Challenge sparks tax student competition.

How many college students wanted to spend a Saturday cloistered in a room doing someone's taxes? It turned out a few hundred accounting students did, and they had fun doing it in the 1993 Arthur Andersen Tax Challenge.

Here's how the competition worked: The country's graduate and undergraduate accounting programs were invited to assemble teams of four top tax accounting students. On a Saturday morning uncomfortably close to dawn, each team gathered in a conference room at a local university. Arthur Andersen & Co. provided breakfast, lunch, snacks, IRS tax code manuals and a thorny family financial situation.

The teams had until four o'clock P.M. to formulate a comprehensive set of financial recommendations for that hypothetical client. The package for graduate students was more difficult than the one for the undergraduates. In 1993, the family financial situation was more complicated than a soap opera plot, with real estate losses; insurance claims; an inheritance; a retirement; a marriage; a new mortgage; an in-the-home business; a U.S. Department of Housing and Urban Development settlement; investments in money markets, mutual funds and common stock; Mississippi River flood damage; a 1957 Thunderbird; and $2,000 in losses at a blackjack table.

In other words, a 1040EZ just wouldn't do. In fact, the students, who were playing the roles of financial advisers more than tax preparers, had to prepare a projection and analysis of current-year tax liabilities and other financial aspects of family and business life.

CPAs who welcome the intellectual challenge of digging into a complex tax situation can appreciate how such a Saturday can be fun. Indeed, gaining an appreciation of such a challenge might have been the primary achievement of the participants.

"This is the first time many of the students have seen the technical issues applied to a real-life situation," said Howard S. Engle, a partner with Arthur Andersen & Co. in Chicago and architect of the Tax Challenge 1993. "There's no question we challenged them. They not only had to work with what they'd learned in the classroom but they also had to learn to work together as a team."

After the divisional competitions, the firm invited 10 teams and faculty advisers from each division to a national competition at its 140-acre Center for Professional Education in St. Charles, Illinois. While their faculty advisers went to a football game, the student competitors rolled up their sleeves and dug into the data.

It's fun, but it gets serious, too. The schools--one graduate, one undergraduate--that win the finals receive $10,000 in scholarship funds. Second-place winners take home $5,000 in scholarships, and third place is good for $2,500.

The Ohio State University won the undergraduate honors last year, defeating Michigan State just a week before Michigan beat Ohio in a football game. The University of North Texas, Denton, won at the graduate level. Oklahoma State and the University of Denver took second place in the undergraduate and graduate competitions, respectively, and the University of Illinois and Southern Illinois took third.

What's in it for Arthur Andersen & Co.? "If we're successful in convincing more students to pursue a career in tax accounting, we'll increase the supply of talent the profession needs," said Engle. "The number of kids going to college is not increasing, and students are selecting from a lot of different careers. When we project our profession's needs in the future, the numbers just aren't there. We start asking ourselves where the talent is going to come from."