The Crisis in Accounting Education

The CPA’s role in attracting the best and the brightest to the profession.

THE CRISIS IN ACCOUNTING EDUCATION IS GROWING. According to a 2000 study by Professors Albrecht and Sack, Accounting Education: Charting the Course through a Perilous Future, practicing accountants perceive the education most accounting graduates get today to be outdated. As stakeholders, CPAs must recognize their input is needed.

MANY ACCOUNTING EDUCATORS HAVE RESISTED restructuring the accounting curriculum to equip graduates with the tools they will need in today’s changing business environment. With fewer and less-qualified students choosing accounting careers, the future of accounting schools as top-tier providers of desirable graduates to business employers is at risk.

THE FLIGHT OF THE BEST STUDENTS TO OTHER careers ex-poses a deeper problem—the resistance in the academic community to major curriculum shifts. Accounting educators have been slow to make the kind of changes needed to reverse the loss of top students to other careers.

ACCOUNTING PRACTITIONERS know better than anyone what the profession has to offer. They also are in the best position to provide expert insight about the changing nature of the profession and employer needs. Involvement in alumni advisory boards, offering internships and similar activities are good ways for CPA to help attract students to accounting.

CPAs ALSO CAN HELP BY RESPONDING TO ALUMNI surveys. These surveys provide accounting programs with information about alumni satisfaction with the program and how well it prepared them for a business career.

ALEXANDER L. GABBIN, CPA, PhD, is the KPMG LLP Professor of Accounting at James Madison University in Harrisonburg, Virginia. He is a former director of the School of Accounting and a member of the accounting accreditation committee of the AACSB.
uch has been written about a crisis in accounting education. Professors W. Steve Albrecht and Robert J. Sack sounded the most recent alarm in a 2000 monograph, Accounting Education: Charting the Course through a Perilous Future, . This study found that many practicing accountants perceived the accounting education graduates get today to be outdated and in desperate need of an overhaul. If these practitioners were completing their own education over again, some said they would choose not to major in accounting. As stakeholders in the success of accounting education, CPAs must recognize their input is urgently needed. This article examines the crisis and explains how CPAs can become active partners to improve accounting education.

The global marketplace is changing. Businesses rely more and more on changing technology. The companies, services and industries that fuel economic growth also are evolving. In this new marketplace, traditional accountants are a dying breed. Technology has made preparing and disseminating financial information so inexpensive anyone with the right software can produce basic data. Yet, many accounting educators have failed to restructure accounting curriculum to equip graduates with the tools and expertise they need in today’s business world. As a result, fewer and less-qualified students choose accounting careers, and the future of accounting schools as top-tier providers of business graduates is at risk.

Fast Facts

The percentage of college students majoring in accounting dropped to 2% in 2000 from 4% in 1990.

The percentage of high school students who intend to major in accounting fell to 1% in 2000 from 2% in 1990.

More than 80% of faculty members surveyed said there were fewer qualified accounting students than five years ago.

Accounting department heads reported that information systems graduates commanded the highest starting salaries among business-related graduates.

Faculty members and practitioners agreed paying higher starting salaries was the most important step corporations and accounting firms could take to attract better students into the accounting profession.

Source: Accounting Education: Charting the Course through a Perilous Future, .

One of the early warning signs that major changes in accounting education were needed came when major CPA firms reengineered themselves as “professional services” rather than “public accounting” firms. So convinced were they of the need for dramatic change, not even intense SEC pressure could deter them from offering the services the marketplace demanded. Unlike the academic community, CPA firms were quick to realize that new business realities demanded a broader set of competencies.

Some faculty argue that the loss of the best students to other majors is due to higher starting salaries. Employers, they say, aren’t paying accounting graduates as much as those with other majors such as consulting and computer systems. While starting salary is certainly an issue, is it the only reason the best and brightest students are choosing fields other than accounting in growing numbers? Why have the starting salaries of accounting majors decreased relative to other majors? Perhaps salary differentials reflect marketplace expectations about valuable skills, knowledge and abilities. Faculty who label starting salary as the culprit should consider that the real reason may be an accounting curriculum that both employers and students no longer value.


The flight of the best students to other areas of study exposes a deeper problem: The academic community, in general, tends to resist major curriculum shifts. In many accounting programs, it isn’t unusual to find decision-making models focused exclusively on enrollment trends, number of students hired by major firms, starting salaries and anecdotal testimony of alumni, campus recruiters and employers as proxies for program quality.

By contrast, the need to maintain profits and increase partners’ wealth forces CPA firms to be proactive in anticipating and responding to opportunities. As public accounting firms quickly realized, reactive firms—those that respond to change only when forced—don’t survive in highly competitive markets. The academic culture, however, lacks the wealth incentives and management structures necessary to anticipate opportunities or reward innovations. As one faculty member at a highly respected university described it: “The academic environment is based on tradition. It holds tightly to the time-honored independence of faculty with respect to classes and scholarship. Our evaluation and reward system is based on individual efforts and our faculty’s most respected attribute is an independence of thought.…With this in mind, no one should be surprised to find resistance to change.”

When declining enrollment or feedback from campus recruiters suggests something is broken and needs to be fixed, accounting educators react by assigning a committee to study the problem. Unless it is “generally acceptable” to both administration and faculty, the solution the committee recommends will face significant opposition. As a result, accounting educators are limited in what they can do to reverse the loss of top students to other careers.

Exhibit 1, below, models two types of information collected by accounting programs and public accounting firms:

Major changes in the business environment.

Proxies that measure the success of programs and firms (profits for professional service firms and enrollment trends and alumni and employer satisfaction for accounting programs).

Proactive accounting programs and firms use both types of information. Reactive ones focus only on feedback about recent successes. The use of this information by each results in different outcomes. Proactive programs and firms respond to changing market conditions by strategically positioning themselves for future success.

Exhibit 1: Information Used to Promote Continuous Quality Improvement
(One example of this is the decision many accounting firms made to become professional service firms.) Reactive programs and firms ignore market changes until lower profits, declining market share and other negative feedback forces them to change how they do business or risk extinction.
Exhibit 2: Curriculum Innovation
The Accounting Education Change Commission, formed in 1989 to improve the academic preparation of accountants, allocated funds to a curriculum grant program to encourage experimentation and stimulate curriculum projects that would become prototypes for nongrant accounting programs. Ultimately, these 13 schools with accounting programs were chosen for funding:

Arizona State University
Brigham Young University
Kansas State University
Kirkwood Community College
Mesa Community College
North Carolina A&T State University
Rutgers University—Newark
University of Chicago Graduate School of Business
University of Illinois
University of Massachusetts at Amherst
University of North Texas
University of Notre Dame
University of Virginia

Source: The Accounting Education Change Commission Grant Experience: A Summary. Edited by R.E. Flaherty. Accounting Education series, Volume no. 14, 1998.

The Albrecht and Sack monograph (see review at the end of this article) highlights the plight of reactive accounting programs. But some of them, such as the 13 that were part of the Accounting Education Change Commission (AECC) “Project Discovery” grant program to encourage curriculum experimentation (see exhibit 2, above), have been proactive. Enrollment trends, employer/alumni surveys and similar assessment data support their efforts.

These 13 programs distinguished themselves from their less successful counterparts in a number of ways, abandoning curriculum traditions that were inconsistent with new technology and the needs of stakeholders. Several schools—Arizona State, Brigham Young and Notre Dame among them—developed entirely new approaches to accounting education delivery and content.

They now use traditional accounting textbooks as only one of several resources rather than as the major driver of course content. Faculty simulates the real-world business environment with case analyses, computer searches for company and industry data and classroom discussions of issues from a business cycle perspective. These programs place a heavy emphasis on cooperative learning, field trips and interaction with accounting practitioners.

This learn-by-doing approach to teaching can also be found at the University of Illinois, where students are challenged to gain knowledge by performing meaningful activities. This is in sharp contrast to many accounting programs that still emphasize journal entries and GAAP. Proactive programs have relegated traditional financial-statement-preparation skills to a laboratory-science-type experience. The classroom focus is on interpretation and use of financial data as a source of information to make decisions about the future. These programs introduce accounting to students from an information systems perspective that views accountants as members of a team dealing with strategic issues.


Because the academic culture is inherently resistant to major changes, a close relationship between alumni CPAs—those who graduated from a particular accounting program—and accounting educators probably has never been more important. Alumni CPAs can be a valuable student resource because

Accounting practitioners know better than anyone else what the profession has to offer top students.

Accounting practitioners are in the best position to provide expert insight about the changing nature of the profession and employer needs.

The opportunity for practitioner interaction with students through internships and similar activities can be used as effective marketing tools to attract students.

Alumni CPAs also are a valuable resource to faculty. They understand better than anyone the disconnect between what they learned in the classroom and the skills needed in the workplace. Regular and systematic feedback from alumni CPAs about the changing business environment and their assessment of an accounting program’s strengths and weaknesses can help support program improvement. Brigham Young University, for example, says increased interest in its program resulting from the AECC changes increased contributions from alumni and others dramatically. This is consistent with the high ratings it got from alumni on survey questions about the adequacy of career preparation.

A proactive model of continuous quality improvement needs experienced practitioners to form a partnership with a school’s accounting educators. A reactive system that relies only on unstructured faculty/practitioner relationships and on informal feedback is inadequate for today’s marketplace.

Alumni CPAs are affected by their college’s success in attracting high-quality students. That gives CPAs a vested interest in helping educators bridge the gap between what goes on in the classroom and the skills, knowledge and ability the current business environment demands. While curriculum is the appropriate responsibility of accounting educators, alumni CPAs should not be passive in their efforts to influence what students are learning. They have a legitimate interest in the quality of their school’s accounting program because it reflects on the training they themselves received. Both the survival and reputation of the colleges and universities from which they graduated are at stake if the existing curriculum is inadequate to prepare accounting students for successful careers.

There are several ways CPAs can support accounting program improvements. Accounting advisory boards offer practitioners an opportunity to be effective partners with educators. Advisory boards are formal vehicles colleges and universities can use to solicit stakeholder input and external financial support for accounting programs. Membership usually consists of alumni, employers of the program’s graduates and local business leaders whose opinions and support the faculty values. The existence of such a board signals recruiters, students, prospective faculty members, accreditation bodies and others that the program is committed to continuous quality improvement.

In addition to regular meetings at least annually, the accounting program chairman or chairwoman should correspond with board members periodically to keep them informed about significant program issues. Faculty can call upon board members for advice, to serve as guest speakers and to provide scholarship and internship opportunities. In getting students to buy into their new Project Discovery curriculum, for example, the University of Notre Dame credits supportive comments from accounting practitioners as an important motivating factor.

These boards are especially important for business and accounting programs accredited by the Association to Advance Collegiate Schools of Business (AACSB). There are 382 U.S. business schools—representing more than 55% of the business and management degrees awarded—that have AACSB accreditation; 154 also have separate accounting accreditation. Since 1991, AACSB-accredited programs have used mission-linked accreditation standards and procedures. Accounting programs applying for AACSB accreditation must demonstrate continuous quality improvement consistent with their mission. This mission, in turn, must be the outcome of a process that values stakeholder input. CPAs are among the most important stakeholders and should volunteer to serve on an advisory board if asked.

Another way CPAs can support continuous quality improvement is to respond fully to alumni surveys. Such surveys are usually designed to solicit feedback about alumni satisfaction with various aspects of the accounting program including curriculum, advising and support services. Programs may also want to know how satisfied alumni are with their chosen career. Legislators, state boards of education and accreditation bodies have, over the last 15 years, demanded more accountability from colleges and universities about program quality. The result has been a significant increase in formal surveys. Practitioners should not underestimate the power of alumni opinion to create change. It drives accounting program behavior in much the same way as profits drive corporate behavior. Employer satisfaction surveys of CPA firms that employ new accounting graduates also provide faculty and administrators with an important measure of program success.

Exhibit 3: Employer/Alumni Input Used by AECC Schools
  Providers of input Type of input
Grants Total Employers Alumni Curriculum
effectiveness evaluation
Doctoral 5 3 3 3 1
Nondoctoral 6 5 5 5 1
Non-AACSB 2 2 2
Total 13 10 8 8 4
    (76.9%) (61.5%) (61.5%) (30.7%)
A 1999 committee report from the American Accounting Association assessment task force documented the importance of employer/alumni feedback. The task force examined the final report summary of each AECC grant school, providing a rough benchmark for identifying assessment best practices among doctoral, AACSB nondoctoral and non-AACSB schools with accounting majors. (See exhibit 3, above.)
The task force found that 10 of the 13 programs acknowledged the importance of alumni or employer feedback in developing curriculum changes and assessing the success of innovations. Of the 13 programs, eight used both employers and alumni input to support curriculum changes. Even when they collect feedback from CPA stakeholders using only well-designed surveys, faculty and college administrators still receive clear warnings or endorsements of program quality.


The horse-and-buggy era of accounting education is over. The shift from smokestack industries, mass-production assembly lines and financial statements prepared using 10-key calculators is irreversible. A new generation of Internet-savvy consumers will replace traditional college students. Given the pace of technological change, it will be difficult for accounting programs to follow a reactive decision-making model and still retain “market share.” Successful programs must anticipate market shifts and put the lethargic academic machinery in motion to exploit emerging paradigms.

While accounting faculty are best suited to helping students develop the skills necessary for an accounting career, CPAs have a similar advantage when it comes to describing the nature, variety, challenges and rewards of practicing accounting. This is perhaps one of the least appreciated and underutilized contributions CPAs can make to attracting talented students to accounting.

For their part, students need to better understand the CPA’s evolving role in today’s economy. To gain this understanding, students need more opportunities for meaningful and timely interaction with CPAs. This will enable them to see how they will fit into accounting firms after they graduate and how an accounting major is relevant preparation for a business career. The bottom line is that CPAs must and should work with accounting educators to share their real-world experiences and provide input to foster accounting program innovations.

Business Bookshelf

Accounting Education: Charting the Course through a Perilous Future
By W. Steve Albrecht and Robert J. Sack
72 pages; $15; Accounting Education Series, Volume no. 16
American Accounting Association, Sarasota, Florida

The enrollment declines of recent years have had a major impact on the profession and on accounting schools. Professors Albrecht and Sack have written a monograph that discusses the causes of the problem and offers some provocative solutions. These educators are CPAs who have held many important positions in the profession and in academia. They are well qualified to tackle the problem of the future of accounting education.

The authors were charged with making recommendations that would help curb the ongoing problem of decreasing enrollment of accounting majors. Usually, a study of this kind would be dry and difficult to read; in this case, however, it is interesting, smooth reading. The authors use charts to report on surveys and direct quotes from focus group participants to support their recommendations. Some of the results may surprise readers.

Overall, the monograph is important because it affects all aspects of the accounting profession. CPAs should read it carefully and continue the dialogue the authors began. Too many times in our daily endeavors we turn off our “vision” button. Long-ignored problems surface when we are least prepared to handle them. Clearly, this book is a wake-up call. The perilous future of accounting education is on the horizon. A major shortfall of the piece, when read today, is that it was written during good economic times. Would a slower economy and the events of September 11 have tempered the survey and focus group responses?

In the first chapter, “Why Accounting Education May Not Survive in the Future,” the authors list three major reasons for their concern about the future:

The decreasing number and quality of students majoring in accounting.

Most accounting educators and practicing accountants would not major in accounting if they began their education again.

Current accounting education is thought to be broken, outdated and in the need of change.

The author’s discussion of declining enrollments is hard to disagree with. They document their views with poll results. Most significant is an AICPA study that reported “the number of students enrolled in accounting programs is down, from 192,000 in 1995 to 1996 to 148,000 in 1998 to 1999, a 23% decline” (page 19). The authors also compare the results of a 1990 Gallup Poll and a 2000 AICPA Topline Report that showed “the percentage of college students majoring in accounting has dropped from 4% in 1990 to 2% in 2000.” They follow that with the finding that “the percentage of high school students who intend to major in accounting has decreased from 2% in 1990 to 1% in 2000” (page 20).

In a survey by the authors, 80.1% of faculty believed there were fewer qualified students majoring in accounting than five years ago. Some 45.7% of practitioners responding to the question agreed. While there was an obvious gap on the issue, practitioners may have answered from a more practical standpoint.

Perhaps the biggest surprise was the finding that “although nearly 100% of accounting educators and 79% of accounting practitioners who responded to our surveys had undergraduate degrees in accounting, most of them stated that they would not get an accounting degree if completing their education over again ” (page 33). The authors put the blame on the evolving business world and the lack of change in education structure. They are concerned that if accounting educators and practitioners are not stronger advocates for the profession, the number of students interested in studying accounting will continue to decline.

While the statistics are frightening, the initiatives the study suggested such as school visits, internships and a better definition of the work accountants do could help change the tide. My own entry into accounting study 45 years ago was based on the belief that if I became a CPA, I could be successful in many business areas. Our professors advised us to be patient, work hard and expect good things to happen. The monograph offers no such practical suggestions.

Accounting today offers a host of opportunities. For example, while AICPA membership has remained about the same over the last few years, the expanding economy has produced a larger number of new businesses. The ratio of businesses to CPA firms has likely increased. Potential students should be made aware of such information. Educators and practitioners must continue to reinforce the image of the profession. Perhaps, because of recent events, more students will select accounting as a “safe” field of study.

The authors use their strongest words to condemn the current accounting education structure. They say technology, globalization and other factors have contributed to the need to prepare students differently. The monograph, surprisingly, points out that colleges and universities must compete with newer education providers such as online and correspondence schools for the accounting students. Although hard to imagine, such schools are seeking accreditation.

Professors Albrecht and Sack seem to believe in the five-year bachelor’s/ master’s approach to accounting education: “While we have been long-term supporters of accounting education, if we were creating a new business school today, we would not have separate undergraduate or graduate accounting programs. At least, we would not have accounting programs that are structured as they are today” (page 1). They say the additional courses in a five-year program should not cover technical accounting but instead should deal with broader areas. In warning educators about the one-shoe-fits-all track, they say students need to be prepared in diverse and broader areas. Albrecht and Sack say schools should end the “memorization” approach, which teaches the CPA exam rather than helping students acquire better skills. They further advise schools to consider many things—from the degrees they offer to curriculum, course content and investing in faculty. Their arguments are strong and persuasive. It’s easy to believe schools will face a dismal future without such changes.

—Stanley Person

STANLEY PERSON, CPA, of New York-based Person and Co., believes in reading for education and relaxation.


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