Academic journal article Management Accounting Quarterly

Crisis in Accounting: Are Accounting Curricula Following the Path of General Motors?

Academic journal article Management Accounting Quarterly

Crisis in Accounting: Are Accounting Curricula Following the Path of General Motors?

Article excerpt

Imagine a company that provides just one product that really serves the needs of only about 30% of its customers. The remaining 70% of its clientele have to make extensive modifications to the product they purchase before it meets their needs. For years, customers in the 70% have complained about the poor quality, lack of relevance, and high cost of this product. Yet the company simply ignores them and continues to offer the same old product according to methods it has been using for more than 50 years.

Does a company that has survived for half a century despite annoying 70% of its customers sound farfetched? Perhaps. But a large number of them exist--and we are not referring to U.S. automobile firms! Although there may be some similarities, the situation described above is that of the nation's business schools, and the product in question is their accounting curricula. The 30% of customers who are satisfied with the training they receive at America's business schools are primarily those who go on to work in the public accounting industry. The other 70% is made up of students who follow the curriculum but do not pursue careers in that particular sector. Because university training in accounting does not directly correlate with other endeavors, the majority of business school customers are forced to modify or expand their training in order to perform in related industries. Numerous studies indicate that the system of accounting education in the United States is broken and in need of serious reform. (1) Unfortunately, accounting educators have ignored these studies and failed to make improvements. According to many critics--including academicians, financial executives, public accountants, and industry accountants--accounting education has changed very little over the last 50 years. Unlike U.S. automobile companies, accounting schools have survived more or less unscathed, but this is only because accounting schools do not have the competitors like U.S. auto producers. There are no Toyotas or Hondas offering alternate products to accounting students.

it is difficult to confront an educational and professional culture that has existed for more than a century, particularly when it is defended by entrenched interests with the financial and political clout of the public accounting industry. Public accounting firms commonly lobby lawmakers and donate money to political campaigns in order to influence decisions, including those pertaining to educational policy. (2) In addition, many accounting educators and administrators are insufficiently aware of the nature of management accounting. In the past, moreover, industry accountants generally came from public accounting ranks, so most were not abreast of new developments in management accounting. But current industry managers are different, and many are upset with their college training and want to see changes.

The time has come for serious changes in the accounting curricula of America's universities. We hope that a clear presentation of relevant, comprehensive, and convincing data might help academicians and administrators accept the reality that accounting curricula are broken--and motivate them to take appropriate actions to fix them. We begin with a brief description of some of the historical background to the current state of accounting education. The primary objective of this article, however, is to quantify the inequities of current accounting curricula. The second half of this article will use data collected from the Association to Advance Collegiate Schools of Business (AACSB)--the accreditation agency for business schools--to test several hypotheses about the current state of management accounting courses in accounting curricula.

Historical Perspectives

People generally assume that accounting involves little more than bookkeeping, doing taxes, or auditing. Few are aware that the field as a whole--including management and nonprofit entity accounting--encompasses much more than these services. …

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