Changes In Accounting Education

At the University of Texas at Dallas, information technology is proving to be the accounting program's savior. Rechristened this past year as the accounting and information management program, the university's curriculum integrates information systems theory and procedures into virtually all accounting courses. The result: a 40% rise in the number of students majoring in accounting during the past three years, while enrollment nationwide in similar programs has plummeted by more than 20%.

Accounting programs are in dire straits. For about two decades, until the mid-1990s, colleges produced a steady annual flow of about 60,000 new accountants. But, according to the American Institute of Certified Public Accountants, a trade association, 47,600 accounting majors were granted undergraduate and graduate degrees by U.S. colleges in 1999 (the latest year for which numbers are available). That's a 20% decline in three years. Correspondingly, enrollment in accounting programs plummeted 23% to 148,000 students in 1998-99 from 192,000 in 1995-96.

Why such a decline? Many educators say traditional accounting programs don't emphasize the reality of the workplace. Instead, they focus on traditional skills involving balance sheets, income statements, taxation, auditing, and assurance. But much of the traditional accounting work once performed by financial managers has been automated, and the skills required to do their jobs now involve a deep understanding of how to use IT to collect, analyze, and report the data needed to run a company. "You can't carry out the accounting function if you don't have a fair understanding of the technology it's based on and the software that runs it," says Rajiv Banker, director of UT Dallas' accounting and information management program. "In addition, [these accounting graduates] will be making decisions about technology implementation itself."

Thus, at a growing number of schools, including UT Dallas, Arizona State University, and Rutgers University in New Jersey, integrating IT into the accounting curriculum is crucial. "We've tried to blend the two disciples from an educational standpoint in reaction to what's going on in the corporate world," says Julie Smith David, an associate professor in accounting information systems at Arizona State's 5-year-old School of Accounting and Information Management.

At Rutgers' department of accounting and information systems, for instance, separate courses in auditing and the basics of IS have been integrated into a single two-semester sequential course. "You can't teach auditing without information systems," department chairman Don Palmon says. Rutgers also requires each instructor to incorporate as much IT as possible into accounting courses, such as employing sophisticated analytical features of Microsoft Excel spreadsheet, Access database, and Peachtree accounting software. The school is creating a laboratory in which students can get hands-on experience using SAP's enterprise resource planning systems. Students entering the school's MBA program must attend a cybercamp to learn how to use technology tools and find financial information over the Internet. "The practice of accounting is changing so rapidly that unless we train future accountants in IT right from the very start, they'll be lost and not able to function at work," Palmon says.

UT Dallas' program has evolved in the past half decade from one in which accounting majors took IT courses offered from the university's MIS degree program to one in which IT professors taught classes tailored for accounting students to one in which the accounting professors integrate IT knowledge within their own courses.

But programs at UT Dallas, Rutgers, and Arizona State are still the exception, not the rule. The accounting community, though, recognizes the need to radically change accounting education in the United States, as reflected in a monograph issued earlier this year by a group of accounting professional and education associations and the Big 5 accounting firms. Among the suggestions: broadening the definition of accounting as a subset of the larger business-information system. "With a broadly defined 'information' perspective of accounting, it is logical that accounting education would evolve as a combination of traditional accounting courses and information system courses," the monograph says. "Such a strategy would require a reduced amount of time and depth devoted to traditional accounting and more study of information systems."

But making such a change isn't easy. Accounting educators say they're caught between the proverbial rock and a hard place. The skills that companies expect from accounting graduates don't necessarily jibe with the knowledge needed to pass state-administered certified public accounting tests, which emphasize traditional accounting skills. And to advance professionally, many accountants consider CPA certification a necessity. "The CPA exam is not synchronized with the knowledge a good accountant needs to do a job," Palmon laments. "We have to bridge the gap and be in two places at the same time. We try our best."

The best, however, may not be enough as accounting programs try to survive as a funnel of talent to the new workplace.

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