Accounting education: Charting a course through a perilous future

Reprinted with permission of the AICPA

In an effort to motivate "serious change in accounting education," W. Steve Albrecht, Brigham Young University, and Robert J. Sack, University of Virginia, issued a provocative report at the recent AAA Annual Meeting entitled, "The Future of Accounting Education: Strategic Thinking About the 21st Century."

The report states the following facts:

The number and quality of students electing to major in accounting is decreasing rapidly. Students say they do not perceive accounting degrees to be as valuable as they used to be or as valuable as other business degrees.
Both practicing accountants and accounting educators, most of whom have accounting degrees, would not major in accounting if pursuing their education over again today.
Accounting leaders and practicing accountants say that accounting education, as currently structured, is outdated and broken and needs to be modified significantly.

Despite previous warnings of the serious problems in accounting education, the call for change has been heeded by very few schools. Some have changed, but the change has not been significant or pervasive enough. The report states that, "In too many respects, accounting education is being delivered the same way today as it was 20 or 30 years ago."

The authors acknowledge some contributing issues, e.g., the lack of competitive salaries for accounting graduates and implementation of the 150-hour requirement unfortunately resulting in adding more accounting to curricula rather than its intent to broaden business skills. However, these factors are said to only mitigate a crisis that is rooted in the real weaknesses in accounting education-curricula and pedagogy.

Technology, globalization and the concentration of power in certain market investors, mostly large mutual and pension funds, have changed practice dramatically. However, accounting education hasn't kept up and ground has been lost to other business majors, corporate competitors and to other types of educational programs. The report concludes that, "The time for change just to be better is past. We must now transform our educational programs merely to survive." In this regard, some recommendations are offered to schools:

undergo strategic planning and outline steps in the process and issues/questions that need to be addressed.
explore alternative structures for future academic programs.
an undergraduate accounting program designed as a preparatory degree for an MBA or other graduate programs, with significantly modified curricula.
a combination undergraduate or graduate degree program with another business department, e.g., an accounting/systems degree or accounting/finance degree.
an integrated five-year master's degree in accounting that looks a lot like an MBA.
an accounting minor on top of a humanities or social science degree.
a Ph.D. program that focuses on pedagogical approaches and curriculum development.

The report warns that if schools are not willing to broaden the accounting major, they should consider abandoning the accounting major and become a service provider for other business majors who need accounting fundamentals.

Funding and research behind the report

Four major organizations jointed together to sponsor this study: the Institute of Management Accountants, the American Institute of Certified Public Accountants, the American Accounting Association and the "Big 5" professional service firms. Their charge was to write a high level thought piece, backed by empirical evidence where possible, that would motivate serious change in accounting education.

Research methodology consisted of four major initiatives. The authors:

read everything they could find on accounting education and studies by various organizations;
interviewed key business and accounting leaders;
conducted focus groups with about 25-30 professionals in each;
surveyed almost 5,000 practitioners (public/industry/government) and educators;
surveyed administrators of accounting programs to gauge changes made and quality of students-latter not conclusive.

The entire report is available on the MACPA, AICPA and AAA Web sites.

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