The lack of professional unity in the accounting profession has led to external influence over the shape of accounting education. Unified leadership would better serve both the profession and the public interest. The Pathways Commission, the body currently charged with developing strategy and making recommendations regarding the future of accounting education, has proposed a way to revitalize such efforts. This article examines the long-standing divide between accounting practitioners and educators, considers the results of a Pathways Commission report on the state of accounting education, and explores its recommendations for renewed cooperation among practitioners and educators.
In July 2012, the American Accounting Association (AAA) and the AICPA Pathways Commission issued a report on the future structure of higher education for the accounting profession (“Charting a National Strategy for the Next Generation of Accountants,” July 2012, http://commons.aaahq.org/posts/a3470e7ffa). The formation of this working group stemmed from a 2008 report from the Advisory Committee on the Auditing Profession (ACAP) to the U.S. Department of the Treasury. Based on suggestions from this quasi-governmental body, the Pathways Commission issued seven noteworthy recommendations regarding many issues affecting human capital in accounting education and practice. Equally important, though, is what it chose not to address. The ACAP had asked that the commission “consider a postgraduate professional school model to enhance the quality and sustainability of a vibrant accounting and auditing profession” (U.S. Department of the Treasury, “Final Report of the Advisory Committee on the Auditing Profession to the U.S. Department of the Treasury,” pt. VI, p. 27, October 2008).
In response to that charge, the Pathways Commission “felt it was premature to address this issue without addressing the underlying issues currently impacting accounting education and the profession. Further study of this issue is suggested as a part of the ongoing implementation activities” (Pathways, p. 18).
The Pathways Commission chose to sidestep a much-debated issue of graduate education for the accounting profession, and instead opted to help create a malleable framework of accounting education for the next generation of accountants. The response is justified, given the “inflexibility of academic environments and the long standing disconnect between academe and practice” (Robert Bloom, “Perspectives on the Pathways Commission Report: An Analysis of the Proposals,” The CPA Journal, August 2013, pp. 10-14).” Apparently, the commission recognized the insurmountable challenges of gaining consensus for graduate education from multifaceted stakeholders and took a more prudent path in recommending further deliberation on this issue.
Although added education requirements cannot guarantee a higher level of performance and integrity in practice, one might imagine that major educational issues in accounting have diminished now that all states require 150 hours of higher education to obtain licensure as a CPA. The ACAP call to consider postgraduate education suggests otherwise, citing ongoing failures in the financial sector that mark the importance of an accounting and auditing profession bolstered by considerable education and experience for healthy, functioning U.S. capital markets (Department of the Treasury, 2008).
Competing Claims for Authority
The author’s own study regarding the accounting curriculum investigated and compared preferences of accounting educators and practitioners under the premise that there is a divide in the opinions of the two groups. An overall finding indicated significant differences between the ratings of practitioners and educators with regard to the authority to prescribe accounting curriculum of five stakeholder groups: 1) accounting educators, 2) accounting practitioners, 3) accountants in industry, 4) state boards of accountancy, and 5) accrediting bodies. This 2007 survey, which preceded the 2008 ACAP report by only months, lends credibility to the notion that differences between practitioners and educators existed at the time. For example:
- ▪ Practitioners and educators each rated themselves highest among the five stake-holder groups regarding prescriptive authority over the accounting curriculum.
- ▪ There were significant differences between practitioners and educators, but little support from either group in granting authority to any other stakeholders.
The gulf between the two groups lends support to the historical claim of competition for authority over matters in accounting education. As suggested by ACAP, a professional working group was needed to demonstrate cooperative efforts related to accounting educational reform. Subsequently, the Pathways Commission was formed in anticipation of doing just that.
A Profession Lacking Unity
Accountants have never been able to unify in a way that could have benefited them politically. As one author notes, “the relationship between the accounting profession and accounting higher education and government in the United States is convoluted and involves shifting alliances” (Glenn Van Wyhe, “A History of U.S. Higher Education in Accounting, Part II: Reforming Accounting,” Issues in Accounting Education, vol. 22, no. 3, 2007, p. 497).
Sentiments that have proven difficult to define have likely limited compromise and stymied attempts at change. This complex relationship appears to have pushed accountants into a reactionary corner more than once in the past decade. Specific examples include the National Association of State Boards of Accountancy (NASBA) 2005 proposal for curricular changes and the aforementioned 2008 ACAP report (NASBA, “Exposure Draft: Uniform Accountancy Act Rules 5-1 and 5-2,” February 2005). For a profession that has relinquished considerable self-regulation in the areas of financial accounting and auditing, any attempt by other entities to influence accounting activities should be taken seriously.
In 1978, the AICPA’s Cohen Commission observed a schism between practitioners and educators that dated back as far as the mid-20th century, but it was unable to determine the exact cause (R. J. Patten, D. Z. Williams, “There’s Trouble—Right Here in Our Accounting Programs: The Challenge to Accounting Educators,” Issues in Accounting Education, vol. 5, no. 2, 1990, pp. 175–179). Indeed, an ongoing gap between educators and practitioners regarding curriculum content appears to exist (A. Novin, D. Fetyko, J. M. Tucker, “Perceptions of Accounting Educators and Public Accounting Practitioners on the Composition of the 150-Hour Accounting Programs: A Comparison,” Issues in Accounting Education, vol. 12, no. 2, 1997, pp. 331–352). The quest for a consistent structural framework has largely eluded the accounting profession due to differences of opinion between accounting educators and practitioners, the two groups recognized as most influential in educational change (R. E. Flaherty, “The Core of the Curriculum for Accounting Majors,” American Accounting Association, 1979; R. W. Rumble, “Accounting Skills and Programs Needed for the Next Century as Viewed by Colleges and Universities,” Dissertation Abstracts International, UMI 8814572, vol. 59, no. 12, 1998, p. 4329).
Public accounting has long been considered “professional” accounting, and correspondingly it has been the province of large CPA firms, which have had a significant formative impact on accounting education. Many academics resent this influence and oppose the exclusion of managerial accounting, internal corporate accounting, and internal auditing from the definition of professional accounting. Some academics have argued for various educational tracks in accounting, which ultimately resulted in the differentiation of managerial accounting and financial accounting at the curriculum level (Van Wyhe 2007).
These differences have also advanced the notion of obtaining special certification examinations for the areas of managerial accounting and internal auditing. The AICPA has implemented a certification process—i.e., the Chartered Global Management Accountant (CGMA) qualification—for CPAs meeting certain requirements in the area of management accounting. Decades ago, one author recommended a unique logical method of organizing the profession and astutely predicted that special certifications would likely be divisive rather than unifying (J. W. Partillo, “Unity in the Accounting Profession,” Journal of Accountancy, vol. 138, no. 1, 1974, pp. 50–58).
This recommendation failed to take root, just as many other recommendations have failed over the years. Now, the Pathways Commission has decided to be all-inclusive by defining the profession broadly and embracing almost anyone working in the accounting community as part of the profession.
Accounting has been likened to the legal profession, and although the legal profession includes both paraprofessionals and attorneys, it is unclear how being all-inclusive might affect the commission’s efforts at building a learned profession. Traditional learned professions (i.e., medicine, law, clergy) rely on both rigorous signature pedagogy and postgraduate degrees as marks of distinction, so it is uncertain whether the comparison is entirely appropriate. At one time, the CPA designation might have served as a sufficient mark of excellence for accountants, but the brand seems to have become less distinguished given the proliferation of various certifications and the trend towards postgraduate academic credentials in other professions.
Reward Structures and Accreditation
In their 1978 report (AICPA, “The Commission on Auditor’s Responsibilities: Report, Conclusions, and Recommendations,” 1978), authors Patten and Williams noted that the reward structure under which faculty labor in business schools contributes to the split between the research that practitioners and academicians view as important. For example, quantitative accounting research geared towards the financial markets is popular among accounting scholars because it adds to their academic credentials, but the topics often prove to be of limited value to the practice of auditing or public accounting. Comments in the Pathways Commission’s 2012 report indicate a dearth of meaningful links between practitioners and educators, causing the widest research divide the profession has experienced. The commission recommended modifying the reward structure for faculty by placing teaching on an equal level with research, but this recommendation will likely face stiff opposition from academics who have benefited under the current system.
Some educators will assert that the current theoretical research agenda has garnered respect for accounting as an academic discipline by promoting the analytical rigor and abstraction that is valued in the academy. This vision is supported by the proposition that, in a professional field, educational preparation must be fundamentally academic to gain prestige and legitimacy (A. Colby, J. Dolle, T. Ehrlich, W. M. Sullivan, Rethinking Undergraduate Business Education: Liberal Learning for the Profession, Jossey-Bass, 2011). In accounting, the contradiction between academic theory and the pragmatism of practice has not been reconciled to the degree necessary to promote a mutually beneficial relationship.
An additional consideration is that while most other professions are accredited via organizations closely aligned with their professional practicing membership, accounting is not. The premier accreditation for an accounting program is awarded by the Association to Advance Collegiate Schools of Business International (AACSB). While AACSB accreditation of business schools is widely accepted and respected, secondary accreditation of professional accounting programs by that same body can be challenged on the grounds that it is not representative of the accounting profession.
Accreditation of accounting education should be of concern for the profession, because an outside body largely disconnected from practice is conferring this status. Many notable academics are involved in the accreditation process, but there is little representation of the professional practice arm. For example, the current makeup of the Accounting Accreditation Committee (AAC) includes 13 members, 12 of whom are from higher education—predominantly administrators from AACSB schools—with only one representative from public accounting (AACSB, “Accounting Accreditation Committee,” 2015, http://www.aacsb.edu/). By contrast, the American Bar Association Council—the oversight body of law school accreditation—is made up of 21 members and limits deans and faculty to 10 members, with the balance consisting of judges, practicing attorneys, a law student, and three public representatives (ABA, “The Law School Accreditation Process,” 2013, http://www.americanbar.org/legaled).
The accounting literature supports the notion that individuals most influential in accounting education are, and ought to be, accounting practitioners and accounting educators (Flaherty 1979, Rumble 1998). This seems reasonable, considering the influence other professions have over their own educational structure, content, and accreditation.
Accreditation might also be viewed as problematic because AASCB data from 2013 shows that only 495 schools in the U.S. with AACSB business accreditation can aspire to achieve this separate level of accreditation; secondly, only 169 of the 439 accounting programs in that category (38.5%) have separate accounting accreditation (AACSB, Schools Accredited in Accounting, 2013, http;//www.aacsb.edu). This is a curiously low percentage, considering the number of schools that apparently have reputable business programs, but are either unable or unwilling to secure top accreditation for an accounting program.
College deans influence accounting education through AACSB International (Colby et al. 2011; W. H. Black, “The Activities of the Pathways Commission and Historical Context for Changes in Accounting Education,” Issues in Accounting Education, vol. 27, no. 3, 2012, pp. 601–625). While their intentions are good, college deans and other administrators frequently have limited background in accounting, which means they make decisions based largely on the mission or financial considerations of the business school. In this way, the accounting profession has forfeited their ability to influence the educational experience of the very individuals they hire. Accreditation of accounting programs by the profession itself could have provided unity and helped to define the profession, but, as Van Wyhe stated, “accounting academicians did not feel the loyalty to the profession that academicians in the other professions apparently felt” (p. 497).
The ACAP’s proposal of considering a postgraduate professional school model separate from the business schools is not a new idea. This concept was put forth in the 1970s with limited success, at a time when several schools of accountancy were formed around the country despite the protest of business school deans. The Federation of Schools of Accountancy was formed in 1977 with the intention of separate schools of accountancy, whether independent of or within the schools of business (Glenn Van Wyhe, The Struggle for Status: A History of Accounting Education, Garland Publishing, 1994). While the AAA and AICPA initially cooperated to begin development of accreditation standards, the tone was changed by the AACSB’s sudden interest, which stemmed from the desire of business school deans to keep control of accounting programs (Van Wyhe, 2007). Shortly thereafter, the joint accounting group recognized it had insufficient support and terminated its accreditation efforts while the AACSB moved forward with little intervention (Wallace E. Olson, The Accounting Profession, Years of Trial: 1969–1980, AICPA).
Thus, the ACAP proposal calls for the reexamination of issues not fully resolved some 40 years ago. Perhaps separate postgraduate schools of accountancy are not needed, but an accrediting body for accounting programs with equal representation from those in practice and academia should be open for deliberation. The Pathways Commission appears to be logically poised to consider such a compromise, thereby adding clarity as to who really has authority for prescriptive changes in accounting education. Accordingly, the commission should seek input from its constituents regarding this issue.
A Unified and Learned Profession
While it cannot be inferred that differences between accounting practitioners and educators have resulted in a defective educational structure, future discord could prove to be hazardous for an academy and a profession under continuous scrutiny by many stakeholders. Perhaps the biggest threat to accounting as a sustainable profession is not the direct risk of divisiveness between the two groups, but the indirect and unintended consequences of surrendering to other groups a certain amount of unwarranted authority over educational issues. Without a sense of professional unity between the parties most influential in accounting education, external interests will continue to be able to use discord to their own advantage. Forging an enhanced educational framework that supports a viable accounting profession is a joint privilege held by accounting practitioners and educators that need not be relinquished to others.
Educators, public practitioners, and accountants in industry alike all seek to participate in a respected and vibrant profession that executes responsible authority over its own affairs.
The Pathways Commission, a body representing both practitioners and educators, is currently taking a thoughtful and deliberative approach to many of the issues confronting accounting education. After two years of implementation efforts, the goal of improving the educational process appears to be progressing. Building a learned profession by encouraging better integration of professionally oriented faculty into the academic arena, urging academic journals to publish on practice-oriented issues, and encouraging practitioner journals to promote awareness and use of academic research are all proposals that should further unity among a profession long divided (“Implementing the Recommendations of the Pathways Commission: Year Two,” August 2014).
Three working groups charged with the task of determining curriculum models and connecting those models to alternate career paths are currently organized around defining a common body of knowledge, developing signature pedagogy, and determining appropriate technology for the accounting generalist (AAA, “Update from the Pedagogy Task Force of the Pathways Commission, Accounting Education News, vol. 42, no. 1, 2014, pp. 6–7).
While still in the early phases, efforts by the Pathways Commission to build “a learned profession through greater connectivity between the academic and practice elements of the profession” is unprecedented. Educators, public practitioners, and accountants in industry alike all seek to participate in a respected and vibrant profession that executes responsible authority over its own affairs. A working group that seeks input from multiple stakeholders is a realistic approach to embrace when confronted with the alternative of change imposed by groups less concerned with the sustainability of the accounting profession.