A growing shortage of accountants has started showing in financial statements of large companies, The Wall Street Journal reported July 11.
Companies such as Advance Auto Parts and electric-air-taxi firm Joby Aviation disclosed in recent months efforts to address material weaknesses due in part to the lack of accounting staff, according to the report. These companies are larger in size than those that have historically had trouble attracting accountants.
The disclosures come as fewer people are pursuing degrees in accounting and entering the field. This has resulted in more positions open and for longer periods of time. Experts told the Journal the shortage will likely be compounded as more accountants retire without a strong pipeline of replacements.
About 600 U.S.-listed companies of a total 7,359 reported material weaknesses related to personnel, typically in accounting or information technology, this year through June, according to the report. That is down 5.2 percent from the same period last year but up 40.6 percent from 2019.
Companies facing a shortage of accountants might assign less-experienced employees to critical tasks, which could lead to more internal control over financial reporting issues and fraud, not only in financial reporting but against the companies themselves, Ben Foster, PhD,an accounting professor at University of Louisville (Ky.), told the outlet.
John Coffee, a professor at Columbia Law School in New York City, told the Journal one potential solution is for companies to offer accountants more lucrative pay packages, adding, "higher salaries are coming for in-house accountants whether management likes it or not."