The Accountant Shortage Highlights How Critical Accounting Is to Capital Markets

Last summer NPR’s Marketplace aired a story about the nationwide shortage of accountants. That caught the attention of Professor Rebecca Hann, Assistant Dean of Doctoral Programs and Dean’s Professor of Accounting at the University of Maryland’s Robert H. Smith School of Business. Intrigued by the report, she pondered, “How can we quantify the cost of an accountant shortage?”

This question led to the study entitled, “The Price of an Accountant Shortage: Evidence from Job Vacancy Duration and Internal Control Weaknesses.” The research co-authored by Hann, Smith PhD candidate Jingwen Yang and Yue Zheng, assistant professor at Hong Kong University of Science and Technology, reveals that prolonged accounting vacancies increase a company’s vulnerability to accounting errors, leading to weak internal controls over financial reporting.

“There’s growing evidence of firms struggling with late filings,” says Hann. The accountant shortage has left numerous companies unable to file their quarterly and annual financial statements on time. This highlights the critical role accountants play in ensuring timely and accurate financial reporting. When filings are delayed and accounting mistakes occur, it can jeopardize a firm’s ability to raise capital and maintain investor confidence.

On the Financial Executives International (FEI) Weekly Podcast Hann said, “It used to take 30 days to fill these positions, then 40 days, and now it takes 50 days.” She explained that while turnover is not new, finding the right candidate with the necessary skills has become increasingly challenging as the demand for accountants far exceeds the supply in the labor market.

This shortage means companies have fewer accounting personnel managing the same workload, which can strain existing staff and affect the quality of internal controls. Hann says, “Having internal control deficiencies is very costly,” and firms become vulnerable to financial statement errors. “When these mistakes occur the stock market reacts negatively, the cost of capital increases and the affected company attracts more regulatory scrutiny.”

One factor driving the accountant shortage is the declining number of students majoring in accounting. To address this, Hann and her colleagues have been exploring various tools to educate students about not only the vital role accountants play in maintaining a healthy capital market but also the promising career paths available. “Many students think accounting is just bookkeeping—sitting in a cubicle crunching numbers.” But she emphasizes, "In reality, accounting is the language of business. With emerging technology, automation and AI, many routine tasks are automated, allowing accountants to focus on more critical duties like data analysis and exercising professional judgment.”

The career paths for accounting majors are diverse. Public accounting is one option, but it’s just the beginning. “The career path for accounting majors is not a straight line.” Hann emphasizes that “After a few years in public accounting, your value in the job market increases significantly. You’ll find opportunities to transition into various industries, leveraging foundational skills that are highly valued in many business settings.” Quoting the American Institute of Certified Public Accountants she often tells her students, “Accounting is the one degree with 360 degrees of possibility.”

The research, “The Price of an Accountant Shortage: Evidence from Job Vacancy Duration and Internal Control Weaknesses.” is a working paper.