Are Accounting Programs Providing Fundamental IT Control Knowledge?
O'Donnell, Joseph, Moore, Jennifer, The CPA Journal
Auditors often provide assurance on computerized controls, where electronic transactions are processed without a paper audit trail. Section 404 of the Sarbanes-Oxley Act (SOA) requires auditors to evaluate a company's internal controls. SAS 94, The Effect of Information Technology on the Auditor's Consideration of Internal Control in a Financial Statement Audit, emphasizes the importance of IT on internal controls and evidential matter.
The pervasive use of systems in organizations and the increased emphasis on assurance of information technology (IT) processes has increased the need for accounting professionals with IT control knowledge and skills. A shortage of well-trained college graduates has led some large accounting firms to cross-train current staff. Some CPA firms have hired individuals with no audit training from other disciplines, such as information systems. The 2000 report of the Public Oversight Board's Panel on Audit Effectiveness saw an increasing need for auditors to have a higher level of technology skills, and recommended that firms develop specific training programs in IT for its auditors. Schools were asked to help with this effort by providing accounting graduates with the basic skills to satisfy the expanding need for accountants with IT control knowledge.
A 2000 study by Albrecht and Sack recommended reform in accounting education in several areas, including IT instruction, to better meet the needs of the accounting profession. They found that accounting professionals and accounting faculty ranked information systems as the second most important topic of study for an accounting major. IT skills were found to be the fourth most important skill for accounting students, after analytical and critical thinking, written communication, and oral communication. An important component of IT skills is fundamental knowledge of IT controls and processes. Accounting students typically gain introductory knowledge of IT controls through an accounting information systems (AIS) course.
The authors studied the status of MIS/IT auditing courses in accounting programs and their relationship to the size of the accounting department, as well as the IT interests of full-time accounting faculty members. Smaller departments may be limited in AIS course offerings due to resource needs and the ability to recruit qualified faculty. A full-time faculty's teaching or research interest reflects an ability to effectively teach IT-related courses that coincide with the business environment's needs.
The study examined 210 accounting programs listed in the 2004-2005 Accounting Faculty Directory, compiled by James Hasselback. The sample of schools was evenly divided into three categories, based on the number of full-time accounting faculty: large (more than 10 full-time faculty), medium (6-10 full-time faculty), and small (1-5 full-time faculty). Coverage of IT controls was determined by the inclusion of an AIS course in the curriculum (all IT auditing classes had AIS as a prerequisite).
The results of the study, as shown in the Exhibit, indicate that 65% of the schools offer AIS; 57% require it, and the other 9% offer it as an elective. These results suggest there is a disparity between the current business needs of large organizations and the education received by students in approximately one-third of the programs. These results may also reflect that many companies have relatively simple IT environments with minimal effect on the financial statements.
It is also useful to understand the interests of full-time faculty. For 63% of the schools, at least one full-time faculty member has a teaching or research interest in IT, similar to the proportion of programs teaching AIS.
Of large accounting departments, 84% offer an AIS course (79% required, 6% elective; difference due to rounding). A slightly lower percentage, 79%, have at least one full-time faculty member interested in information systems. …