A small firm does not fix the talent shortage. It decides how many engagements it can sign with the people it has, and builds the system that sets that number. This article lays out what the published data says about supply, and then three strategies that raise capacity without lowering the standard of the file the CPA signs.
What the data says
The numbers below come from the AICPA's Trends report and its CPA Firm Top Issues Survey, as reported by the Journal of Accountancy.
Degrees. Accounting bachelor's and master's degrees awarded totaled 55,152 in 2023-24, down 6.6% from the prior year. The prior year's decline was 9.6%, so the rate of decline slowed. Bachelor's degrees fell 3.3% and master's degrees fell about 15%.
Enrollment. Spring 2025 enrollment in two- and four-year U.S. accounting programs was 266,506, up 12.4% from the prior year and the highest total since 2020.
New CPA Exam candidates. New candidates numbered 42,626 in 2023, ahead of the exam model change. They fell to 28,082 in 2024, the first year of the new exam. Through the first six months of 2025, 16,448 new candidates entered the pipeline.
Firm hiring. Participating firms made 11,985 new-graduate hires in 2024, and 75% of participating firms expected to hire at least as many in 2025. The Journal of Accountancy article notes that a low response rate prevented a statistically reliable estimate for all firms.
Firm priorities. In the 2024 Top Issues Survey, finding qualified staff was the most pressing concern of accounting firms other than sole practitioners. In the 2026 survey, with 629 respondents fielded April 20 to May 22, firms with 11 to 30 employees ranked hiring experienced staff first, staff workload management was in the top four for the four largest size groups, and staff retention made the five-year top five for every group except sole practitioners. Firms with 10 or fewer people, and sole practitioners, ranked tax law complexity first.
Read together: the graduate supply is shrinking more slowly than it was, the exam pipeline is recovering, and firm owners still rank people as a top constraint. Hiring alone does not close the gap in a busy season. See managing busy season in a small CPA firm.
Strategy 1: Delegate by task, not by title
Capacity is lost when senior people do work that a trained staff member could do under review. The fix is a written split of each engagement into three tiers.
- Partner-only: acceptance and continuance, risk assessment conclusions, significant estimates, going concern, the opinion. These are the judgments the signature stands behind.
- Manager review: the planning memo, analytical conclusions, journal entry testing results, the misstatement summary.
- Staff preparation: tie-outs, schedules, confirmations tracking, tickmarked lead sheets, rollforwards.
Write the split into the engagement checklist so that it does not depend on who is in the room. Each tier needs a reviewer one level up. The reviewer sign-off is the evidence of supervision, and it is also the training mechanism for the staff member being delegated to.
The same logic applies to the client side. Clean, complete client-prepared schedules cut hours from every engagement. See audit readiness checklist for clients and the PBC list.
Strategy 2: Standardize workpaper preparation
The same schedules get rebuilt engagement after engagement, in slightly different forms. Standardization turns preparation into repeatable work that new staff do correctly the first time.
- One workpaper index and one lead-sheet layout for every engagement.
- One tickmark legend, defined once. See audit tick marks.
- Account-level templates with the procedure, the assertion and the conclusion line already placed. See audit procedures by account.
- Trial balance, adjusting entries and financial statement tie-out in a fixed order. See adjusted trial balance worksheet guide and tick and tie.
- For clients on off-the-shelf accounting software, a standard data pull and cleanup sequence. See auditing a client on cloud accounting software and accounting-file cleanup before the audit.
Standard preparation shortens the reviewer's job as well. A reviewer who knows where every item sits reviews faster and catches more. Standardization also supports the firm's quality management system; see SQMS 1.
Strategy 3: Outsource preparation, keep review
Outsourced preparation expands capacity in the weeks when the staff is full. The firm's responsibility does not move: the report goes out under the firm's name, and the CPA's signature stands behind the file. Three conditions keep outsourcing inside professional standards.
- Confidentiality. Under the AICPA Code's interpretation on third-party service providers (ET 1.700.040), a member either obtains the client's specific consent or enters a contractual agreement with the provider to keep the information confidential, with reasonable assurance that the provider has procedures to prevent unauthorized release.
- Independence and competence. The preparers act under the engagement team's direction. See independence and nonattest services for small firms.
- Supervision and review. Outsourced work enters the file as a prepared draft. A named reviewer on the engagement team reviews it, ties it to the source, and signs the workpaper. Nothing is relied on until that review is done and evidenced.
See outsourced audit support for CPA firms for scoping and contract terms, and AI in auditing for small CPA firms for automated preparation.
A capacity calculation to run each fall
- List each engagement and the hours by tier: partner, manager, staff.
- Mark the hours that are preparation: schedules, tie-outs, data pulls.
- Move preparation hours to standard templates first, then to supervised outside support.
- Recompute partner and manager hours. Those are the hours that cap how many engagements the firm signs.
Retention belongs on the same sheet. A staff member who finishes a first busy season with a structured review trail and a path to licensure stays; see CPA licensure with a bachelor's degree and two years of experience and audit career path from staff to partner.
Sources
- Journal of Accountancy, The accounting graduate pipeline: where do things stand (AICPA 2025 Trends report figures)
- Journal of Accountancy, Finding qualified staff tops ranking of CPA firm top issues (AICPA PCPS 2024 survey)
- Journal of Accountancy, AICPA top issues survey: firms focus on technology rises (AICPA PCPS 2026 survey)
- Journal of Accountancy, AICPA confidentiality rule (ET 1.700.040 third-party service providers)
CORAA prepares ready-to-review audit files for US CPA firms from client books; you review and sign. See /us.
Part of CORAA University · Quality management and practice: related guides, calculators and templates.
AU-C references are to AICPA Professional Standards, paraphrased here; read the standard itself before relying on a requirement. This page is guidance, not professional advice. Report an error