(taken from the May/June 2006 issue of On Balance magazine)

Advancing the accounting curricula
By Larry E. Rittenberg, CPA, Ph.D.

As we look forward to the second decade of the 150-credit-hour requirement for certification of CPAs, I have been asked to take a look at our educational challenges. We have a strong tradition of accounting leadership in this state and I hope to see it continue.

Accounting departments in this state have built solid value into the 150-credit-hour requirement. Unfortunately, all of our departments are facing significant challenges: These include:

• Increased demand for highly qualified accounting majors
• Decreased resources to both educate and provide financial support for students
• A decrease in qualified doctoral graduates coupled with the impending retirement of a large percentage of our existing faculty
• An increase in demand for understanding global factors affecting the profession.

The implications for accounting curricula in the future cannot be meaningfully discussed without understanding and addressing these challenges.

As has happened every generation before us, the student body is changing. In some ways students are savvier, particularly with computers; they want work-life balance; they are not interested in performing mundane work beyond that needed to understand basic processes; they are more attuned to worldly issues; and they are willing to look outside their immediate boundaries for career success.

On the downside, some students have become too accustomed to passive learning. One of our biggest challenges is to help students develop an ability to perform substantive research and to think critically about issues.

Before looking explicitly at the challenges identified above, two important trends must be recognized: increasing globalization and the segmentation of processes into smaller components that might be outsourced. Our educational system must prepare students to add value through the types of critical analysis and decision-making which require higher-level cognitive skills. Students are ready for these challenges and they want their careers to provide them.   

Insufficient resources
The No. 1 challenge facing accounting departments today is the significant decrease in state-provided resources. For example, our department has recently lost 25 percent of its faculty to retirement or transfer, and none of those positions has been replaced by tenure-track doctoral-qualified faculty.

The implications are clear and the options are limited: (a) increase private financial support for the departments, (b) increase class sizes therefore decreasing the ability of the faculty member to challenge each student’s thinking process, (c) replace tenure-track faculty with part-time faculty or adjuncts, e.g. CPAs who would like to teach, or (d) shrink the size of the program.

All of these options may have merit, but each also has a significant cost. Most likely, our departments will respond with a combination of the four options. For example, at the University of Wisconsin-Madison, we will likely increase class size for some classes while holding constant or decreasing class size for others. Unfortunately, in our case and many others, the only way we can grow the program with high-quality faculty and students is to obtain significant outside endowments.

This real financial challenge cannot be ignored by those in the state who want to maintain the quality of our programs and grow the programs to meet employers’ needs. Resource constraints color our decisions more today than at any time in my 30 years of experience at UW-Madison. 

Curricula changes
One of the significant developments of five-year professional programs has been the emergence of internships as a major part of the curricula. We are able to build on internships to challenge students to think about professional issues and develop the skills needed for a successful career.   

We are in the process of re-thinking our curriculum and are discussing:

• Setting more learning into a business context
• Adding more on development of professional skills
• Size of classes
• Integration of knowledge across the curriculum.

Setting learning in a business context. We are working with our advisory board and alumni of the five-year professional program to assist us in developing classes to provide a specific context for broad accounting issues such as valuation, financial reporting and analysis, international accounting, governance, risk, and control. We are discussing the possibility of adding modules on fundamental business processes such as supply chain management, information technology, tax strategies and strategic planning, which require students to “drill down” into the processes in a specific company and industry, including government. 

Developing more immediate professional skills. We are working on alternatives to improve the professional communication skills of our students. We are also integrating real-life ethical dilemmas into the classroom. Students are attuned to current developments such as the Enron trial and the escalation to commitment that exists in many organizations that experience unethical behavior. We are adding modules to assist students in managing their careers.

Size of classes.  Change is constant and the rate of change will continue to increase. We must challenge students to become active learners and adapters to a changing environment. They need better analytic and decision-based skills. This can best be done in highly interactive classrooms with skilled faculty who have performed research. We must seek a balance in class sizes across our discipline.

Integrating skills.  As we view the future, accountants need a high level of technical skills, but those skills must be based on a fundamental understanding of business and business purposes.  We cannot compromise on the strong technical background required for success. But, we need to go beyond understanding the technical aspects of accounting. For example, it is important to not only understand how to account for financial derivatives, but to understand the business purpose for entering into these contracts as well as the risks. The same is true of other business knowledge areas. We want students to have in-depth accounting knowledge combined with a breadth of business knowledge.

Future of accounting curricula
Accounting and business are intertwined. Our curricula must continue to enhance students’ fundamental skills and knowledge. More important, it must build confidence in our students to challenge themselves and think independently. All of us welcome CPAs’ input on the issues raised in this article, as well as assistance in building our programs for the future.

 

Larry E. Rittenberg, CPA. Ph.D. is an Ernst & Young Professor of Accounting at the University of Wisconsin-Madison. He can be reached at lrittenberg@bus.wisc.edu or (608) 262-2267.  

 

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