Commentary: CPA shortage could affect taxpayers, businesses
The following commentary is an opinion item submitted to the newspaper. It does not necessarily reflect the views of the Echo Press.
Editor's note: The following is a blog written by Rachel Kats, communications coordinator for the Minnesota Society of CPA's website highlighting concerns CPA sole practitioners have — namely retirement and succession planning.
By Rachel Kats, Bloomington, MN
Tax filing season is days away and, as millions of taxpayers turn to CPA practitioners to prepare their returns, it’s worth noting that the profession is facing a staffing shortage that is likely to worsen in the years to come.
In the recent Minnesota Society of Certified Public Accountants Tax Survey, an annual survey of members in public practice, sole practitioners were asked what their top concerns are for the next two years. The answers offered insight into the unique opportunities and challenges they’re facing and reflected ongoing, larger scale issues that the accounting profession is up against.
Responses to the open-ended question varied but included common themes. Among the top concerns MNCPA sole practitioners shared were related to:
- Succession planning.
- Working with the IRS.
- Continuous tax law changes.
- Workload management, changing client needs.
Touching on several of these issues, one respondent said their biggest concerns are related to the “death of baby boomers,” and “estate issues,” as well as technology and clients.
Another respondent also mentioned client-related challenges, saying they struggle with “juggling the increasing demand from clients and new clients while not having the staff for it.” And another member said, “I am aging and keeping up with the complexity is an increasing challenge.”
Comparing the results
The MNCPA survey results showed alignment with the results of the Association of International Certified Professional Accountant’s 2022 PCPS CPA Firm Top Issues Survey . That survey segmented the results based on firm size into top-five lists for sole practitioners and for firms with two to five, six to 10, 11 to 20, and 21 or more professionals. Key concerns were staffing and working with the IRS. However, unlike the MNCPA survey, the AICPA survey results showed that succession planning didn’t make the top five concerns for any group, but it ranked in the top 10 for all but one group.
“And yet I receive a large volume of calls and emails from practitioners in both solo and multi-partner firms wanting to talk about strategies, market conditions and how to prepare for retirement,” said Carl Peterson, CPA, an MNCPA member and the AICPA vice president of small firm interests.
A closer look at succession planning
Highlighting results from the 19th annual Rosenberg Practice Management Survey, the CPA Practice Advisor reported that among sole practitioners and smaller firms, 71.1% are older than 50. The AICPA estimated that almost 75% of the CPA workforce met the retirement age in 2020.
Given these statistics regarding CPA firm ownership and the impending “ silver tsunami ,” it makes sense that a reoccurring theme from the MNCPA survey is related to the issue of succession planning. With respondents sharing that they are concerned with, “Finding a suitable person to transition my firm to,” and similarly, “Slowing down my practice over the next few years in anticipation of retirement.”
Taxpayers and businesses should take note of the impending CPA retirements and potential talent shortages, and consider how it may affect how they handle their tax returns, estate planning, bookkeeping or other accounting services.