NEWS
Center for Accounting Transformation report reveals talent shortage in accounting
The Center for Accounting Transformation’s (the Center) latest research report states that the accounting profession is facing a talent shortage.
The study, ‘Staffing Strategies: Uncovering Solutions for the Accounting Talent Gap,’ examines the recruitment and retention challenges that firms encounter.
It is sponsored in part by Scrubbed and co-authored by Donny Shimamoto, Bryan J. Coleman, and Rick Telberg.
Scrubbed US CEO Gani Laguisma said: “The accounting profession is facing a staffing crisis unlike any we've seen before, and firms must adapt or risk being left behind.”
Survey data indicates that 68% of accounting professionals are experiencing burnout, and nearly one-quarter are dissatisfied with turnover rates at their firms.
The struggle to recruit qualified candidates is said to be pronounced at senior levels, forcing many firms to hire non-accounting graduates and provide extensive training.
Nearly one-third of respondents feel that their accounting staff are burdened with unreasonable workloads.
More than two-thirds of the professionals surveyed identify burnout as an issue within the sector.
Furthermore, only 51% report high employee satisfaction.
The high turnover rates worsen workload management issues, leading to increased stress and prompting further departures, the report says.
The Center's study also highlights the difficulties firms face in attracting experienced professionals and the declining pipeline of accounting graduates, which impacts the availability of entry-level talent.
Young professionals are claimed to be seeking work-life balance and career development opportunities, which traditional accounting firms find challenging to provide.
Despite these challenges, the Center's report suggests several strategies to mitigate the talent gap.
These include improving workplace culture, embracing remote work and flexible hours, and leveraging technology to alleviate workloads.
ACCA releases new paper to guide accountants in sustainability
The Association of Chartered Certified Accountants (ACCA) has released a new paper titled ‘Empowering business: navigating nature-related reporting.’
The paper aims to guide accountants in assisting organisations with nature-related reporting and promoting actions to address sustainability challenges.
This comes at a time when organisations are said to be disclosing their environmental impacts, particularly with the introduction of the Corporate Sustainability Reporting Directive in Europe.
The International Sustainability Standards Board has also signalled its intention to delve into biodiversity, ecosystems, and ecosystem services.
Over the next two years, the board plans to develop global reporting standards. Accountants are encouraged to broaden their knowledge in this field.
Such reporting involves detailing an organisation's nature-related impacts, dependencies, risks, and opportunities, highlighting the interplay between natural, social, and human capitals.
ACCA regional policy lead and report author Jessica Bingham will discuss the key messages from the ACCA report at COP 16 on biodiversity in Colombia, scheduled from 21 October to 1 November 2024.
The event will feature a panel that includes representatives from the Global Reporting Initiative, credit agency S&P, and Astra Zeneca.
Bingham said: “Nature is the foundation for all life on Earth, and our research suggests that an overwhelming number of organisations do not effectively assess and communicate their impacts and dependencies on nature’.
Research conducted by ACCA, in partnership with the University of Glasgow, has revealed that a high percentage of early adopters of the Taskforce on Nature-related Financial Disclosures guidelines have policies aimed at halting and reversing biodiversity loss.
Only a minority of these organisations are reported to have policies informed by the 2030 and 2050 global biodiversity frameworks.
Organisations engaging with accountants on the Task Force on Climate-related Financial Disclosures are positioning themselves in developing nature-related reporting, enhancing resilience, and managing their environmental impact.
The evolution of nature-related reporting presents opportunities for accountants and the broader profession in areas such as strategic planning, value creation, risk management, and more.
Earlier in October 2024, ACCA published a report addressing the ethical challenges faced by the accountancy sector.
The study, which surveyed more than 1,100 professionals from 135 countries, found that 64% of accountants perceive ethical issues as more complex than they were three years ago.
ncrease in ACA qualification student numbers in the UK and Ireland
The UK's Financial Reporting Council (FRC) has highlighted a growth in the number of students pursuing the ACA qualification from 2022 to 2023.
The figures for the ACA qualification show an 8.5% increase to 24,348 in the UK and Republic of Ireland (ROI).
This rise contrasts with a cross-institute average decrease of 0.2% and signals an interest in accountancy careers despite a generally sluggish sectoral growth over the past year.
The FRC's 22nd edition of its Key Facts and Trends report provides a detailed analysis of the accountancy and audit landscape across seven accountancy bodies.
These bodies represent more than 405,000 members in the UK and ROI and more than 616,000 globally.
The overall membership of accountancy bodies is claimed to have continued to grow.
Meanwhile, overall student numbers have stabilised after a recent decline, with the ICAEW's compound annual growth rate of student members in the UK and ROI at 5.5% between 2019 and 2023.
Globally, ICAEW student numbers have also seen a 6.7% increase from 2022 to 2023, bringing the worldwide total to 38,490.
The total number of accountancy students in the UK and ROI now exceeds 155,000, with global figures surpassing 585,000.
ICAEW Education and Training managing director Will Holt said: “This report from the FRC demonstrates that the accountancy profession continues to be a popular choice for those who are starting their careers.
“Our membership numbers remain robust and this data shows the recent growth in the number of people choosing to train with ICAEW.”
The report also notes a continuing trend of consolidation in the audit market, with a decrease in the total number of audit firms registered with Recognised Supervisory Bodies (RSBs) to 4,038 as of 31 December 2023.
Despite this, the number of FTSE 350 audits conducted by firms outside the Big Four has increased, reaching 41, up from 35 in 2022.
The Big Four audit firms in the UK saw an 11.1% increase in total fee income in 2023, while firms outside the Big Four experienced a 13.2% rise.
Audit fee income specifically for the Big Four increased by 19.5%, and for non-Big Four firms, it increased by 23.2%.
However, fees for non-audit work from audit clients decreased by 8.9% for the Big Four and 4.5% for non-Big Four firms
India’s ICAI launches stress management initiatives
The Institute of Chartered Accountants of India (ICAI) has formed a dedicated group to address stress management and provide counselling services.
It is focusing on developing peer support networks and plans to collaborate with health institutions to roll out stress management programmes.
These initiatives are aimed at fostering a supportive environment where members can share experiences and seek advice on coping with professional stress.
The ICAI is also introducing a special counselling help desk within its national call centre.
This resource is designed to assist members with managing stress and achieving a better work-life balance.
In addition, the ICAI has been actively organising health and wellness events.
These include health awareness camps, webinars, yoga sessions, and motivational conferences, as well as physical activities such as walkathons and marathons.
A Grievance Redressal Cell is already operational at the ICAI to address concerns from members, students and employees.
Furthermore, the ICAI is advocating for flexible work models in partnership with industry players.
ICAI president Ranjeet Kumar Agarwal said: “Employees are the backbone of any organisation, and their well-being is essential to its long-term success.
“We strongly urge organisations to implement balanced work policies that promote employee health and reduce stress. By prioritising the mental and physical well-being of their workforce, organisations can foster a more productive, resilient and innovative environment.”
This initiative follows the ICAI's earlier call for a pause in the revision of auditing standards by the National Financial Reporting Authority (NFRA).
NFRA released Standards on Auditing 600 (SA 600) for public consultation, which aligns with International Standards on Auditing.
AICPA & CIMA launch new apprenticeship
The American Institute of Certified Public Accountants (AICPA) and Chartered Institute of Management Accountants (CIMA) have announced the introduction of the Registered Apprenticeship for Accounting and Finance Associate.
This programme aims to bolster the accountancy talent pipeline by providing an "earn and learn" opportunity for new recruits or those seeking to upskill in entry-level roles.
The newly launched AICPA and CIMA programme allows apprentices to work with participating organisations while receiving instruction through the CGMA Finance Leadership Programme.
It provides on-the-job training, a progressive wage scale, and mentorship.
The Accounting and Finance Associate Apprenticeship Programme offers advantages to both students and organisations.
It enhances social mobility by attracting a broader range of candidates earlier in their careers, and in addition it promotes retention by encouraging apprentices to stay with the employer post-apprenticeship while also enabling incumbent employees to upskill for different roles within the organisation.
Furthermore, the programme provides a bridge between education and employment by identifying promising candidates early and delivering accelerated, competency-based training.
To be eligible, candidates must be at least 16 years old and possess a high school diploma.
AICPA & CIMA Business Engagement and Growth executive vice president Tom Hood said: “The battle for talent is increasing, making the need for more skilled accounting and finance talent even more pressing.”
This apprenticeship is described as stackable, leading into the Registered Apprenticeship for Finance Business Partners Programme or following the Youth Apprenticeship Programme.
The Finance Business Partners Programme is said to be the nation's first of its kind and registered with the US Department of Labor.
It aims to create a pool of engaged candidates for employers to develop skilled, long-term employees.
Additionally, the Youth Apprenticeship Programme, supported by the Maryland Works Grant initiative, partners with industry leaders in finance to establish a talent pipeline for high-demand fields.
CA ANZ clarifies new pathways to CA Programme
Chartered Accountants Australia and New Zealand (CA ANZ) has addressed misunderstandings regarding the updated entry pathways to its Chartered Accountant (CA) Programme.
The organisation emphasises that while the routes to enrolment are evolving, the CA Programme's standards and the prestige of the CA designation remain unchanged.
The CA ANZ has made it clear that all candidates, irrespective of their entry pathway into the CA Programme, will be required to meet the same stringent criteria.
This includes a three-year period of mentored practical experience supervised by fully qualified Chartered Accountants.
Upon completion, participants are awarded a postgraduate degree recognised under the Australian Qualifications Framework.
Furthermore, CA ANZ mandates that its members complete at least 120 hours of continuing professional development every three years to maintain and update their skills.
This professional development includes a minimum of six hours of verifiable ethics training.
The new pathways are intended to provide access to the CA Programme for individuals who may not have the resources for university education, come from non-traditional academic backgrounds, or have relevant work experience.
The introduction of these pathways is not meant to supplant the traditional university experience of pursuing a three-year degree.
Instead, it is claimed to be about creating opportunities for all those who have a passion for the accountancy field, whether they are employers or individuals.
Part of a larger 'Attractiveness of the Profession' initiative, these new pathways aim to alter the perception of accounting careers by collaborating with students, academics, and educators.
They provide them with resources that generate interest and correct misconceptions about the sector.
Additionally, CA ANZ is advocating for government policies, including migration settings, to mitigate the shortage of audit and accounting professionals in Australia and New Zealand.
Contrary to concerns that these pathways might lead to lower remuneration for Chartered Accountants, CA ANZ believes this is not the case.
The organisation also produces the annual CA ANZ Remuneration Report, advocating for appropriate compensation within the industry.
ANAN to reform accounting education in Nigeria
The Association of National Accountants of Nigeria (ANAN) has introduced two publications to reform accounting education and enhance financial reporting standards in Nigeria.
The announcement was made during the 29th Annual Conference in Abuja, themed “Advancing Accounting Excellence in a Changing World”.
The first publication, titled “Country Report on Accounting Education in Nigeria,” analyses the current state of accountancy education, identifying challenges and offering recommendations for modernisation.
The report, presented by ANAN Country Report on Accountancy Education chairman and Financial Reporting Quality Award Panel and Membership Secretary Suleiman Aruwa, highlights the reliance on outdated curricula in many Nigerian accounting programmes.
It points out the failure to address emerging areas such as forensic accounting, sustainability reporting, and financial technology, which limit students' exposure to skills necessary for combating global financial crimes.
The report also notes the infrastructure deficiencies in under-resourced institutions, which hinder students' practical experience.
Another issue raised by the publication is the shortage of highly qualified accounting educators in Nigeria.
The report indicates that many faculty members lack opportunities for continuous professional development, which impacts their ability to teach contemporary accounting practices effectively.
To tackle these issues, the report recommends that educational institutions should modernise accounting curricula to include contemporary topics and expand practical training opportunities through industry partnerships.
The ANAN also unveiled the “National Financial Reporting Quality Award” publication.
This initiative aims to improve the quality of financial reporting in Nigeria by establishing benchmarks and recognising organisations that demonstrate excellence in financial transparency and accountability.
In addition, the inaugural winners of the financial reporting quality award for the public and private sector categories were the Federal Inland Revenue Service and MTN Nigeria, respectively.