U.S.-listed companies such as car-parts provider Advance Auto Parts, electric-air-taxi firm Joby Aviation and German biotech company Evotec in recent months have disclosed efforts to address material weaknesses due at least in part to a lack of accounting staff. These names are larger than the typically smaller companies that historically might have had trouble attracting accounting expertise.

The disclosures come as fewer people are pursuing degrees in accounting and entering the field, resulting in more positions open and for longer periods of time. What’s more, academics say, the shortage will likely be compounded as more accountants retire without a robust pipeline of replacements.

Smaller companies in need of accounting staff often decide not to fill the jobs because they either can’t afford to or can’t justify the cost-benefit trade-off, while their bigger counterparts might be unable to find the right people, said Andrew Imdieke, an assistant professor of accounting at the University of Notre Dame.

“This is an economic shock where larger companies are not able to fill these roles as opposed to choosing not to fill these roles,” he said. “It’s definitely a cause for concern.”

One of the most explicit examples of the fallout came from Advance Auto Parts, which said it had identified a material weakness in its ICFR due to turnover in key accounting positions during the fiscal quarter ended April 22. The company said it wasn’t able to attract and retain enough qualified people to fulfill internal-control responsibilities.

So much so, that the Raleigh, N.C.-based company said on June 2 it wouldn’t be able to file its 10-Q quarterly report on schedule because it needed more time to assess the control deficiency and its remediation. It filed the 10-Q four days later.

Advance Auto Parts is working to address the shortcoming, in part by tapping temporary outside help with the requisite accounting knowledge and experience, it said in its June 6 filing. The company didn’t respond to a request for comment.

Big and midsize firms like Advance Auto have a higher regulatory bar to clear than smaller companies do: In 2020, the Securities and Exchange Commission exempted public companies with less than $100 million in annual revenue from retaining an outside auditor to verify their internal controls.

Companies with longstanding ICFR gaps rarely face SEC charges for that recurrence alone, but they can risk higher borrowing rates, a falling stock price and an investor exodus if they don’t make fixes. In 2019, the SEC settled charges with four public companies, including health-food company Lifeway Foods, for failing to maintain ICFR for seven to 10 consecutive years.

Another company that has struggled with an accountant shortage is Joby Aviation, a maker of electric vertical takeoff and landing aircraft, or eVTOLs. In a May 5 quarterly filing, the company said it was continuing to fix the control deficiencies that led to its material weakness. The remaining aspect of the material weakness, as of Dec. 31, 2022, related to the lack of sufficient accounting personnel with deep technical knowledge to identify and resolve complex accounting issues in a timely manner, the Santa Cruz, Calif.-based company said. Joby Aviation declined to comment.

Nearly 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, down 5.2% from the prior-year period, but up 40.6% from the 2019 period, according to a review of filings by research firm Bedrock AI.

Of these companies, 21% were based outside the U.S., a jurisdiction whose reporting requirements can be knotty for companies with complex operations and corporate structures.