What Should Young Economists Expect and Why Choose Financial Consulting, Auditing, and Accounting?

“At times like these, new people, new times!” but the “new” people must work with the “old” ones and vice versa, would be the continuation of the famous phrase from Romanian literature. Because experience must always be coupled with energy and enthusiasm. The question is how to attract young people to fields like tax consultancy, auditing, or accounting that they find less appealing.

By Alex Milcev, Leader of the Tax and Legal Assistance Department, EY Romania & Moldova, and Claudia Sofianu, Leader of People Advisory Services, EY Romania & Moldova, and the CESA region

It has become a true challenge for companies to find new, well-prepared individuals suited for these professions. How do we draw their attention to fields they perceive as requiring suits, fixed schedules, and spending the whole day buried in papers? Especially when things have changed significantly in the fields of tax consulting, auditing, and accounting. It might seem unbelievable to some, but these professions can be “cool” too, especially since they require different skills compared to the past.

Status quo – a few statistics

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How are things in Romania and other European or US countries from this perspective? Is there a new wave of tax consultancy experts, so essential in the current economic context, complex, constantly changing, under the pressure of new technologies and new working tools, digitalization, and more recently, artificial intelligence?

Officially, in August 2022, the National Association of State Boards of Accountancy (NASBA) – the professional organization for accountants (and by extension, auditors) in the USA – registered a total of 665,612 auditors. Looking at the American association’s figures, we see different trends from year to year between 2016 and 2022, with decreases in the number of consultants (in 2019, there were 654,375 consultants compared to 664,532 in 2016), but also increases (669,130 in 2021). Overall, however, the figure for 2022 is lower than the previous year (by 3,518 CFAs) and only slightly higher (1,080 more individuals) compared to 2016. This results in an average growth, over a six-year period, of 180 individuals per year or 0.16% in 2022 compared to 2016, which, for the US economy, could suggest a personnel deficit in the tax consultancy field, against a GDP that grew by over 13% in the same period (2016-2022).

On the other hand, a Bloomberg Tax Analysis report indicates that in the US, “financial professions” peaked in 2017 and since then, the number of professionals in the field has decreased by 17% (by 2021), creating an annual deficit of over 130,000 jobs for accountants and auditors.

The situation is not much different in Europe. Although the figures are harder to compare due to differences between countries and regulations, it seems that even in Europe, the number of accountants, auditors, and consultants has decreased over the last decade. However, GDP has grown by around 9% in the same period.

The situation is relatively similar in Romania, where there are three professional associations under whose umbrella professionals in the tax, audit, and accounting fields gather: CECCAR, CAFR, CCF. For example, according to the most recent statistics from the Chamber of Tax Consultants (CCF) in Romania, the current total number of CCF members is 6,526, of which active tax consultants are 4,192. An analysis of the evolution of the number of consultants shows slight increases from year to year, but also decreases. The number of members in 2023 is lower compared to the previous year when there were 6,544. From 2017 to 2023, there has been a slight increase in the number of tax experts, meaning less than 2% more people enrolled in CCF during the period of 2017 – 2023.

If we look at the bright side, any growth is still growth, no matter how small. But if we look realistically, the economic processes Romania has gone through in the last three years and what is expected in the near future would theoretically require a serious influx of young graduates in economics to prepare and enter the fields of tax consultancy, auditing, and accounting. Practically, these individuals should be helped to discover the current challenges of these professions and be guided (mentored) to choose this path. In other words, the economies of the world have grown, legislation and regulations have multiplied and become more complex, and consequently, the demand for professional services is greater. However, the number of those choosing these professions seems to be in disagreement with what’s happening in the economic environment; therefore, the demand for professionals is greater than the supply.

How are companies and the market responding?

Companies have had to quickly adapt to new trends and adopt new digital tools, thus investing heavily in innovative online services, digital platforms, and applications, all to achieve more accurate and prompt reporting. The shortage of qualified personnel, both in Romania and other countries, has been and continues to be a significant catalyst for this digital revolution. The adoption of technology and digital tools is what accelerates changes in the economy and within companies. For all these changes and adaptations of business models to happen, well-prepared people, both professionally and digitally, are needed. There is a real battle on the recruitment front to find the best-prepared individuals, those most capable of understanding and working with new technologies and digital tools. Therefore, a natural question arises: how appealing are the professions of tax consultant, auditor, or accountant in these times, and why has finding these people become a problem?

Let’s try to offer some explanations and perhaps debunk some incorrect perceptions.

The professions of tax consultant, auditor, or accountant are often associated with routine, boredom, and extreme demands, and it seems that their allure has faded away many years ago. Even though the younger generation is gravitating towards universities with an economic profile – finance, banking, accounting – they might not necessarily choose these fields upon graduation. According to the American Institute of Certified Public Accountants (AICPA), the number of enrollments in accounting programs – the breeding grounds for future auditors – is also continuously declining. For example, in 2019, enrollments dropped by 4% compared to 2016.

What is actually happening, how does the present look, but especially the future, in the context of digitalization, the emergence of numerous digital tools, and solutions based on artificial intelligence? Why would these types of professions become less appealing or why would graduates be less interested in pursuing these careers? These are just a few of the concerns of the trade, but they have pertinent explanations related to perceptions, appearances, and realities, mixed with preconceived ideas.

The demand for accounting experts is on the rise

In the US, it is anticipated that the demand for accountants and auditors will grow by 6% by 2028, and the demand for all jobs is projected to grow by 5%. Thus, the potential need for Certified Public Accountants (CPA) will likely be higher than for other professions. Additionally, The American Institute of CPA (AICPA) monitors the demand for future accountants and CPAs, and according to a survey conducted among American companies, almost one-fifth (18%) of firms stated that they will need more CPAs in their workforce in the coming years.

In Romania, we have seen, at times even at an accelerated pace, the digitization of certain sectors of the economy, both private and public. This trend has visibly changed the financial, auditing, and accounting sector, where traditionally, people sat with paper in front of them, desk calculators, spreadsheets of mundane situations, routine. However, more and more digital applications and tools have emerged. Even state institutions are becoming more digital – let’s not forget the initiative of the Ministry of Digitalization – in the near future, practically no public institution will be allowed to ask for paper documents, copies, or files.

Developers of digital solutions have already created a multitude of tools through which databases can not only be well and easily managed but also extracted and interpreted to generate useful situations and reports for institutions and companies. In this context, we’re talking about the deep and continuous transformation of the professions of auditors, accountants, and tax consultants, where the emphasis is now more on two attributes (or qualities): digital skills and an in-depth knowledge of Romanian and international legislation.

Monotonous work is replaced by suitable software that allows “taking the robot out of humans”. The routine work of the past is transforming into something much more interesting in this context, something creative even, which involves using other skills. This includes the ability to analyze and understand statistics, legislation, and an economic environment in a fast-paced dynamic, paired with digital competencies.

The fear that people would be replaced by machines has not come true so far, both in professional services and other sectors. On the contrary, in Romania, we could say that automation and digitization – the levers of productivity growth – have barely chipped away at the shortage of qualified workforce, far from achieving balance between demand and supply. Artificial intelligence is just beginning, but it’s already clear that it will bring even more profound changes in the practice of these professions.

Young people and professional services in the digital era

We could assert, without fear of being wrong, that the new generations are well-equipped in terms of digital competencies (despite the shortcomings of Romanian education, which we know all too well). This is the so-called “digital native” generation, and beyond that, these generations are more dynamic and more willing to embrace new challenges.

The fact that too few young people are attracted to these professions nowadays, we believe, is due to a less glamorous image, seemingly dusty, outdated, and seemingly without a promising future. But that couldn’t be further from the truth! Such impressions are far from reality and can be easily contradicted, even with a short period of working in the field.

Things are quite simple here: the routine parts of the auditor/accountant/tax consultant profession are and will be increasingly taken over by technology, while innovation, analysis, interpretation, and business decisions become the primary attributes of the professional. Moreover, the job market, both globally and locally, is heavily skewed in favor of the employee – the profound imbalance between demand and supply won’t be resolved soon, making these professions even more attractive now and in the near future.

In paraphrasing a well-known motto, we can say that the “future of the profession sounds good”! However, a concentrated effort is needed to change perceptions of the past. Here, the business environment, the academic world, and professional organizations (CECCAR, the Chamber of Auditors of Romania, the Chamber of Tax Consultants) must collaborate intensively to give the younger generations of economics graduates the correct signal about the importance of these professions and their key role in their future and in the future of Romania’s economy.