Accounting education: the next horizon.

In 1967 Robert H. Roy and James H. MacNeil's Horizons for a Profession proposed a common body of knowledge for CPAs. That study's horizons are being attained as more highly qualified people are entering the CPA profession, which is changing from an undergraduate to a graduate entry-level profession. By the next decade the changeover should be complete. The modifications needed to bring about the change in accounting education should benefit the CPA's employer and the individual CPA as well as provide the public with a more valuable set of services.

SCOPE OF SERVICES

At present accounting is taught along functional-technical course lines (auditing, financial reporting, managerial, tax, fund accounting, etc.), which follow the Uniform CPA Examination, with little emphasis on specific industry applications. Until the 1970s public accounting practice was well served by this approach. Now, however, the scope of CPA firms' services has further developed along functional lines; today firms emphasize lines of business, resulting in, for example, practitioners who concentrate on oil and gas tax issues and others who focus exclusively on auditing retail business.

This change will have a significant impact on accounting curriculums as the scope of CPA services in both public and corporate practice, not the professional exam, will be the primary driving force behind accounting curriculum development.

ETHICAL RESPONSIBILITIES

Beginning in 1994, the changed content of the CPA exam will include a new component on professional duties and responsibilities. Adding such a topic to the accounting curriculum will emphasize that the ethical aspects of practice are as important as technical competency.

This will be a challenge to educators, who may consider such "subjective" notions as integrity, objectivity, competence and commitment to serve others' interests as difficult--if not inappropriate--subject matter for an accounting curriculum. However, other professions for generations have been incorporating similar treatments in their curriculums. Lawyers are educated in their responsibility to serve as advocates of their clients' rights; physicians are taught the Hippocratic oath's provisions to place their patients' well-being above all else; other social service disciplines provide similar, if less obvious, treatments in their education programs. In the past such an emphasis in the accounting curriculum has been secondary to the functional-technical focus on competency as measured by the CPA examination.

Employers and society have a right to expect the coming generation of CPAs to be functionally and technically competent as well as to incorporate the ideals of professionalism that are commonly expected in practice.

AGENTS OF CHANGE

Education reform will be limited and ineffective without broader social and institutional support. The Accounting Education Change Commission (AECC) is the prototype of the agency that will be required if institution and curriculum reforms are to occur on a timely and efficient basis. However, the AECC's charter, which was developed in cooperation with the largest CPA firms, sets limits on its financial resources.

Can accounting--the language of business--be transformed through a single, limited education effort, even if well administered? For pervasive reforms to be accomplished, a permanent agency with access to broad public support and resources at a national level, along the lines of the National Science Foundation, the National Institutes of Health or some other body, is needed.

LIFELONG LEARNING 

Among the most important changes affecting CPAs are the efforts to implement formal continuing professional education requirements to maintain and upgrade every CPA's skills. Educators and professional and academic institutions need to cooperate in developing consistent, convenient and cost-effective lifelong learning education systems. The CPA in the interim must not only seek to address personal improvement but also, as a matter of professional responsibility, work to establish the proper institutional arrangements to ensure high-quality CPE is offered.

PERSPECTIVE

The issues that have shaped the profession over the last century--many of which are relevant today--have a place in the classroom, too. Understanding how accounting has developed, especially in the area of professionalism, can provide students with a perspective on where CPAs are now, how they got there and where they likely will be headed. Accounting education, however, has been slow to focus on this approach, perhaps because curriculums traditionally have been driven by the CPA exam.

In general, the profession has had three periods of development: (1) 1896 to 1945--the United States acquired its industrial capacity and a growing need for CPAs' services while the fledgling organization that preceded that American Institute of CPAs grew to 9,500 members; (2) 1945 to 1973--in the post-World War II economic boom the Institute increased tenfold to 95,000 members, the majority of whom were CPAs with undergraduate degrees who offered primarily attest services; and (3) 1973 to 1991--this period of tremendous change for business and the accounting profession saw AICPA membership total over 300,000. CPAs entering the profession, increasingly with graduate degrees, now often first gain public practice experience and then shift to the corporate practice career path.

Being made aware of the profession's developments should provide students with an incentive to adapt to the times as well as to continue learning both professionally and personally.

THE COST OF PURSUING

EXCELLENCE

In 1987, as AICPA members were debating and evaluating the major proposals in the Institute's Plan to Restructure Professional Standards, I was invited to speak on the proposals before a midwestern state society chapter. In discussing the potential costs of requiring more education, a member who believes added education helps in the pursuit of excellence said, "If you think the cost of education is high, consider the cost of incompetence."

All accountants, whether from public practice, corporate practice or academia, need to be aware of the costs of educating the upcoming generations of CPAs. The profession's common body of knowledge keeps growing. It now includes a wide array of technical standards--not only the more than 200 government and corporate reporting and auditing standards (promulgated by the Governmental Accounting Standards Board, the Financial Accounting Standards Board, the AICPA auditing standards board and their predecessors) but also other professional position statements issued by such bodies as AICPA senior technical committees. CPAs also must achieve and maintain technical proficiency in the regulations of federal, state and local agencies, such as the General Accounting Office, the Internal Revenue Service and the Securities and Exchange Commission.

The costs of accounting education reflect the cost of the profession's commitment to maintaining integrity and to the pursuit of excellence and service to the public.

Bruce H. Biskin, James Blum, Rick Elam and Susan Menelaides are employees of the American Institute of CPAs and their views, as expressed in the articles in this section, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.

GARY JOHN PREVITS, CPA, PhD, is professor of accountancy at Case Western Reserve University's Weatherhead School of Management, Cleveland.