Integrating Finance in Certified Public Accounting Education: A Comparative Analysis of CPA Practice and Education in the US and China

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ABSTRACT

This paper examines what CPAs do and what accounting educators teach in the US and China. The comparison reveals that while practicing CPAs provide many finance and finance related services, accounting educators offer only limited exposure of finance to accounting students. The finding shows that there is a knowledge gap in finance among accounting students. To provide quality finance and finance related service, additional finance training is necessary for the future CPAs. The paper further discusses the difficulties of making curricular changes, and needs and benefits of integrating finance in accounting education. It also makes preliminary recommendations on what and how to integrate finance in accounting curricula.

INTRODUCTION

Profound changes in accounting practice have made it necessary to revise the accounting curricula. The calls for changes in accounting education in US are well documented. In its 1986 report titled "Future Accounting Education: Preparing for the Expanding Profession," the American Accounting Association indicates that a growing gap exists between what accountants do and what accounting educators teach (AAA, 1986). The AICPA's CPA Vision Project: Focus on the Horizon calls for modified education programs to meet the future needs of CPAs (AICPA, 1998). In three separate studies published in 1994, 1996, and 1999, the IMA warns accounting education needs to change if it is to meet the future needs of accountants in industry (IMA, 1994, 1996, 1999). Evidence shows that the previous warnings for changes in accounting education have for the most part been ignored and accounting education is being delivered the same way today as it was 20 or 30 years ago (Albrecht & Sack, 2000). Albrecht and Sack warn that because practice has changed so dramatically and because accounting education has not kept up, accounting programs have lost ground to other business majors, to corporate competitors, and to other types of educational programs.

Chinese accounting profession has undergone significant changes since China adopted the policy of economic reform and opening up to the world. The broad transformation in many aspects in China has completely altered the landscape of the accounting profession. The certified public accountant profession was established in the early 1980's. There were only 500 CPAs in China in 1986. They mainly provided service to clients in foreign invested enterprises. The numbers grew to 3,000 in 1988, more than 10,000 in 1993, and more than 50,000 in 2000 (CICPA, 2001; Li, 2001). Currently, CPAs provide services to a broad range of customers including government agencies, state owned enterprises, foreign invested enterprises, privately owned enterprises, and publicly traded companies. The sweeping changes have a significant impact on accounting education. The CPA major has been established at major Chinese universities. Accounting curricula at higher education institutions were completely revised in the past 20 years (Cooper et al., 1994; Tang, 1997; Smith et al., 1999; Chan & Rotenberg, 1999). Although the Chinese accounting programs have made progress in preparing future CPAs, there are still many areas that need to be improved. For example, content covered in the existing accounting textbooks do not meet the needs of CPA education, and there is a gap between what employers want from new accounting graduates and what is taught in universities' CPA programs (Xun, 2002). Chinese accounting programs should further revise their curricula, update faculty knowledge, and improve pedagogy to better help students acquire knowledge, skills, and abilities needed to advance in their careers.

This paper examines the differences between what CPAs do and what accounting educators teach in undergraduate accounting programs in the US and China. The US is the largest developed country and China is the largest developing country. Professional services such as accounting play an important role in the American economy. …