Impact of the Global Business Credential on the Next Generation

Impact of the Global
Business Credential
on the Next Generation

BY SCOTT TAYLOR AND JEAN FINNEGAN
THE TAYLOR GROUP

Survey results say it’s a win/win outcome for the profession .

he next generation is obviously critical to the future of the accounting profession, but the data on its interest in the field are not encouraging. Recent studies conducted by The Taylor Group for the AICPA indicate the following:

In 2000 only 1% of high school juniors and seniors nationwide said they were interested in majoring in accounting, down dramatically from 4% in 1990.

In 2001 only slightly more than 2% of all college students in four-year institutions nationwide are majoring in accounting, down significantly from 4% in 1990.

It is no wonder, therefore, that fewer and fewer young people are taking the CPA examination, and that a dwindling number are entering the profession.

With the next-generation recruitment challenge crystal clear, the question facing the profession is inescapable: What can be done to reverse the situation—to turn the tide in a positive direction to ensure the long-term health of the profession in the 21st century?

Three specific questions were tested in a nationwide, 20-minute telephone survey of 945 college students in four-year institutions conducted by The Taylor Group in January 2001: [Note: A stratified sample design was used to ensure that we had a sufficient sample of key groups of students. The sample included 225 accounting majors, 230 nonaccounting business majors, 225 undeclared majors, 235 “all other” majors and 30 “switchers” (former accounting majors who had switched to another major).]

How interested are college students in the CPA credential if the CPA profession was to live up to the vision of the CPA as recently reconstituted?

How interested are college students in the global business credential?

To the extent that college students are interested in the global business credential, how likely is it to replace interest in the CPA, be independent of interest in the CPA or complement interest in the CPA?

THE APPEAL OF A VISION-BASED CPA

Once students learn about the CPA as the credential is described in the new vision statement, perceptions turn considerably more positive. First, students were read the Vision statement and then asked if they were more interested in the CPA, less interested or unaffected.

The results (see exhibit 1 ) show that though most college students (86%) were unaffected by the Vision CPA, the balance was definitely more interested than less interested (10% versus 4%). Significantly, the most affected group was undeclared majors.

The Vision CPA goes beyond making the credential more appealing—it affects student interest in considering pursuing the credential (see exhibit 2 ). Prior to hearing about the CPA as it exists in the Vision Statement, only 4% of college students would even consider pursuing the CPA credential.

After hearing about the Vision CPA, the level of interest in possibly pursuing the CPA credential jumps to 11% from 4% among college students overall, and rises dramatically among nonaccounting and undeclared majors.

THE APPEAL OF THE GLOBAL BUSINESS CREDENTIAL

The evidence (see exhibit 3 ) shows that the appeal of the global business credential (placeholder name, XYZ) is significant among college students, even when the requirements of the credential are taken into consideration.

Fully two-thirds (67%) of all students find the concept “somewhat appealing,” with more than one in ten (12%) finding it “very appealing.”

While appeal is certainly desirable, whether it translates into an interest in pursuing the global business credential is another issue. The survey results (see exhibit 4 ) suggest that substantial numbers of college students would be interested in pursuing the global business credential if it were available to them.

Though only 1% of all college students said they would “definitely” be interested in pursuing the global business credential, more than one in four students said they would “probably” be interested in doing so.

The primary sources of the global business credential’s appeal among college students lie in four areas: (1) it is multidisciplinary and requires a variety of skills, (2) it includes a strong and explicit ethics component, (3) it would provide significant earnings potential for holders of the credential, and (4) it would be prestigious.

THE EFFECT OF THE GLOBAL BUSINESS CREDENTIAL ON THE CPA

The study indicates that both the global business credential and a Vision-based CPA credential have some appeal among college students. The question remains as to the effect each has on the other. For example, would the existence of the global business credential further reduce interest in the CPA or complement interest in it? Alternatively, the question is, would interest in the credential be totally independent of the CPA?

The data from this study very clearly indicate that the global business credential is likely to complement interest in the CPA, not detract from it. The global business credential, more than anything else, represents an opportunity for the profession to keep students in the fold who might otherwise be lost to different credentials and professions (see exhibit 5 ). Given the choice of pursuing the CPA only, the global business credential only, both together or neither, the findings show:

Almost one in four students would choose the global business credential only.

Only 3% of accounting students who are definitely planning now to pursue the CPA would no longer be interested—thus loss to the profession’s hardcore recruits would be minimal if the global business credential were available.

A substantial number of students—especially accounting majors—would be interested in pursuing both the global business credential and the CPA.

The data suggest that moving the CPA credential toward the Vision and establishing the global business credential would be mutually reinforcing and beneficial for the profession.

The data can be useful in projecting the population of qualified candidates based upon the following four scenarios: (a) do nothing—the profession does not create the global business credential or move toward the CPA vision; (b) the profession doesn’t create the global business credential but aligns the CPA with the Vision; (c) the profession creates the global business credential but maintains CPA status quo; (d) the profession does both—creates the global business credential and moves toward the CPA Vision.

Based on a formula often used in survey research to develop projections (i.e., that those who vow to do something definitely will, and that one-quarter of those who expect to act will do so), the following can be projected (see exhibit 6 , at right):

If the profession does nothing with respect to both the CPA and the global business credential it can expect about 157,000 qualified candidates (2.4%) for the profession among the current population of 6.5 million students in four-year institutions.

If the profession moves the CPA toward the Vision and decides not to create the global business credential, it can more than double the pool of qualified candidates considerably to 345,000 or 5.3% of all college students.

If the profession creates the global business credential but does not shift toward the CPA Vision, it can expect a much higher pool of qualified candidates for the profession as a whole—645,000 or 9.9% of all college students.

The scenario maximizing the pool of qualified candidates for the profession is one which creates the global business credential and moves the CPA to the Vision—768,000 candidates, or 11.8% of all college students.

Although the forecasts are encouraging, one should bear in mind the following:

We are dealing with 18- to 22-year-old students, whose career interests can change overnight.

Much would depend on the overall reach/effectiveness of future CPA and global business credential marketing/advertising/recruitment campaigns.

How “stretchable” the CPA proves to be.

The time and cost required to stretch the CPA.

These caveats notwithstanding, the data provide strong evidence that the profession stands to gain the most by moving the CPA toward the Vision and creating the global business credential. A stronger CPA would bring the profession more into line with students’ career interests, while the global business credential represents an opportunity to retain many students who would be lost to other career pursuits. The global business credential also represents an opportunity for CPAs to expand their skill-sets, credentials and overall career potential.

In the end, the data suggest a win/win outcome for the profession. Without minimizing the clear challenges ahead, the data on college students indicate that the global business credential may very well offer a great opportunity.