The Truth About A College Degree in Accounting

Higher education continues to promise 18-year-old freshmen that any college degree is the cornerstone of economic prosperity.

They continue to grossly under-deliver on that promise.

One of the biggest risks faced by students is that their selected degree will not provide access to a college-level job. Today, only about half of bachelor’s degree graduates secure employment in a college-level job within a year of graduation.

“I think that for a long time now, higher education has painted the picture that any college degree is the cornerstone of economic prosperity.”

Click here to watch Joey Reeve’s full interview with Stephanie Chavez with KRQE Media Group.

“I think that for a long time now, higher education has painted the picture that any college degree is the cornerstone to economic prosperity.” Joey Reeve, CPA and CEO of Universal CPA Review says in an interview with KRQE Media Group when asked about the concerns regarding the current decline in accounting enrollment.

He goes on further to state “The degree does matter, and I think that is a narrative that is not being communicated well enough in the Freshman and Sophomore age groups.”

Strata Education Foundation and The Burning Glass Institute state that math-intensive business fields such as accounting have substantially higher rates of college-level employment compared with general business, human resources, and marketing fields.

Statistics remain consistent in that those with a college degree still tend to do better in today’s job market than those who only have a high school diploma. However, the real concern is that a significant number of college graduates don’t get the economic benefits they expected from their degree. A little over half of them find a job that requires a college education within a year after graduating, but the other half are underemployed, meaning they work in jobs that don’t need a degree or don’t at all apply to what they studied.

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Accounting Graduates Are Getting Jobs

Many students enter their freshman year knowing that they want to study business but are unaware of the fact that employers don’t find the same value in all business degree concentrations. Those who graduate with an accounting degree consistently rank in the top three for the highest rates of college-level employment, while other business degrees tend to have much less success. 76% of accounting graduates are securing a college-level jobs, while just 30% of general business graduates such as hospitality administration or management are able to do the same.

Making matters even more appalling, the vast majority of graduates who are underemployed out of school, remain underemployed for the next 10 years on average.

Many high schoolers, and even parents are now wondering, is a college degree even worth it? My answer is unequivocally, yes, but only if their chosen degree will provide a compelling return on investment.

Accounting Job Prospects Are High Yet Accounting Enrollment is Down:

There is an ongoing issue within accounting education in that fewer  degree-seeking undergrads and second-degree-seeking graduates are electing accounting as their field of study.

College enrollment is down across all fields, particularly for those who were initially underemployed. Lightcast Career Histories Database indicates that graduate school enrollment for initially underemployed workers with a bachelor’s degree has declined between the years 2010-2017.

Careers in Accounting

An accounting degree will not only provide a direct path to employment but also serve as a prerequisite for obtaining a professional license. The younger generation has consistently labeled the accounting profession as a “dry” and “boring” profession when in reality, opportunities continue to emerge by adding knowledge to database languages such as SQL.

To make an accounting degree even more compelling, data suggests that there will be much less competition in the near future. With 75% of boomers qualified for retirement as of 2020 coupled with the rapid decline in CPA candidates, a background in accounting will become more valuable than ever before. With a lower supply of licensed CPAs, their demand will increase in addition to the cost of their services.

Will Artificial Intelligence Replace Accountants?

Artificial intelligence will replace the jobs of accountants, but it will not replace the services performed by CPAs. At first, this might sound like a paradox, but this is why it’s not; while an accountant may have an accounting degree, they cannot legally perform the work of a licensed CPA.

Unlicensed accountants can perform the work of preparing financial statements, bookkeeping, and financial analysis, whereas CPAs are those who have successfully passed the Uniform CPA Examination and are qualified to deliver on tasks that legally require a CPA’s license. Machine learning can process large volumes of data faster and more accurately than humans, and will replace many of the manual tasks performed by accountants.

However, unless large language models such as Open AI can somehow sit for the CPA Exam and get their very own CPA license, the services performed by a CPA will never be replaced by them.

CPAs will leverage AI to make them more efficient and more valuable than ever before. This will increase their demand and the cost of their services. Obtaining this license is still and will become an even more valuable designation in the future.

Bottom Line:

Higher education needs to clearly define the skills students acquire and show how these skills are applicable in the job market to increase the value of a degree. They should also explicitly inform freshmen and sophomores about the post-graduation economic worth of their chosen degrees, using data.

Sure, not every student in American higher education will prioritize the economic outcomes of their chosen degree equally, but the role of an advisor is to advise. This becomes even more critical as banks continue to hemorrhage cash by loaning incoming college students funding for their education.