Many years ago, I graduated with a shiny new degree in accounting and landed a coveted job at a then–Big Eight accounting firm. I was an excellent accounting student, in part because I was a nontraditional student who went back to school later in life. We nontraditional students usually take our studies very seriously because we understand what a privilege it is to have that seat in the classroom. Looking back, I distinctly remember scanning the room and thinking, “Do these students know how lucky they are to have the opportunity to learn?”

Despite graduating as one of the top accounting students at my university that year, I experienced a large skills gap between what I knew and the nontechnical competencies that were expected of me in my first professional accounting job. For my undergraduate degree, I specialized in tax and amassed a fair amount of knowledge in the legal and regulatory aspects thereof, as well as a thorough understanding of the tax code. If you had asked me a question about whether someone could claim a particular deduction, I could have answered it.

My studies had not, however, required me to prepare an actual tax return. I thus arrived at my prestigious job never having used tax software or even having prepared a tax return by hand. Nor had I ever seen a set of audit work papers, from which the tax accrual is performed on the audit side. I also had ample time in college—usually a couple of weeks—to work on a tax research problem, but in my post-graduation job, I often had only a couple of hours to research a tax issue, analyze the tax implications, and write a tax memo with my findings. This was a far cry from two weeks to consult multiple authorities, consider many perspectives, and write up my findings and recommendations. Furthermore, my advice needed to be right. It was not just a matter of a grade; it was my job to be an expert, and people would be relying on my advice. The difference between making a grade in a class and working on a real client issue was quite a wake-up call for me.

My individual case is somewhat a function of its time. The 2000s brought the internship as an available avenue for students to learn firsthand what public accounting or other careers as a professional accountant are like, including the amount of work expected of new employees and the level at which they are expected to perform. Since then, internships have become a valuable means of calibrating fit from both the employer’s and the potential employee’s perspective. Furthermore, the Internet has made information accessible to anyone, so research that was once a time-intensive process is now available at our fingertips.

Nevertheless, later in my career as an accounting professor and subsequently director of a large and successful accounting program, I noticed that the skills gaps persisted. Such gaps relate to the currency and relevancy of accounting curricula, as well as students’ ability to synthesize and apply information critically in order to analyze real-world problems—with or without the use of ever-changing technology. It is essential that students develop technological agility and a growth mindset to be successful in today’s work environment. Accreditation can play a role in bridging the gaps between graduate skills and workforce needs.

Where Does Accreditation Fit In?

Today in my work with AACSB International (Association to Advance Collegiate Schools of Business), I have the privilege of overseeing both business and accounting accreditation for AACSB-accredited schools globally. As of December 2018, 831 institutions in 54 countries and territories have achieved AACSB accreditation for their business schools. Each AACSB-accredited institution also has the option of pursuing supplemental accreditation for their accounting programs. This supplemental recognition is a nod to the fact that accounting is a “learned profession,” similar to law or medicine, and requires years of study, licensure, and continuing professional education to maintain authorization to practice public accounting. To date, 187 schools of the 831 accredited have achieved supplemental accounting accreditation, primarily in the United States.

Institutions that seek this supplemental endorsement must adhere to a set of standards that are in addition to the requirements met for general business accreditation. These standards establish quality in accounting education by requiring schools to document the following:

  • How their accounting programs strategically manage their programs and resources
  • What types of research and other intellectual contributions are produced, and how that research makes an impact on the accounting profession
  • What types of faculty qualifications their professors maintain
  • What content is included in the accounting curriculum
  • How learning is assured
  • How technology is infused within the accounting curriculum
  • How academics and students are actively engaged in the accounting profession.

After earning accreditation, schools must undergo a complete quality review of their accounting program through a peer-review team visit every five years. The peers who participate in these evaluations have traditionally been heads of accounting programs, or deans with prior experience leading very successful accounting programs.

While this central model is a good one, the AACSB recognized there was a need for improvement. Conversations with faculty, alumni, recruiters, and external stakeholders revealed that those within the industry who hire accounting graduates believed a strong skills gap still persisted, most acutely with respect to currency and relevancy of curricula and technology agility. To tackle this problem, a task force of 19 highly respected accounting educators and accounting practitioners—including leaders from the National Association of State Boards of Accountancy (NASBA), the Institute of Management Accountants (IMA), the AICPA, and public accounting—worked for almost 20 months to develop updated accounting standards that would bridge the gap between academic and workforce expectations for new accounting graduates. In April 2018, AACSB schools who currently maintain supplemental accounting accreditation voted on these new accounting standards, which passed nearly unanimously.

A Major Step Toward Bridging the Persistent Gaps

To address the scholastic-to-workforce gaps, the AACSB’s 2018 accounting accreditation standards made two major shifts. First, through its work, the task force determined that many accounting curricula suffer from a lack of currency or relevancy, which is sometimes a function of the currency of the accounting professoriate. Since accounting is a rapidly changing field, schools that teach accounting must be on top of current changes and ensure their courses and curriculum are reflective of the work new graduates will be expected to do. Going forward, all accounting accreditation visits will include an accounting practitioner on the team, in addition to two accounting academic department heads or deans. Because practitioners see real-time organizational needs and complete daily work, their role in the peer-review process will be twofold:

  • Review the accounting curriculum with a focus on determining the currency and relevancy of course content
  • Review how technology is infused across the accounting discipline as a whole.

Today’s professional accountant uses technology constantly, whether spreadsheets, tax preparation or research software, communications tools, data analytics software, or analysis of drone data to evaluate inventory. The practitioner will be able to determine whether the institution’s accounting curriculum is sufficient to prepare students for success as a new graduate in accounting.

The second major shift relates to technology. The AACSB’s previous accounting standards gave examples of the types of technologies that accountants should be skilled at using. In addition, the 2018 standards incorporate a theoretical shift to including technological agility as a new focus—that is, today’s accounting students must be able to learn technologies quickly and continuously, and this expectation must be imbued in them during their studies. Students must be able to solve an unstructured problem, with a part of the solution found in determining which technology they should use during analysis. For example, the old way of teaching accounting was to teach Excel skills and then assign an Excel project that would reinforce those particular Excel skills. Going forward, educators must expose students to a problem, ask them how best to address the issue, and require them to identify pathways to a solution. It involves determination of which current technologies to use, where the relevant sources are, and how they would—as an expert—integrate and synthesize facts to create a solution. This mindset is paramount to success in the new age of accounting, and the 2018 standards stress learning for the sake of learning, with the expectation that faculty, too, will embrace lifelong learning.

Will these changes close all the gaps? Probably not. There will always be proprietary software that a new accounting graduate has to learn, and navigating firm policies and procedures must be an on-the-job experience. In the spirit of continuous improvement, AACSB accounting accreditation now and in the future is designed to ensure that accounting curricula are current and relevant to the world of business, and that students are taught to be nimble thinkers. We embrace the idea that learning does not stop after completing an accounting degree, but must permeate each stage of professional growth. Students, faculty, employees, and employers are all responsible for maintaining a growth mindset to promote relevance, knowledge, and ultimately success in their personal and professional responsibilities.

I am confident that the recent changes to the 2018 AACSB accounting accreditation standards will go a long way toward helping accounting graduates be successful throughout their accounting careers. At the same time, the AACSB will continue to innovate and improve these standards, challenging itself just as the standards challenge schools. The board remains committed to collaborating with all stakeholders to close current and future gaps between the accounting graduate and workforce needs.

Stephanie M. Bryant, PhD is the executive vice president and chief accreditation officer at AACSB International, Tampa, Fla.