Canada needs more CPAs, here’s how to attract them
Mitchell Stein, an associate professor of managerial accounting and control at the Ivey Business School, recently had what struck him as a revealing conversation with a student at Western University. A psychology major, she had taken a business accounting course as an elective and discovered, somewhat unexpectedly, that she enjoyed the discipline enough to transfer into Ivey's program. She then secured a summer job at an accounting firm, and also consulted Prof. Stein for his advice on this shift just before she began the work program.
He told her she seemed to have an aptitude for accounting and urged her to pursue it. “One thing that stuck out at me,” he recounts, “is that she said, `I'm starting this in the next week or two, [but I] need to catch up on summer courses and if I don't like it in a couple of weeks, I'm not going to do it.’”
The exchange dovetailed with similar sorts of feedback he’s heard lately from commerce or accounting-focused students. “They talk to their peers, and [the internship] is maybe not too exciting, or the first month is not too exciting, and they say, ‘it's not for me.’”
Other accounting educators point to an expectations gap that dissipates once young people get going in their careers. "There might be a bit of a misconception of what the profession entails versus what it actually is and what it offers," observes Catherine Barrette, an associate professor in the teaching stream at the Rotman School of Management. "Some of those misconceptions are that the profession is a little bit rigid and or would limit what you can do afterwards, which actually is quite contradictory when you see CPAs in the workplace and where they end up five or ten years after graduation."
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There’s nothing especially new about young people zig-zagging through those early academic and work-related experiences as they try to figure out what suits them best. Yet in the aggregate, the sorts of stories that reach Prof. Stein and many other accounting educators tell about the diminishing lustre of the CPA badge seem to be at odds with what those in the profession feel—revealing the contours of what has become, for some, a deeply worrying imbalance between the supply and demand for CPAs.
A labour market survey conducted by CPA Manitoba, for instance, found that 45 per cent of the province's accountants felt confident that the value of the designation has remained consistent, and another 36 per cent saw it gain in importance. Yet Manitoba, like many other parts of the country, has seen some stagnation in new entrants.
The ranks of CPAs working in Canada has not changed meaningfully since 2011, yet the population, the numbers of tax filers and the size of the labour force have risen in the same period. There are 20 per cent more small businesses today compared to 2011, yet the profession’s productivity gains have not kept pace with these trends, according to CPA Canada data.
An online survey of almost 200 HR managers conducted late last year by recruiting giant Robert Half found that 40 per cent reported difficulties in filling internal accounting positions and over a third were concerned that the resulting backlogs were leading to accounting inaccuracies. Half attributed these responses to “a shrinking talent pool.” In the U.S., the Wall Street Journal reported earlier this year that tax preparation firms and the Big Four were scrambling to find accountants abroad to handle returns before the filing deadline.
The consequences of this pipeline crisis—for capital markets, government institutions, and individuals—are bracing. “There is a decline, and it's not just in Canada,” says Rotman School of Management accounting professor Irene Wiecek, who sits on the newly established accountancy education panel of the International Federation of Accountants (IFAC). “The cost to society is huge.” Absent a sufficient supply of CPAs, companies will find themselves scrambling to carry out a wide range of tasks, from internal controls to public disclosure and compliance. Governments and society more generally rely on the profession for tax advice, tax collection, and assurance services guaranteeing the integrity of public markets. It's not an overstatement to conclude that accountants are an integral part of the modern economy, with its dual reliance on the wealth-generating function of the private sector and the responsibility of government to raise the funds needed to provide the services required in a highly diverse society.
“There are key tasks, that are economy wide, that are done by accountants, such as tax administration for individual businesses,” adds David-Alexandre Brassard, CPA Canada's chief economist. “They need to be done in a timely way, and they need to be done at low cost. If you don't have enough accountants, the timeliness part is an issue, and the cost part is an issue as well.”
Wiecek points to other concerns related to the shortage of accountants, such as the steadily expanding standards and regulations governing the disclosure of hard information about corporate environmental performance. She cites the latest set of sustainability reporting requirements adopted recently by the European Union, which may impact Canadian firms supplying to European companies. “Anybody who has this footprint in the European Union, whether they're listed or not on public markets, requires this additional reporting, and then they need it to be assured as well.”
While the cascading impact of the decline is apparent, the reasons behind it are multi-faceted and therefore challenging to confront. What’s more, Canada is by no means alone in experiencing a decline in enrolments and graduations. Similar trends have been observed in the U.S., Europe and Asia, but not in regions such as Africa and India.
Accounting educators in Canada concede they need to do a better job at communicating the full range of career opportunities made available by an accounting degree so that it appeals to a generation of young people more interested in disciplines like sustainability or analytics than conventional auditing. As Andy Thomas, CPA Canada's vice-president of pre-certification education, says, “There are some very exciting stories to be told there, and maybe we need to get out there and do a better job of telling those stories.”
Since the beginning of the COVID-19 pandemic, American accounting organizations have been reporting disquieting statistics about an accountant shortage, including low retention rates for accounting students. The American Institute of Certified Public Accountants (AICPA) in 2021 revealed that the number of first-time candidates sitting for CPA exams plunged by a third between 2016 and 2021, from over 48,000 to about 32,000. The following year marked the lowest number of exam takers since 2006, and far fewer candidates are passing their tests.
In 2023, a survey published by the Association of Chartered Certified Accountants (ACCA) found that the profession is being buffeted by stagnating wages, hybrid work arrangements and burnout, while career mobility is seen to be driving a talent crunch. Technology is also playing a role, the ACCA found. “Faster pace of technological change in the profession is ‘turning off’ some people, especially the baby boomers; for others, there is the talk of AI taking over the work of the accountants—although most experts are not convinced that the latter will be happening anytime soon, if at all."
Andre Bellefeuille, president and CEO of the CPA Atlantic School of Business, says his institutions actually saw a slight uptick in new learners in 2024, but acknowledges the overall trend. His analysis of what's driving it, however, draws in an array of wider societal forces. “What we're seeing in the profession is no different than what we're seeing at grad schools,” he says. “I think it's more a function of demographics than people are willing to give credit to.”
Baby boomers swelled the ranks of the accounting profession, and every other job category, but the rate at which they’re retiring hasn’t been offset by new entrants. “We’re having the undoing of that at the other end,” Bellefeuille notes. “And the question becomes, can employers ask would-be employees to jump through the same hoops when there are ever more jobs available and less of a feeling of crisis over getting a job than, say, would have been the case for me when I entered the [labour force] in the 1990s.” CPA Canada’s Brassard adds that the average age of accountants in Canada, 47, is about five years older than the workforce overall, which means the retirement/replacement pressures are being felt sooner than in other sectors, and potentially more acutely than in the U.S. because our tax code is more complicated.
Taking a more sanguine approach, Bellefeuille argues that the ebb and flow of demographics, coupled with macro-economic trends, will largely sort out issues of supply and demand. Recessions traditionally lead to rising enrolments in professional programs, including accounting, and the COVID-19 Recession of the past few years has been no exception. There’s also some evidence that employers, responding to inflation-driven increases in the cost of living, have sought to become more competitive with their salary offerings. The Robert Half survey conducted last year found that 45 per cent of the responding firms were offering referral bonuses while 40 per cent had bumped up entry level salaries and 38 per cent were offering paid internships.
But the persistence of the trend lines has accounting educators rethinking their approach to recruit and retain students – and that includes conveying the fact that there is a wide array of career trajectories that a CPA designation opens up, beyond working in private practice.
“We have many students who’ve gone to telecoms and banks and major companies in Canada, and you never have to set foot in the door of an accounting firm to get your CPA,” says Ivey's Stein. “People always thought, `I must go to a one of the Big Four and work there,’ not realizing that some of our best and most successful students have gone a very different route, and that seems to work out better for them, as well.”
In order to reinforce the message that people can join the profession from a wider range of backgrounds and then practice in more diverse sectors or specializations, such as sustainability reporting and data governance, the Canadian profession’s new competency map aims to provide for much more flexibility, with the goal of attracting career changers, who may be in their mid-30s, and international candidates, including those with accounting experience. “We have trouble recognizing that experience, and recognizing truly what they bring to the table,” says Thomas.
Rotman, for one, is revising its core "Introduction to Accounting" course for first-year commerce students, so it provides both the basics but also a wider perspective of the profession. "By changing the first-year class and trying to make it more representative of what could be a career -- bringing the student a little bit out of the weeds, more into that bigger picture decision making, being part of the discussion, being at the table -- we are hoping that may actually open the eyes of some students to having an interest in accounting."
The orientation of accounting careers is also changing in ways that provide an opening for the profession to shift the traditional narrative, says CPA Canada’s Andy Thomas. “I think in general, younger people are very much interested in sustainability and how it factors into the world at large. We actually have an opportunity here as an accounting profession to start embedding some of those values within what we do every day.”
One potentially appealing feature of this kind of career trajectory is that it is necessarily multi-disciplinary, as accountants will need to work with data scientists and engineers to properly assess the wide range of metrics associated with corporate sustainability and carbon performance. “You need somebody like an accountant who can decide what the metrics are, decide on the goals, measure things, decide if we're moving forward,” comments Wiecek. “You need that kind of accounting mindset for that. I think the opportunity is there for us to say, `Yes, accounting isn’t just about money. It is about having an impact on our lives, our society, our organizations globally, and the environment.”
Rosemary McGuire, CPA Canada's vice-president of membership experience, adds that technology governance has emerged as another critical field for accountants. “There's a really important role for accountants in overseeing the responsible use of technology and in putting in place appropriate control systems and processes,” she says. “We often look at technology [such as artificial intelligence] as a displacement of accounting functions, and sometimes we forget that it also is opening up a lot of opportunities, as well as taking out some of the more mundane tasks that colour our vision of what CPAs do.”
At Ivey, Mitchell Stein likes to stress one other point with his students, which is that the accounting degree, not unlike a law degree, engenders the kind of analytical problem-solving skills that are in high demand in organizations dealing with highly fluid markets, rapidly evolving regulatory systems and the advent of disruptive technologies, such as generative AI. Indeed, with the federal government's recent decision to invest $2 billion in Canada's AI sector as well as the advent of a new code of conduct for firms developing generative AI systems, it seems clear that fast-growing tech firms will need to hire a range of financial and governance professionals, including CPAs, to manage the coming growth cycle.
“I see it as having an understanding of how to frame problems and assess problems in a concise manner, and also with a strong aptitude around financial expertise,” he says. “A lot of students still have that impression that if you join a firm, you're somehow going to be an auditor for life. Some people enjoy that. But there's also so many other areas you can apply it to.”