Academic journal article Management Accounting Quarterly

Naked Truths about Accounting Curricula: Here Is a Rallying Cry for Revamping Undergraduate Accounting Curricula to Prepare Students to Be Certified Management Accountants and Not Only Certified Public Accountants

Academic journal article Management Accounting Quarterly

Naked Truths about Accounting Curricula: Here Is a Rallying Cry for Revamping Undergraduate Accounting Curricula to Prepare Students to Be Certified Management Accountants and Not Only Certified Public Accountants

Article excerpt

The emperor of accounting education is parading naked. Accounting educators and university administrators are applauding, praising the beauty of the emperor's CPA pass rates. In reality, however, accounting education is at a crossroads. Industry leaders are not happy with the state of current accounting education. Students claim they do not perceive an accounting degree to be as valuable as it used to be, and accounting graduates say they would not major in accounting if they had to do their education over. Decades of academic inertia and neglect may have contributed to this decline.

Now the gap between current accounting education and the needs of the industry is widening. Technological advances have automated many activities that accountants traditionally performed, such as posting transactions, paying invoices, and calculating variances, and have changed accountants' role. Critics feel that accounting education as it is taught at many universities is broken and in desperate need of fixing. Some wonder whether accounting programs as they exist today will survive in the future unless significant changes are made.

Today's management accountants spend less time preparing standardized reports and more time analyzing, interpreting, and providing information for decision making. Auditing and tax filings are regulatory needs, whereas cost management is essential for organizational success and survival. The objectives, users, and uses of financial accounting and managerial accounting differ in many ways. Traditionally, management accountants have spent much of their time on activities such as tracking variances, making budgets, allocating overhead costs, and computing product costs. Financial accountants have spent much of their time conducting audits and preparing financial statements and tax returns. Management accounting played a key role in the success of the U.S. industrial revolution at the turn of the 20th Century. Similarly, innovative cost management tools and techniques of today, such as activity-based costing, the balanced scorecard, target costing, and lean accounting, are playing significant roles in improving the competitiveness and profitability of companies.

At the same time, nonpublic accounting jobs, the growth of consulting, and certifications such as the CMA (Certified Management Accountant), CFM (Certified Financial Manager), and CIA (Certified Internal Auditor) are significantly influencing career choices of accounting graduates. More companies are now recognizing that the knowledge gained from the CMA program adds value to their organizations. In fact, CMAs are employed by a variety of organizations, including manufacturing, public accounting, hospitals, government, and nonprofits. Their salaries are comparable to or better than those of CPAs (Certified Public Accountants).

Yet very little has changed in the kingdom of accounting education. Most college and university accounting programs are loaded with courses relevant to the CPA examination, but two-thirds of accounting graduates take jobs outside public accounting and have no interest in taking the CPA exam. Overall, accounting majors have little flexibility and are required to take essentially the same courses irrespective of their career choices.

A sample of 150 accounting curricula I randomly selected using James Hasselback's Accounting Faculty Directory shows that most universities require three to six credits of cost accounting, and just a few require more than six credits. (1) Only a few universities have senior-level courses in the cost/managerial accounting area. Despite significant changes in the business environment and decades of studies criticizing it, accounting curricula have remained static. Accounting faculty are reluctant to design alternate tracks for nonpublic accounting careers. This narrow focus undermines the needs of other industries and accounting graduates seeking nonpublic accounting careers. …

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