New PwC US Audit Head Backs Easing CPA Licensing Requirements

PwC’s top US audit leader is backing efforts to reform accountant licensing requirements by swapping college credit hours for more on-the-job experience.

Developing the Big Four firm’s roster of auditors and recruiting newcomers from a shrinking pool of candidates is a top priority for Deanna Byrne, who took the job as the firm’s assurance leader in July. She spoke about her goals for the US audit practice in a wide-ranging interview with Bloomberg Tax this week. Other top objectives include enhancing audit quality and expanding the firm’s work vetting the reliability of clients’ sustainability reporting and use of artificial intelligence technology.

“We are supportive of alternative pathways into accounting that preserve mobility, which is really of critical importance, but that build competencies and help increase the number of people coming into the profession,” Byrne said.

The Big Four firms have so far avoided the brunt of the talent crunch hitting companies and smaller firms as colleges send fewer accounting graduates into the market. To combat the accountant shortage, state regulators are looking to scale back the education requirements to match a standard bachelor’s degree along with two years of working experience.

CPA candidates must earn the equivalent of an extra year of school beyond the traditional four-year degree. The so-called 150-hour rule has been criticized as a barrier to the entering the profession, contributing to the decline in qualified accountants.

Competitor KPMG’s CEO has similarly backed efforts to decrease the college credit hours required to earn a license.

“We think we can continue to deliver high quality work with the candidates that would have the 120, plus the experience that’s being promoted,” Byrne said, referring to the credit-hours needed to earn a standard bachelor’s degree.

Audit Quality Focus

Byrne brings 36 years of experience at PwC, also known as PricewaterhouseCoopers, to her job running the firm’s audit business.

During her career, she has led audits for Under Armour Inc. and Campbell Soup Co., according to Public Company Accounting Oversight Board records. She was in charge of the firm’s Philadelphia office as managing partner and led the consumer and industrial products and services team for the east region.

Preparing staff to vet new environmental reporting required in Europe and provide AI governance services is a key part of her strategy to expand the firm’s non-financial assurance business.

“We are very focused on being able to meet the demand and ensure that as this market evolves that we’re ready to deliver to our clients,” she said.

The firm is also working to shore up the quality of its traditional audit work vetting the income and assets of its publicly traded clients. Eight top PwC partners including Senior Partner Paul Griggs and Byrne signed compensation agreements that could jeopardize their pay in the event of breakdowns in the firm’s audit governance system.

Tying top partners’ pay to audit quality was a key commitment the firm made last year when it announced a suite of reforms under now retired Senior Partner Tim Ryan. The voluntary steps, spread over three years, were meant to bolster investor confidence in PwC’s audits.

A pilot program to improve fraud detection and assessments of risks that could shutter a company, known as a going concern analysis, will run through the upcoming annual reporting season, Byrne said. Results could inform the firm’s response to expected proposals that would revise US audit standards on fraud and going concern risks.