by Rick Telberg
July 3, 2000 (SmartPros) — Some college accounting professors appear to be poised to recommend that accounting education and recruitment begin in high schools. While none of the supporters of the idea asserts that it's the only remedy for the profession's brain drain, it has stirred some passion and debate.
The proposal was aired by W. Steve Albrecht, associate dean at Brigham Young University. Along with professor Robert J. Sack of the University of Virginia in Charlottesville, Albrecht will present the findings of "Strategic Thinking on Accounting Education for the 21st Century" in August at the American Accounting Association annual meeting in Philadelphia.
"Steve and Bob are correct in the causes of the decline but I don't like their recommendation at all," commented Ed Ketz, an outspoken professor at Pennsylvania State University. "One thing they leave out is that academics are mostly Ph.D.s trained in financial economics. Many have no experience. The problem that this causes is that they don't appreciate the changes in practice. And consequently they don't care about changing the curriculum. Changing the teaching of accounting in high schools is ridiculous. The vast majority of my accounting students never took accounting in high school, and I suspect that this true for other schools as well. I sure didn't. The high schoolers tend to be weak students who couldn't get into college."
"The issue is the value of the services," says Bob Elliott, chairman of the American Institute of CPAs, a top executive at KPMG and one of the profession's true visionaries. "If it doesn't rise, we can't charge clients more and therefore can't pay CPAs enough to attract them away from information systems."
"Why is the value down relatively?" Elliot asks. And answers:
· "We are functioning at the middle of the information value chain (the production of information), not at the top (the use of information to create wealth), where the high compensation is." His solution: move up the value chain to consulting services.
· "We are auditing financial statements of declining relevance (backward-looking, annual balance sheets filled with the tangible assets of the industrial revolution, not the intangible assets of the post-industrial world)." His solution: refresh the accounting model. "That's the FASB's job, and they're working on it, though too slowly," he says. The profession must "move toward more frequent reporting, real-time assurance."
· "Companies a generation ago lacked the internal capacity to prepare GAAP financial statements. They needed the CPA to do it. Today (through hiring many CPAs from practice, to the extent that CPAs in industry now outnumber those in practice), most companies have internalized all the skills they need. Solution: "Provide value-added services that companies have not yet internalized," Elliott says.
"If we don't do these things, the sweetest talking recruiter -- whether in high school or college -- won't be able to attract students to accounting."
"Having said that," Elliott adds, "I believe that the profession is working on the solutions. I believe that the profession is more attractive (in the sense of opportunities) today than it has been in a long time. But students (like most people) are still laboring under obsolete information and images."
Irv Gleim, the straight-talking head of the Gleim CPA review based in Gainesville, Fla., is tired of waiting. He says succinctly: "What would you have your child major in, accounting or computer information systems?"
In fact, they are all correct. Solving the profession's brain drain must begin everywhere at once -- in colleges, providing professors with practical experience; in the marketplace, by enhancing the value of the services delivered; and in the high schools, by letting youngsters know that accounting provides a surefooted entrée into the business world.
