Declining Enrollment and Retention
In recent years, there has been a significant decline in accounting graduates, both at the bachelor’s and master’s levels. Accounting programs have been experiencing an overall decline in enrollments (and thus graduation rates) around the nation. Approximately 47,070 students received a bachelor’s degree in accounting in the 2021-2022 academic year, which was down 7.8% from the previous year. This is after a steady decline of 1-3% per year, starting since the 2015/16 academic year (AICPA, 2023 Trends Report, https://www.nysscpa.org/2023-trends). Detailed statistics regarding accounting student enrollments starting from the 2010/11 academic year are presented in Exhibit 1. From this graph, it is easy to see the continuously declining trend in accounting student enrollments over time.
EXHIBIT 1
New Accountants
In a recent report, the Bureau of Labor Statistics (BLS) indicated that job openings for accountants and auditors are projected to grow by 6% from 2023 to 2033, which equates to about 130,800 new openings every year (Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Accountants and Auditors, 2023, https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm). At the same time, there has been a larger pool of accountants retiring or leaving the workforce in recent years. BLS data indicates that over 300,000 accountants quit their jobs between 2019 and 2021 (M. Maurer, “Job Security Isn’t Enough to Keep Many Accountants from Quitting,” Wall Street Journal, 2023, http://bit.ly/3B2ek6y). Declining student enrollments along with increasing demand for accountants will, if left unaddressed, result in significant strain on the profession which will only be exacerbated over time.
As the profession continues struggling to attract students, spurring interest in the accounting field through novel approaches becomes critical. Various efforts have been made to promote the accounting profession, whether in the form of increasing salaries and benefits for new hires, expanding support for those pursuing a CPA designation, or even providing scholarships and other financial support to students (H. Pitstick, “What Everyone Can Do to Strengthen the Next Generation of CPAs,” Journal of Accountancy, vol. 234, no. 3, 2022, pp.28-33). More recently, some CPA firms have started recruiting future accountants at high schools. For example, KPMG started a 3-week paid internship program for high school students who learn about what it means to be a CPA, take a class in business etiquette, and are assigned to mentors who monitor their progress (J. Dickler,“$20 an Hour, Clothing Stipend, Meals: How a Big Four Firm Is Trying to Get Teens Interested in Accounting,” CNBC, 2023, https://bit.ly/40ssWof). Similarly, UHY Advisors started a Junior Connect recruitment program aimed at identifying young talent and offering high-school students that are interested in accounting careers mentorship and networking opportunities (UHY, “UHY Launches High School Recruitment Initiative,” 2023, https://bit.ly/45XIXn7). Finally, the Deloitte Foundation is collaborating with Urban Assembly and Outlier.org to offer a dual enrollment program at certain New York City high schools whereby students can take introductory financial accounting classes for college credit (J. Dickler, “No One Wants to Be an Accountant Anymore, but a Program Aimed at High Schoolers Looks to Fix the Shortage,” CNBC, https://tinyurl.com/bdh3wfjh).
While all these efforts are good starting points, it cannot be left to CPA firms alone to spur interest in the accounting profession. The rest of this article discusses how getting accounting programs designated as STEM degrees is a novel path that some colleges and universities are utilizing to grow student interest in accounting.
STEM and Diversity in the Accounting Profession
One relatively recent avenue that an increasing number of universities are currently exploring in order to increase interest, enrollments, and eventual graduation in accounting is to push their accounting programs to be designated as STEM degrees. For a field to be considered STEM, the degree program needs to fall under the umbrella of science, technology, engineering, or mathematics. Programs in this category emphasize research, innovation, or the development of new technologies. Historically, accounting has been classified as a non-STEM major, with few people associating accounting with technology and innovation. But times have changed. Today, accounting is a data analytics-, and technology-intensive field. As such, some universities have successfully requested and received a STEM designation for their accounting programs (UCI, Master of Professional Accountancy, https://tinyurl.com/2s49dtjr).
In terms of student interest, international students in particular are more likely to pursue STEM-designated degrees in the United States, as STEM degrees provide them with access to beneficial visa policies. The Department of Homeland Security allows F-1 students to remain in the United States and work for up to 36 months after graduation if they have received a STEM degree (USCIS, “Optional Practical Training Extension for STEM Students (STEM OPT),” https://bit.ly/49ggIUh). Similarly, students on J-1 exchange visas studying in STEM fields will also be allowed to stay for up to 36 months (BridgeUSA, “Opportunity for Academic Training Extensions for J-1 College and University Students in STEM Fields,” https://bit.ly/3CyBSjU). This contrasts with the 12 months allowed for students to remain in the United States following the completion of non-STEM studies.
Although there are potential benefits to a STEM designation when it comes to student enrollments, STEM fields have historically been characterized by lower participation from women and minorities (National Center for Science and Engineering Statistics, “Diversity and STEM: Women, Minorities, and Persons with Disabilities,” 2023, https://tinyurl.com/2em7nm8c). This may raise some concerns that, as accounting programs become more STEM-intensive, some women and minority students may be more hesitant to study accounting. More recent census data provides some reassurance that the overall participation of women and minorities within STEM fields is rising. Comparing census data for the STEM workforce from 2011 and 2021, there was a decided increase in women and minorities pursuing a STEM degree. The number of women pursuing a STEM degree increased by approximately 31%, while the number of minorities pursuing a STEM degree increased by approximately 65% (National Science Foundation, “NSF STEM Workforce Report,” https://tinyurl.com/3pd5h3uj). In addition to this significant leap, female and minority group representation in the accounting field has been relatively high compared to traditional STEM fields. Per the AICPA 2021 Trends Report, women make up approximately 50% of accounting graduates, while minority students account for approximately 40% of accounting degree completions. Considering this, it seems unlikely that the STEM designation itself would be detrimental to the existing diversity within the accounting field. In fact, as the STEM designation is likely to spur more interest from international students, it may potentially increase diversity alongside enrollments.
This trend has been shown quite starkly for graduate STEM programs. Specifically, according to the Council of Graduate Schools (CGS), the number of international students in graduate STEM programs accounted for approximately 21.9% of total enrollment in Fall 2022, growing by more than 10% compared to the previous year. This increase in international enrollment was across all fields of study (except engineering). In addition, when looking at graduate student enrollment for underrepresented minority (URM) students, they were more likely than their majority peers to enroll in fields relating to business, education, and health sciences (Council of Graduate Schools, “Graduate Enrollment and Degrees,” 2022, https://tinyurl.com/mt9xjtvz). This provides some comfort that, if accounting were to receive a STEM designation, international student enrollment in accounting would increase, and diversity within the field would continue to grow.
Various studies have made efforts to identify areas within universities that are attractive to URM students. One survey (K. Shook, “Dos and Don’ts for Recruiting Diverse Students,” Inside Higher Ed, Apr. 17, 2022, https://tinyurl.com/33eb4u69) used a sample of racially and ethnically diverse college students, ages 18 to 24, to examine the factors they considered when selecting their universities. Students’ responses show that they care about a university’s academic reputation as one of their main concerns (92.4%). Given the importance of academic reputation, a STEM designation could further contribute to increasing potential interest from URM students in the field of accounting. This is assuming appropriate financial support and resources are made available to help URM students interested in pursuing an accounting degree.
The Need for STEM Designation
The accounting profession must rely on sophisticated quantitative methods to measure and analyze businesses’ value creation activities and financial position in today’s environment. Given the exponential growth of big data and rapid technological innovations in the business world, auditors need to apply their data science knowledge to access data from different sources and conduct statistical testing to obtain reasonable assurance of financial reporting and operational effectiveness. In response to these developments, the AICPA and NASBA developed a new CPA exam, known as the CPA Evolution, which emphasizes technology and analytics in all CPA exams. The AICPA urges universities to update their curricula and increase the technology and analytics components offered in all accountancy courses to prepare students for the new exam and for the demands of the current and future business environments.
From a legislative perspective, two bipartisan bills have recently been introduced to the U.S. Congress. The Accounting STEM Pursuit Act of 2021, introduced in the House of Representatives, and the STEM Education in Accounting Act of 2021-2022, introduced in the Senate, would recognize accounting as a STEM subject. This would permit state and local educational agencies to use funds from the Student Support and Academic Enrichment Grant program to increase K-12 students’ awareness of accounting as a career. It may take years until these bills are passed, opening up the path to all accounting programs nationwide becoming STEM designated. That is why an increasing number of universities are expected to pursue STEM designation for their accounting programs on an individual basis in the near term.
The STEM Designation Process
The AICPA recently released information on the process for accounting programs to apply for and receive STEM designations for their degree programs (AICPA, “The Latest on the STEM Initiative,” https://tinyurl.com/4zwycejy). The first focus for colleges and universities is to increase the emphasis on technology and data analytics in the classroom. This can be done through providing an accounting data analytics course and/or ensuring coverage in other core courses, such as accounting information systems. These courses should try to incorporate some of the following items: 1) software tools, such as Excel, Microsoft Access, Tableau, and Power BI, 2) practice in writing macros and scripts or in programming, and 3) preparation and use of data in creating visualizations.
After updating curricula, the next step is to encourage leadership within the accounting program to go through the process of receiving an official STEM designation. Likely, this will first involve a petition requesting a change in the relevant major’s Classification of Instructional Programs (CIP) code within the college or university system. The department or school must choose from the set of STEM CIP codes that are approved by the Department of Homeland Security. For accounting programs, the following five CIP codes have been successfully used to date to qualify as STEM:
- ▪ 11.1003—Computer and Information Systems Security/Information Assurance
- ▪ 27.0305—Financial Mathematics
- ▪ 45.0603—Econometrics and Qualitative Economics
- ▪ 52.1301—Management Sciences and Quantitative Methods
- ▪ 52.1399—Management Sciences and Quantitative Methods, Other (AICPA, https://tinyurl.com/4zwycejy).
Colleges and universities will need to persuasively argue that their accounting programs, whether undergraduate or graduate, fit under one of these CIP codes based on the technology incorporated into the curriculum. After the petition is approved by university officials, it will go to state higher education authorities for review—and, hopefully, ultimate approval of the STEM designation.
A STEM designation can both encourage university programs to embrace the use of cutting-edge technology in accounting, and also spur student interest and professional success. But creating a STEM program can be a costly investment for universities with limited funds. Addressing the decline in student awareness and encouraging students to pursue a career in accounting may take a multi-party effort from both inside and outside of academia.
Success Stories
Relatively few universities currently have a STEM designated accounting program. For example, the Gies College of Business at University of Illinois obtained a STEM designation in 2018 for the graduate programs in the department of accountancy. “This designation reflects our commitment to innovation in accountancy education and to serve a global population of future business leaders,” said W. Brooke Elliott, head of the department of accountancy at that time and EY Distinguished Professor in Accountancy. “We are one of the first Accountancy Departments to receive STEM designation for our graduate accounting programs.”
The curricula in the University of Illinois graduate programs involve applying quantitative methods to the description, analysis, and forecasting of business data. This includes courses in data analytics that focus on data acquisition, processing, mining, and visualization. Courses also incorporate the application of theoretical and practical data analytic skills to various business and accounting scenarios. In response to the authors’ inquiry about international student enrollments, Emily Ziegler, senior associate program director for the master of science in accountancy (MSA), said: “having worked very closely with prospective students during recruiting, having a STEM designation is highly sought after and a contributing factor to their joining Gies.”
In Fall 2022, the Brigham Young University (BYU) bachelor’s, master of accountancy in professional accountancy, and master of accountancy in taxation degrees received a STEM designation. Professor Troy Lewis, who helped to lead the STEM process, indicated that the motive for pursuing STEM designation was to signal to employers that BYU accounting graduates possess strong analytical and technical skills that are needed in their future jobs. The designation process was straightforward at BYU, as their accounting courses already focused on technology, analytics, programing, database design and management. Ultimately, he noted that the STEM designation is one of the factors that helped BYU accounting programs retain their strength, as enrollments at BYU have continued to rise despite the nationwide decline.
Moving in the Right Direction
The STEM designation provides a potential avenue that can help to address the falling number of students enrolling in accounting programs across the United States. If such an effort is well supported, it can also potentially play a role in encouraging and diversifying the student body that pursues a career in accounting. While the STEM process does require technologically innovative curricula, the field of accounting has already moved in that direction. More and more universities are incorporating technology and data analytics into the classroom. Therefore, utilizing these changes and pushing for a STEM designation can potentially open up another avenue for garnering greater student interest in the accounting profession.
