam and a median salary of $79,880 just isn’t going to get most younger people out of bed in the morning when they can work from their couch making money doing things they’re interested in and have a flexible schedule,” said Erin Andrews, owner of the Vero Beach, Florida-based firm Level Accounting & Advisory.
Andrews highlighted the proliferation of social media personalities and private-equity firms encroaching on the accounting space as “supposed” experts, driving the consumer demand for increased availability and devaluing licenses.
“Being available and offering a great client experience seem to be more important than having letters after your name today,” she said.
Some organizations seeking to address this disparity are developing their own training regimens and partnering with outside trade groups to expand recruitment efforts.
In addition to partnering with the National Association of Black Accountants and Future Business Leaders of America,
The New York-based
Zachary Gordon, a CPA and chairperson of the New York State Society of CPAs’ digital assets committee, said technology isn’t just essential for addressing the immediate effects of the shortage, but is also shaping the evolution of the profession.
“AI will help to complete mindless, repetitive tasks and allow talent to shine with higher-value aspects of an engagement. … Accounting becomes less about commodities like a tax return or financial statements and more about being a trusted advisor providing tangible value to clients,” Gordon said.
Tod McDonald, a CPA and co-founder of Valid8 Financial, agreed with the sentiment, highlighting how today’s artificial intelligence-powered tools allow what was once lengthy data preparation to be completed in hours as opposed to weeks.
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Outside of wages and upward mobility, the profession’s long hours and general lack of flexibility are driving away younger professionals.
Major firms like Ernst & Young recognize these shifts, and are developing plans to address some of the core issues. The organization’s U.S. firm plans to
“There was a time where working ridiculous hours during busy season and not seeing your family was a badge of honor,” said Dean Sonderegger, general manager of research and learning at Wolters Kluwer Tax and Accounting. “Many younger employees no longer feel this way and are looking for more balance between their work and personal lives … and are attracted to firms that are more flexible.”
Read on to find out more about the depth of the talent shortage and how seasoned advocates for the profession are working to bring future generations of talent into the fold.
AICPA collaborates to help tackle talent shortage
Amid the growing talent shortage facing the profession, the American Institute of CPAs worked with the National Association of State Auditors, Comptrollers and Treasurers to publish a
One of the main disparities highlighted in the report is the differences in accounting and auditing standards between those working in the government and private-sector markets. CPAs working in the public sector often come with specialized expertise in certain areas, but salaries and audit fees aren’t always commensurate with that knowledge.
“We have a talent shortage in accounting that affects business as a whole, and many of the pipeline initiatives the profession is putting in place will help the public sector as well,” Susan Coffey, the AICPA’s CEO of public accounting, said in a statement this month.
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The top MPs building out the talent pipeline
When it comes to top leaders working to stem the outflow of professionals from the world of accounting, the eight honorees on Accounting Today’s
Public perception, tighter partnerships with colleges and universities, broader education regarding career paths in accounting and more are all areas in which the MP Elite are working to make changes both within their firms and across the profession. These recommendations are designed for deployment right away, or as part of long-term strategies.
“The accounting profession faces a significant challenge in how it’s perceived, particularly by younger generations,” Christopher Geier, chief executive of Sikich, told AT. “To combat this, we need to launch a multitiered education and awareness campaign.”
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Staffing spotlight shifts from seniority to skill sets
Recruiters are starting to focus less on how long a candidate has been in accounting and more on
At the heart of the trend are a host of factors — a lack of education on career opportunities being one of the most significant.
“Accounting is not a linear profession, and aspiring accountants are often not informed about the various paths they can pursue. … As a result, early-career professionals may struggle to envision the long-term utility of myriad opportunities associated with pursuing accounting and tax as a profession,” said Paul Bryant and Stan Hannah, partners at Plante Moran.
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The talent shortage creates a proving ground for firms
Fewer and fewer college students are choosing to major in accounting, making those who do a valuable asset to firms of any size. But what can companies do to distinguish themselves from their competitors?
“These successful firms will achieve this by creating a culture that fosters mutual support, offers meaningful career opportunities, promotes team cohesion and ensures both personal and professional fulfillment,” Eric Abati, CEO of San Antonio-based Regional Leader ATKG Advisors, said in an interview with AT’s
Abati represents one perspective of leaders — those focused on changing the tried-and-true corporate culture that is standard throughout the accounting profession — while others focus on career mapping and wage disparities.
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What will it take to fix the pipeline issue?
Andrey Popov/Andrey Popov – stock.adobe.com
Competitive wages, ample preparation for certification exams and a rebranding campaign. These are just a few of the recommendations that experts with the National Pipeline Advisory Group shared for how employers can do their part in addressing the staffing shortage.
“With so many of the themes we uncovered, the solutions lie at the employers’ feet,” Jennifer Wilson, who served as facilitator for the group’s work, told attendees at the AICPA Engage Conference in June. “We’re going to have to make changes. We need to take responsibility as employers for these solutions.”
Salaries were the first up, as data from the group’s report found that only one in nine business majors selected accounting as their major, as the others were able to obtain a higher salary in a more competitive industry.
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The shadow knows; body of evidence; make a Note of it; and other highlights of recent tax cases.
Newark, New Jersey: Thomas Nicholas Salzano, a.k.a. Nicholas Salzano, of Secaucus, New Jersey, the shadow CEO of National Realty Investment Advisors, has been sentenced to 12 years in prison for orchestrating a $658 million Ponzi scheme and conspiring to evade millions in taxes.
Salzano previously pleaded guilty to securities fraud, conspiracy to commit wire fraud and conspiracy to defraud the U.S., admitting that he made numerous misrepresentations to investors while he secretly ran National Realty. From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I, a real estate fund operated by National Realty, of $650 million.
Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors, advertisements, and meetings and presentations to investors. Salzano led and directed the marketing campaign that was intended to mislead investors into believing that NRIA generated significant profits. It in fact generated little to no profits and operated as a Ponzi scheme.
Salzano stole millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA. He also orchestrated a separate, related conspiracy to avoid paying taxes on his stolen funds.
He was also sentenced to three years of supervised release and agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses and $6.46 million to the IRS.
Marina del Rey, California: Tax preparer Lidiya Gessese has been sentenced to 41 months in prison for preparing and filing false returns for her clients and for not reporting her income.
Gessese owned and operated Tax We R/Tax R Us and Insurance Services from 2013 through 2019 and charged clients $300 to $800. Gessese would then prepare returns that included claims to deductions and credits she knew her clients were not entitled to, including falsely claiming dependents, earned income credits, the American Opportunity Credit, Child Tax Credits, business deductions, education expenses or unreimbursed employee business expenses. The illegitimate claims led to some $1,135,554.64 issued by the IRS for 2010 through 2018.
She failed to report, or underreported, her own income for 2010 through 2018, some of which included improperly diverted funds from clients’ inflated or fraudulent refunds, causing a tax loss of $488,276.
Gessese, who pleaded guilty in April, was also ordered to pay $1,096,034.01 to the IRS and $53,526.95 to her other victims.
Fullerton, California: In Chun Jung of Anaheim, California, owner of an auto repair business, has pleaded guilty to filing false returns for 2015 to 2022, underreporting his income by at least $1,184,914.
He owned and operated JY JBMT INC., d.b.a. JY Auto Body, which was registered as a subchapter S corp. Jung was the 100% shareholder.
Jung accepted check payments from customers that he and his co-schemers then cashed at multiple area check cashing services; the cashed checks totaled some $1,157,462. Jung withheld the business receipts and income from his tax preparer and omitted them on his returns.
He will pay $300,145 in taxes due to the IRS and faces a $250,000 penalty and up to three years in prison. Sentencing is Jan. 31.
Tucson, Arizona: Tax preparer Nour Abubakr Nour, 34, has been sentenced to 30 months in prison.
Nour, who pleaded guilty a year ago, operated the tax prep business Skyman Tax and for tax years 2016 through 2018 prepared and filed at least 27 false individual federal income tax returns for clients.
These returns included falsely claimed business income that inflated refunds so that he could pay himself large prep fees. Nour’s clients had no knowledge that he was filing false tax returns under their names.
Nour was also ordered to pay $150,154 in restitution to the United States for the false tax refunds.
Farmington, Connecticut: Tax preparer Mark Legowski, 60, has been sentenced to eight months in prison, to be followed by a year of supervised release, for filing false returns.
From January 2015 through December 2017, Legowski was a self-employed accountant and tax preparer doing business as Legowski & Co. Inc. He prepared income tax returns for some 400 to 500 individual clients and some 50 to 60 businesses.
To reduce his personal income tax liability for 2015 through 2017, Legowski underreported his practice’s gross receipts by excluding some client payment checks. He then filed false personal income tax returns that failed to report more than $1.4 million in business income, which resulted in a loss to the IRS of $499,289.
Legowski, who
Wheeling, West Virginia: Dr. Nitesh Ratnakar, 48, has been convicted of failing to pay nearly $2.5 million in payroll taxes.
Ratnakar, who was found guilty of 41 counts of tax fraud, owned and operated a gastroenterology practice and a medical equipment manufacturer in Elkins, West Virginia. He withheld payroll taxes from employees’ paychecks and failed to make $2,419,560 in required payments to the IRS. Ratnakar also filed false tax returns in 2020, 2021 and 2022.
He faces up to five years in prison for each of the first 38 tax fraud counts and up to three years for the remaining counts.
Orlando, Florida: Two men have been sentenced for their involvement in the “Note Program,” a tax fraud.
Jasen Harvey, of Tampa, Florida, was sentenced to four years in prison and Christopher Johnson, of Orlando, was sentenced to 37 months for conspiring to defraud the U.S.
From 2015 to 2018, they promoted a scheme in which Harvey and others prepared returns for clients that claimed that large, nonexistent income tax withholdings had been paid to the IRS and sought large refunds based on those purported withholdings. The conspirators charged fees and required the clients to pay a share of the fraudulently obtained refunds to them.
Overall, the defendants claimed more than $3 million in fraudulent refunds on clients’ returns, of which the IRS paid about $1.5 million.
Both were also ordered to serve three years of supervised release. Johnson was also ordered to pay $864,117.42 in restitution to the United States; Harvey was ordered to pay $785,858.42 in restitution. Co-defendant Arthur Grimes will be sentenced on Jan. 13.
Ft. Lauderdale, Florida: Tax preparer Jean Volvick Moise, 39, has been sentenced to three years in prison for filing false income tax returns.
Moise prepared false returns for clients to inflate refunds. He prepared returns which included, among other things, false dependents, false 1099 withholdings, false educational credits and false Schedule C expenses, often for businesses which did not exist. Moise’s fee was larger than the typical one charged by a tax preparer.
Moise filed hundreds of false returns that caused the IRS to issue more than $574,000 in fraudulent refunds.
With 2025 almost upon us, it’s worth thinking about what the new year will bring, and what accounting firms expect their next 12 months to look like.
With that in mind, Accounting Today conducted its annual Year Ahead survey in the late fall to find out firms’ expectations for 2025, including their growth expectations, their hiring plans, their growth expectations, how they think tax season will play out and much more. The overall theme: Thing are going well, but there are elements of friction holding them back, particularly when it comes to moving to more of a focus on advisory services.
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