Magazine article The CPA Journal

Developing the Knowledge Base of New Tax Professionals

Magazine article The CPA Journal

Developing the Knowledge Base of New Tax Professionals

Article excerpt

Reaching new heights through a learning environment

In Brief

Practical Guidelines for Staff Development

For years, the research of cognitive scientists has produced practical insights into the learning process, many of which can be applied to accounting. Specifically, accounting researchers have found a strong connection between knowledge and performance: A practitioner's level of knowledge, whether the result of an advanced degree, CPE, or years of specialized experience, is a good predictor of performance in accounting tasks. Thus, methods that enhance knowledge can increase performance, benefiting both practitioners and their firms.

This article presents the results of a study investigating the means by which tax practitioners most effectively acquire knowledge. The characteristics of those practitioners with higher knowledge should be of interest to new practitioners wishing to succeed in their careers, as well as to any firm that benefits from the expertise of its tax professionals.

Research has shown that knowledge accounts for performance differences between practitioners when using their professional judgment. Knowledge can be a better predictor of performance than years of professional experience. In other words, professional experience alone does not generate knowledge. Management of the specific education and experience that lead to knowledge acquisition is critical to improving professional performance.

In general, practitioners begin the knowledge acquisition process by building a knowledge base of facts, concepts, instructions, and examples. Professionals must also develop the ability to apply this knowledge base to fact patterns encountered in practice. The ability to apply their knowledge base to real-world situations is possibly the single most important characteristic of a successful practitioner. Recognizing practitioners that already demonstrate this ability can be invaluable in hiring successful new tax professionals.

Study Results

Tax practitioners from four public accounting firms (international, national, and regional) responded to a questionnaire that measured their ability to apply tax law to specific examples on 12 issues commonly encountered by C corporations. Practitioners were then grouped based on their questionnaire score. They also answered eight questions taken from the GRE examination to assess their problem-solving ability and provided extensive information about their education, training, and work experiences. The common characteristic of practitioners with higher knowledge scores proved to be the ability to apply-not just remember-tax concepts.

As expected, the 10 practitioners with the highest knowledge score (at least 75% correct) held the rank of senior or above and shared common education, training, and work experiences. The top 10 practitioners at the staff level also had characteristics that distinguished them from their peers with lower knowledge scores, demonstrating that it is possible for relatively new staff to acquire a high level of technical tax knowledge. Methods of quickly developing high knowledge in entrylevel practitioners could accelerate the career of a new professional to everyone's benefit.

Comparison of three groups. Significant differences were found between the 10 practitioners with the highest knowledge scores, the 10 staff with the highest knowledge scores, and the 10 staff with the lowest knowledge scores. An analysis reveals the areas where training and changes in assignments could enhance the knowledge of new tax practitioners and where the education and work experiences of staff in the low knowledge group could be improved.

Exhibit 1 provides general descriptive information about the three groups. The high knowledge practitioner group had an average score of 82%, the high knowledge staff group had an average score of 52%, and the low knowledge staff group had an average score of 18%. …

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