Will the pipeline dry up?
As you are well aware, effective August 1, 2009, candidates for CPA licensure in the State of New York will be required to have 150 credits of qualifying courses, up from the 120 that was previously required. What does this mean for you? Well, it depends on where you are in the hiring process. For those of you graduating in 2008 and seeking employment with the Big 4 this year, it may help your chances. The reason for this is that, once the new requirement kicks in, there may be a shortage of accounting students in the pipeline.
In the April 2008 issue of The CPA journal there is a great article that highlights this topic (see "Meeting of the Minds -– Preparing Future Accounting Professionals," The CPA Journal, April 2008). According to Charles A Barragato, professor of accounting and director of the C.W. Post School of Accountancy, “practitioners are apprehensive about how many students will be coming out of the pipeline after August 1, 2009.” In response to this, notes Barragato, “some firms are considering ramping up their recruitment efforts-preparing themselves to hire more people to make sure they can service their clients during the transition period.” Thus, in the short run, firms may be looking to hire extra graduates to prepare for the downturn in the number of graduates the following year. Let’s take a look at this in more detail.
In a typical year, Big 4 firms would look to hire a “new class” of recent graduates to begin working in the summer/fall timeframe. The number varies by office, from as little as a few new hires in smaller offices to over one hundred in larger offices. Due to the “move up or move out” promotion patterns found in most of the Big 4, it is essential that a fresh class of grads be hired to fill the spots of the associates hired the previous year who are now “experienced associates.” Beginning with the class of 2009, however, the number of accounting graduates entering the workforce is poised to significantly decrease. As the new requirement kicks in these students will be faced with an additional year of college in order to get their 150 hours. Accordingly, that shrinkage in the 2009 graduates is boosting the demand in graduates in 2008 to comply. Look for an increase in the number of new hires in the Big 4 this season.
Should you accelerate your degree to beat the deadline?
The new requirement presents a difficult dilemma for students who are set to graduate in 2009. Should you continue your degree at the set pace and thus require an extra year of educational experience? Or, should you accelerate your study in an attempt to graduate early and beat the deadline? This is a difficult decision and one that requires your own cost/benefit analysis. What does another year of accounting study mean? The cost of an additional year of study and an advanced degree will be the fact that you will be forever one year behind in your career. At this point it is likely too early to say what advantage an extra year of school will provide. 150 hours and a masters degree will be the status quo in 2009 so it does not seem to offer much in terms of a competitive advantage. Should you stick around for that 5th year you will be competing with a whole new class of students with Masters degrees.
However, what really matters is getting your foot in the door of the Big 4, advanced degree or not. In this regard, it seems to make sense that jumping at the hiring ramp-up in 2008 would make more sense. As mentioned, this is a difficult decision and a personal one. In the end, could another year of college really be a bad thing?
Former staff of the Big Four public accounting firms help college grads gain an edge over the competition in the brutally competitive world of public accounting. Big4Guru.com offers insider information to help accounting students get noticed and get hired by these world-class firms. For more information please visit: http://www.big4guru.com.© 2008 Jake Oxford
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