‘Tabulating’ the Challenges & Opportunities in Accounting Today

NJCPA CEO & Executive Director Aiysha Johnson discusses workforce shortages, regulations, and the state’s overall tax environment.

By Anthony Birritteri, Editor-in-Chief On Sep 11, 2024

Aiysha (AJ) Johnson, who this past summer celebrated her one-year anniversary as CEO and executive director of the 13,000+ member New Jersey Society of Certified Public Accountants (NJCPA), says the accounting profession is operating in a place of uncertainty, both at the state and federal levels. Faced with workforce shortages, increased regulations, an overall problematic tax environment, and other issues, she says the society is doing its part in researching the issues, hearing from its members and various partners, and implementing solutions to the challenges.

“I have a sense of pride that we are all in this together,” says Johnson, who, prior to joining NJCPA, was executive director of the Americas Region for BKR International, an association of independent accounting and advisory firms. There, she was responsible for overseeing the implementation of all strategic efforts for BKR accounting and business advisory member firms in the US, Canada, Latin America, and the Caribbean.

A Workforce Shortage

Johnson says the profession is coping with a workforce shortage of which clients – including businesses – are now seeing the effects. “Companies are having trouble finding the talent to meet their [accounting] needs,” she tells New Jersey Business Magazine.

A recent article in CPA Trendlines reports that this “severe” talent shortage saw more than 300,000 accountants and auditors leaving the profession since 2020, representing a 17% national decline. Meanwhile, a Bloomberg report said that the number of candidates taking the CPA exam is the lowest since 2006.

Johnson says the causes for the shortage include declining birth rates, college enrollments and fewer accounting degree programs being offered at institutions of higher education, coupled with a large number of accountants retiring and the impact of the COVID-19 pandemic.

NJCPA is actively working to increase the number of students entering the profession. Last year, it created the Pipeline Task Force, which has developed a set of actionable and measurable recommendations that identified areas of needed improvement. These include:

• Raising awareness of the profession among high school students and addressing negative perceptions among college students and recent grads.
• Removing obstacles to licensure and improving access to resources.
• Engaging with and getting buy-in from key professionals at firms, companies and in academia.

The society has already acted upon these recommendations by: visiting 64 high schools during the fall of 2023 to inform students about the benefits of having a successful career in accounting; holding the inaugural Accelerating Scholars in Accounting (ASA) event this past May, in which more than 50 accounting students from universities/colleges and county colleges took part in interactive discussions about the profession; awarding $168,000 in scholarships to 38 New Jersey-based high school and college students through the NJCPA Scholarship Fund; and actively supporting and advocating for initiatives that recognize accounting as a STEM subject and that allow STEM K-12 grant funding to be used for accounting awareness and education.

“We’re looking at all of our options, and we’re partnering with local business advocacy groups to help us look at long- and short-term solutions and opportunities,” Johnson says, adding that some solutions will require legislative changes.

Via the Task Force already mentioned, the society is also looking at some of the obstacles to CPA licensure, such as the 150-hour education requirement, which is seen as preventing students from entering the profession. 

Another hindrance in increasing the number of CPAs in the state is the time it takes the New Jersey State Board of Accountancy, within the Division of Consumer Affairs (DCA), to issue CPA licenses. The board is understaffed and underfunded, with Johnson saying it can take up to six months to a year for an accountant to receive their license. This is after sitting through four licensing exams, obtaining 150 college credit hours, and completing an experience requirement under a CPA’s supervision.”

There was a bill (A-5283) that proposed studying the time it takes the various boards within the DCA to issue licenses compared to other states. Additionally, the bill called for money collected from the licensing fees from more than 720,000 individuals and businesses, to be reinvested into the various licensing boards so that they would be able to hire additional staff and technology. Unfortunately, Gov. Phil Murphy vetoed the bill earlier this year.

Both NJCPA and the New Jersey Business & Industry Association supported the bill. “The issue continues to be a challenge,” Johnson says. “Quite frankly, it is another barrier to entry. If you’re excited about accounting, then you have to wait a year to actually receive your license – and that’s also tied to promotions and other employer opportunities – that takes away the excitement about the industry.”

Taxes & Business Environment

Johnson says the society’s members are concerned about New Jersey’s overall business landscape. They don’t want the state to be an outlier in the region and country concerning taxes and affordability. The fact is, however, that some NJCPA members have advised companies to move out of state. When applicable and considering options, it’s the responsibility of the CPA do so, Johnson explains. In a current NJCPA member survey, 50% of responding CPAs advised a business client leave New Jersey.

Among the recent factors that may cause businesses to consider leaving is the Corporate Transit Fee on businesses earning $10 million or more. This $1 billion tax, that was part of the state’s FY2025 budget and is retroactive to the beginning of the year, will have a trickle-down effect impacting small businesses, not just large companies, Johnson says, adding that it is not right to tax large companies as a solution to resolve budget issues. 

“The state should be looking at comprehensive solutions, and we would be happy to have conversations with the administration now and in the future on sustainable [fiscal] solutions, ways to generate new revenues, and looking at inefficiencies,” Johnson says.

 A New Mandate

The accounting industry is also being impacted by mandates and regulations that are placed either on CPA firms or their business clients. One example is complying with the state’s RetireReady NJ program, in which businesses with 25 or more employees – if they do not already offer employees a 401(k) plan – must sign up for the state’s new retirement program, in which employees can enroll in a Roth or Traditional Individual Retirement Account (IRA).

“It’s a great idea that will encourage retirement savings, but it’s a mandate for small and mid-sized businesses. … and who do you think these businesses will turn to for help? Their CPA,” says Johnson, who explains that companies that are required to participate, but don’t, will be faced with penalties. 

To participate, business must report any qualifying employee 18 years or older, regardless of hours worked. Alternatively, a company must certify that it is exempt from participating in the program. There are also payroll issues that must be dealt with concerning employee contributions and deposits into the savings account. Businesses that collect employee contributions, but fail to remit any portion of them to the fund, will be subject to a penalty of $2,500 for a first offense and $5,000 for the second and each subsequent offense.

On the federal level, with a new US president on the horizon, the expiration of the Tax Cut and Jobs Act next year, and if any changes occur to the Inflation Reduction Act, there is a concern on how changes would impact what’s being done at the local level, Johnson says. “Regardless of who the president will be, Democrat or Republican, the tax issues won’t go away, but the approaches may be radically different. This leaves the profession in a state of uncertainty. You can only [prepare] so much until you really see what decisions are being made.”

With all of these issues taken into consideration, Johnson says the CPA industry is still an exciting profession: “Accounting is the language of business with a lot of exciting opportunities to work in any industry and in any setting, including Fortune 500 firms, startups, government and not-for-profits, etc. This profession provides you with a foundation that opens many doors.” 

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