Competence. Reliability. A commitment to excellence. These are the traits you expect from the recent accounting graduates you hire. Such traits also include ambition.

Unfortunately, many of your newer hires are taking longer to fulfill their ambition to become CPAs. Though the number of bachelor’s degree recipients in accounting rose six percent in 2002-03, the number of CPA Exam candidates has slowly slid from its 1991 high of some 143,000. Last year, that slide turned into a nosedive.

According to a task force report from AICPA, Prometric and NASBA, the candidate numbers plunged from about 82,000 in 2003 to 52,000 in 2004 (the first year of computer-based testing). That’s a decline of nearly 37 percent. The #1 reason given by candidates for not taking the exam is they’re too busy and lack time to prepare.

While an exact calendar year comparison of Michigan statistics is not available, Michigan’s numbers reflect the downturn. In 2003, 2,282 candidates took the final paper-and-pencil exams. From April 2004 through February 2005 (the first full year of the computerized exam), 1,969 candidates took the exam.

The bottom line of this is your bottom line. If you don’t have accountants who are CPAs, your ability to maintain and grow your practice begins to deteriorate, as does the pool of qualified staff to succeed you and keep the practice going.

Some Practical Ideas to Implement Now
Of course, there are solutions to help you send or re-emphasize the message that becoming a CPA as soon as possible is a core value of your firm’s culture. These solutions, used by numerous major CPA firms, include the following:

• Faster advancement after successful exam completion, along with reimbursement for registration, review courses, study materials, even mileage, and/or passing bonuses to cover some of these costs.
• A tracking system to follow employee progress in preparing for and taking the exam. This system could show who has tested, who has passed, etc., and could be used as part of the annual review process, including the threat of demotion, pay decreases or even layoffs for those who do not pass within their first 12 to 15 months at your firm.
• “Window” policies in which new employees are expected to take the exam only at certain times within the year, with a window of only perhaps two to four dates.
• Vacation time to study; permission to study on the job, especially during the off-season; permission to not use personal leave for the day the exam is taken.
• Communication of your firm’s CPA Exam policy through HR to new hires. This communication could come, for instance, as part of the employee handbook. Also, education of HR on its role in encouraging employees to make becoming a CPA their top priority.
• Promote the benefits of taking the CPA exam by posting Top 10 Reasons to Take the CPA Exam in your staff lounge and e-mailing it to your entry-level accountants.

For more information on this vital issue or to access samples of these tools, visit the PCPS CPA Exam web page or contact the PCPS Team at 800.272.3476 or pcps@aicpa.org, or visit www.cpa-exam.org.

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