Magazine article The CPA Journal

The Perilous Future of Accounting Education

Magazine article The CPA Journal

The Perilous Future of Accounting Education

Article excerpt

Study Identifies Need for Fundamental Changes

Critics of accounting education charge that its programs and curricula have failed to remain relevant to students and employers. Some educators have heeded the warnings and made significant changes; however, such forward-thinking individuals are in the minority. Accounting programs are consequently experiencing dramatic decreases in student enrollments. Moreover, many practicing accountants and educators say that they would not choose an accounting education if given the chance to do it again. This indicates a serious problem at the profession's most vulnerable point: the quality of its professionals.

To determine the severity of the problems that face accounting education, the American Accounting Association (AAA), the Institute of Management Accountants (IMA), the AICPA, and the Big Five jointly sponsored a study on the future of accounting education. Their charge to the researchers was to "write a high-level thought piece, supported by evidence where possible, about the future of accounting education." The researchers discuss here the study's principal findings and exhort accounting practitioners to become actively engaged in supporting fundamental reform in accounting education.

The research methodology for the authors' study consisted of four major parts. The first stage was a literature search, with special focus on empirical reports and institutional studies like those prepared by the AAA, IMA, and AICPA, but also including academic articles on accounting education. The second stage included interviews with a number of business, accounting, and education leaders. Four focus groups of approximately 25-30 educators and corporate, public, and governmental accountants nominated by the sponsoring organizations made up the third part of the research. Participants in the Ross Institute Roundtable at New York University served as an additional focus group. The last stage was an analysis of survey questionnaires directed to accounting practitioners and educators (of the 783 responses, 134 were from active accounting department chairs).

The Study

The study's main conclusion was as follows: While we have been long-time supporters of accounting education, if we were creating a new business school today, we would not have separate undergraduate or graduate accounting programs. At least, we would not have accounting programs that are structured as they are today. This conclusion represents a complete reversal of the beliefs that have driven the past 25 years of educational development, during which separate accounting accreditation and accounting school status have been sought and achieved at many academic institutions. However, consider the following facts:

The number and quality of students electing to major in accounting is decreasing rapidly, driven by the perception that an accounting degree is less valuable than other business degrees or less valuable than it once was.

If given the opportunity, both accounting professors and accountants would not again major in accounting.

Accounting leaders and practicing accountants believe that accounting education, as currently structured, is outdated, broken, and in need of significant modification.

The status quo of accounting education looks bleak. At best, educators may be able to avoid changes as long as the economy stays strong and university budgets remain healthy. However, this indecision will result in a downward spiral beginning with fewer qualified students, reduced budgets, and decreasing faculty positions and eventually leading to the elimination of some accounting programs. Department chairs responded that budget and faculty allocations at their colleges are based on the number of students enrolled, a criterion that does not bode well for an education program experiencing declining enrollment.

Changes in Business

Historically, businesses have relied on accountants to prepare financial information for internal and external decision making, to audit the fairness of that information, and to assist in the fulfillment of regulatory and tax-reporting requirements. …

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