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Crisis in accounting: are accounting curricula following the path of general motors?

Imagine a company that provides just one product that really serves the needs of only about 30% of its customers. The remaining 70% of its clientele have to make extensive modifications to the product they purchase before it meets their needs. For years, customers in the 70% have complained about the poor quality, lack of relevance, and high cost of this product. Yet the company simply ignores them and continues to offer the same old product according to methods it has been using for more than 50 years.

Does a company that has survived for half a century despite annoying 70% of its customers sound farfetched? Perhaps. But a large number of them exist--and we are not referring to U.S. automobile firms! Although there may be some similarities, the situation described above is that of the nation's business schools, and the product in question is their accounting curricula. The 30% of customers who are satisfied with the training they receive at America's business schools are primarily those who go on to work in the public accounting industry. The other 70% is made up of students who follow the curriculum but do not pursue careers in that particular sector. Because university training in accounting does not directly correlate with other endeavors, the majority of business school customers are forced to modify or expand their training in order to perform in related industries. Numerous studies indicate that the system of accounting education in the United States is broken and in need of serious reform. (1) Unfortunately, accounting educators have ignored these studies and failed to make improvements. According to many critics--including academicians, financial executives, public accountants, and industry accountants--accounting education has changed very little over the last 50 years. Unlike U.S. automobile companies, accounting schools have survived more or less unscathed, but this is only because accounting schools do not have the competitors like U.S. auto producers. There are no Toyotas or Hondas offering alternate products to accounting students.

it is difficult to confront an educational and professional culture that has existed for more than a century, particularly when it is defended by entrenched interests with the financial and political clout of the public accounting industry. Public accounting firms commonly lobby lawmakers and donate money to political campaigns in order to influence decisions, including those pertaining to educational policy. (2) In addition, many accounting educators and administrators are insufficiently aware of the nature of management accounting. In the past, moreover, industry accountants generally came from public accounting ranks, so most were not abreast of new developments in management accounting. But current industry managers are different, and many are upset with their college training and want to see changes.

The time has come for serious changes in the accounting curricula of America's universities. We hope that a clear presentation of relevant, comprehensive, and convincing data might help academicians and administrators accept the reality that accounting curricula are broken--and motivate them to take appropriate actions to fix them. We begin with a brief description of some of the historical background to the current state of accounting education. The primary objective of this article, however, is to quantify the inequities of current accounting curricula. The second half of this article will use data collected from the Association to Advance Collegiate Schools of Business (AACSB)--the accreditation agency for business schools--to test several hypotheses about the current state of management accounting courses in accounting curricula.

Historical Perspectives

People generally assume that accounting involves little more than bookkeeping, doing taxes, or auditing. Few are aware that the field as a whole--including management and nonprofit entity accounting--encompasses much more than these services. The subareas of accounting range beyond public accounting practices to serve many types of customers with a variety of needs and objectives. They also involve managing diverse types of data, working under unique sets of regulations, and following distinctive assumptions. Popular views, however, do not take these elements of the profession into account. That general perceptions of accounting are so limited is the result of longstanding traditions in American business and education.

Evolution of the U.S. Accounting Profession

Throughout history, accounting developments closely followed emerging business needs. As societies moved from agricultural to industrial economies, new accounting and cost management methods were developed to help businesses better control their assets, improve the effectiveness of their operations, and gain competitive advantages. It is well known that the rise of Italian merchants during the Renaissance was accompanied by the development of double-entry bookkeeping.

Approximately three centuries ago, accountants from Britain came to the United States to explore economic opportunities. As North American industry grew, so did the profession of public accounting. By the end of the 19th Century, states formed societies of Certified Public Accountants (CPAs) to regulate this growing industry. Later, scandals such as Kreuger & Toll, Inc., and McKesson & Robbins, Inc., as well as the Great Depression, increased political support for passage of the U.S. Securities Acts in 1933 and 1934.

The Rise and Fall of Management Accounting

The second phase of the industrial revolution, peaking at the turn of the 20th Century, brought dramatic improvements to both manufacturing and management accounting. For example, railroad companies developed internal controls and lock-box systems, while textile and steel mills developed cost management and process improvement techniques. The DuPont Company pioneered powerful accounting tools such as ROI (return on investment), and New England textile mills innovated elaborate cost accounting records. Following the stock market crash of 1929, however, audits and public disclosure of financial statements became mandatory for public companies. As a result, companies channeled their resources into financial accounting and auditing at the expense of management accounting. This was the beginning of the decline of management accounting. Over time, management accounting stagnated and lost relevance. A generation of management accounting techniques stopped being developed. Indeed, virtually all management accounting practices used today were developed by the 1920s. It was not until the last decades of the 20th Century that significant developments such as activity-based costing (ABC), the balanced scorecard, and lean accounting were formulated. (3)

The Evolution of Accounting Education

By the late 19th Century, accounting professionals felt that while technical procedures of auditing and accounting could be learned effectively through practical experience, college-level training was needed to develop analytical and critical-thinking skills. (4) They therefore supported the teaching of accounting in universities, and in 1883 the first accounting course, titled "Conceptual Accounting Theory," was offered at Wharton School. (5) Unfortunately, accounting educators soon embraced a pedagogical orientation that focused more on rules and regulations than theoretical and conceptual approaches. Instead of developing critical thinking, accounting courses became exercises in mechanical number crunching. Accounting professionals who had supported university accounting courses were deeply disappointed when the direction of accounting education failed to meet their expectations. (6)

An Erroneous Assumption about the CPA Exam and the Accounting Degree

In the 1950s, the State of New York made a degree in accounting a requirement for the CPA exam, and other states followed. At this time, the accounting profession was split into two camps regarding better preparation for the CPA examination: One promoted apprenticeship and experience; the other preferred college training and degrees. To resolve the conflict, the American Institute of Accountants (AIA) conducted a survey and concluded that in "good" schools the percentage of graduates passing the CPA examinations was eight times higher than in "bad" schools. But two subsequent studies concluded that the AIA study results were based on the erroneous assumption that the primary focus of college accounting programs was training for the CPA examination. (7)

Nonetheless, the assumption that the CPA examination pass rate was the measure of program quality completely changed the landscape of accounting education. CPA examination preparation became the main objective of accounting curricula, a practice that continues today. (8) At most universities, accounting programs revolve around the needs of the CPA examination and public accounting. For example, when State Boards of Accountancy raised the required number of credits to qualify for the CPA exam to 150, universities revised their accounting curricula accordingly, with little consideration of what should be taught in the additional 30 credits. As it stands, students usually complete the additional 30 credits by completing a double major in accounting and finance, a combination that does not add more critical-thinking or problem-solving skills. As a result, accounting curricula became increasingly centered on rule-bound number crunching instead of developing skills such as critical thinking and communication. There has been little change since. For instance, it was only when scandals such as Enron and WorldCom surfaced that accounting departments added courses such as forensic accounting and fraud detection. This is clearly a case of too little critical thinking, far too late.

The Management Accounting Revolution

The state of accounting education in America is not reflective of important trends in business practices. While curricula have remained focused on public accounting techniques, a sea change has taken place in management accounting. With the rise of Japan as an economic power and model, the business and manufacturing environment underwent significant transformation. To compete, U.S. manufacturers adopted techniques such as Just-in-Time (JIT), Total Quality Management (TQM), and Process Improvements. These changes have made traditional cost accounting techniques such as direct-labor-based overhead allocations less relevant. In fact, some managers consider them a hindrance to manufacturing progress, as reflected in article titles such as "Cost Accounting: The Number One Enemy of Production" and "Yesterday's Accounting Undermines Production." (9)

In order to overcome the limitations of traditional accounting methods, consultants and organizations such as the Institute of Management Accountants (IMA[R] have spent millions of dollars researching and developing numerous innovative and highly useful cost management tools such as ABC, activity-based management (ABM), the balanced scorecard, target costing, and lean accounting. This has brought about a cost management revolution similar in scope and impact on industry to the industrial revolution at the turn of the 20th Century. (10) Unlike narrowly focused financial accounting and auditing, the new and emerging cost management techniques have broad applicability and are based on knowledge of many subjects besides accounting, including manufacturing, engineering, and marketing. Therefore, the role of the management accountant has drastically changed from that of a routine staff position and corporate cop to that of a consultant and business partner. (11)

Inadequacy of Current Accounting Curricula

As a result of these trends, today's management accountants require a broad business perspective that enables them to provide accounting and operational information needed to make effective decisions. Yet this demand for wider preparation is not reflected in contemporary accounting curricula. To learn these new cost management techniques, students need an understanding of all business aspects, stronger exposure to operations management, and better preparation in quantitative methods. The two most critical skill sets companies are looking for in entry-level employees are the capacity for strategic thinking and the command of process improvement methods. Unfortunately, these topics are not adequately taught in current accounting programs. (12) Currently, most cost/management accounting courses are offered at the junior level--before students have a chance to complete management operations courses and gain general business understanding. As a result, many teachers find it impossible to go into any depth regarding cost management subjects and end up teaching the same old cost accounting. (13) Continued concentration on auditing standards and tax codes has made accounting education even more technical and more rule based. A great deal of time is spent teaching the correct format for balance sheets and income statements or formal accounting rules such as financial accounting standards, but little time is spent cultivating the critical-thinking and management techniques that are so valuable across the financial professions. (14) This is a great disservice to accounting students--and their future employers.

The Need for Change

The business environment is changing rapidly. The gap between what industry needs and what management accounting education offers is widening. Today's employers want employees who understand how internal processes work so they can identify and eliminate nonvalue-adding activities. Above all, firms no longer want "bean counters"; they want accountants who will help make "better beans"--products with lower cost and higher quality. While the role of a referee (i.e., CPA) is important, team players (management accountants) are considered critical to winning the game.

Consequently, accounting educators should focus on preparing more team players and fewer referees. By establishing more-relevant management accounting degree programs, universities can produce better-qualified accounting graduates. Management accounting degree programs give universities a unique competitive advantage, yet the accounting curricula at most universities remain stagnant. With the exception of some cosmetic changes, such as changing names of cost accounting to "cost management" and governmental accounting to "not-for-profit accounting" and changing a few courses from elective to required, no significant reforms have been made over the past few decades.

As more and more traditional accounting activities, such as transaction processing and basic tax preparation, are automated and outsourced, accounting students need preparation for other careers and especially training in value-adding skills. Table 1 shows the relative value of accounting activities and their emphasis in current accounting education. It is hard to comprehend why accounting educators put so much emphasis on low-value-adding activities.

Just as the U.S. automobile industry lost market share by ignoring fuel embargos and customer expectations, accounting educators have lost students by remaining stagnant over the past half century. (15) In "Accounting Education: Charting the Course through a Perilous Future," Steve W. Albrecht and Robert J. Sack describe the conclusions from a study by a blue ribbon panel of experts representing several accounting and related fields:

* The number and quality of students electing to major in accounting is decreasing rapidly.

* Students are telling us by their choice of major that they do not perceive an accounting degree to be as valuable as it 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.

* Accounting leaders and practicing accountants are telling us that accounting education, as currently structured, is outdated, broken, and needs to be modified significantly. (16)

The Need for Study and Reform

Responding to these signs of crisis, a handful of observers have expressed dismay about academic traditions that "undermine quality education" in accounting. (17) Some have questioned whether accounting education belongs in the university. (18) Others have suggested that accounting education follow legal and medical professions by requiring a liberal arts undergraduate degree followed by graduate programs for licensing. (19) Another proposal is that accounting programs follow a corporate university model whereby schools function as strategic tools designed to assist the specific needs of parent organizations. (20)

Except for the historical and institutional reasons outlined above, this crisis in accounting education has not been fully acknowledged. Given the emerging importance of management accounting, it is critical to study issues such as the percentage of accounting courses that focus on management accounting and whether accounting programs inform students about all accounting certifications. (21) The rest of this article will be dedicated to providing statistical evidence of the prevailing orientation of accounting curricula at U.S. schools so that accounting educators might finally begin to address these inequities more effectively.

Quantifying the Inequities of Accounting Curricula

To the best of our knowledge, there have been no quantitative studies of the state of management accounting in U.S. university curricula. The primary nature of past studies has been to survey employers about the knowledge and skills they look for in accounting graduates. The few recent surveys that have addressed the needs of the accounting industry beyond public accounting clearly show that these are not being met adequately. (22) The goal of our study is to provide statistical evidence of the reasons for this failure, i.e., the fundamental lack of emphasis on management accounting training in our schools. We feel that it would be hard for educators and administrators to ignore hard data based on comprehensive analysis of university accounting curricula.

Basis of Research

To achieve these aims, we conducted a comprehensive analysis of the curricula at all U.S. schools with AACSB-accredited undergraduate business degree programs because they represent programs that meet standards set by this respected organization. The sources of our data were the websites of AACSB-accredited universities. Out of the 555 AACSB-accredited universities at the time of the study, 464 were U.S. schools, and 399 of those offered undergraduate programs. While some websites were complete and user-friendly, some were incomplete, and a few were confusing, and it was hard to gather desired data. As a result, we were able to obtain useful data from 295 universities.

Data Gathered

The following data was gathered from each of the 295 relevant university websites:

* Number of senior-level accounting courses available.

* Number of senior-level cost/management accounting courses available.

* Number of required senior-level accounting courses.

* Number of required senior-level cost/management accounting courses.

* Whether or not an operations management course is a required course for an accounting major.

* Whether or not an operations management course is a prerequisite for cost/management accounting courses.

In researching each website, we also observed and took note of the following issues:

* The information provided on the university websites regarding the CPA and the CMA[R] (Certified Management Accountant) programs.

* Whether or not a strategy course is required for a major in accounting.

* Whether or not an accounting information systems course is required for a major in accounting.

Hypotheses Tested

Using the data gathered in this fashion, we tested the following hypotheses regarding university accounting curricula:

* Hypothesis 1: The number of senior-level cost/ management accounting courses available is significantly smaller than the number of other available senior level accounting courses.

* Hypothesis 2: The number of required senior-level cost/management accounting courses is significantly smaller than the number of other required senior-level accounting courses.

* Hypothesis 3: At most universities, the number of senior-level cost/management accounting courses available is limited to one or two.

* Hypothesis 4a: Operations management courses are not required.

* Hypothesis 4b: When an operations management course is required for majors in accounting, it is not a prerequisite for any accounting courses.

Analysis of Data

We analyzed the data in two ways. We used independent samples and one-sample t-tests to test Hypotheses 1, 2, and 3. We used a binomial test for Hypotheses 4a and 4b. Four of the hypotheses are accepted at less than the 0.01 significance level, and one (Hypothesis 4a) is rejected at less than the 0.01 significance level. For course requirements, we used summaries of Yes or No.

Quantitative Results

Table 2 includes the descriptive statistics of the data we collected. For Hypothesis 1 (Tables 2b-2e), the Independent Sample t-test is significant at less than the 0.01 level. It demonstrates that the mean number of cost/management accounting courses available is significantly different from the mean number of other senior-level accounting courses available.

Based on the results of the one-sample t-test, Hypothesis 1 is accepted at less than the 0.01 significance level. Because the t-score represents the difference between the sample mean and the test value, a t of -271.324 shows that the mean number of senior-level cost/management accounting courses available is significantly smaller than the mean number of other senior-level accounting courses available.

We also calculated the percentage of cost/management accounting courses of all other available senior-level accounting courses. We found that the percent of cost/management accounting courses in these curricula ranged from 0% to 33.3%, with an average of 12.3%.

For Hypothesis 2 (Tables 2f-2i), the Independent Sample test demonstrates that the mean number of required cost/management accounting courses available is significantly different from the mean number of other senior-level required accounting courses. The output of the one-sample t-test (t = -156.674) demonstrates that the mean number of the senior-level required cost/ management accounting courses (one course) is significantly smaller than the mean number of other required senior-level accounting courses (6.32 courses). The test supports Hypothesis 1 at less than the 0.01 significance level. Additionally, we found that among the university curricula, the percent of required cost/management accounting courses of other required senior-level accounting courses ranged from 0% to 16.7%, with an average of 13.7%.

Hypothesis 3 (Table 2j) is also accepted at less than the 0.01 significance level, as demonstrated by the one-sample t-test. The large t-score (-271.324) indicates that there is a large difference between the sample mean (the mean number of senior-level cost/management accounting courses available) and the test value of 10.95 (the mean number of total available accounting courses).

The data we gathered also revealed that the percent of senior cost/management accounting courses available to students ranged from zero to three courses, with an average of 1.3 cost/management accounting courses offered to students (see Figure 1).

[FIGURE 1 OMITTED]

The binomial test demonstrates that Hypothesis 4a (Table 2k) is rejected at less than the 0.01 significance level. It also shows that 62% of universities require operations management for their accounting majors.

At less than the 0.01 significance level, the binomial test supports Hypothesis 4b (Table 2l) and demonstrates that only one university requires students majoring in accounting to take an operations management course as a prerequisite to other accounting courses.

Observations

We looked at accounting curricula that require strategy and accounting information courses and the number of university websites that describe the CPA and CMA exams and requirements. The data revealed that 53% of accounting programs require a strategy course, but 47% do not require any strategy coursework. Additionally, 66% of accounting programs require students to take an accounting information systems course. Finally, while 54% of the university websites described both the CPA and CMA examinations and requirements, 45% of the university websites did not mention the CMA exam. This number is much larger than we expected (see Figure 2). CMA certification has been in existence since 1972 and is sought after by employers.

Suggested Revisions

For several years, accounting professionals have been complaining that the accounting curricula in the United States are broken and in need of repair. Many feel that current accounting programs are inadequate for both students and employers. Some specific criticisms include lack of relevant courses in the cost/management accounting area, lack of focus on process improvements and strategy, and lack of exposure to broader business areas. Our research confirms what critics have been saying. The results of this survey constitute quantitative proof that university accounting curricula do not meet the needs of a large percentage--if not the majority--of students because they are weighted too heavily toward public accounting as they have been for more than 100 years.

The measures of all four of our main hypotheses confirm that the number and level of cost/management accounting courses are limited and offered primarily at the junior level. At this stage in their education, students do not have sufficient exposure to core business courses such as management and operations management. As a result, these students have little understanding of critical aspects of business such as strategy, communication, and the impact of performance measures on productivity. For instance, students lacking this knowledge have difficulty comprehending the impact on costing that physical flows of materials and activities performed by different people at different times in the process have. Imagine trying to teach activity-based costing if students do not have a clear idea of what an "activity" is! Because most accounting students do take operations management courses later, why not make one a prerequisite for cost/management accounting courses? It is the need for precisely such adjustments that our results identify.

[FIGURE 2 OMITTED]

Over the past few decades, innovations in cost/ management accounting exploded. These integrated tools and techniques, such as ABC, ABCM, the balanced scorecard, target costing, and lean accounting, require critical thinking and broad understanding of both business and process activities. Under the present system, this is not easy or even possible to achieve by the junior level. The limited amount of time given to cost/management accounting courses (three to six credits) limits the opportunity students have to study these important new techniques.

Moreover, based on our research, only 53% of accounting programs require a strategy course. More importantly, even when a strategy course is required, it is not a prerequisite for accounting courses. Without a clear understanding of what strategy is, it is impossible to integrate awareness of market focus, customer satisfaction, product functions, and manufacturing processes with cost accounting methods. Accountants now have new and innovative cost accounting tools at their disposal, but the status quo accounting curricula make it difficult to include them in courses. This could be improved by requiring study of business strategy as the basis for training in accounting.

Furthermore, our research indicates that an accounting information systems course is currently required by only 66% of schools. While this is not bad, it is not adequate. In an increasingly information-intense economy, with businesses becoming more and more dependent on technology and accounting systems constantly being computerized, it is hard to understand why an accounting information systems course is not a standard requirement. This is definitely not in the interests of students or employers.

Another factor that our research revealed is the lack of emphasis on the CMA at our nation's accounting programs. Almost all accounting program websites described the requirements for CPA certification, but only 55% mentioned the CMA. This lack of balance is unfair to students who are not particularly interested in a career in public accounting. The CPA is not the only path toward certification and successful accounting-related professions. Universities should encourage students to consider all the options.

Defenders of the present curricula often say "We don't have time or resources" as the reason for the lack of additional cost/management accounting courses and alternate accounting education tracks. They also ask, "If we add cost/management accounting courses, what should be eliminated?" With 150 credits, there is ample room to add new courses. We feel that both of these questions can be addressed through curriculum reforms. With minor modifications to existing curricula, accounting departments could easily make room for training geared toward non-CPA-oriented careers. Table 3 compares the typical accounting curriculum with a cost/ management accounting track that would both meet the CMA certification needs and incorporate broader perspectives.

This revised curriculum would have many advantages over the typical accounting curriculum. Students would have the opportunity to graduate with 120 credit hours while developing a wider range of skills. Accounting programs could gain competitive advantage by attracting students who may not be interested in a traditional cost accounting position. Companies would benefit by being able to recruit employees with more-comprehensive skills and knowledge.

Accounting programs have two choices: maintain the status quo or revise their curricula. Just like General Motors, accounting educators have thus far ignored market changes and customer needs. The automotive giant produced huge, gas-guzzling vehicles--despite many signs of a gas shortage after the first embargo in 1973--and lost market share. Similarly, accounting programs have continued to concentrate on public accounting--while adopting a bloated 150-credit load--and lost students. Unless academicians and practitioners understand and acknowledge the lopsidedness of accounting education and take immediate corrective actions, accounting education institutions may end up like General Motors.

At one time, American industries did not actively recruit at universities. As a result, accounting graduates entered the job market through public accounting and moved to industry a few years later. This pattern has changed significantly as more and more business schools require internships for graduation, giving students a chance to move more directly into industry positions. Industry has also become more visible on campus, actively engaged in direct recruiting. Because of these and similar developments, focusing only on public accounting and CPA preparation is not sufficient for all accounting students. There is an urgent need to initiate a discourse among professionals and educators about developing a course of action to address the deficiencies of accounting curricula. We hope that this research will help to inform this important dialogue. ?

Endnotes

(1) American Accounting Association (AAA), "Future Accounting Education: Preparing for the Expanding Profession," Committee on Future Structure, Content, and Scope of Accounting Education, Issues in Accounting Education, 1986, pp. 168-195; AAA, The Future Viability of Accounting Education: Report of the Changing Environment Committee, 1998; Accounting Education Change Commission (AECC), "AECC Urges Priority for Teaching in Higher Education: Issues Statement Number One," Issues in Accounting Education, Fall 1990, pp. 320-321; AECC, "Objectives of Education for Accountants: Position Statement Number One," Issues in Accounting Education, Fall 1990, pp. 307-312; AECC, "AECC Urges Decoupling of Academic Studies and Professional Accounting Examination Preparation: Issue Statement Number Two," Issues in Accounting Education, Fall 1991, pp. 313-314; Steve W. Albrecht and Robert J. Sack, "Accounting Education: Charting the Course through a Perilous Future," Accounting Education Series, AAA, 2000; Norton M. Bedford and William G. Shenkir, "Reorienting Accounting Education," Journal of Accountancy, August 1987, pp. 84-91; Brent C. Inman, Andre Wenzler, and Peter D. Wickert, "Square Pegs in Round Holes: Are Accounting Students Well-Suited to Today's Accounting Profession?" Issues in Accounting Education, Spring 1989, pp. 29-47; Gary Siegel and James Sorenson, What Corporate America Wants in Entry-Level Accountants, Institute of Management Accountants, Montvale, N.J., 1994; Thomas E. Moore, "The Corporate University: Transforming Management Education," Accounting Horizons, March 1997, pp. 77-85; Irwin T. Nelson, "What's New about Accounting Education Change? A Historical Perspective on the Change Movement," Accounting Horizons, Fall 1995, pp. 62-75; Mary Ellen Oliverio and Bernard H. Newman, "Attention to Accounting Education: The First Decade of the Twentieth Century," Issues in Accounting Education, Fall 1996, pp. 253-257; Ronald J. Patten and Doyle Z. Williams, "There's Trouble--Right Here in Our Accounting Programs: The Challenge to Accounting Educators," Issues in Accounting Education, Fall 1990, pp. 175-179; Donald H. Skadden, "Accounting Education: New Horizons for the Profession," The Accounting Review, July 1978, pp. 818-819; A. Marvin Strait and Ivan Bull, "Do Academic Traditions Undermine Teaching?" Journal of Accountancy, September 1992, pp. 69-73.

(2) Lakshmi U. Tatikonda, "Naked Truths About Accounting Curricula," Management Accounting Quarterly, Summer 2004, pp. 62-73.

(3) Johnson and Kaplan, p. 12.

(4) Previtz and Merino, A History of Accounting in America, p. 213.

(5) Harold Q. Langenderfer, "Struggle for Status: A History of Accounting Education," Accounting Historians Journal, June 1996.

(6) Previtz and Merino, A History of Accounting in America, p. 213.

(7) J. Pedelahore, "Case for the Dissent: Report of the Commission on Standards of Education and Experiences for CPAs," AICPA, New York, N.Y., 1956. Cited in Ibid.

(8) Nelson, "What's New about Accounting Education Change?"

(9) Eliyahu M. Goldratt, "Cost Accounting: The Number One Enemy of Productivity," APICS Conference Proceedings, 1983, pp. 433-435; Robert S. Kaplan, "Yesterday's Accounting Undermines Production," Harvard Business Review, July-August, 1984, pp. 95-101.

(10) Callie Berliner and James A. Brimson, Cost Management for Today's Advanced Manufacturing: The CAM-I Conceptual Design, Harvard Business School Press, Boston, Mass., 1988; Germain Boer, "Revolution in Management Accounting: A review of Robert S. Kaplan's and Anthony A. Atkinson's Advanced Management Accounting," Journal of Management Accounting Research, Fall 1991, pp. 223-229; Peter J. Clarke, "The Old and the New in Management Accounting," Management Accounting, June 1995, pp. 47-49; Robin Cooper, "Look Out, Management Accountants," Management Accounting, May 1996, pp. 20-25; H. Thomas Johnson, "Management Accounting in the 21st Century," Journal of Cost Management, Fall 1995, pp. 15-19; Robert S. Kaplan, "New Roles for Management Accountants," Journal of Cost Management, Fall 1995, pp. 6-13.

(11) Keith A. Russell, Gary H. Siegel, and Bud Kulesza, "Counting More, Counting Less: Transformations in the Management Accounting Profession," Management Accounting Quarterly, Fall 1999, pp. 28-34; Gary Siegel and Bud Kulesza, "The Coming Changes in Management Accounting Education," Management Accounting, January 1996, pp. 43-47.

(12) Jean E. Cunningham and Orest J. Fiume, Real Numbers, Managing Times Press, Durham, N.C., 2003; Siegel and Sorenson, What Corporate America Wants; Russell, Siegel, and Kulesza, "Counting More, Counting Less."

(13) Tatikonda, "Naked Truths."

(14) Inman, Wenzler, and Wickert., "Square Pegs in Round Holes"; Michael W. Mather, "Management Accounting Education at the Millennium," Issues in Accounting Education, May 2000, pp. 335-347; Irvin Nelson, James Bailey, and Tom Nelson, "Changing Accounting Education with Purpose: Market-based Strategic Planning for Departments of Accounting," Issues in Accounting Education, Spring 1998, pp. 301-326; Patten and Williams, "There's Trouble--Right Here in Our Accounting Programs."

(15) John J. Siegfried, Malcolm Goetz, and Kathryn H. Anderson, "The Snail's Pace of Innovation in Higher Education," Chronicle of Higher Education, May 1995, p. A56.

(16) Albrecht and Sack, "Accounting Education: Charting the Course through a Perilous Future."

(17) A. Marvin Strait and Ivan Bull, "Do Academic Traditions Undermine Teaching?" Journal of Accountancy, September 1992, pp. 69-73.

(18) Stephen A. Zeff, "Does Accounting Belong in the University Curriculum?" Issues in Accounting Education, Spring 1989,

pp. 203-210.

(19) Dan Subotnik, "What Accounting Can Learn From Legal Education," Issues in Accounting Education, Fall 1987, pp. 313324.

(20) Moore, "The Corporate University."

(21) Michael Bromwich and Alnoor Bhimani, Management Accounting: Evolution not Revolution, Chartered Institute of Management Accountants, London, England, 1992; Clive Emmanuel, David Otley, and Kenneth Merchant, Readings in Accounting for Management Control, Chapman & Hall, London, England, 1992.

(22) Clarke, "The Old and the New"; Kaplan, "Yesterday's Accounting Undermines Production"; Kaplan, "New Roles for Management Accountants"; Nelson, Bailey, and Nelson, "Changing Accounting Education with Purpose."

Lakshmi U. Tatikonda, CMA, CFM, CPA, Ph.D., is Professor Emeritus of Accounting at the University of Wisconsin Oshkosh. You can contact Lakshmi at (920) 233-8092 or tatikond@uwosh.edu.

Olesya M. Savchenko received her MBA from the University of Wisconsin Oshkosh. She can be contacted at savcho04@uwosh.edu.
Table 1: Accounting Activities, Value, and Academic Emphasis

ACTIVITY TYPE OF ACCOUNTING VALUE/COST

Recording business events Financial $10/Hr.
Summarizing recorded events Financial $30/Hr.
Converting data into information Financial/Managerial $100/Hr.
Turning information into
 knowledge Managerial $300/Hr.
Making value-added decisions Managerial $1,000/Hr.

 EMPHASIS IN
 ACCOUNTING
ACTIVITY EDUCATION

Recording business events High
Summarizing recorded events High
Converting data into information Moderate
Turning information into
 knowledge Low
Making value-added decisions Low

Source: Steve W. Albrecht and Robert J. Sack, "Accounting Education:
Charting the Course through a Perilous Future," p. 36.

Table 2a: Descriptive Statistics, Hypothesis 1

 NUMBER OF MINIMUM
 UNIVERSITIES NUMBER OF
 COURSES

Senior-level Acct. Courses
 Available 295 3
Senior-level Cost/Mgmt. Acct.
 Courses Available 295 0
Required Acct. Courses 295 0
Required Cost/Mgmt. Acct. Courses 295 0

 MAXIMUM
 NUMBER OF STD.
 COURSES MEAN DEVIATION

Senior-level Acct. Courses
 Available 22 10.95 3.145
Senior-level Cost/Mgmt. Acct.
 Courses Available 3 1.30 .611
Required Acct. Courses 13 6.32 1.736
Required Cost/Mgmt. Acct. Courses 6 1.00 .583

Table 2b: Independent Sample t-Test--Group Statistics, Hypothesis 1

 NUMBER OF MEAN NUMBER
GROUP UNIVERSITIES OF COURSES

Senior-level Acct. Courses Available 295 10.95
Senior-level Cost/Mgmt. Acct. Courses
 Available 295 1.3

 STD. STD. ERROR
GROUP DEVIATION MEAN

Senior-level Acct. Courses Available 3.149 0.184
Senior-level Cost/Mgmt. Acct. Courses
 Available 0.611 0.036

Table 2c: Independent Sample Test, Hypothesis 1

 LEVENE'S TEST FOR
 EQUALITY OF VARIANCES *

 F SIGNIFICANCE

Courses Equal variances
 assumed 249.24 00.000
 Equal variances
 not assumed

 T-TEST FOR EQUALITY OF MEANS

 t DEGREES SIGNIFICANCE
 OF FREEDOM (2-TAILED)

Courses Equal variances
 assumed 51.593 586 0.000
 Equal variances
 not assumed 51.593 314.999 0.000

 T-TEST FOR EQUALITY
 OF MEANS
 95% CONFIDENCE
 MEAN STD. ERROR INTERVAL OF THE
 DIFFERENCE DIFFERENCE DIFFERENCE

 LOWER UPPER

Courses Equal variances
 assumed 9.653 0.187 9.286 10.021
 Equal variances
 not assumed 9.653 0.187 9.285 10.021

* Levene's Test for Equality of Variances is significant; thus the
results in the row labeled "equal variances not assumed" is used.

Table 2d: One-Sample t-Test--Statistics, Hypothesis 1

 NUMBER OF MEAN NUMBER
GROUP UNIVERSITIES OF COURSES

Senior-level Cost/Mgmt.
 Acct. Courses Available 295 1.30

 STD. STD. ERROR
GROUP DEVIATION MEAN

Senior-level Cost/Mgmt.
 Acct. Courses Available 0.611 0.036

Table 2e: One-Sample t-Test--One-Sample Test, Hypothesis 1

 TEST VALUE = 10.95 (MEAN NUMBER OF
 SENIOR-LEVEL ACCT. COURSES AVAILABLE)

 DEGREES SIGNIFICANCE
 t OF FREEDOM (2-TAILED)

Senior-level Cost/Mgmt.
 Acct. Courses Available -271.324 295 0.000

 TEST VALUE = 10.95 (MEAN NUMBER OF
 SENIOR-LEVEL ACCT. COURSES AVAILABLE)

 MEAN 95% CONFIDENCE
 DIFFERENCE INTERVAL OF THE
 DIFFERENCE

 LOWER UPPER
Senior-level Cost/Mgmt.
 Acct. Courses Available -9.652 -9.72 -9.58

Table 2f: Independent Sample t-Test--Group Statistics, Hypothesis 2

 NUMBER OF MEAN NUMBER
GROUP UNIVERSITIES OF COURSES

Required Senior-level
 Acct. Courses 295 6.32
Required Senior-level
 Cost/Mgmt. Acct. Courses 295 1.00

 STD. STD. ERROR
GROUP DEVIATION MEAN

Required Senior-level
 Acct. Courses 1.699 0.099
Required Senior-level
 Cost/Mgmt. Acct. Courses 0.580 0.034

Table 2g: Independent Sample Test, Hypothesis 2

 LEVENE'S TEST FOR
 EQUALITY OF VARIANCES *

 F SIGNIFICANCE

Courses Equal variances
 assumed 241.994 00.000
 Equal variances
 not assumed

 T-TEST FOR EQUALITY OF MEANS

 t DEGREES SIGNIFICANCE
 OF FREEDOM (2-TAILED)

Courses Equal variances
 assumed 49.859 588 0.000
 Equal variances
 not assumed 49.859 359.554 0.000

 T-TEST FOR EQUALITY
 OF MEANS
 95% CONFIDENCE
 MEAN STD. ERROR INTERVAL OF THE
 DIFFERENCE DIFFERENCE DIFFERENCE

 LOWER UPPER

Courses Equal variances
 assumed 5.315 0.107 5.106 5.525
 Equal variances
 not assumed 5.315 0.107 5.106 5.525

* Levene's Test for Equality of Variances is significant; thus the
results in the row labeled "equal variances not assumed" is used.

Table 2h: One-Sample t-Test-Statistics, Hypothesis 2

 NUMBER OF MEAN NUMBER
GROUP UNIVERSITIES OF COURSES

Req. Senior-level
 Courses Cost/Mgmt. Acct. 295 1.00

 STD. STD. ERROR
GROUP DEVIATION MEAN

Req. Senior-level
 Courses Cost/Mgmt. Acct. 0.583 0.034

Table 2i: One-Sample t-Test--One-Sample Test, Hypothesis 2

 TEST VALUE = 6.32 (MEAN NUMBER OF
 SENIOR-LEVEL ACCT. COURSES AVAILABLE)

 DEGREES SIGNIFICANCE
 t OF FREEDOM (2-TAILED)

Req. Senior-level Cost/Mgmt.
 Acct. Courses -157.263 294 0.000

 TEST VALUE = 6.32 (MEAN NUMBER OF
 SENIOR-LEVEL ACCT. COURSES AVAILABLE)

 95% CONFIDENCE
 MEAN INTERVAL OF THE
 DIFFERENCE DIFFERENCE

 LOWER UPPER
Req. Senior-level Cost/Mgmt.
 Acct. Courses -5.340 -5.41 -5.27

Table 2j: One-Sample t-Test--One-Sample Test, Hypothesis 3

 TEST VALUE = 10.95

 DEGREES SIGNIFICANCE
 t OF FREEDOM (2-TAILED)

Senior-level Cost/Mgmt.
 Acct. Courses Available -271.324 295 0.000

 TEST VALUE = 10.95

 95% CONFIDENCE
 MEAN INTERVAL OF THE
 DIFFERENCE DIFFERENCE

 LOWER UPPER
Senior-level Cost/Mgmt.
 Acct. Courses Available -9.652 -9.72 -9.58

Table 2k: Binomial Test, Hypothesis 4a

 NUMBER OF OBSERVED
 CATEGORY UNIVERSITIES PROPORTION

OPS Course Group 1 Required 182 0.62
 Group 2 Not Required 113 0.38
 Total 295 1.00

 TEST ASYMPTOTIC
 PROPORTION SIGNIFICANCE
 (2-TAILED)

OPS Course .05 0.000 (a)

(a.) Based on Z approximation

Table 2l: Binomial Test, Hypothesis 4b

 NUMBER OF
 CATEGORY UNIVERSITIES

OPS as a Group 1 Not a Prerequisite 294
prerequisite Group 2 Prerequisite 1
 Total 295

 ASYMPTOTIC
 OBSERVED TEST SIGNIFICANCE
 PROPORTION PROPORTION (2-TAILED)

OPS as a 1.00 0.50 0.000 (a)
prerequisite 0.00
 1.00

(a.) Based on Z approximation

Table 3: Typical Accounting Curriculum and
Suggested Cost/Management Accounting Curriculum

 PROPOSED COST/MANAGEMENT
 TYPICAL ACCOUNTING CURRICULUM ACCOUNTING CURRICULUM

3-6 credits of Foundations of 3-6 credits of Foundations of
 Accounting Accounting
6 credits of Intermediate 3-6 credits of Intermediate
 Accounting Accounting
3-6 credits of Cost Accounting 3-6 credits of Cost Management *
3-6 credits of Advanced 3-6 credits of Advanced
 Accounting Management (new course) *
 3 credits of Process
3-6 credits of External Auditing Improvements (new course) *
6 credits of Tax 3 credits of Tax (modified course)
3 credits of Internal Auditing 3 credits of Internal Auditing
 3 credits of Legal Environment
6 credits of Law (modified course)
3 credits of Accounting 3 credits of Accounting
 Information Systems Information Systems

* Strategy and operations management courses will be prerequisites for
cost/management accounting course
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Author:Tatikonda, Lakshmi U.; Savchenko, Olesya M.
Publication:Management Accounting Quarterly
Geographic Code:1USA
Date:Jan 1, 2010
Words:6640
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