The State of Indiana has modified some of the rules that cover accounting licensure in a move that could bring more people into the field. Advocacy groups are saying the “historic” rule change will reduce some of the barriers to entry and enable more accountants to obtain their licenses.
That’s important because the accounting industry has experienced labor shortages for several years now, on top of forecasts that show employment growth in the sector. Last year, Bloomberg Tax reported the number of employed accountants and auditors in the U.S. dropped 17% from 2019 to 2021.
Indiana employment in accounting is projected to grow 7.5% through 2030, with average Hoosier job openings totaling 2,260 annually, according to Department of Labor data.
This means a whole lot of companies are looking for fresh accounting talent, so Indiana is going to have to create these individuals in more efficient ways.
The Rule Change
As described by the 2021 Association of International Certified Professional Accountants (AICPA) Trends Report, some of the biggest factors that led to the talent shortage are declines in college enrollment, rising tuition costs, and specific problems that arise during the CPA Exam process. It is the latter of these the new rule change focuses on.
The Indiana CPA Society (INCPAS) advocated for the rule change in our state. The organization explained that logistical hurdles and time constraints for studying and taking the CPA Exam have become key areas of focus. Many other states have already updated their exam rules, and now Indiana has too.
“As employers have been adapting to employees' needs and work preferences, so, too, must the CPA profession offer students the exam flexibility that works with their academic, work, and personal lives,” said INCPAS President & CEO Courtney Kincaid, CAE.
The logic is all about getting students on the track and keeping them moving forward. INCPAS says that “students who complete at least part of the CPA Exam before they graduate, or between school and their work start date, are far more likely to complete the exam cycle and go on to be CPA licensees in Indiana.”
Changes to the rules include:
Perspectives at the Front Line
CLH, CPAs & Consultants is one Hoosier company that knows a lot about this issue. The firm has been actively engaged with in-house talent development for some time now. We reached out to the company with some questions about how the rule change will impact Indiana accounting firms.
Building Indiana (BIN): How will this new rule change impact a company like yours? Will this help your firm onboard more CPAs?
Lisa Human.Lisa Human, CPA, Senior Manager: “We are excited that Indiana has removed this competitive barrier in the licensure process. At our firm, we actively engage with regional college students, offering internships that often result in offers of full-time employment, with the hopes that our new staff will eventually seek licensure. We are hopeful this change will encourage more college graduates to remain in Indiana, rather than seeking employment in other areas that had already conformed to the 120-hour rule to sit for the exam.
Historically, new graduates have been hesitant to begin the exam process, as earning the additional credit hours to meet the 150-hour requirement posed a significant financial barrier. The thought process has typically been that they did not want to finance the additional education requirement without successfully passing the exam because the additional education could, in a worst-case scenario, translate to a wasted financial investment.
The new rules allow those same new hires to focus first on successful completion of the exams while gaining real-world experience, which enhances the knowledge they learned during their bachelor’s program and the CPA exam study materials, while enabling them to apply what they learn in practice. We anticipate that this will exponentially increase successful passing rates.
We have already witnessed a positive impact on our accounting staff. Several of our staff and senior accountants have engaged in the exam process since early November and we are excited to support them in their endeavors.”
BIN: Can you describe some real-world examples of ways the new rule changes will make exam completion more efficient for students?
Allison Raymond.Allison Raymond, Manager: “With those barriers removed, we anticipate seeing accounting professionals credentialed earlier in their careers. Currently, we typically see recent graduates and entry-level professionals begin the process of earning their licensure only once they have 3-5 years of experience or when they have attained a senior accountant or manager level. Additionally, the rule change expands testing opportunities, as candidates no longer have wait times to retest certain sections, which could delay a candidate from completing the multi-section exam timely. As a result, I think we’ll begin to see more entry-level accountants begin the process of earning licensure earlier in their careers, and when successful, may have opportunity to advance their careers much earlier.”
More Flexibility, More Accountants
With these recent rule changes, Indiana accounting students will have greater flexibility to complete their license exams and become CPAs. That will ultimately give companies a wider cross section of skilled professionals in the labor pool, which is a great reason for optimism as the industry moves forward and grows.
