there’s a paradox going on.
by 卡塔尔世界杯常规比赛时间 research
a working paper by three academics presents a paradoxical contradiction in the accounting industry. somehow, technology, which is starting to replace some accounting functions, is causing a shortage of accounting professionals. and despite the high demand for the few graduates who major in accounting, starting salaries are lower than in related professions.
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and in a related paradox, technology’s most powerful tools may be augmenting the accountant’s workload.
how can all this be concurrent?
a paradox or a vicious cycle?
the authors – henry friedman (ucla), andrew sutherland (mit) and felix vetter (u of mannheim) – present evidence that “relatively weak demand for accounting majors’ labor, driven by technological change, can help explain the accounting major decline … in particular that technological developments are associated with softer demand for accounting majors, as reflected in both employment and wages.”
the study compares declines in accounting majors and declining median wages with parallel increases in finance majors.
- in 1990, 22 percent of undergrad business majors were in accounting, and 10 percent were finance majors.
- in 2021, 16 percent were in finance and just 14 percent were in accounting.
- in that time period, the salary differential went from accountants earning $5,000 less than finance majors to earning $17,000 less.
the paper suggests that the decline in the number of accountants may be because of a falling demand for their services, setting off a vicious cycle. automation software can perform tasks once handled by entry-level accountants. the decline in demand for entry-level accountants drives wages lower. the lower wages drive many students toward more lucrative careers in finance, which drives declines in accounting majors.
the problem
the problem is, how do we get senior-level accountants without entry-level accountants?
a bloomberg analysis of data from the bureau of labor statistics finds that while most supply chain shortages from the pandemic years have eased, the shortage of accountants is worsening. today there are 340,000 fewer accountants than five years ago, leaving the united states with only 1.6 million.
the working paper maintains that better software allows accountants to “augment their work,” that is, produce more than before in the same amount of time. it doesn’t reduce the workload, which continues to be brutally demanding, albeit with more productive results.
but as the talent pipeline dries up, fewer professionals move up to the senior advisory positions where value is in human expertise, not functions that can be automated. higher wages for entry-level positions would not solve this problem because the positions are redundant. why pay more – or anything at all – for professionals who aren’t needed?
citing the working paper, a report from the “ucla anderson review” says the solution is in a modified cpa exam and college curricula. both need to focus less on applying rules and performing routine tasks and more on accountancy and technology working in tandem, even at the entry level, to provide the value that employers and clients need.