The Preparation of Future Accountants

The age we live in is certainly a dynamic one — both professional and economic barriers that previously defined the parameters of our profession have changed. Indeed, even the playing field has changed. Where in the past accountants were typically stereotyped as “pencil-necks” and “bean counters,” there now exists a whole new depth and breadth to society’s perception of what a CPA actually is and his and her role in this new economy.

I believe that the profession is at a crossroads, and where it actually ends up depends greatly on our foresight, stamina and ability to initiate the required change. However, before we discuss where the accounting profession is headed, it is important to illustrate where we’ve been.

Prior to the technological explosion that resulted in cutting-edge computer and software developments, most financial statements were prepared manually or with software that had very limited flexibility both in preparation and presentation. In the 1980s, most college accounting graduates could look forward to a very lucrative career in a Big Eight accounting firm performing either auditing or tax services for clients. The highly mechanical content of the accounting function at that time, coupled with the relative simplicity of financial statement line items, made it a fairly uneventful task to provide assurance that the client’s financial statements were free from material misstatement. The accounting profession sailed along fairly smoothly.

Then came the computer hardware and software explosion. No longer was it an arduous and time-consuming task to compile financial information. The parameters by which the accounting profession previously operated began to change. Consequently, the accounting profession was thrust into a state of flux. Not only did the compilation and maintenance of financial information become as simple as pressing a button or clicking a mouse, the introduction of a global marketplace and increased competition left clients themselves needing to become more savvy about ways to manufacture, market and invest. This, in turn, necessitated an accounting professional who could think “outside the box” and meet the dual function of both assuring the validity and correctness of financial information (auditing) and advising clients on how to effectively compete for profit in a changing and expanding marketplace. Indeed, the accounting firms themselves found it more profitable to merge within their own ranks, such that the Big Eight is no more and in its place is a more streamlined, yet diverse, group of entities.

Current Education and Enrollment

The increased demand for professional services extending beyond the realm of the former requirements dictated that accounting majors should know more than they were historically taught in academia. Unfortunately, the crisis in the profession that is now being exemplified is mostly a result of corporations cross-training non-accountants to fulfill responsibilities previously exclusive to CPAs and CPA candidates, or in the case of academia providing an academic curriculum for accounting majors that somehow fails to adequately prepare students for the myriad of functions they are now expected to perform.

It is an unquestionable fact that the number of accounting majors has been steadily decreasing over the past several years. It is evident that, especially in light of the Enron debacle, the demand for qualified individuals to perform the accounting function should be on the rise and therefore, supply should increase. This, however, is not yet the case. Although demand for qualified professionals is on the rise, especially in light of the collapse of Enron, the decrease in the number of accounting majors is going to keep the supply low for some time. So, now it becomes necessary to ask the question: “Why?”

Based on a survey performed by the New Jersey Society of CPAs, enrollment in accounting programs at the five New Jersey universities with the largest accounting programs have declined 35 percent since the 1995/96 academic year. As is the case with most other New Jersey universities, Monmouth University has actually seen an increase in enrollment in its School of Business Administration, which has risen 18 percent since 1997. The number of students majoring in accounting, however, has decreased by 21 percent during that period of time. A number of studies have been performed that have attempted to understand the problem, and there are many schools of thought regarding the reasons why there has been a decline in accounting enrollments. In their 2000 study on the issue, “Accounting Education: Charting the Course Through a Perilous Future,” W. Steven Albrecht of Brigham Young University and Robert J. Sack of the University of Virginia stated that the key to increasing accounting school enrollment is changing the curriculum to meet the needs of the new marketplace.

Focus on Education

Although other factors, such as technology and globalization, have had an effect on enrollments, it is hard to deny that the accounting curriculum, as it now stands, clearly does not meet the needs of the changing financial environment. A revision of the curriculum, or even a complete overhaul of the accounting major requirements, appears to be the only method by which academia can strive to compete in the existing student, human-capital marketplace. Why would a student major in accounting when a finance major is more broadly prepared for a range of career options?   As I see it, there are many ways that universities can address, and perhaps reverse, the current downward spiral in accounting majors. When New Jersey passed its 150-hour educational requirement in 1995 for those who wish to take the CPA exam, its universities were presented with an opportunity to broaden the knowledge and skill base of their accounting graduates. As a result, the vast majority of accounting students in the state now will graduate with a master’s level degree. As educators and practitioners, we also need to ensure that accounting curriculums are revised to introduce a broader base of accounting and financial management topics. Current technology needs to be introduced and incorporated into lectures. Monmouth University addresses this via its Laptop Initiative program. Students who participate in this program are offered course sections where education takes place utilizing current technology. Outside guest speakers should be used whenever possible to raise students’ awareness of the various responsibilities accountants hold. In addition, one cannot understate the value of educators who have had practical experience and can impart that real-life experience in a classroom setting.

Albrecht and Sack have made sound recommendations for how an educational institution can elicit change and what those changes may be. This appears to be a “top-down” process of:

a. Assessment of the current educational environment
b. Evaluation of the degrees offered
c. Review of curriculum content, and
d. Revision of classroom pedagogy.

Although the above suggestions have merit, an educator can most directly impact and most quickly change what subject matter is taught and how it is presented. It is apparent that the accounting profession has suffered; it is now up to educators, and practitioners, to make sure accounting school curriculums are as interesting and dynamic as the profession itself. Accomplishing this feat will not happen overnight, and it is clear that there are other obstacles beyond an instructor’s control that will also impact a student�s career choice. But with persistence and creative educational tools, it is my belief that the accounting profession will once more become the coveted and admirable profession it was in the past.

JACQUELINE-ANN CALDERONE, MBA, CPA, is a visiting assistant professor in Monmouth University’s Department of Accounting and Business Law. She is a Deloitte & Touche alumna, with extensive background in the financial services industry.

Article courtesy of Jacky Calderone.

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