A joint report by American Institute of CPAs (AICPA) and National Association of State Auditors, Comptrollers and Treasurers (NASACT) has revealed the need for multifaceted strategies to enhance Certified Public Accountant (CPA) value in the public sector.
The scarcity of accounting professionals, particularly CPAs, is said to be placing a strain on state and local governments.
The report identifies the disparity in accounting and auditing standards between the government and private sectors, necessitating specialised expertise for public sector CPAs.
It also notes the challenge of lower salaries and audit fees in the public sector compared to private sector offerings.
To address these issues, the report recommends benchmarking CPA salaries against the market and exploring flexible work arrangements to attract talent.
AICPA public accounting CEO Susan Coffey said: “We have a talent shortage in accounting that affects business as a whole, and many of the pipeline initiatives the profession is putting in place will help the public sector as well.
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By GlobalData“But accountants who do government work face unique challenges that require more specialised solutions. The public deserves to know its tax dollars are being spent as intended — and that requires strong government finance teams and experienced auditors.”
Furthermore, the report suggests that government entities should prioritise CPA firm qualifications over fees when evaluating external auditors and remove geographic restrictions to widen the pool of potential auditors.
Regulators are encouraged to align accounting and audit standards for both sectors to simplify processes.
To ensure smaller governmental entities can still be held accountable, the report proposes that federal and state governments periodically reassess audit threshold requirements and offer audit alternatives.
It also highlights the importance of providing accounting and auditing resources or financial assistance to local governments to facilitate timely audits.
State governments are advised to develop educational programmes for legislative bodies and officials to communicate the CPA value proposition and the necessity for qualified, competitively paid accounting and auditing staff.
The report states that Higher education institutions should increase governmental accounting topics in the curricula and strengthen ties with government entities to enhance campus presence.
This report concludes with recommendations for state and local governments to foster internships and mentorships, along with financial incentives for accountants pursuing a CPA in government roles.
CPA firms are encouraged to promote government practice as a viable career path and adopt staffing models that allow for specialisation in governmental audits throughout the year.
In 2023, AICPA formed an advisory group to develop a national strategy addressing the accounting profession’s talent shortage, including support for accounting students pursuing CPA licenses.
