Tuesday, June 27, 2006

Rachel vs. The CPA

Congratulations, Rachel, on passing part 2 (of 4 parts) of your CPA. Passing the first time, again! Beginners luck, or just super-smart? Deloitte is luckier than a drunken lottery winner for landing you. BEC and REG down, FAR and AUD to go.

CPA current events: A few years ago, accounting geeks complained that the "all-or-nothing" 1-weekend CPA exam was too gruelling. If the student didn't pass all 4 sections of the exam over the 2-day period, the student had to retake the exam months later. Everyone thinks they love the new system, whereby prospective CPAs have up to 18 months to complete the four sections at their own pace. Sounds great, and so think the students (including Rachel). I (Rob) have another theory - now that students have 18 months to take 4 separate tests, the level of business acumen and financial analysis required to exceed the 75th percentile passing score has increased commensurately. Students have more time to focus their energy on a specific test, and test-makers have more leeway to intensify each test's scope and difficulty. My own anecdotal evidence reveals that fewer people are passing the CPA, either from fatigue, indifference, or intensified difficulty and competition. What does this mean for the future of the accounting world? I predict that the CPA will be both more distinguished if you have it, and less necessary if you don't. Those who have a CPA will end up being managers who oversee business decisions and subordinates. However, it will also be more unnecessary on a daily-basis as fewer people manage to acquire the designation.

Big 4 firms spend million of dollars training bright-eyed youngsters to pass the exam, but increasingly their victory does not outweigh the Pyrrhic (self-inflicted) battle. I predict that more emphasis will be placed on obtaining a masters in accounting. Whereas today it is required to have a CPA to become a senior, in the future the only requirement will be "masters degree and 2 years of experience." Are these observations wrong? Any accountants want to comment?

1 comment:

James said...

I agree. It looks like here in Massachusetts they are lowering the ed requirements to 120credits to sit but need addt'l 30 w/in 3 years to receive certification. Having sat for the exam a couple of times now, if I could start over I would take all sections within the same month rather than piecemail over different months.