The 150-hour requirement: the practitioners' viewpoint.

EXECUTIVE SUMMARY

* AFTER THE YEAR 2000, the American Institute of CPAs will require all new members to have 150 hours of college education. A survey asked public practitioners what should be studied in the fifth year of education.

* RESPONDENTS CHOSE federal taxation as the most important subject, perhaps in part because of the increasing complexity of the tax laws.

* INTERPERSONAL SKILLS ranked second. It seems CPAs

* A MAJORITY OF respondents believed graduates with 150 hours of education would command higher salaries.

What courses should be covered in a fifth year of accounting study to help new graduates succeed? Linda M. Leinicke, CPA, PhD, and Joyce A. Ostrosky, CPA, PhD, both assistant professors, and Gary L. Fish, CPA, EdD, professor, Department of Accounting, Illinois State University, Normal, Illinois 61761-6901, report the opinions of a sampling of practitioners.

After the year 2000, the American Institute of CPAs will require all new members to have 150 hours of college education, including a bachelor's degree. As of June 1, 1992, 23 states (Alabama, Alaska, Arkansas, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, South Carolina, South Dakota, Tennessee, Texas, Utah and West Virginia) had adopted legislation requiring 150 hours of college to sit for the Uniform CPA Examination. The 150-hour rule has generated considerable discussion among both practitioners and academicians alike on what should be included in the fifth year of education.

We decided to see if there was a consensus among CPAs in public practice on what specifically should be emphasized in the fifth year. Their views on this issue are particularly important because many schools now are forming curriculums for comprehensive 150-hour accounting programs. If practicing CPAs can identify courses most critical to a practitioner today, accounting educators can start building 150-hour curriculums designed to meet realworld needs.

THE STUDY

We surveyed a random sampling of CPAs in California, Illinois and New York. Local and sole practitioners were most heavily represented, with 70% CPAs at local firms and 18% sole practitioners. A total of 6% were from regional firms, 3% came from large national firms and another 3% came from the largest national firms.

Respondents were asked to rank the following 10 subjects in order of importance--federal taxation; quantitative and business support studies; small business management; international business studies; interpersonal and communication skills; social science and psychological studies; human resource development; additional accounting and auditing studies; general business studies; and computer studies, including networking. A ranking of 1 meant the area of concentration was most important to include in a fifth y.e.a.r of study., while a 10 meant it was least important. Exhibit 1, below, shows the mean rankings.

CPAs from all three states ranked federal taxation studies as the most important area. This may be due to the increasing complexity of tax laws, as well as the resulting need for greater specialization in this area. The fact that many respondents came from small or local firms also was a probable factor behind this result.

Respondents chose interpersonal and communication skills second. This high ranking has significant implications, since it seems to indicate practitioners would rather see greater emphasis on written and verbal presentation skills than on simply adding more technical accounting and auditing skills to the curriculum. The number three ranking was small business management, which may reflect this type of client's increased importance to today's CPA firms.

CPAs were asked to indicate overall satisfaction with the 150-hour rule. With a ranking of 1 indicating no satisfaction and a ranking of 10 indicating complete satisfaction, a total of 44% gave a rating of 5 or less, while 56% ranked the rule between 6 and 10 in terms of satisfaction. It would appear CPAs are split in terms of overall satisfaction with the new requirement.

We also asked respondents' opinions on whether the fifth year of education would improve CPA services. With 1 indicating no conviction and 10 indicating total conviction, 55% of the practitioners picked 5 or below, while 45% indicated a conviction level of 6 to 10.

In addition, 90% believed an internship should be a part of an accountant's education.

SALARY IMPLICATIONS

Finally, CPAs were asked if an accounting graduate with 150 hours of education would command a higher salary than one with 120 hours. The responses to this question are shown in exhibit 2 on page 98.

GENERAL SATISFACTION

The survey's results are very clear. CPAs generally are satisfied with accounting students' current technical education. They did not indicate a strong desire for more accounting and auditing classes in the fifth year of education.

The degreed accounting work force of the early 21st century will have more college education than its predecessors. Our sampling of CPAs found an interest in having new practitioners take nontechnical courses in the fifth year to enable them to compete in an increasingly complex business environment and to offer a dramatically broadened array of services.