Business

Accounting Firms Face a Thinner Talent Pipeline as AI Takes On Routine Work

November 10, 2026

By Dr. Tamara Patzer

Key Takeaways

The National Center for Science and Engineering Statistics counted 109,075 U.S. accounting, tax preparation, bookkeeping and payroll companies with employees in 2021, and 94,137 of them had fewer than 10 employees.
The Bureau of Labor Statistics projects 5 percent growth for accountants and auditors from 2025 to 2035, with about 115,300 openings a year, many from workers who retire or change careers.
As of a July 2026 update, CFO Dive’s tracker counted 44 states and territories that have eased the 150-semester-hour rule for CPA licensure.
The Bureau of Labor Statistics says AI may automate some routine accounting work but does not expect it to reduce overall demand.

A Profession Made of Small Offices

Most accounting offices in the country are not skyscraper floors of auditors. They are a handful of people, a calendar crowded with deadlines and a partner who knows where everything is filed.

The federal numbers bear that out. The National Center for Science and Engineering Statistics, which is part of the National Science Foundation, published a table in report NSF 24-303 built from the Census Bureau’s 2022 Annual Business Survey, covering data year 2021. It counted 109,075 companies with employees in the category of accounting, tax preparation, bookkeeping and payroll services. Of those, 94,137 had one to nine employees, 13,138 had 10 to 49, 1,472 had 50 to 249, and 329 had 250 or more.

That puts about 86 percent of the category in the smallest size band. The category is broader than CPA firms alone, since it also includes bookkeeping and payroll businesses, and the table does not separate them. The figures are from 2021, so they are a snapshot. They show why hiring and licensing changes land hardest on small shops that cannot easily absorb a vacancy.

The Road to the CPA License Is Being Redrawn

In most states, becoming a CPA has meant earning 150 semester hours of college coursework, about 30 more than a typical bachelor’s degree. The Bureau of Labor Statistics describes the requirement in its Occupational Outlook Handbook, noting that licenses come from each state’s board of accountancy and require passing a national exam.

Many states are now changing that. CFO Dive, a trade publication covering corporate finance, maintains a running tracker of the changes. Its most recent count, from a June 26, 2026, article cited on the page and last updated July 14, 2026, put the number of states and territories that have eased the 150-hour rule at 44, plus Puerto Rico. Ohio was the first, in January 2025.

The model most states are following is often called bachelor’s plus two. It asks for a bachelor’s degree, typically 120 credit hours, two years of professional experience and a passing exam score. According to CFO Dive, that language appeared in the ninth edition of the Uniform Accountancy Act, issued in July 2025. The tracker listed Michigan, Massachusetts, North Dakota, Wyoming and Florida as states without formal reforms as of July 2026.

The push grew out of a shrinking pool of accounting students. In an August 28, 2025, report, CFO Dive Senior Editor Maura Webber Sadovi wrote that a smaller student pipeline had pushed states to act. She also reported that cities and towns were struggling to replace retiring baby-boomer CPAs.

Hiring Gets Pickier While AI Absorbs the Routine

The talent picture is not simple. In that same August 2025 report, Hofstra University’s Jack Castonguay described a role-based shortage rather than an industry-wide one. A Controllers Council survey of finance and accounting executives, fielded from May through July 2025, found 53 percent reported no shortage, 33 percent a minor one and 10 percent a significant one. The hardest roles to fill were controllers and assistant controllers, at 34 percent, followed by bookkeeping and financial reporting at 27 percent and accounts payable at 22 percent.

Meanwhile, AI is changing what entry-level work looks like.

The work being absorbed first is the repetitive kind, such as matching invoices and assembling first drafts of reports. That is also the work that once taught new hires how a client’s books fit together.

What the Federal Outlook Says

The Bureau of Labor Statistics, part of the U.S. Department of Labor, offers a steadier view. Its Occupational Outlook Handbook entry for accountants and auditors, last modified October 29, 2026, reports 1,595,200 jobs in 2025. It projects employment to grow 5 percent from 2025 to 2035, faster than the average for all occupations, adding about 79,400 jobs.

The more telling figure may be openings. The bureau expects about 115,300 a year on average over the decade, and it says many will come from replacing workers who move to other occupations or leave the labor force, such as retirees.

On technology, the handbook says accountants and auditors may use AI and robotic process automation to raise productivity and spend more time on analysis. It adds that cloud computing, AI and blockchain may automate some routine accounting work but are not expected to reduce overall demand. A bachelor’s degree in accounting or a related field is typically required.

The Knowledge That Is Not Written Down

One effect of retirements does not show up in any federal table. Long-serving partners and office managers carry procedures in their heads: how a particular client’s records arrive, which exceptions recur every spring, who to call at a state agency. When those people leave, a firm can lose working knowledge that was never put on paper. None of the sources cited here measures that loss. It follows, though, from a profession of small offices and a long-serving workforce.

For clients, the change is likely to be quiet. What shifts is who does the first pass and how quickly new staff reach independence.

Frequently Asked Questions

How many accounting firms are there in the United States? The National Center for Science and Engineering Statistics counted 109,075 accounting, tax preparation, bookkeeping and payroll companies with employees in 2021, using Census Bureau survey data. The category includes more than CPA firms.

Is AI expected to replace accountants? The Bureau of Labor Statistics says AI may automate some routine tasks but does not expect it to reduce overall demand for accountants and auditors. It projects 5 percent employment growth from 2025 to 2035.

What is the 150-hour rule and why are states changing it? It is the requirement of 150 semester hours of college coursework for CPA licensure. CFO Dive reported that 44 states and territories had eased it as of its July 2026 update, largely in response to a shrinking pool of accounting students.

How many accounting job openings are expected each year? The Bureau of Labor Statistics projects about 115,300 openings a year for accountants and auditors from 2025 to 2035, many from workers who retire or leave the occupation.

About the Author

Dr. Tamara “Tami” Patzer is a publisher and former newspaper editor who was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist in Breaking News Reporting. She writes about AI and media literacy. Connect with her on LinkedIn. Contact: info@dailysuccessinstitute.com.