AICPA News: May 2022

AICPA News is a round-up of recent announcements from the American Institute of Certified Public Accountants.

Diversity Hiring of Graduates into the Accounting Profession is Increasing

The diversity of graduates hired into accounting and finance functions of U.S. CPA firms is on the rise with an increase of almost five percentage points from 30.1 percent in 2018 to 34.8 percent in 2020, according to the “2021 Trends: a report on accounting education, the CPA exam and public accounting firms’ hiring of recent graduates,” released today by the AICPA.

The report, first published in 1971, provides data reported to Integrated Postsecondary Education Data Systems (IPEDS) as well as statistical projections and expectations based upon university responses for the abbreviated 2019-2020 and 2020-2021 academic years and firm responses for the 2020 calendar year. The data provides a snapshot of the profession, set against the current economy and the ability to forecast future trends.

More broadly, the accounting profession was not immune to the pandemic-related global shift in the workforce and in college enrollments, and this included the hiring of new graduates. Overall CPA firms hired 10 percent fewer accounting graduates in 2020 than in 2019. However, the report data showed an increase (two percent) from 2019 in hiring new master’s degree graduates. While COVID-19 attributed to the decrease in the number of CPA exam candidates in 2020, between 2020-2021, there was a six percent increase in new candidates.

One of the ways AICPA is working to address this trend is through the CPA Evolution project, in partnership with the National Association of State Boards of Accountancy. CPA Evolution will ensure that CPAs continue to have the competencies needed in a changing profession by transforming the CPA licensure model in 2024.

Additional report highlights:

Accounting graduates trended downward in the 2019–2020 academic year, with decreases of 2.8 percent and 8.4 percent at the bachelor’s and master’s levels, respectively.
New non-accounting graduates hired into accounting and finance functions increased by 10 percent in 2020.
74 percent of CPA firms expect to hire the same or more accounting grads in 2022 compared with 2021.
More U.S. CPA firms expect to hire more new accounting graduates into accounting and finance functions for 2022 (36 percent) vs. 2021 (28 percent) as compared to 2020.
New accounting graduate new hires are increasingly being assigned to audit — a shift of 11.5 percentage points between 2018 and 2020.

Oracle and AICPA & CIMA Team Up to Tackle the Technology Skills Gap in Finance

Oracle, the AICPA, and the Chartered Institute of Management Accountants (CIMA), recently announced an introductory certification series to address the technology skills gap in finance and accounting. Created in collaboration with Oracle, AICPA & CIMA’s new “Agile Finance Transformation Certification Series” is designed to equip finance leaders with practical knowledge required to embrace the latest finance technology, processes, best practices, and skills to help them succeed in changing business environments and accelerate their careers.

The course materials walk through critical steps for finance leaders to begin the transformation journey from the perspective of a finance practitioner who has successfully completed a transformation project. The certification series features key elements including:

Practical steps to guide a finance transformation journey
Proven best practices and corresponding operational blueprints
New skills that support and accelerate career development
Real world experiences delivered by Oracle finance leaders based on their own finance transformation

The “Agile Finance Transformation Certification Series” is now available globally from the AICPA Store. Attendees can earn 21.5 Continuing Professional Education (CPE) credits for the three-part certification. The total cost of the program is US$1,485 for non-AICPA or CIMA members, and US$1,195 for members. Learn more about the Agile Finance Transformation Certification Series here and enter code “Launch15” to save 15% off the training through July 31, 2022.

AICPA Announces Endorsement of Supply Chain Disruptions Relief Act

The AICPA supports efforts by Congress to provide tax relief to businesses that have been unable to maintain inventory during the pandemic. While there are a number of industries that have been impacted by the disruptions in the supply chain, the automotive industry is among those most greatly affected. Today, the AICPA announced its endorsement of the bipartisan Supply Chain Disruptions Relief Act, sponsored in the House by Representatives Dan Kildee (D-MI) and Jodey Arrington (R-TX).

The Supply Chain Disruptions Relief Act would allow automotive dealerships to choose to wait until as late as 2025 for their inventory to be replaced in order to determine the income attributable to the sale of inventory during 2020 or 2021.

In a letter addressed to Representatives Kildee and Arrington, the AICPA expressed their support and gratitude for this bill, saying: “The [AICPA] thanks you for your continued efforts to provide tax relief to automobile dealers who use the Last-In-First-Out (LIFO) accounting method and are struggling to replace inventories in the wake of various COVID-19-related government restrictions that caused disruptions in foreign trade and the global supply chain.”

The House bill echoes the advocacy work and recommendations the AICPA has undertaken, and also includes the principles outlined in AICPA’s proposed safe harbor method. The AICPA offers its strong support for this legislation, as well as broader relief for other industries if it becomes feasible.

Another Tax Filing Deadline Down, But Problems with IRS Persist

While the 2022 individual tax filing deadline is behind us, taxpayer issues with Internal Revenue Service (IRS) is not. According to reporting from USA Today, an estimated 13.56 million taxpayers filed for extensions in 2021, with the IRS estimating that 15.2 million taxpayers would file for an extension in 2022. As of March 29th, the National Taxpayer Advocate reported that there were still 15 million unprocessed returns – a number that some think is too low to reflect the actual IRS backlog.

At the start of the 2022 tax season, the AICPA joined a diverse coalition of stakeholders representing tax practitioners, businesses and taxpayers from many divergent backgrounds. The Tax Professionals United for Taxpayer Relief Coalition presented several recommendations to the IRS designed to ease the burden of a difficult filing season for taxpayers and tax practitioners by reducing unnecessary contact with the IRS.

Following months of letters, meetings and Congressional hearings, the IRS announced that it would suspend many automated notices and implement two new surge teams to address the overwhelming processing backlog. The AICPA notes that these are welcomed measures for the IRS to take but continues to encourage the IRS to do more. Implementing all of the coalition’s recommendations is an important and necessary next step to ensure that the millions of Americans who have extended their tax filing to October can do so with minimal stress and anxiety.

BACKGROUND:

Recommendations submitted to the IRS are:

Discontinue automated compliance actions until the IRS is prepared to devote the necessary resources for a timely resolution
Align requests for account holds with the time it takes the IRS to process any penalty abatement requests
Offer a reasonable cause penalty waiver, similar to the procedures of first time abate administrative waiver
Provide taxpayers with targeted relief from the underpayment and the late payment penalty for the 2020 and 2021 tax year

AICPA Building Diverse Talent Pool of CPAs Through Leadership Workshop

The AICPA is encouraging qualified students to apply for the 2022 Accounting Scholars Leadership Workshop (ASLW), being held Oct. 12–14 in Litchfield Park, Ariz.

The annual workshop gives ethnic minority college students who either major in accounting or have an interest in majoring in accounting the opportunity to strengthen their professional and networking skills. They also increase their understanding of the career possibilities and benefits of earning an accounting-related credential.

The U.S. Census projects that minority populations will comprise more than 50% of the total population in 2045, with the largest growth among multiracial individuals. Firms will need to better reflect the ethnic and racial makeup of their communities and clients.

During the three-day program, students will learn how their unique backgrounds and experience add value to the accounting profession. They will participate in sessions and panel discussions covering an array of topics, including mentorship, building your brand and what to expect from CPA licensure and the CGMA® designation. Additionally, the event runs concurrently with the AICPA’s Accounting Professional Diversity Symposium, which focuses on the pipeline. This will expose students to countless networking and relationship-building opportunities.

Applications will be accepted through June 15, 2022. The AICPA Foundation funds the ASLW and covers the cost of attendees’ experience.

More information about the program, as well as instructions to apply, is available at thiswaytocpa.com.