Accounting graduates: big changes ahead.

A number of indicators point to important changes that will affect the recruitment of new accountants across the country. Here's an overview of some of the educational trends most pertinent to CPAs.

Continued strong interest in accounting. Deans of business schools have been shocked by the reported decline in interest in business among new college freshmen. The annual study, The American Freshman: National Norms for Fall 1991, published by the Higher Education Research Institute of the Graduate School of Education at the University of California at Los Angeles, reported the percentage of freshmen seeking a business career fell from a 1987 peak of 24.6% to 15.6% in 1991. Similarly, interest in business-related college majors declined to 18.1% in 1991, down from a 1987 peak of 27.3%.

Interest in accounting as a major did not decline nearly as sharply as other business majors, however. For example, the exhibit below shows freshmen's interest in accounting fell less than their interest in general business and finance. The 1991 level of interest in finance was less than half what it was in 1987.

Different candidates. Changes in U.S. demographics mean that women, minorities and people over age 25 will make up a greater percentage of accounting graduates and new CPAs. Employers that hire mostly white, college-age, recent male graudates will face a sharp decline in the number of those candidates for staff positions.

The average college students of the year 2002 literally will look much different from their counterparts in the 1990s. Among the traditional college-age group (18-24), a much larger percentage will be ethnic minorities. Females will account for 56% of all college students. Of the student body, 23% will be over age 35.

A smaller pool. For the past eight years, the number of accounting degrees awarded has remained flat, at about 50,000 annually. More accounting degrees would have been awarded if university accounting programs had admitted every student who wanted one. Because accounting programs do not accept all applicants, a decline in interest in business and accounting degrees probably will not lower the total number of accounting graduates. Schools will continue to admit enough students to fill their available spaces. However, the quality of those admitted may decline, since the schools will be selecting from a smaller applicant pool.

The only thing that might cause an absolute decline in the number of accounting graduates is financial problems at universities. Severe cutbacks are unlikely for most accounting programs because their relatively low cost per student credit hour makes them money-makers when compared with majors requiring costly laboratories and computer systems.

More high school grads. The good news for universities is the recent decline in the number of high school graduates has ended. The number will turn sharply upward, resulting in a 20% increase between 1992 and 2000. College attendance rates continue to improve, which explains why college enrollment moved steadily upward during the 1980s in spite of constantly declining high school graduates. By 2002, there will be 16 million people in college, up from 14 million in 1991, and the number of college degrees awarded annually will have increased 12% to 1.2 million.

A new social conscience. Surveys indicate a growing sense of social responsibility among college freshmen. The concentration on making a lot of money is giving way to a feeling that individuals should "make a difference." This also is reflected in 1991 freshmen's choices of majors. In 1987, the first choice of major was general business. In 1991, the number-one choice was nursing. Interestingly, accounting was the second choice in both years, with elementary education the third most popular choice in both years.

A range of choices. Credentials are important. As a growing percentage of the population earn bachelor's degrees, more and more will look for other credentials to set themselves apart from the masses. Advanced degrees and licenses such as the CPA certification will grow in importance.

All of this indicates that employers will have plenty of accounting graduates to consider during the years ahead. Hiring the best will depend on a firm's ability to attract the traditional graduate as well as the older graduate, females and minorities.