A comparative analysis of practitioner and educator preferences regarding accounting curriculum meeting the 150 hour requirement

... School of the University of North Dakota, and is hereby approved )G&2 a^ 2 '•Mat Deai of the Graduate School in PERMISSION Title A Comparative Analysis of Practitioner and Educator Preferences Regarding. .. CPAs A considerable amount has been written about the 150- hour requirement but there is little comparative analysis of practitioner and educator preferences since actual adoption and implementation... education and research (American Accounting Association, n.d.) This is the primary accounting educator organization American Assembly of Collegiate Schools of Business (AACSB): An international accrediting

A COMPARATIVE ANALYSIS OF PRACTITIONER AND EDUCATOR PREFERENCES REGARDING ACCOUNTING CURRICULUM MEETING THE 150-HOUR REQUIREMENT by David L. Crawford Bachelor of Science, South Dakota State University, 1976 Master of Professional Accountancy, University of South Dakota, 1986 A Dissertation Submitted to the Graduate Faculty of the University of North Dakota in partial fulfillment of the requirements for the degree of Doctor of Philosophy Grand Forks, North Dakota May 2008 UMI Number: 3324264 INFORMATION TO USERS The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleed-through, substandard margins, and improper alignment can adversely affect reproduction. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. ® UMI UMI Microform 3324264 Copyright 2008 by ProQuest LLC. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 E. Eisenhower Parkway PO Box 1346 Ann Arbor, Ml 48106-1346 Copyright 2008 David L. Crawford 11 This dissertation, submitted by David L. Crawford in partial fulfillment of the requirements for the Degree of Doctor of Philosophy from the University of North Dakota, has been read by the Faculty Advisory Committee under whom the work has been done and is hereby approved. £ ^ x^J~> Chairperson &CS^L^> This dissertation meets the standards for appearance, conforms to the style and format requirements of the Graduate School of the University of North Dakota, and is hereby approved. )G&2. 0 a^2 '•Mat Deai of the Graduate School in PERMISSION Title A Comparative Analysis of Practitioner and Educator Preferences Regarding Accounting Curriculum Meeting the 150-Hour Requirement Department Teaching and Learning Degree Doctor of Philosophy In presenting this dissertation in partial fulfillment of the requirements for a graduate degree from the University of North Dakota, I agree that the library of this University shall make it freely available for inspection. I further agree that permission for extensive copying for scholarly purposes may be granted by the professor who supervised my dissertation work or, in his absence, by the chairperson of the department or the dean of the Graduate School. It is understood that any copying or publication or other use of this dissertation or part thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the University of North Dakota in any scholarly use which may be made of any material in my dissertation. Signature Date 3/411>J62 iv TABLE OF CONTENTS LIST OF TABLES ix ACKNOWLEDGMENTS xi ABSTRACT -. xii CHAPTER I. II. INTRODUCTION 1 Theoretical Underpinnings 4 Justification or Rationale 6 Need for the Study 8 Significance of the Study 10 Research Questions 11 Delimitations of the Study 12 Terminology 13 REVIEW OF THE LITERATURE A Need for Accounting Education 15 15 Apprenticeships 15 Industrial Demand for the CPA 16 Collegiate Education for the CPA 19 Conceptual Framework for Accounting Education 21 1950s-An Emerging Curriculum 21 v 1960s - A Common Body of Knowledge 26 1970s - Educator versus Practitioner Split 29 1980s - The 150-Hour Requirement 35 1990s - The Accounting Education Change Commission 39 The 21st Century Vision 41 Experience Requirements 42 Accounting Models Meeting the 150-Hour Requirement 44 Recent Criticism of Accounting Education 50 Current State of Accounting and the Future of Accounting Education 52 Chapter Summary 55 METHODOLOGY 59 Purpose of the Study 59 Survey Instrumentation 59 Part I - Time Commitments and Program Structure 61 Part II - Type and Amount of Specialization 61 Part III - Experience Requirements 61 Part IV - Accounting Subjects and Courses 62 Part V - Authority to Prescribe Curriculum 62 Demographic and Background Information 62 Pilot Study 63 Target Population and Data Collection 63 Data Analysis 65 vi RESULTS 67 Response Rates 67 Data Screening 68 Demographic Data 68 Research Findings 70 Research Question 1 70 Research Question 2 74 Research Question 3 77 Research Question 4 79 Research Question 5 82 Summary 85 SUMMARY, CONCLUSIONS, DISCUSSION, AND RECOMMENDATIONS Summary of the Study 86 86 Purpose of the Study 87 Review of the Literature—Brief Summary 87 Methodology—Brief Summary 90 Summary of Questions and Related Findings 91 Conclusions and Discussion 94 Conclusions 94 Discussion 95 Limitations of the Study 107 Recommendations for Further Study 107 vii Concluding Comments 108 APPENDICES 110 REFERENCES 128 viii LIST OF TABLES Table Page 1. Response Rates of Practitioner and Educator Groups 68 2. Demographic Information—Job Title/Rank, Gender, Age, and Education 69 3. Demographic Information—Years Experience, Specialization, and Employment Status 71 Demographic Information—Number of Professionals in Firm or Department, People Supervised/Students Advised 72 5. Preferences When There is no 150-Hour Requirement 73 6. Preferences When There is a 150-Hour Requirement 73 7. Preferences for Type of Specialization Area 75 8. Preferences as to Time Commitment for Specialization 76 9. Preferences for Amount of Experience Prior to Licensure 78 10. Preferences for Type of Experience Prior to Licensure 78 11. Chi-Square (X2) Values With Degrees of Freedom (df) and Significance Levels (p) for Research Questions 1-3 79 Means (M), Standard Deviations (SD), F Ratios, and Significance Levels (p) for Undergraduate Courses 81 Means (M), Standard Deviations (SD), F Ratios, and Significance Levels (p) for Graduate Courses 83 Means (M), Standard Deviations (SD), F Ratios, and Significance Levels (p) for Stakeholders 85 4. 12. 13. 14. 15. Rankings of Undergraduate Courses With Mean (M) Ratings of 4.00 or Higher ix 102 16. Rankings of Graduate Courses With Mean (M) Ratings of 4.00 or Higher x 102 ACKNOWLEDGMENTS I wish to thank a number of people who have offered their time and support throughout my educational experience at the University of North Dakota. I wish to express my gratitude to Dr. David Yearwood, Chairperson of my Doctoral Committee, who has been steadfast in offering insightful help on matters related to my educational journey at the University. I offer my thanks to him not only for his knowledge and patience but also for his forthright and thoughtful opinions as a teacher and advisor. I offer my thanks to Dr. Myrna Olson, Dr. Lars Helgeson, Dr. Harold Wilde, and the late Dr. Jacob Wambsganss, who all played a unique and vital role while serving on this Committee by making recommendations that invariably improved the quality of this study. Additionally, I wish to thank Dr. Richard Landry for his expertise and guidance during the data collection and analysis phase of this undertaking. Finally, to my wife Trudy, and children Matthew and Rachel, I offer my sincere appreciation for your support during the past several years. Without your understanding and cooperation, this achievement would not have been possible. XI ABSTRACT Accounting education has been controversial for several decades because of diverse interests among stakeholders regarding content, structure, competencies, and experience needed by entry-level accountants. Elevating debate was the introduction and adoption of a 150-hour requirement among most of the 55 jurisdictions that regulate public accounting. Although the 150-hour requirement stipulates the minimum number of credit hours and a baccalaureate or higher degree, considerable flexibility exists for accounting programs as to coursework and level of education. Additionally, little uniformity exists regarding the amount and type of experience required for certification or licensure. Such diverse conditions, along with widespread implementation of the 150hour requirement, prompted this study to focus on curricular components of content, program structure, and experiential requirements that are ongoing academic questions in accounting. Given the prominent influence on accounting education by practitioners and educators, this study surveyed both groups in an eleven state Midwest region of the United States that had adopted the 150-hour requirement. Questions related to curricular issues in accountancy guided the development of survey questionnaires administered to a random sample consisting of 1,000 Managing Partners at CPA firms, and concurrently, to 187 Accounting Chairpersons from baccalaureate and higher institutions. xii This study found that the 150-hour requirement influences the time commitment and kind of educational structure preferred by practitioners and educators. The study also revealed that neither practitioners nor educators support specialization during the formal educational experience. Majorities from both accounting groups prefer two years of work experience prior to licensure for entry-level accountants with practitioners clearly choosing public accounting over other experience. There were significant differences between practitioners and educators as to appropriate subject/course offerings at both the undergraduate and graduate level. However, while specific differences were identified at the undergraduate level of education, findings are more ambiguous at the graduate level. Finally, both practitioners and educators ranked their own group highest among certain other stakeholder groups regarding the level of authority to prescribe curriculum. xiii To Dr. Larry W. Huus, 1947-2007 CHAPTER I INTRODUCTION Formal education of accountants has long been controversial because of diverse interests among various stakeholders. In addition to the question of how much education is sufficient, the structure, coursework, topics, and competencies comprising the curriculum have not been firmly established or uniformly accepted. Curriculum as defined by Stark and Lattuca (1997) is "an academic plan promoting purposeful learning of knowledge, skills, and attitudes, in addition to content, sequence, instructional processes, evaluation, and adjustments for improvement" (pp. 325-330). Eisner (1979) expands this further by indicating that there are really three curricula: the explicit, the implicit and the null curricula. The explicit curriculum includes the content, structure and learning objectives of the discipline and is usually stated in writing. The implicit curriculum is more nebulous and may include skills, competencies, social, and cultural values that are usually unwritten yet imparted to the student through disciplinary study or related experience. The null curriculum might stem from a conscious and political decision about what not to teach at all (de Lacey, n.d.). Therefore, while curriculum is considered a cohesive framework that integrates many features of teaching and learning, one aspect of that structure advanced by McNeil (2006) includes content found in course offerings. This particular concept of the curriculum can be viewed as a subset of courses representing how a discipline will organize core and supporting program requirements. 1 Curriculum as a concept originated with the creation of formal schooling (McNeil, 2003) and continues to drive the structure of modern academic programs in higher education such as accountancy. The ongoing quest for an appropriate explicit structural framework in accounting curriculum has elicited as much if not more debate than implicit themes related to competencies, skills, and behaviors desirable in accounting graduates (American Institute of Certified Public Accountants, n.d.). While the popularity of implicit curriculum topics signaled a shift away from knowledge-based course content and focused attention on what Boschee & Baron (1993) describe as outcome-based education, the more explicit curricular issues of content and program structure have not been clearly addressed by accounting educators or practitioners. Recently, this lack of clarity, together with more varied and unique program structures, prompted a proposal to prescribe specific curriculum content by the National Association of State Boards of Accountancy (2005). Education for individuals entering accountancy has traditionally consisted of a four-year baccalaureate degree. However, for many years there have been ongoing discussions within the profession regarding the need for additional education beyond the four-year degree, which culminated in most states requiring at least five years of study in order to take the Uniform Certified Public Accountant (CPA) examination. Interestingly, the issue of post-baccalaureate education for accountants has been a policy formally embraced by the predominant national practitioner group, the American Institute of Certified Public Accountants (AICPA) since 1959 (Van Wyhe, 1994). In 1988, nearly thirty years after the 1959 acknowledgement, general membership of the AICPA voted requiring all new members to have 150 semester hours of college education including a 2 minimum of a baccalaureate degree (American Institute of Certified Public Accountants, n.d.). Although this requirement did not take effect until after the year 2000, ostensibly, such a mandate should have ended much of the educational controversy. However, many stakeholders remain unconvinced as to the value of the 150-hour requirement (Albrecht & Sack, 2000) and are uncertain about what course content should be included in the additional year of study. There are essentially two stakeholder groups most influential in curriculum development and reform (Flaherty, 1979; Novin, Fetyo & Tucker, 1997; Rumble, 1998): public accounting practitioners and accounting educators. Therefore, regardless of how one views the curriculum, it is clear that educators and practitioners play a vital role in shaping, defining, and implementing the curriculum—the stated (explicit), implied and null curriculum. The fact that the stated curriculum includes a sequence of courses (American Accounting Association, 1954; American Accounting Association, 1956; American Institute of Certified Public Accountants, 1988; Needles & Powers, 1990) with a specific number of course credits (American Institute of Certified Public Accountants, 1988; Commission on Professional Accounting Education, 1983; Covaleski, 2000; Heffernan, 1973; Russel & Smith, 2003) suggests that both educators and practitioners can and should be able to arrive at some common understanding about what constitutes a core of course work within an accounting program of study. The dynamic nature of curriculum suggests a need for scholarship that examines preferred course content at the undergraduate and the post-baccalaureate graduate level while considering the 150-hour requirement that pervades the current status of accounting education. 3 Theoretical Underpinnings Sterling (1973) asserts that harmony exists between education and practice in accounting due to educators' inclination to prepare students for employment. This mutually beneficial relationship is based largely on the notion that while practitioners may, over time, add to accepted practice, "the educator must observe, codify and teach these additional accepted practices" (p. 169). This form of education aligns with the pragmatist philosophy which recognizes that shared human experiences can result in ideas for solving problems and ultimately asks whether an idea works (Gutek, 2004). However, to merely exclaim that accounting is based upon what works is also an over simplification of what practice really is, for unless practice can stand up to theoretical scrutiny, it is bound to fail. Justifiably, practice must be subjected to rigorous critical inquiry that is largely the responsibility of the academic community via related research. An additional consideration oft debated among accounting professionals is the need for relevant experience following formal education (American Accounting Association, 1972; American Institute of Certified Public Accountants, 1969; Graves, 2004; Perry, 1955). While it may seem obvious that experience is desirable for the professional development of an accountant, the required amount and type of experience has never been clear or uniformly accepted. Early in the 20th century, partly due to the limited educational requirements that could be imposed at the time, accounting practitioners concluded that no single criteria was sufficient to assure competence and thus formal education followed by success on the Uniform CPA examination and a relevant experience requirement became the accepted practice. 4 This combination of requirements is in accord with the pragmatic thinking of many educators influenced by John Dewey at the time (Previts & Merino, 1998). While some misinterpreted Dewey's brand of progressive education to mean narrow vocational skills, Dewey really advocated experience that builds on previous education as the connectedness that promotes growth of the individual (Dewey, 1938). Dewey's idea of systematically solving problems coincides with how most accountants view their work role and appears to be a major force driving the framework of accounting education to this day. Tanner and Tanner (1995) point out that what Dewey referred to as the scientific method was a form of systematic inquiry that he often alluded to as reflective thinking free from rigid or sequential constraints. According to Dewey (1916), meaningful experience requires an element of thought or reflection and is far superior to mere trial and error. Such experience expands one's conceptual framework and promotes the application of learning to a multitude of situations that vary from the initial experience (Dewey). Essentially, linking scholarly activity with practical experience that builds on formal learning has permeated professional accounting education for decades and has been a pragmatic conduit for imparting theory into practice. In essence, experience coupled with life-long learning has become part of the implicit accounting curriculum. A speech by Hensler (1990) to an accounting symposium regarding the background and recommendations for accounting education included: "The common thread that weaves through twenty years of commissions and committee reports is the need to hire and retain professional accountants with broad liberal-arts backgrounds..." (p. 63). Indeed, this theme appears in the literature almost from the beginning of 5 discussions concerning accounting as a profession (Previts & Merino, 1998) and has continued to carry forward to the present. Early authors on accounting education such as Kester (1936) and Carey (1937) stressed the need for a liberal education followed by specialized training in accounting as the ideal education for accountants. Later studies adhered to this concept and established a general model with liberal education consisting of approximately 50% of the coursework and an equal split between business and accounting courses for the other 50% (American Accounting Association, 1954). This concept of a broad based education is significant because it purports to distinguish accountancy from a technical trade, thus influencing the structural makeup of accounting programs. In addition, a liberal-arts background is complicit with other disciplines worthy of collegiate level study and presents evidence supporting the conceptual nature of knowledge in the field. Given the 150-hour mandate that most states are now required to follow, the issue of educational breadth versus specialization becomes more urgent. While four-year accounting programs have generally provided little if any option for specialized studies within the curriculum, the concept of using the additional credit hours for more focused and in-depth study in accounting is worthy of consideration. Justification or Rationale The actual certification and licensing of public accountants takes place at the state level. The AICPA mandate for membership prompted most state regulatory jurisdictions to pass legislation requiring 150-hours of education for those taking the CPA exam. In response to this requirement, colleges and universities with accounting programs attempted to address the issue through appropriate changes but have not done so 6 uniformly. Essentially, there is a fair amount of flexibility as to how institutions of higher education may choose to deal with the 150-hour issue (Williams, 1990). Some accounting programs treated the extra 30 hours as undergraduate credits while others have opted for graduate credits. Currently, many accounting programs (Covaleski, 2001; Ethridge & Hemmingway, 1993) continue to offer the traditional baccalaureate degree of approximately 120 hours and recommend that students consider additional study in a second major as fulfilling credit requirements. Others (Donelan & Reed, 2000; Rumble, 1998; Shafer & Kunkel, 2001) have implemented 150-hour baccalaureate programs or have modified and created masters level graduate programs that provide for both the bachelor's and master's degrees in accounting. While flexibility that affords differences in accounting programs has merit, the resulting unique programmatic and curriculum variations have created additional controversy among stakeholders and licensing j urisdictions. Many accounting educators have been unsupportive of the 150-hour requirement while questioning the necessity and cost of advanced and graduate education for entry level accountants (Albrecht & Sack, 2000; Anderson & Griffin, 1963) and have often advocated for a well planned and reasonably rigorous four-year program to educate entry level professionals (Mautz, 1974). Practitioners have generally been supportive of additional education requirements whereas accounting educators have often been opposed to the practice point of view concerning the amount, type, and level of education that is best suited for accountants (Colson, 2002; Kerrigan, 1959; Miller & Bahnson, 2003; Rimmerman & Daroca, 1990). Academics have historically viewed accounting education from a broader disciplinary perspective that favors a balanced approach in financial and 7 managerial topics whereas public accounting deals primarily with financial and audit services that elicit different emphases in a curriculum. Regarding curricular content and structure, it is unclear as to where practitioners or educators stand in relation to each other given the mandated changes for increased education meeting the 150-hour requirement. Need for the Study For decades, there have been calls for more research related to the structure of accounting programs (Rebele, 2002). Referring to the common body of knowledge disseminated in the 1967 Horizons study, Mautz (1974) stated: "we have not yet had the kind of consideration that is needed to determine how that common body of knowledge might best be put together in an educational program" (p. 359). Williams, Tiller, Herring & Scheiner (1988) noted that work concerning the structure of accounting curriculum remains to be done and that "a related question of how the dual characteristics of accounting programs—professional education at the undergraduate and master's levels...is related to academic structure" (p. 136). An indication that these questions have yet to be answered can be confirmed by considering the recent American Accounting Association (2006) call for a study to examine the common body of knowledge at both the undergraduate and graduate levels, or from Allen and Woodland (2006) who indicate that an issue still remaining is "what academic content should be required in the 150 hours?" (p. 174). Should the additional education be geared towards specialization, or should it increase the breadth of the education? Together, these questions are central to the curriculum and elicit a pressing need for additional research into the form, content, and structure of accounting programs. 8 Closely related to the time commitment, content, and make-up of formal education is the matter of amount and type of experience needed for the practice of public accountancy prior to licensure. Experience and formal education are issues not easily divorced if reasons for the requirements—protection of the public from incompetent practitioners—is to be considered. Indeed, it was this notion of complementing what formal education could not do (Merino, 1977) that prompted licensing jurisdictions to mandate experience. Over the years, this requirement has been debated (Commission on Standards of Education and Experience, 1956) and jurisdictions, while generally requiring some form of experience, are by no means uniform (American Institute of Certified Public Accountants and National Association of State Boards of Accountancy, 2000). Consequently, there is a need for more information regarding accounting curriculum as it relates to the preferred amount and type of experience necessary prior to licensure. Recent action by the National Association of State Boards of Accountancy (NASBA) in an attempt at prescribing curriculum content is an indication that curricular choices are in need of attention by interested stakeholders involved in the educational process. There appears to be a need for information that helps explain what is wrong in accounting education and how to go about improving it. Systematic research in the area of accounting education should help to answer critical questions by providing data that will guide future policy making in the area (Reckers, 2006). Absent such research, concerned stakeholders (i.e., practitioners, educators, and others) will continue to be at odds with politically motivated special interest whims having little concern regarding the appropriate academic preparation of CPAs. 9 A considerable amount has been written about the 150-hour requirement but there is little comparative analysis of practitioner and educator preferences since actual adoption and implementation of the mandate. This shortage of information has contributed to a lack of clarity with respect to preferred program structure, the amount of specialization, and the level at which specific accounting coursework should be offered. Consequently, a fundamental question posed by Tyler (1950) regarding effective organization of educational experiences is in need of attention. Both the educator and public practitioner groups are, and should be, instrumental in the formulation of accounting curriculum. While the educator is often considered an expert on curriculum issues, there appears to be support for new paradigms to begin at the grassroots level. Tanner and Tanner (1995) note: "Paradigms are not concocted out of hat, but from the world of practice" (p. 229). Apparently, there is sufficient precedent to include both the practitioner and educator as legitimate contributors when it comes to curricular change. Significance of the Study Controversy over the 150-hour requirement continues. While it is unlikely the requirement will be reversed, there is a need to increase the knowledge base in accounting education and lend focus to potential changes in curricular components that constitute accounting programs of study. Williams, et al. (1988) noted a trend toward longer education requirements for accounting students before entering practice and observed: "work on the content and alternative structures for five-year programs will contribute to knowledge of accounting education in general and will be of great value to those schools that have not yet made the transition" (p. 136). This comment seems even 10 more timely now that nearly all jurisdictions have passed the 150-hour requirement leaving accounting programs searching for curricular guidance. The recent proposal by NASBA in an attempt to provide clear guidance has led many to wonder who really has authority to make prescriptive curriculum changes. Given the nature of this debate, the issue might be too important to leave in the hands of any one group. Educators alone cannot be left with the burden of implementing requisite change, nor can practitioners afford to endure vicarious accounting failures leading to mandated regulatory changes in order to protect the public. Indeed, a starting point might be to clearly define where these groups agree and disagree with respect to accounting education. A study examining preferences of the academic and public practitioner emerged as appropriate given the historical and current controversy regarding accounting curriculum and experience requirements. This investigation imparts insight into what educators and practitioners believe regarding program form, structure, and content that meets the 150-hour requirement and at which level—undergraduate versus graduate— core accounting courses should be offered. This analysis also contributes to an understanding of where different perspectives are most acute by lending clarity to issues affecting policy makers wishing to focus the experiential debate. Research Questions The investigation was designed to consider curricular preferences of those CPAs in the practice of public accounting and those educators that are preparing students for entry into practice. The following research questions served as a guide in conducting this study: 11 1. To what extent do public practitioner and educator preferences differ regarding time commitments and program structures when (a) there is no 150-hour educational requirement for certification and licensure, and (b) there is a 150-hour educational requirement for certification and licensure? 2. To what extent do public practitioner and educator preferences differ regarding the type and amount of curricular specialization within the formal educational structure? 3. To what extent do public practitioner and educator preferences differ regarding the amount and type of work experience that should precede a license to practice public accounting? 4. To what extent do public practitioner and educator preferences differ as to (a) accounting subjects or courses most appropriate in comprising a common core for all accounting students at the undergraduate level of study and (b) accounting subjects or courses most appropriate to graduate level accounting students following an undergraduate common core? 5. To what extent do public practitioner and educator preferences differ as to the level of authority that certain stakeholders should have in prescribing accounting curriculum? Delimitations of the Study Selection of expert opinion samples were acquired from public accounting practitioners and accounting educators located in an eleven state Midwestern region of the United States. The eleven states from which samples were taken are: Kansas, Nebraska, South Dakota, Missouri, Indiana, North Dakota, Iowa, Illinois, Wisconsin, 12 Michigan, and Minnesota. These states have passed some form of legislation requiring 150 credit hours of education on or before July 1, 2006. These eleven states were also chosen because they make up the Midwest Region of the American Accounting Association (AAA) and constitute a manageable geographical area for the study. Terminology The following terms are provided for the reader to add uniformity of understanding in the study. Where the definitions are not cited, the researcher has developed the definition as it relates to this study. 150-hour requirement: A legal requirement that any candidate for the CPA exam must have completed 150 semester hours of collegiate education including a baccalaureate degree. Most jurisdictions require 150 hours to take the exam while a few have enacted legislation allowing candidates to take the exam with 120 hours but require 150 hours prior to licensure. Accounting educators: Accounting instructors and professors working in higher education. Accounting practitioners: For purposes of this study, CPAs presumed to be working in the profession of public accounting. American Accounting Association (AAA): A voluntary, national organization of persons interested in accounting education and research (American Accounting Association, n.d.). This is the primary accounting educator organization. American Assembly of Collegiate Schools of Business (AACSB): An international accrediting agency founded in 1916 with adoption of accreditation standards in 1919 for business schools and programs (Association to Advance Collegiate Schools of 13 Business—International, n.d.). The name was later changed and currently the acronym stands for Association to Advance Collegiate Schools of Business—International. American Institute of Certified Public Accountants (AICPA): A voluntary, national, professional organization of Certified Public Accountants (American Institute of Certified Public Accountants, n.d.). This is the predominant professional organization for practicing accountants. Certified Public Accountant (CPA): A person licensed by a state (jurisdiction) to practice public accounting as a profession, based on having passed the CPA examination and having met certain educational and experience requirements (Whittington & Pany, 2006, p. 23). The individual may or may not be engaged in the practice of public accounting. Entry level accountant: A recent college graduate who is looking for the first job as an accountant or is in the first year of employment as an accountant (Gustafson, 2004, P- 7). Financial accounting: Concerned with the production of information for external parties such as stockholders, suppliers, banks, and government regulatory agencies (Warren, Reeve, & Fess, 2005, p. 12). Management accounting: Concerned with the production of information for managers within an organization (Warren, Reeve, & Fess, 2005, p. 12). National Association of State Boards of Accountancy (NASBA): An organization serving as a forum for the 55 U.S. boards of accountancy (National Association of State Boards of Accountancy, n.d.). The state boards of accountancy are jurisdictions that regulate the certification and licensure of accountants working in public accounting. 14 CHAPTER II REVIEW OF THE LITERATURE Reviewed in this chapter are literature and research related to the past and present state of accounting education in the United States including the 150-hour requirement for entry into the public accounting profession. First, a brief historical account of the need for and progression of accounting education is presented. Second, a chronological review of literature related to the evolution of a conceptual framework for accounting education is provided. Third, ongoing debate regarding experience requirements in public accounting is noted. Fourth, structure and content of various accounting educational models meeting the 150-hour requirement is discussed. Fifth, recent criticism of accounting education is conveyed for perspective. Finally, the current state of accounting education is articulated with the anticipation of developing a coherent future outlook. A Need for Accounting Education Apprenticeships Although the profession of accountancy has been around for well over a century, it is in a stage of infancy when compared to where education might ultimately lead and the extent to which it lags behind traditional learned professions of medicine, law, and theology. In an early article addressing accounting education, Kester (1936) pointed out that each profession begins by providing, through self-taught practitioners, services needed by society. Apprenticeships were first introduced to transmit one's experience and 15 as sufficient knowledge was accrued, professional schools were established that utilized scholarly activity to facilitate learning. Later, as the body of knowledge increased and was documented, accounting education moved away from the apprentice type of training and into the classroom where work was based on one's academic initiative and reflection (Kester). Dewey (1916) noted that as society advances and complexity increases, learning via experiential means such as apprenticeships becomes increasingly difficult. Essentially, in complex disciplines, it is impossible to convey the requisite knowledge completely outside of a formal educational structure (Dewey). According to Gustafson (2004), an apprentice type of system tends to develop practitioners by involving them in the very narrow, technical focus of entry-level accountants. Additionally, through the early part of the 20th century, most practitioners were held to the Scottish model of preliminary examination to determine the capabilities of new entrants to accounting. This examination was not an examination of accounting knowledge and skills, but rather, a general examination of competency in writing, mathematics, the liberal arts and sciences (Previts & Merino, 1998). A requirement for grounding in the liberal arts was perceived as important at the end of the 19th century, because it was associated with "professional" status and, to a limited extent, this perception has continued to the present. Industrial Demandfor the CPA After the Civil War, transformation from an agrarian economy to one based on industrialization rapidly emerged in the United States. Along with industrialization came the need for individuals versed in the methods of modern business affairs including accounting and auditing. While there was a certain amount of success teaching business 16 courses at commercial schools in the late 19th century, the first truly successful collegiate business school was the Wharton School at the University of Pennsylvania in 1881 (Van Wyhe, 1994). Over the next decade, business and accounting education was introduced as legitimate university level study. The emergence of the CPA designation from passage of 1896 New York legislation which protected the use of this title and required certified accountants to pass a qualifying examination was a huge step in the development of a professional image. Other states promptly followed New York's lead in establishing a governmentally protected and recognized profession (Langenderfer, 1987). Gaining acceptance of business and accounting courses as legitimate subjects in higher education in the late 19 century was no small task. The introduction of accounting courses at universities took time, but progress was made in the early 1900s due to the need for educated individuals who could pass the CPA exam along with other governmental requirements that encouraged knowledge of the new corporate and individual income taxes established in 1909 and 1913 respectively (Langenderfer, 1987). Whereas there were just 12 institutions of higher education offering accounting courses in 1900, by 1920 the majority of colleges and universities in the United States offered accounting programs of study (Langenderfer) with a curriculum that largely mirrored requirements for the CPA exam. In addition to the work of accountants in promoting the need for a post secondary education to match the industrial demands, there were much broader developments during those years that would leave an indelible mark on collegiate education while opening the door for more practical subjects like accounting. Prior to the Civil War, 17 collegiate study was largely a prescribed classical type of curriculum taken predominantly by the upper class as a right of social passage versus an academic pursuit (Rudolph, 1962). Noting the necessity to motivate youth, while also bringing science and more modern subjects into equality with the classical and traditional, President Charles Eliot, of Harvard, introduced an elective system that usurped much of the traditional prescriptive education (Rudolph) and which ultimately became universally recognized around the country as the new form of "liberal" education. Additionally, the passage of the Morrill Acts in 1862 and 1890 opened the door for much more comprehensive education in this country than just utilitarian agriculture. That seminal legislation, to a great extent, allowed for democratization of higher education by expanding opportunities for educational access to many beyond the privileged classes. Mumford (1940) saw the emergence of land grant colleges as representing, more than most, the gradual shift from traditional scholasticism to humanism. Many of those institutions served well in helping to temper an elitist movement in higher education by providing useful knowledge and education for many people that have contributed greatly to the country's economic infrastructure. While there was significant success in the early 1900s with respect to accounting education, the prolonged debate about the type and amount of education was emerging. Some stakeholders felt that education of accountants should be narrow and practice oriented following a technical path allowing for success on the CPA exam, and others, including many practitioners, believed that educating accountants should be broad and allow for a better theoretical and conceptual base. This argument of conceptual versus technical knowledge continues to a certain degree through the present. Regardless of the 18 debate, by 1921 all states had CPA laws that generally required only a high school education and some experience to take the CPA exam in order to become licensed. Most students, however, found that a collegiate education was necessary to successfully enter the profession (Van Wyhe, 1994). After the 1929 stock market collapse, the United States government stepped in with legislation in the form of the Securities Act of 1933 and the Securities Exchange Act of 1934, which created the Securities Exchange Commission (SEC) and, among other things, required audits by CPAs of publicly traded corporations whose shares were traded in interstate commerce (Rees & Rees, 2004). Effectively, such legislation greatly changed the auditor's responsibility from the corporation to predominantly the investing public. Although it was still the corporate client that would hire and pay the accountant for auditing services and from whom there would be considerable input, the ultimate responsibility of the CPA was to the investor (Starkey, 1934). Collegiate Education for the CPA While some authors advocated for a five-year course of study beyond high school for the professional accountant (Kester, 1936; McCrea & Kester, 1936), few states had any collegiate educational requirements in the early 20th century. New York was the first state to require a college degree for CPAs, having passed legislation in 1929 that mandated a college education for anyone taking the exam after January 1, 1938 (McCrea & Kester, 1936). It was apparent that higher education created more status for accountants, but it was New York's prominence in the financial world which prompted other states to follow (Van Wyhe, 1994). States slowly adopted requirements of collegiate education for accountants and universities responded by providing 19 predominantly undergraduate education in accounting to meet the demand. For many years, the standard education of accountants was a four-year baccalaureate degree with a major, or emphasis, in accounting. Largely, the need for college-educated accountants came about because of the state CPA law requirements. While the CPA exam has long been a national uniform test of competency in accounting, the states have the legal right to regulate accountants in public practice in order to protect citizens from receiving inadequate or incompetent accounting services. Many states have long prescribed rigid requirements including a college degree, whereas others have only recently increased educational requirements, previously substituting significant experience in lieu of a college education. In short, there has been wide disparity of education and experience requirements among the states. According to Pierson (1959), an evaluation of typical accounting programs in the 1950s identified required courses from three areas which included a certain amount of liberal or general studies, general business studies, and accounting studies. Most fouryear degree programs required 120 to 128 total semester credit hours with accounting courses constituting from 24 to 30 hours, including accounting principles, intermediate accounting, advanced accounting, cost accounting, auditing, and income tax. Later, a course in accounting information systems was added to the mix of courses (Van Whye, 1994). In a recent study of 18 four-year institutions in Nebraska, Garvin (2006) noted that curriculum development should focus on common competency development for both management and public accounting students in the first four years. The 18 institutions: 20 have eight courses in common; these are Accounting I, Accounting II, Intermediate Accounting I, Intermediate Accounting II, Cost Accounting, Accounting Information Systems, Auditing, and Federal Income Tax Accounting. The Accounting I and II courses are often taken by students in the second year, the Auditing and Federal Tax Accounting often taken in the fourth year, and all other courses often taken in the third year of a four-year program, (pp. 22-23) Like many technical disciplines, accounting education emerged because of a need for individuals who were knowledgeable regarding actual practice. Diverse requirements of business demanded a profession based predominantly on practice rather than theory, thus barring the notion that accounting education could begin with a neat and tidy conceptual framework that articulated the exact structure of how an appropriate knowledge base could be advanced. It might be fair to say that such a framework is ongoing and what currently exists can be discovered only through careful examination of the present state of education and how its acceptance has evolved over time. Conceptual Framework for Accounting Education 1950s-An Emerging Curriculum Typical titles of courses found in most college accounting programs were common by 1950, but Perry (1955) and other accounting leaders believed there was a need for more uniformity in order to facilitate progress and raise standards in states with low entry requirements. Over the next fifty years, numerous studies and commissions were charged with determining the type of academic and experiential training most needed by accountants. This evolution of a common body of knowledge for entry-level 21 accountants has, more than most developments, been the underpinnings of a conceptual framework for accounting education. In 1954, the American Accounting Association published a Report of Standards Rating Committee which was a culmination of five years of work by the committee. This committee recommended three general classifications of academic courses for an accounting curriculum (American Accounting Association, 1954): Liberal (general) education making up approximately 50% of the total curriculum. General business studies constituting approximately 25% of the curriculum. Accounting studies representing approximately 25% of the curriculum, (p. 43) The percentage breakdown among general studies, business courses, and accounting courses of 50/25/25 had strong intuitive appeal and has remained fairly representative of most four-year undergraduate accounting programs to the present day. Programs meeting the 150-hour requirement have tended to vary from this allocation by requiring approximately the same amount of credits in general education as the four-year programs. A report published by the AAA Task Committee on Standards of Accounting Instruction which was a successor to the Standards Rating Committee used a questionnaire to gather information regarding undergraduate courses taken by accounting majors in the mid 1950s. The questionnaire was mailed to most schools in the United States that offered a major in accounting and had a usable response from 100 institutions. Those findings were published and included a table of "Typical Curriculum for Accounting Majors" (American Accounting Association, 1956, p. 41) that illustrated the 22 breakdown of non-business courses, general business courses, and accounting courses. Interestingly, the table conformed exactly to the 50/25/25 ratio as advocated in the Standards Rating Committee. Total average credit hours numbered 126 with accounting and general business courses each composing 31 of the total while the remaining 64 credits were general or non-business education. A Commission on CPA Standards was formed in 1954 and represented a number of interested stakeholder groups charged with formulating standards of education and experience. The study, known as the Perry Commission, issued its report in 1956 titled Standards of Education and Experience for Certified Public Accountants. This landmark study supported the mix of courses as promoted in the 1954 AAA report and added substance with respect to formal education and experience. The Perry Commission is often cited as the first major study to call for collegiate education beyond the traditional four-year degree. Most notably, the study referred to the fact that the breadth of knowledge needed by the CPA is beyond what can be accomplished in a typical undergraduate program and favored academic study beyond the bachelor's degree. The Commission also recommended an elimination of any formal experience requirement for entry into the accounting profession while qualifying this recommendation with the likelihood that it would be unrealistic for a CPA to practice without first gaining experience (Commission on Standards, 1956). The Perry Commission recommendations were quite controversial to most practicing CPA's who had come to rely upon both education and experience as important components of training for new accountants. While the additional education was widely accepted by many stakeholders, the idea of promoting certification and licensure of a new 23 college graduate without requisite experience was near heresy to the practitioners. Van Whye (1994) notes the idea of dropping an experience requirement was discrediting to the point of crippling the Commission's credibility. Shortly thereafter, both the AICPA and the AAA formed committees to study the Perry Commission's report. The AAA Committee on Professional Education in Accounting agreed with the integration of the liberal non-business areas with the general business and technical accounting studies while also recommending some form of advisory accreditation for accounting programs. This Committee (AAA) also envisioned an over-all program of study to range from four to six years with an "evolution" of most four-year programs to five years (American Accounting Association, 1959). The AICPA committee (referred to as the Bailey Committee) rejected the Perry Commission's recommendations of an accreditation body and of not requiring experience, but did agree that students should take the CPA exam upon graduation while deferring actual certification until the experience requirement was met. This Committee recommended that additional education was desirable and noted "as soon as it is feasible postgraduate study devoted principally to accountancy and business administration should become a requirement for the CPA certificate"(American Institute of Certified Public Accountants, 1959, p. 66). Consequently, the AICPA approved the recommendation of the Bailey Committee as official policy in 1959. Two other reports that surfaced at about the same time were critical of accounting education in general. One study, titled Higher Education for Business financed by the Ford Foundation reported that there was too much specialization in accounting programs for a four-year degree resulting in business schools that "inevitably act as trade 24 schools"(Gordon & Howell, 1959, p. 132). The report noted that such narrow training did not belong in collegiate education. A two year graduate degree such as a Master of Business Administration (MBA) emphasizing analytical and behavior skills built on a four year liberal arts degree was the preferred education for business people including industrial accountants, while public accountants should take an undergraduate degree with a limited number of accounting courses followed by a fifth year of accounting and business courses. Another foundation study sponsored by the Carnegie Foundation and chaired by Frank Pierson was also published in 1959 titled, The Education of American Businessmen: A Study of University-College Programs in Business Administration. This book assesses the different approaches to academic preparation for business careers by advocating a liberal arts undergraduate background. The Pierson report, as well as others (Kerrigan, 1959) were critical of the domination of public accounting because of the CPA requirements and called for programs to develop curriculum on sound academic principles rather than on the CPA examination requirements. The Pierson report recommended that postgraduate accounting programs "should be developed within the framework of high-quality master's programs, thus making it possible for 'professional accounting' to draw upon the courses in Policy Making, Decision Making, Concepts of Administration, and other management courses forming the core of the master's program" (Pierson, 1959, p. 388). Such language seemed a clarion call for degrees along the lines of Master of Accountancy programs that are closely linked to the MBA core. In a follow up to both of the foundation reports, the AAA sponsored a study to comment on the reports and indicated that over the years, the breakdown from various 25 professional committees has remained in the 50/25/25 mix so that accounting courses made up approximately 25 percent of the undergraduate curriculum. However, the recommendations of the Ford and Carnegie Foundation reports would so severely limit the undergraduate offerings in accounting that such a reduction would effectively prohibit a professional education at the undergraduate level and would push the bulk of such preparation to the graduate level (American Accounting Association, 1961). 1960s -A Common Body of Knowledge Both of the foundation reports—Ford and Carnegie—prescribed a liberal arts undergraduate degree followed by graduate study in business and accounting as the preferred mode of education. While a graduate education in accounting was a stretch for either the accounting practitioners or educators to accept in the 1960s, the possibility of a five-year education for accountants was becoming more apparent. Some authors set out to add to that knowledge base recognizing the traditional educational solution was usually premised upon a broad liberal education followed by thorough specialized professional training. Anderson and Griffin (1963) administered a matched pair's test where one group included only undergraduate education levels and the other, graduate education that supported the idea of added value from the formal study of accounting beyond the traditional 24 credit hour level. The findings indicated that taking accounting courses beyond the course load required of the traditional baccalaureate degree improved work performance, thus supporting the need for specialized accounting education. Another study sponsored by the AAA in the mid 1960s was conducted to compile a revised statement of education by reviewing all available educational reports from 1950-1965. While this report was largely a distillation of previous reports dealing with 26 curriculum issues, the recommended undergraduate accounting curriculum consisting of approximately 20 to 25 percent of the total hours was presented as appropriate based on the analysis to that date (American Accounting Association, 1967). The revised statement acknowledged that certain graduate programs should exist for students who start their accounting education at the graduate level, but the thrust of the report seemed to reinforce the idea of significant accounting education at the undergraduate level. During the 1960s, research sponsored and funded jointly by the AICPA and Carnegie Corporation was undertaken to investigate the common body of knowledge (CBOK) for CPA's. The report, titled Horizons for a Profession: The Common Body of Knowledge for Certified Public Accountants considered accounting a discipline and not a mere service role as had been advanced in the foundation reports of a few years earlier (Langenderfer, 1987). The Horizons Study, as it would become known, is an oft-cited landmark study pertaining to what new CPAs should know upon entry into the profession. A book of over 300 pages in length, it contains five parts, including a section dealing specifically with the CBOK (Roy & MacNeill, 1967). The Horizons Study did not actually design a curriculum but did emphasize that the modern CPA be well schooled in mathematics, statistics, and quantitative methods and that "preparation for public accounting should come to include graduate study" (Roy & MacNeill, p. 5). The general thrust of the Horizons Study prompted the AICPA to take further action at providing more specific curriculum guidance and was followed by a 1969 report chaired by Elmer Beamer which came to be known as the Beamer Committee. This committee would adhere to the Horizons Study recommendation regarding graduate work 27 by explaining that".. .our analysis of the recommendations leads us to conclude that the mastery of the body of knowledge which is commensurate with the public responsibility will require not less than five years of collegiate study" (American Institute of Certified Public Accountants, 1969, p. 42). The Beamer Committee also suggested that experience requirements be abandoned in favor of the five-year requirement and that states adopt the requirement no later than 1975. The Beamer Committee advocated a "model program" that was presented only as guidance despite the fact that the sample program adhered to the accepted breakdown between general education, general business, and accounting but broke the mold of the 50/25/25 percentage requirement. One variation was that the 150-hour, five-year program continued to have just 60 hours of general education with the additional 30 credits allocated between the general business and accounting course work. The general education portion of 60 hours now made up only 40% of the total curriculum and included elementary accounting. While strongly advocating the five-year program, the committee did recognize that for the time being, most entrants into the profession would have to settle for a four-year program that should match the five-year program in scope but sacrifice in depth of coverage (American Institute of Certified Public Accountants, 1969). Essentially, the Beamer Committee would back away from prescribing a five-year program knowing that legislation would be needed at the state level if business programs were to be compelled to implement the requirement (Van Whye, 1994). The Beamer Committee recommendations were adopted by AICPA Council in 1969 as the official policy, thus replacing what was in place since 1959. The CBOK was 28 ratified through this process lending credence to those programs that adhered to the basic pattern established in the model program (Van Whye, 1994). 1970s - Educator versus Practitioner Split Not taking the Beamer Committee report and AICPA endorsement lightly, academic accountants responded with their own committee in 1970 that was established to evaluate the Beamer Committee findings, arrive at conclusions as to what actions to take, and make recommendations to colleges and universities regarding their accounting programs. Notable conclusions of this committee were that the CP A certificate should be separated from the license to practice which would include experience (American Accounting Association, 1972). Apparently, the AAA did not want to take sole responsibility for preparation of CP As by eliminating the experience requirement entirely (Van Whye, 1994) and hence this is the first formal report that recommended separation of the certificate from actual licensure. Additionally, educators were now advancing quality over quantity in accounting programs and accreditation seemed the likely mode of achieving this if the five-year requirement was not to be set in stone. Although 66% of the responding department chairpersons believed five or more years of education was necessary to achieve the CBOK , the AAA report ignored this majority and was unwilling to promote the five-year requirement (Van Whye, 1994). A committee known as the Albers Task Force proposed that wording of the five-year requirement be changed to a 150-semester-hour requirement leading to a graduate degree with implementation at the earliest practical date 29 (Langenderfer, 1987). The recommendation was approved by the AICPA Council in 1978 and the 150-hour requirement eventually became the predominant and official terminology in use. While Sterling (1973) noted an apparent harmony of curriculum content between accounting education and practice, there has been considerable disagreement between academic and practicing accountants over the years. The Cohen Commission (American Institute of Certified Public Accountants, 1978) observed the "schism" that existed between the two groups as far back as the mid twentieth century. Although it is hard to determine the exact causes, the reward structure (Patten & Williams, 1990) that faculty work under in business schools may have contributed to this split between what practice and academe view as important in research. Accounting research geared towards the financial markets and other management topics provides knowledge of limited use to auditing and the professional practice of accounting (American Institute of Certified Public Accountants, 1978). An additional consideration is that public accounting has long been considered "professional accounting" and correspondingly, the large CPA firms have had a significant formative impact on accounting education. Accountants have never been able to unify in a way that would have potential to benefit the profession on many fronts. In particular, the split between academics and practitioners has stymied various movements for change over the years that arguably could have been beneficial to the profession and ultimately, other stakeholders. 30 A major effort by the AICPA to promote a professional school movement came from a commission titled The Commission on Auditors' Responsibilities chaired by Manuel Cohen. While the Cohen Commission recognized that establishing separate schools of accountancy would take time, the Committee also observed that an intermediate step might be to establish identifiable graduate programs of accounting within the framework of existing schools of business (American Institute of Certified Public Accountants, 1978). Several schools of accountancy were formed around the country in the 1970s despite protest from the business school deans. In December of 1977, the Federation of Schools of Accountancy (FSA) was formed in New York with 21 charter members. The intention was to form schools of accountancy, whether independent of, or, within the schools of business (Van Whye, 1994). Despite the upbeat atmosphere regarding separate professional schools at the time, the concept never became very popular largely because the profession did not take control of accreditation issues. The idea of accounting programs having accreditation apart from business programs emerged simultaneously with the debate about separate professional schools of accountancy. Initially, there was the usual difficulty in getting academics to agree with practitioners over what accreditation would mean. However, the AAA ultimately cooperated with the AICPA and subsequently representatives from both groups formed a "committee of six" to forge accreditation standards (Van Whye, 2007). Van Whye notes that sudden interest in accounting accreditation at that time by the American Assembly of Collegiate 31 Schools of Business (AACSB) stemmed from the desire of business school deans to keep control of accounting programs. Shortly thereafter, the AICPA recognized that they had insufficient support and few prospects for success (Olson, 1982) and terminated efforts aimed at separate accreditation. The AACSB moved forward with little intervention by other groups in the accreditation of both undergraduate and graduate programs in accounting. Separate accreditation of accounting programs under the AACSB seems to have met with limited success. Pastore (1989) noted that while many stakeholders view accreditation as ensuring program quality and improvement, other politically motivated reasons such as competitive advantage and resource allocation are the more likely reasons for programs to seek accreditation. Additionally, accreditation of accounting programs can only take place if the business school or department is first accredited. Accounting programs must meet those requirements in addition to a second set of requirements specific to its program to secure separate accreditation Regardless, the impact of the AACSB accreditation on accounting curriculum is apparent when examining the standards. Particularly interesting is a requirement that undergraduate accounting degree programs include a minimum of 90 semester credit hours outside of the accounting discipline (The Association to Advance Collegiate Schools of Business International, 2007). While this requirement appears to provide for a solid general education, it also leaves traditional four-year programs limited to approximately 30 credit hours of accounting. This limitation might be viewed as insufficient preparation for 32 professional accountancy, and it may be a leading impetus for schools to consider a master's degree for professional education in accountancy. A grant of funds from a large accounting firm to the AAA in the early 1970s resulted in two research monographs that addressed at length many curriculum topics for consideration. The first document was published following a symposium in 1974 where the idea of appointing a task force surfaced to "supervise a study designed to determine, develop and test the content of the 'accounting core' as discussed in the body of this report" the meeting participants defined the accounting core generally as "what every accounting major should take (know)" (Ferrara, 1975, pp. 224-225) after the introductory course. Ostensibly, this core curriculum could then be followed with specialized areas of study in financial accounting, managerial accounting, auditing, taxation, not for profit, and other applicable topics. Although this initial document did not specifically say what the core of the curriculum was, the intent was to lay the groundwork for a subsequent task force that would do just that. A follow up study to the 1975 report (Flaherty, 1979) used an extensive expert opinion survey of accounting educators and accounting practitioners in an effort to determine important topics in identifying an accounting CBOK referenced as the "common core" to be acquired by all majors regardless of specialization, and areas of core specialization broken into managerial accounting and information systems, taxation, financial accounting, auditing, and generalist. Overall, respondents placed more emphasis on conceptual knowledge than on technical ability and the "implications from this finding were that accounting education should be more conceptual than technical in its 33 orientation" (p. 127). Additionally, the 1979 monograph noted that while accounting is made up of many specialties, significant commonalities exist and authors of this report concluded that a fair amount of specialization should take place in the formal educational process but gave no details as to what that should be. Two things emerge from the extensive survey used and reported on by the AAA. First, comparing views of accounting educators and practitioners was deemed as very important to accounting curriculum. Second, the study was conspicuously silent with respect to the type of program structure that the respondents viewed as most desirable, or the timeframe over which the education should take place. Thirty years later, the 150-hour requirement has greatly influenced the potential structural characteristics of accounting programs but no similar study has been undertaken to identify differences. The AAA study yielded valuable information for those individuals charged with curriculum development because it provided information as to how experts opined on the importance of individual accounting topics. However, there was no indication as to program format regarding length of time or types of specialization that would be appropriate for an accounting degree. A study by Hadley and Balke (1979) addressed the dearth of empirical evidence regarding curriculum content views of practitioners in undergraduate accounting programs. Their study was an extension of the research conducted by the AAA Committee on Professional Examinations in the mid 1970s where 12 categories containing 72 topics commonly found in accounting curriculum were studied for content levels in undergraduate and graduate programs. Of the 72 topics, 27 were found to be offered at significantly higher levels of content level than what was desired by CPA 34 firms. Only three topics, Other Information Systems, Fund Accounting, and Budgeting for Operations and Control, were desired to be at a higher content level by CPA firms than was offered in undergraduate accounting curriculum. With just three topics identified as lacking in desired content, the findings by Hadley and Balke (1979) support the notion set forth by Sterling (1973) of agreement between practice and academe regarding actual substance of the curriculum. Certainly, the split between academics and practitioners was a real concern but from practitioner responses, it did not appear to be of a magnitude where curriculum content was being negatively compromised. 1980s - The 150-Hour Requirement Dissatisfied with the slow implementation of the 150-hour requirement, the AICPA again attempted to garner support in 1981 through an independent commission that gathered information and developed strategies for promotion (Van Whye, 1994). After many months of work, the Commission reported, "a baccalaureate accounting program is no longer an adequate education for entry into the CPA profession" (Commission on Professional Accounting Education, 1983, p. 5). The Commission also recommended that the AICPA provide leadership to accomplish the legislative requirement and to appoint a well-financed special body to develop and aid in the implementation together with state societies of CPAs and state boards of accountancy as the key organizations for the campaign. An outgrowth of this special body was a 1984 Model Accountancy Bill that required additional education and was promoted for all states to accept (Van Wyhe, 1994). 35 The AAA established another committee in 1984 that was to specifically focus on the future of accounting education and to consider whether the education had kept up with changes in the profession. The committee, known as the Bedford Committee, reiterated much of what had been studied in the prior twenty years but resulted in a significant impact on educators in its conclusion that accounting education had not kept up with practice. The report noted that the emphasis in the classroom should be on "learning to learn" while indicating that major changes in curriculum design and delivery systems needed to take place in academia by the year 2000 in order for accountants to compete in an ever expanding profession. The report advanced the notion that accountants who remain narrowly educated will not be able to compete effectively and that a minimum of five years of education was necessary in order for any specialization to occur (American Accounting Association, 1986). Concurrently, an AICPA Special Committee (Anderson Committee) on Standards of Professional Conduct for CPAs recommended mandatory continuing education for CPAs and participation by all members in a quality review program in addition to adoption of the 150-hour requirement as conditions of membership in the AICPA for those entering the profession after the year 2000. Adoption of the 150-hour mandate was viewed as necessary in persuading states and institutions of higher education to follow suite in accepting the post-baccalaureate education (Langenderfer, 1987). At this historic juncture in accounting education, it is worth noting that both major bodies most influential in accounting curriculum had just recommended significant change by or around the year 2000. The AAA, with its Bedford Committee report in 1986, indicated that change in academia must take place by the year 2000 in order for 36 accounting education to keep pace with the changing profession (American Accounting Association, 1986), and the AICPA, with its own 1986 report from the special Anderson Committee advocated adoption of the 150-hour requirement for those entering the profession after 2000 (Langenderfer, 1987). In 1988, the 150-hour requirement finally became reality with 83 percent of AICPA voting membership in favor. The official position was subsequently clarified with the following statement (American Institute of Certified Public Accountants, 1988, p. 24): General Education 60-80 semester hrs Education in Business Administration 35-50 semester hrs Accounting Education 25-40 semester hrs This curriculum varied slightly from the sample program often years earlier because it did not specify hours by subject and actually allowed for fewer accounting hours. It seemed clear that the focus of the 150-hour requirement was not to be for additional specialization in accounting but favored a broader education. Nearly 30 years had passed since acceptance by AICPA Council of the need for study beyond the traditional four-year degree and formal adoption of a 150-hour requirement into the organization's bylaws. Ijiri and Sunder (1991) note a changing attitude of the AICPA with respect to the focus of increased education during that 30-year time span. In 1959, increased education was intended to allow for more specialization; however, with the proliferation of information needed by the accountant as generalist, by 1988, the emphasis was on broadening the education (Ijiri & Sunder, 1991). Van Wyhe (2007) also observes that "Despite the massive and extended effort persuading AICPA 37 members to vote for 150 hours and the subsequent campaign to persuade states to adopt legislation there was little concerted effort to address the educational content of the additional 30 hours of credit. Changes and efforts to reform accounting education did occur however, although the efforts were not unified" (pp. 489-490). Capitalizing on the recent success with the 150-hour requirement for membership, the big eight CPA firms issued a White Paper titled Perspectives on Education: Capabilities for Success in the Accounting Profession (1989). The White Paper is considered a landmark document because of the unparalleled uniformity of the large, international accounting firms' pledge of $4 million in monetary support to influence change in accounting curriculum. The accounting firms would make a five-year commitment to support the development of curriculum at colleges and universities responsive to the needs of the profession. Calling for cooperation between faculty and practitioners, the accounting firms did not focus on specifics, but rather, discussed skills and knowledge areas that were necessary for entry into the profession of public accounting including preparation of students ready for life-long learning (Perspectives on Education, 1989). One thing was clear from what had developed in the 1980s, change was needed in accounting education so that graduates of accounting programs could adapt to the burgeoning body of rules and regulations that were overtaking the profession. It had become apparent that students could no longer be expected to master this entire body of material and that a different way of teaching conceptual knowledge was needed so that students would learn a process allowing them to access the specific information that was 38 needed at hand. Money from the then big eight accounting firms would provide impetus for a new commission to act as a catalyst for such change. 1990s - The Accounting Education Change Commission In 1989, with funding from the then big eight CPA firms, the AAA authorized the organization of the Accounting Education Change Commission (AECC) with 16 initial members, significant autonomy, and a full-time executive director (Van Wyhe, 1994). The Commission was expected to act as a forum, provide a focal point, and "serve as a catalyst in bringing about demonstrable improvements in the education of accountants" (Mueller & Simmons, 1989, p. 248). While initially expected to exist for five years, additional funding of $1 million was later granted in order to extend the Commission's life to seven years but it was recognized that this was really just seed money to initiate the change process at a few schools with hopes that others would follow the lead. The AECC Request for Proposals explicitly indicated that grants were for implementation of change, not just further study of curriculum change. Several factors played heavily into the awarding of grants including the promise of benefits beyond the grantee school; pervasiveness and integration of change throughout the curriculum; creativity, innovation, and outcome measurement; and institutional support for the proposed changes (Sundem, 1999). The 13 institutions that received grants by showing substantive changes to traditional modes of delivery were: Arizona State University; University of Chicago; University of Illinois and Notre Dame (joint); North Carolina A&T State University; University of Virginia; Brigham Young University; Kansas State University; University of Massachusetts at Amherst; University of North Texas; Rutgers University; Kirkwood 39 Community College; Mesa Community College (Sundem, 1999). A monograph by Flaherty (1998) provides a brief summary of the grant experience at each school. In addition to the grants, other activities by the AECC included sponsoring workshops and symposia, producing two videotapes directed at accounting faculty, hosting panels and presentations, publishing two commissioned monographs, along with two other publications on the positions and issues, and a summary of the grant experience (Sundem, 1999). A monograph summarized much of the history of the Commission claiming that there were many successes and failures from which to learn while creating recognizable changes in accounting education. Noting significant progress in developing better communication and interpersonal skills, and the promotion of "learning to learn" in the curriculum which was consistent with what the Bedford Committee report had promoted, Sundem recognized that much was left to be done in the future, specifically citing the lack of success in developing assessment measures for programs. The AECC activities claimed much discussion surrounding accounting education during the 1990s and certainly added to the body of pedagogy in the field. Many of the curriculum projects completed by grantee schools during that period provided models for other programs to experiment with and have carried over into the 21 st century. Using educational techniques recommended in AECC projects required educators to change how curriculum is viewed, how it can be delivered, and how students learn. In short, pedagogical innovation and reform seems to have been issues on which the AECC focused. 40 The 21st Century Vision In a continuing quest to address anticipated dynamic information needs of the 21st century, the AICPA Vision Project was initiated in the late 1990s in order to ensure the viability of accounting into the future. According to the Vision Project, the top five core competencies were communication skills, strategic and critical thinking, focus on the client and market, interpretation of converging information, and technological expertise (Pallais & Thomas, 1999). Expanding the initial work of the Vision Project was a committee that developed the AICPA Core Competency Frameworkfor Entry into the Accounting Profession. Here, the Committee identified three broad categories of Functional, Personal, and Broad Business Perspective that included 20 specific competencies desirable for accounting graduates to be successful in their careers (American Institute of Certified Public Accountants, n.d.). In 2005, NASBA surprised accounting educators and practitioners by issuing an Exposure Draft that modified certain rules of the Uniform Accountancy Act, which had been adopted by many states. The proposal prescribed certain courses and credit hours at the undergraduate or graduate level (National Association of State Boards of Accountancy, 2005). Resistance by stakeholders prompted NASBA to table the exposure draft with plans of developing an alternative framework in the future. The AAA then called on the academic community to take the lead on the content of accounting education and to consider developing a useful framework that would be in the form of a common body of knowledge for accounting education to serve as a forum for future debates regarding accounting curriculum (American Accounting Association, 2006). 41 Indeed, accounting education had come full circle. The AICPA continued to promote the 150-hour requirement, but their recent emphasis on acquisition of skills and competencies was supported by the Core Competencies Framework. While such a shift would conceivably encourage flexibility for most accounting programs, the structure and content of accounting education had become ever more unclear. NASBA attempted to address this issue of content clarity for concerned State boards through prescriptive curriculum measures that had long been deemed the domain of others. Without a unified strategy as to educational structure and content, both educators and practitioners were forced to react to a quasi-governmental attempt at prescribing curriculum. Lack of professional unity appears to have pushed accountants into a reactionary corner rather than a visionary and proactive arrangement that might benefit accounting education. Experience Requirements Public accounting has long relied on three prerequisites—education, examination, and experience—to prepare individuals for entrance into practice. Attainment of educational requirements and successful completion of the Uniform CPA examination signal necessary academic preparation for entry into the profession. States have also required experience to complement education and examination and to lend assurance as to competency for practice. However, the amount and type of experience needed has been debated resulting in varying requirements among the licensing jurisdictions. Most states require from one to three years of experience but this requirement has been broadening over the years to include training in accounting outside of public accountancy. Some states mandate experience prior to actual licensure keeping the certification and licensing as two separate steps while others require it prior to certification and combine licensure 42 with certification (American Institute of Certified Public Accountants and National Association of State Boards of Accountancy, 2000). Mandated experience can be partly attributed to the apprentice nature of accounting in the early years (Kester, 1936). By the 1950s, problems related to requisite experience were becoming evident due to a lack of standardization which affected reciprocity issues among licensing jurisdictions. The questions presented by Perry (1955) are still relevant and debated today (pp. 192-193): 1. Should experience be required before being authorized to practice? 2. Can a system of educational internships take the place of present experience requirements? 3. What is the extent of the requirement and how can quality be evaluated? 4. Must experience be only in public practice under supervision of a CPA, or should private accounting, government, or teaching in higher education be allowed? 5. To what extent should extended formal education be a substitute? In short, these questions all pertain to the amount and type of experience necessary for practice; questions that have largely gone unanswered for over fifty years. The Commission on Standards of Education and Experience for Certified Public Accountants (1956) concluded that while practical experience was advantageous for a public accountant, it should not be required for entry into the profession and would, eventually, be eclipsed by improved formal education. The 43 Beamer Committee (American Institute of Certified Public Accountants, 1969) recommended outright abandonment of any experience, favoring in its place a five-year educational requirement. However, the American Accounting Association (1972) was not willing to accept elimination of experience and the idea of abandoning the requirement was never widely accepted or adopted by the accounting profession or licensing jurisdictions. Illustrative of continuing debate over experience requirements is a monograph issued by a large international accounting firm (PricewaterhouseCoopers, 2003) that advocates for an additional year of practice as one way of meeting the 150-hour requirement in lieu of an additional year of formal education. Graves (2004) responded to this proposal noting: "To substitute for the 150-hour requirement what entrants already do is to effectively eliminate the 150-hour requirement. It is the 150-hour requirement that adds another dimension to accounting education, not on-the-job training" (p. 3). Accounting Models Meeting the 150-Hour Requirement With passage of the 150-hour requirement by general membership of the AICPA in 1988, most states eventually mandated the stipulation as a matter of law. Of the 55 licensing jurisdictions, 48 have enacted laws requiring 150-hours of education. The model law requires 150-hours of education including a baccalaureate or higher degree and provides flexibility for various types of programs and educational paths requiring a minimum of 24-hours each of accounting and business (undergraduate or graduate) within the 150-hour requirement (American Institute of Certified Public Accountants, n.d.). 44 The issue of how to best acquire the knowledge and skills needed by entry-level accountants appears to be largely a matter of opinion. Some stakeholders maintain that additional study should broaden the skills and competencies of the individual, a position that seems to coincide with the intention of the AICPA, while others continue to value specialized technical knowledge that would help candidates pass the CPA exam. Nelson (1995) felt there was a three-way struggle between breadth, depth, and technical coverage in accounting. The struggle between specialist and generalist is considered by Weinberg (1967) who warned against the propensity for universities to reward the specialist engaged in a narrow research agenda while largely ignoring the generalist. Rededication to educating the generalist student will help temper the inclination to value the narrow specialist who frequently claims necessity for self-absorbed purposes (Weinberg). Williams (1990) expressed the view held by many regarding a professional education stating, "that breadth in professional education must precede specialization—if the latter is to be anything more than narrow training" (p. 1). Within that context, and in meeting the 150-hour requirement, Williams identified three approaches as the liberal arts model, the business model, and the accounting model. The liberal arts model is predominantly aimed at broadening the education where much of the accounting is moved into the fourth and fifth year and might range from 25 to 30 hours beyond introductory courses. The business model would concentrate on adding to the business education component with the accounting component falling in the 30 to 35 hour range. The business model seems particularly appropriate for those students seeking the MBA degree within the five-year period. The accounting model would most 45 likely include limited specialization in accounting with, perhaps, 35 to 40 hours in accounting beyond the introductory courses. While there is some merit to each of the models, Williams (1990) argues for flexibility in legislation dealing with the additional educational requirement so that schools can experiment and capitalize on their particular strengths. Needles and Powers (1990) performed a comparative analysis of 17 accounting models that had been developed by the AICPA, the AAA, the AACSB, the Association of Government Accountants, the National Association of Accountants, the Institute of Internal Auditors, and the Federated Schools of Accountancy. Only four of the 17 model programs did not require at least five years of education and three of those four presented either five-year or graduate programs as alternatives that would meet the 150-hour requirements. The study concluded (Needles & Powers, 1990): • Changes in objectives and structure of accounting education over several decades have been slight. • Specific CBOK has historically focused on completion of certain coursework but has more recently moved to knowledge categories. • All of the models stipulate a broad general education background and general business knowledge. • Little change in categorical emphasis has occurred over the years but there has been significant disagreement as to the amount of accounting knowledge for the entry-level accountant. • There is no substantive difference between models that emphasize public accounting versus other accounting tracks. 46 • Most models focused on topical content rather than on how to achieve educational outcomes. Klein and Levy (1993) addressed the issue of program structure and content by surveying practicing CPAs in Massachusetts and found that large and small firms were different. Small accounting firms did not favor the additional 30 credits resulting in a second degree, whereas, the large firms viewed a liberal arts baccalaureate degree plus an accounting master's degree as preferable. Additionally, smaller firms wanted additional hours in accounting and taxation while larger firms desired additional accounting and business. Smaller firms also favored internships but the large firms did not. In order to guide accounting educators when designing 150-hour programs, Novin and Tucker (1993) studied the perceived relative importance of various academic subjects by accountants in public practice. The study provided a template for use by educators in determining the composition of 150-hour programs that ranked general education, accounting education, and business education by level of importance according to the public accountants. Historically, practitioners had been thought to favor more breadth—perhaps indicative of large firm influence—while accounting educators generally advocated for technical coverage in the curriculum. However, a study by Novin, Fetyko & Tucker (1997) revealed a different picture as well as a gap in perception between accounting department heads and public accounting practitioners regarding curriculum content. In this study, practitioners tended to focus on entry-level job specific skills that emphasized accounting and technology knowledge. Educators, on the other hand, were more inclined to take a long-term view favoring areas of international business, economics and other 47 courses that would help develop critical thinking skills and were generally perceived as better for career building. Novin et al. also noted that neither group—educators or practitioners—should solely dictate exactly what constitutes appropriate curriculum; there is a need for cooperation between the groups in effective program design. This is significant because it is the only identified study that compared perceptions of practitioners with educators regarding technical versus conceptual knowledge in twenty years. A study conducted by Rumble (1998) of accounting chairs and deans at Midwestern colleges and universities in 10 states found that while over 87% of programs reported changes to meet the 150-hour requirement, 75% indicated that no particular accounting model was used. Of the respondents, the most widely adopted models were the AICPA model with 13%, and the AACSB model with 6%. Additionally, respondents indicated the two groups most important in identifying accounting skills and competencies were accounting educators and public accountants. Examining the impact of the 150-hour requirement on accounting programs, Donelan & Reed (2000) suggested that while the total number of accounting degree programs changed little from 1988 to 1998, there was a significant increase in graduate accounting programs. Considering Florida as a mature state with respect to the requirement, Donelan & Reed predicted that 80% of universities would ultimately offer masters degrees in accounting to meet the legislative mandate and that schools not offering a graduate degree will face significant competitive challenges from those that do. A study conducted by Donelan & Philipich (2001) surveyed 500 CPA exam candidates in five states with a 150-hour requirement. They found that 35% had fulfilled 48 the requirement with a master of accountancy, 22% with the MBA or other graduate degree, and 43% with additional undergraduate credits. The candidates who were employed in public accounting were more satisfied if they had enrolled in masters of accountancy programs as opposed to other graduate business programs. An article by Shafer & Kunkel (2001) notes that for AACSB accredited schools, the vast majority complied with the 150-hour requirement and that the most popular programs were bachelor's degrees followed by either a master's of accountancy or MBA degree. Only 20% of the programs offered formal programs leading to a 150-hour baccalaureate degree. It appears that the 150-hour requirement has generally been met by CPA exam candidates enrolling in master's degree programs. Shafer & Kunkel questioned this method of meeting the requirement given the intended objective of adding breadth to education as initially advocated by the AICPA. In an effort to aid accounting educators in counseling students about study beyond the traditional bachelor's degree, Renner & Tanner (2001) surveyed practitioners in public accounting and industry in order to obtain preferences of structure for the additional education requirements. Although the authors noted different preferences for the two groups surveyed, the top five choices for both groups, in no particular order, included "(a) BA in accounting, master's in taxation, (b) BA with double major in accounting and management information systems, (c) BA in accounting, master's of business administration, (d) BA in accounting with a master's of accountancy, and (e) BA with a double major in accounting and finance" (p. 132). Russell & Smith (2003) called for curriculum reform and specifically addressed the 150-hour requirement in public accounting by presenting the Institute of Management 49 Accountant's curriculum model. While not endorsing the 150-hour requirement, this model illustrates a curriculum that should prepare entry level professionals at the end of either four or five years. The fifth year (30 hours) would be restricted to graduate coursework leading to the master's degree in accounting with a focus on preparation for the CPA exam while still providing 12 to 18 hours of non-accounting coursework. Worth noting here is that this amount of graduate study demands more than nine months of academic work and most likely results in a minimum of twelve months of study in completing the 30 credits. Recent Criticism of Accounting Education Criticism of accounting education is not new and might have been partly responsible for the ultimate acceptance and passage of the 150-hour requirement in hopes that this change would improve the quality of entry-level personnel. However, after many states enacted legislation that met the requirement, there emerged an even stronger assault on accounting curriculum and instruction (Mathews, 2001). While criticism was directed at the 150-hour requirement claiming it was hurting the supply of students (Frieswick, 2000; McCrarry, 2001), others concluded the requirement was not meeting its objective of providing a broader and more liberal education for aspiring CPAs (Shafer & Kunkel, 2001). Williams (1991) noted additional problems leading to a loss of accounting's premier status in business schools because, as a discipline, it did not attract much in the way of sponsored research funding. Additionally, the CPA exam itself was cited as a problem. It favored a "teach to the test" mentality that kept accounting at a vocational level rather than a true profession. Other researchers like Patton & Williams (1990) alluded to barriers such as the faculty reward system which promoted certain 50 types of research activities while giving little consideration to progressive change in accounting education. Accounting groups outside the public accounting community have often called for reform in accounting education. A study sponsored by the Financial Executive Institute and the Institute of Management Accountants indicated that there was dissatisfaction with accounting curriculum which was lacking in applicable management accounting preparation because of the emphasis and orientation towards public accounting (Siegel & Sorensen, 1994). Ethridge & Heminway (1993) also indicated that attitudes of management accountants were significantly different with respect to the additional educational requirement because it was not seen as adding any value. Significant criticism of accounting education came from public accounting practitioners in the 1990s when the profession fell upon leaner times because auditing and taxation services were not growing. Indeed, the business community questioned the value of auditing, which had been the primary justification for the CPA. This environment spawned new initiatives at the AICPA to identify new tools, skills, and roles for the CPA permitting continued growth of the profession (Fisher, 1996). In effect, the profession was being asked to reinvent itself and to be proactive in creating its own future. Many of the large CPA firms were already redesigning themselves as "professional services" firms rather than public accounting firms in order to market to an ever-expanding clientele. Publications regarding consulting practices were in vogue during the 1990s and were very persuasive in promoting the CPA as the premier professional that should share in the wealth by expanding practice beyond the traditional accounting services (Reeb, 1998). According to Gabbin (2002), this was a sign that major 51 changes in accounting education were needed. Additionally, this change in what and how accountants were educated also coincided with much of the information being disseminated by the AECC during that time. A joint project of the AAA, AICPA, IMA and the then big five accounting firms resulted in a controversial document issued in 2000 titled Accounting Education: Charting the Course through a Perilous Future. This document, hereafter referred to as "the monograph," used a combination of qualitative and quantitative research methods, and was critical of the current state of accounting education (Albrecht & Sack, 2000). The monograph claimed that enrollment in accounting programs declined because of various problems, including the 150-hour requirement and accounting education may not survive the crisis without swift actions to correct them. The authors offered various recommendations, including changing the current structure of accounting programs in addition to modifying the curriculum content, implementing different pedagogy, and combining degree programs (Albrecht & Sack, 2000). The Albrecht & Sack monograph seems to have echoed with even greater urgency what many authors and studies advocated as the 21st century approached—that accounting education had not kept up with the times and drastic changes were needed in order to reverse falling enrollments. An attempt to produce the ideal business graduate, it seemed, was more important than the ideal accountant and auditor. Current State of Accounting and the Future of Accounting Education Less than two years after issuance of the Albrecht & Sack monograph, financial disasters included audit failures at major corporations like Enron and WorldCom. A 52 resulting crisis in the accounting profession led the public to question the credibility of financial statement audits. Consequently, the Sarbanes-Oxley Act of 2002 mandated many changes in regulation of auditors including restrictions on the type of consulting CPAs might perform for audit clients (Whittington & Pany, 2006). As previously noted,' many of the larger accounting firms had been in the process of re-inventing themselves as "professional services" firms rather than public accounting firms. This change in direction was promoted by many organized accounting groups in addition to the large firms. Controversy over a potential big firm bias in the findings of the Albrecht & Sack monograph prompted several subsequent studies that attempted to validate the findings of that report. An article by Burnett (2003) focused on smaller CPA firms and employers of accounting graduates as compared to large firms. Generally, the results were similar to the monograph findings except that respondents indicated satisfaction with accounting education. Another study by Anderson and Stanny (2003) questioned whether accounting education could be as bad as what was stated in the monograph and found little support from regional and local accounting practitioners for implementing some of the changes that had been proposed in the monograph. A survey of accounting and non-accounting majors at a Southern university pertaining to the 150-hour requirement, explained that certain findings conflicted with those of Albrecht and Sack. Francisco, (2003) found that long-term salary prospects, prestige of the accounting profession, and job security ranked high when selecting accounting as a major. Additionally, the 150-hour requirement has not had a negative impact on students choosing accounting as a major, nor have related financial reasons pertaining to the additional time spent in school. 53 In addition to the claims of Albrecht and Sack in the monograph, criticism regarding the 150-hour requirement came from other authors (Abels, 2004; McCrarry, 2001; Shafer, Kunkel, & Hansen, 2003) who suggested that there was a dramatic decline in the number of accounting majors and CPA exam candidates, although passing rates have increased significantly since implementation. However, Boone and Coe (2002) asserted that much of the criticism attributing the decline in accounting graduates to the 150-hour requirement was based more on anecdotal evidence than on verifiable fact. While Boone and Coe did find that the 150-hour requirement contributed to a decline of accounting graduates in the 1990s, 38% of the total decline was attributed to that requirement with the other 62% from other unexplained factors. Strong hiring of accounting majors has recently helped to boost enrollment in accounting programs by 19% for the four years 2000-2004 (American Institute of Certified Public Accountants, 2005). Other articles have listed accounting as the top degree in demand by employers and one of the best backgrounds to have for a jobseeking graduate (Karr, 2005; Pope, 2004). Given financial debacles and pressures at the beginning of the new millennium, there was an uneasy anticipation that accounting education might not survive as we know it today. What appears to have happened is nearly the opposite. Renewed interest in accounting knowledge and expertise to shore up weak internal control systems in corporate America has meant unprecedented demand for these graduates. Ironically, negative publicity that followed the audit failures of just a few years ago also seems to have breathed new life into a struggling profession trying to reinvent itself. Accounting has been rediscovered and as noted by Reckers (2006) "it is unfortunate that it required financial disasters to achieve this recognition" (p. 40). 54 There appears to be renewed appreciation and demand for the kinds of things that accountants do and for accounting education contributing to those skills. In 2004, there was a 17% increase in the number of new hires by CPA firms compared to 2003 with over 75% of those new graduates assigned to accounting and auditing, while less than 3% were assigned to technology and consulting engagements (American Institute of Certified Public Accountants, 2005). Resurgence of interest by students in accounting education summons temperance with respect to the underlying curriculum issues. Reckers (2006) contemplates curriculum conformity versus flexibility in accounting education and questions the respective roles of higher education, practical experience, and continuing professional development for public accountants. What seems apparent is the need for well-reasoned incremental changes in curriculum based upon systematic research that recognizes the implicit social responsibility that educators have in educating CPAs. Indeed, there is recognition that many changes in accounting education are yet to come and that there will always be a need to evolve and meet the demands of a dynamic business environment, however, the future appears to be one of cautious optimism for accounting education. Chapter Summary Literature relating to the historical and current structure of accounting curriculum in higher education was reviewed in this chapter. The review included a brief overview of the demand for educated accountants and auditors prompting the development of formal collegiate education for CPAs. An extensive review of the literature and research relating to accounting educational curriculum and the 150-hour requirement was performed. Sources for the 55 review included professional journals, books, research reports, white papers, dissertations, research papers, professional association publications and professional website resources. Reference materials were located via various electronic search engines relating to scholarly papers and other research. Resources were also found at the Chester Fritz Library at the University of North Dakota (UND), and the Kiehle Library at the University of Minnesota, Crookston (UMC) campus. Interlibrary loans through the UMC library were utilized extensively in order to access books and articles at other major libraries and databases. A conceptual framework for accounting education was considered by exploring evolutionary trends influencing the structure and content of accounting programs. Education for accountants has been predominantly influenced by two groups: Practitioners and their professional organization, the AICPA, and educators represented by the AAA (Flaherty, 1979; Novin, Fetyo, & Tucker, 1997; Rumble, 1998). Landmark commissions, committees, and resulting studies that transpired from both of these groups were examined along with input from other researchers in the field. Limited prescribed accounting coursework affords considerable flexibility to programs of study but it also results in a lack of clarity and direction with respect to curriculum content. The profession recognizes the need for an evolving CBOK influencing core accounting curriculum at the undergraduate level with considerable flexibility for varying graduate programs of study meeting the 150-hour requirement. A pragmatic approach embracing a flexible and dynamic curriculum that responds to practice tempered by theoretical underpinnings with a trend towards increased formal education and life-long learning emerges as the predominant theme shaping the conceptual framework for accounting 56 education. Such learning includes liberal studies supporting the notion of a broadly educated generalist that can adapt to the needs of industry rather than extensive specialization within the formal educational structure. Regardless of this framework, stakeholder debate over accounting education continues and is fueled by a 150-hour requirement which was initially passed for membership in the AICPA and later mandated by most state legislatures as a matter of law. The history and merit of the 150-hour requirement was considered throughout the review by examining many of the popular supporters and critics of that mandate. Debate includes the attractiveness of a postgraduate education for accountants along with issues such as the breadth, depth, and specialized knowledge that should be part of accounting education. The requirement's effect on accounting enrollment was considered, in addition to shifts in thinking regarding the importance of content knowledge versus development of core competencies for entry-level accountants. Closely related to the formal educational process is the complementary role that experience has played in the development of public accounting professionals. Controversy as to the appropriate amount and type of experience has resulted in wide ranging requirements among state jurisdictions. Experience requirements prior to licensure were reviewed and this examination revealed that jurisdictions vary considerably for entry-level public accountants. No definitive answer or consensus about experience emerges given the wide range of opinion and debate even though there appears to be a need for more uniform standards facilitating reciprocity and practice in interstate commerce. 57 The review concludes by discussing recent developments in public accounting while alluding to potential harm that can result from poorly developed or defective changes that might adversely affect stability and integrity of underlying educational programs. Increased demand for skills and knowledge of current graduates in accounting was noted along with a recent resurgence in accounting as a popular collegiate discipline. Recognition of accounting as a viable field of study serves to temper rapid haphazard modifications while advocating for well-reasoned incremental transformation of accounting curriculum. 58 CHAPTER III METHODOLOGY In this chapter, methodology for the study is summarized. Purpose of the Study The purpose of this study was to compare curricular preferences of CPAs practicing public accounting with accounting educators who are preparing students for entry into practice. Acquiring information via an expert opinion survey from both stakeholder groups—practitioners and educators—was deemed appropriate in addressing concerns of curriculum developers and policy makers who deliberate academic studies and work experience for entry level accountants. The specific preferences examined included program structure and time requirements with consideration given to the 150-hour requirement, program specialization, experiential requirements for licensure, appropriateness of subjects/courses at the undergraduate and graduate level, and the level of authority to prescribe accounting curriculum by certain stakeholder groups. Information from this study will add to and update existing knowledge used by stakeholders involved in development, implementation, and evaluation of educational programs in accountancy. Survey Instrumentation Several survey instruments relating to the topic of accounting education and the 150-hour requirement were examined and none of those instruments were found to be 59 acceptable for the study at hand without significant modification. As a result, a unique instrument was developed to address the specific questions proposed in this study. In addition to a separate section dealing with demographic and background information of respondents, a five-part questionnaire was developed to collect data for answering the five major research questions: 1. To what extent do public practitioner and educator preferences differ regarding time commitments and program structures when (a) there is no 150-hour educational requirement for certification and licensure, and (b) there is a 150-hour educational requirement for certification and licensure? 2. To what extent do public practitioner and educator preferences differ regarding the type and amount of curricular specialization within the formal educational structure? 3. To what extent do public practitioner and educator preferences differ regarding the amount and type of work experience that should precede a license to practice public accounting? 4. To what extent do public practitioner and educator preferences differ as to (a) accounting subjects or courses most appropriate in comprising a common core for all accounting students at the undergraduate level of study and (b) accounting subjects or courses most appropriate to graduate level accounting students following an undergraduate common core? 5. To what extent do public practitioner and educator preferences differ as to the level of authority that certain stakeholders should have in prescribing accounting curriculum? 60 Parts one through three of the questionnaire contained two questions each and asked participants to select one answer. Part four used a five-point Likert scale to collect quantitative data designed to measure appropriateness of accounting subjects and courses at the undergraduate and graduate levels. The five-point scale ranged from 1 which represented not appropriate through 5 which represented very appropriate. Part five also used a five point Likert scale where 1 represented little authority and 5 much authority. Part I- Time Commitments and Program Structure Part I of this study asked participants to answer two questions based on their views of appropriate time commitments and educational structure for accounting programs preparing entry-level accountants. Five different categories ranging from four to six years of full-time study were used because these categories represent commonly debated time and program structures as noted in the literature. Part II- Type and Amount of Specialization Part II asked participants to answer two questions based on their views of appropriate specialization areas, if any, and time commitment for that choice of specialization area in a formal educational program. The notion of specialization within the formal educational structure has long been debated and participants were given choices ranging from nothing to more than three years of full-time study along with five different areas of potential specialization. Part III - Experience Requirements In Part III of this study, participants were asked to answer two questions based on their views regarding the amount and type of experience needed in accounting subsequent to formal education but prior to obtaining a license to practice. While licensure follows 61 formal education and passing of the Uniform CPA Examination in every jurisdiction, experiential requirements vary greatly among the states and have never been uniformly established. Part IV- Accounting Subjects and Courses Part IV requested participants to rate course topics that most appropriately constitute core accounting subject matter in a common body of knowledge that all accounting majors should obtain beyond the elementary principles courses. This section also asked participants to rate subject matter and courses that most appropriately comprise topics for post-baccalaureate or graduate level study by accounting majors following the undergraduate common accounting core. Part V-Authority to Prescribe Curriculum In Part V, participants were asked to select a level of authority for five stakeholder groups identified in the literature as influential in accounting curriculum. Four groups besides the participant's own professional group were included among the stakeholder categories. Demographic and Background Information A demographic section of this questionnaire was designed to provide a profile of respondents by collecting information that contributed to a holistic understanding of preferences relating to accounting curriculum in general. Pertinent information has been summarized in the data analysis section of the study. The demographic section collected data for measuring: • Highest educational level achieved. • Rank or level of current employment. 62 • Years of experience in current professional role. • Area of specialization, if any. • Employment status—full vs. part-time. • Size of organization or department where employed. • Number of students advised/supervised or entry-level accountants supervised. • Age of respondent. • Gender of respondent. Pilot Study Prior to mailing the questionnaire, a pilot study was conducted to obtain information regarding the credibility and validity of the survey instrument. Three accounting educators and three public accounting practitioners were asked to provide feedback regarding the questionnaire in an attempt at gathering information as to overall clarity, relevance, and wording needed to assist in providing useful information for answering the research questions (Gustafson, 2004). Responses from all three educators and two of the practitioners were received and their comments and suggestions were used in refining the final instrument. Target Population and Data Collection This study focused on two groups identified by Flaherty (1979) and Rumble (1998) as most important in determining accounting curriculum—accounting educators and public accounting practitioners. Selected individuals in both groups from an eleven state Midwest region previously identified were mailed the questionnaire. The accounting educator group was selected from Prentice Hall's Accounting Faculty Directory 2006-2007 (Hasselback, 2006). From that group, all 187 Accounting Chairpersons of 63 accounting programs at public and private four-year colleges and universities in the 11 state region were mailed a cover letter with the questionnaire and asked to personally complete the survey or forward the survey to a person in their accounting department most interested and knowledgeable regarding educational preparation and accounting curriculum structure. The public accounting practitioner group was selected from CPA firms that are engaged in the practice of public accounting and enrolled in an approved practicemonitoring program with the American Institute of Certified Public Accountants (AICPA). Any firm performing services that includes issuance of reports purporting to be in accordance with AICPA professional standards is required to be enrolled in a practicemonitoring program. From that group, 5,479 names of firms in the eleven state region of the United States were acquired from the AICPA website. A random sample of 1,000 CPA firms were then selected and managing partners of those firms were mailed a cover letter with the questionnaire and asked to personally complete the survey or give the survey to a person in their firm most interested and knowledgeable regarding educational preparation for new entry-level personnel. Following the first mailing, a follow-up reminder was mailed to non-respondents at the end of a three-week period. Survey instruments were coded by number in order to provide for the follow-up reminder. Coding was destroyed after the surveys were collected and the research was completed to ensure confidentiality. Institutional Review Board (IRB) approval was obtained prior to mailing questionnaires. In order to protect the privacy of respondents, numerical coding used for follow-up reminders was destroyed and any information kept on computer hard drive was 64 erased. Additionally, data from the survey will be stored long-term off-line in a separate and secure storage device and will eventually be destroyed after keeping it for the minimum time required by the IRB. Data Analysis Data from survey responses were analyzed using descriptive as well as inferential statistics. Statistical calculations were performed on a personal computer using version 13.0 of Statistical Package for the Social Sciences (SPSS). Descriptive summaries of demographic information along with descriptive and inferential records related to analysis of data for dependent variables were reported. Chi square tests of association were conducted on categorical data collected from the survey results for the first three research questions. Contingency tables were used to report frequency of responses and related proportions for each dependent variable as classified by factor level. Tests of independence were calculated to determine and compare differences between practitioner and educator preferences for each question in Parts I-III. Significant findings from the non-parametric data analysis were reported. Multivariate Analysis of Variance (MANOVA) was used to determine the effect of one categorical independent variable with two levels (accounting educators and accounting practitioners) on groups of quantitative dependent variables from Parts IV and V of the questionnaire. Questions four and five were concerned with subject/course titles for undergraduates, subject/course titles for graduate students, and levels of authority by stakeholder group. Multivariate tests of significance were performed with respect to the combined dependent variable for each question category. Follow-up univariate tests using Analysis of Variance (ANOVA) were interpreted for F ratios using the Bonferroni 65 adjustment to hold the Type I error rate constant (Mertler & Vanatta, 2005). Tables that display means (M), standard deviations (SD), F ratios, and significance levels (p values) were constructed for reporting purposes. 66 CHAPTER IV RESULTS In this chapter, data are summarized from survey responses that were sent to two groups of accounting experts—accounting practitioners and accounting educators— located in an eleven state Midwest region of the United States. Given the prominent historical influence that practitioners and educators have wielded with respect to accounting education, it was deemed important to gather data that could be used for comparative purposes. Five specific questions were previously identified as important to this study and these questions prompted development of survey instruments (Appendices B and D) that included five parts and a demographic section. Response Rates Surveys were mailed to 1,000 Managing Partners based on a random sample from accounting firms located in the Midwest region. Twelve of these surveys were returned by the postal service as undeliverable. After three weeks, a reminder card was sent to practitioners not responding. There were a total of 245 completed surveys from this practitioner group for a return rate of 24.5% (Table 1). Accounting Chairpersons from baccalaureate and higher colleges and universities in the Midwest region were selected from a directory compiled by Hasselback (2006) resulting in 187 mailings to those educators. After three weeks, a reminder card was sent to educators not responding. There were a total of 51 completed surveys for a return rate of 27.3% (Table 1) from this 67 group. The entire mailing of 1,187 survey questionnaires resulted in 296 responses for a total response rate of 25.0% (Table 1). Table 1. Response Rates of Practitioner and Educator Groups. Practitioner Educator Total 1,000 187 1,187 Number of responses 245 51 296 % responding 24.5 27.3 25.0 Number of surveys Data Screening Upon examination of the responses, it was found that there was limited missing data and all of the responding surveys were used for analysis purposes. Cells that were missing data were left blank and excluded from the analysis while the remaining survey data was used. Data independence was achieved via random sampling design for the practitioner group and by selection of all accounting chairs in the educator category. Demographic Data Background information concerning participants is presented in Tables 2 through 4. Nine demographic questions deemed relevant to the study were asked of both the practitioner and educator groups. Of the accounting practitioners responding, 235 (95.9%) indicated that they were partners or owners of the firm and the same was true for those reporting their employment as full-time. The practitioner group was predominantly male with 198 (80.8%) responding in that fashion and 116 (47.3%) indicated their age category at 50-59. 68 Table 2. Demographic Information—Job Title/Rank, Gender, Age, and Education. Practitioners N % N Educators % 235 95.9 12 23.5 Principal/Professor 3 1.2 19 37.3 Manager/Associate Prof. 4 1.6 11 21.6 Senior/Assistant Prof. 2 .8 9 17.6 Other/Other 1 .4 0 0.0 198 80.8 42 82.4 47 19.2 8 15.7 20-29 5 2.0 1 2.0 30-39 14 5.7 2 3.9 40-49 58 23.7 8 15.7 50-59 116 47.3 30 58.8 52 21.2 9 17.6 Doctorate 3 1.2 36 70.6 Master's 50 20.4 13 25.5 188 76.7 2 3.9 4 1.6 0 0.0 Job Title/Rank Partner/Administrator Gender Male Female Age category 60 or over Education achieved Bachelor's Other 69 Baccalaureate degrees accounted for 188 (76.7%) of this group with 50 (20.4%) achieving a master's degree. The vast majority of 192 (78.4%), had more than twenty years of experience and 101 (41.2%) claimed taxation as their area of specialization. Smaller firms of less than three accounting professionals were represented by 125 (51.0%) of the responding practitioners. The accounting practitioners were dominated by a group of 138 (56.3%) who reported supervising one to five people in their firm. Of the educators, 12 (23.5%) chose the category of Administrator with Rank while 19 (37.3%), 11 (21.6%), and nine (17.6%) selected Professor, Associate Professor, and Assistant Professor respectively. The educators were predominantly male with 42 (82.4%) responding as such and 30 (58.8%) indicating their age category at 50-59. Doctorate education was most popular among educator respondents with 36 (70.6%) achieving terminal degree status and 13 (25.5%) noting the master's degree as the highest level of education. A majority of 32 (62.7%) said they had more than twenty years of experience and 18 (35.3%) claimed financial accounting and reporting as their area of specialization. All 51 (100.0%) of the educators responded that they were employed as full-time status of at least nine months per year. The majority of educators worked in departments ranging from three-five (29.4%), six-ten (31.4%), and eleven to twenty (21.6%o) accounting faculty, and 28 (54.9%) advised more than twenty accounting majors per year. Research Findings Research Question 1 Question 1 pertained to preferred educational time commitments and program structures of each group—practitioners and educators—in situations when there is no 70 Table 3. Demographic Information—•Years Experience, Specialization, and Employment Status. Practitioners N Educators % N % Years of experience 0-five 5 2.0 4 7.8 Six-ten 6 2.4 3 5.9 42 17.1 12 23.5 192 78.4 32 62.7 Financial Accounting 15 6.1 18 35.3 Management/Cost 13 5.3 5 9.8 Audit and Assurance 21 8.6 3 5.9 Accounting systems 3 1.2 0 0.0 101 41.2 10 19.6 7 2.9 6 11.8 No specialty 55 22.4 1 2.0 Multiple specialties 28 11.4 8 15.7 Full-time 235 95.9 51 100.0 Part-time 9 3.7 0 0.0 Eleven-twenty More than twenty Specialization Taxation Other Specialty Employment status 71 Table 4. Demographic Information—Number of Professionals in Firm or Department, People Supervised/Students Advised. Practitioners N % Educators N % Number of professionals 125 51.0 6 11.8 Three-five 51 20.8 15 29.4 Six-ten 31 12.7 16 31.4 Eleven-twenty 26 10.6 11 21.6 Over twenty 11 4.5 3 5.9 27 11.0 8 15.7 One-five 138 56.3 2 3.9 Six-ten 42 17.1 4 7.8 Eleven-twenty 24 9.8 9 17.6 More than twenty 14 5.7 28 54.9 Less than three People supervised/advised None 150-hour requirement and when there is a 150-hour educational requirement. Respondents from each group were asked to select among five different categories of educational structure for each situation. Table 5 is a 5x2 contingency table reporting frequency of responses and related proportions (percentages) for each educational structure by group in the case when there is no 150-hour requirement while Table 6, a similar contingency table, reports frequency of responses and related proportions in the case when there is a 150-hour requirement. 72 Table 5. Preferences When There is no 150-hour Requirement. Educational Structure Practitioners Educators Four years, Bachelors in accounting 142 58.7% 26 52.0% Five years, Bachelors in accounting 58 24.0% 7 14.0% Five years, Bachelors integrated with MA in accounting 26 10.7% 15 30.0% Six years, Bachelors plus MA in accounting 15 6.2% 2 4.0% Six years, Bachelors liberal arts plus MA accounting 1 .4% 0 0% Practitioners Educators Four years, Bachelors in accounting 63 26.0% 6 12.2% Five years, Bachelors in accounting 109 45.0% 12 24.5% Five years, Bachelors integrated with MA in accounting 56 23.1% 30 61.2% Six years, Bachelors plus MA in accounting 12 5.0% 1 2.0% Six years, Bachelors liberal arts plus MA accounting 2 .8% 0 0% Table 6. Preferences When There is a 150-hour Requirement. Educational Structure 73 A chi-square (X2) test of association was chosen to analyze observed data in both Tables 5 and 6 to determine if there were differences between practitioners and educators regarding the five structural categories when there is no 150-hour requirement (Table 5) and when there is a 150-hour requirement (Table 6). An alpha level of .05 was selected for the test. A chi-square test of association was calculated comparing preferences for educational structure by accounting practitioners and educators when there is no 150hour requirement. A significant association was found (X2(4) = 13.664,p = .008). Table 5 indicates that 58.7% of practitioners versus 52.0% of educators favor a four-year bachelors degree when there is no 150-hour requirement in place. However, 30.0% of educators compared to only 10.7% for practitioners would favor a five-year baccalaureate integrated with a master's in accounting under that same scenario. A chi-square test of association was calculated comparing the preferences of educational structure for accounting practitioners and educators when there is a 150-hour requirement. A significant interaction was found (X2(4) = 28.586,/? < .001). Practitioners prefer (45.0%) a five-year baccalaureate program in accounting and educators highly favor (61.2%) an integrated five-year baccalaureate plus master's degree structure when there is a 150-hour requirement while 26.0% of practitioners versus only 12.2% of educators favor a four-year baccalaureate degree under that scenario. Research Question 2 Question 2 was designed to examine preferences of accounting practitioners and accounting educators regarding the appropriate type and amount of curricular specialization within the formal educational structure. Samples from each group— 74 practitioners and educators—were asked to select among five types of specialization and five categories of time commitments devoted to those specialties. Table 7 is a 5x2 contingency table reporting frequency of responses and related proportions (percentages) for each specialization area by practitioner and educator group while Table 8, a similar contingency table, reports frequency of responses and related proportions for time commitments to a specialization area. A chi-square test of association was calculated comparing the preferences for type of specialization between accounting practitioners and educators. A significant association was found (X2(4) = 11.133,/? = .025). Table 7. Preferences for Type of Specialization Area. Educational Structure Practitioners Educators None—no specialization 114 46.9% 36 70.6% Accounting systems 11 4.5% 1 2.0% Auditing and assurance 31 12.8% 5 9.8% Taxation 17 7.0% 0 0% Financial accounting and reporting 70 28.8% 9 17.6% Type of Specialization 75 Table 8. Preferences as to Time Commitment for Specialization. Time for Specialization Practitioners Educators None—no time commitment 104 43.7% One year or less 44 18.5% 7 14.3% Two years or less 71 29.8% 8 16.3% Three years 10 4.2% 2 4.1% More than three years 9 3.8% 1 2.0% 31 63.3% Practitioners preferred no specialization (46.9%) while a large majority (70.6%) of educators chose no specialization over certain other specialty areas within the formal educational structure of accounting programs (Table 7). The most popular area of specialization by both practitioners and educators was financial accounting and reporting at 28.8% and 17.6% respectively. A chi-square test of association was calculated comparing the preferences of accounting practitioners and educators as to time commitments for specialization within a formal educational structure (Table 8). No significant relationship was found (X2(A) = 6.759, p = .149). The preferences of practitioners and educators appear to be independent events, even though 43.7% of practitioners and 63.3% of educators chose no time commitment for specialization within the formal educational process. 76 Research Question 3 Question 3 examined preferences of accounting practitioners and accounting educators regarding the appropriate amount and type of work experience that should precede a license to practice public accounting. Participants from each group— practitioners and educators—were asked to select among five amounts and types of experience following the formal educational process. Table 9 is a 5x2 contingency table reporting frequency of responses and related proportions (percentages) for experience preferences by practitioner and educator group while Table 10, a similar contingency table, reports frequency of responses and related proportions by type of work experience preference. A chi-square test of association was calculated comparing the preferences for amount of experience (Table 9) prior to licensure between accounting practitioners and educators. A significant association was found (Z2(4) - 29.316, p < .001). A majority of practitioners and educators preferred two years of experience prior to licensure at 58.4% and 51.0% respectively (Table 9). Next most popular for practitioners was three years of experience (26.1%) while educators favored less experience and chose one year as their second choice at 39.2%. A chi-square test of association was calculated comparing the preferences for type of experience (Table 10) prior to licensure between accounting practitioners and educators. A significant interaction was found (X (4) = 22.428,/? < .001). Practitioners (57.6%) preferred public accounting experience of all kinds over other types of experience whereas educators favored public accounting experience of all kinds (31.4%) 77 Table 9. Preferences for Amount of Experience Prior to Licensure. Amount of Experience Practitioners Educators No experience necessary 1 .4% 0 .0% No experience if 150-hours of education 3 1.2% 3 5.9% One year of experience 34 13.9% 20 39.2% Two years of experience 143 58.4% 26 51.0% Three years of experience 64 26.1% 2 3.9% Table 10. Preferences for Type of Experience Prior to Licensure. Type of Experience Practitioners Educators Public accounting—accounting and assurance only 45 18.4% 9 17.6% Public accounting—any type of public accounting 141 57.6% 16 31.4% Public or private accounting of any kind 14 5.7% 9 17.6% Public, private or governmental accounting 25 10.2% 5 9.8% Public, private, governmental, or academic 20 8.2% 12 23.5% 78 but were evenly split at 17.6% between accounting and assurance services versus public or private accounting experience of any kind (Table 10). A summary of the chi-square (X2) tests of association related to research questions 1 through 3 appears in Table 11. Table 11. Chi-Square (X) Values With Degrees of Freedom (df) and Significance Levels (p) for Research Questions 1-3. X2 df la. Educational structure—no 150 requirement 13.664 4 .008* lb. Educational structure—150 requirement 28.586 4 ) educators prefer three years of experience and 20 (39.2%) educators prefer one year of experience preceding licensure. 92 • Regarding type of experience prior to licensure, 141 (57.6%) practitioners chose any type of public accounting as the favorite, and 16 (31.4%) educators also chose that same category. 4. To what extent do public practitioner and educator preferences differ as to (a) accounting subjects or courses most appropriate in comprising a common core for all accounting students at the undergraduate level of study and (b) accounting subjects or courses most appropriate to graduate level accounting students following an undergraduate common core? Findings related to part (a) of question 4 are: • A significant finding between practitioners and educators indicated differences among undergraduate course rankings of 14 subject/course categories commonly found in accounting programs. • Significant findings indicate differences at the undergraduate level between practitioners and educators specifically related to Cost Accounting, Auditing, Accounting Theory, Governmental/Fund Accounting, and Advanced Information Systems. Findings related to part (b) of question 4 are: • An overall significant finding between practitioners and educators indicated differences among graduate course rankings of 14 subject/course categories commonly found in accounting programs. 5. To what extent do public practitioner and educator preferences differ as to the level of authority that certain stakeholders should have in prescribing accounting curriculum? 93 Findings related to question 5 are: • An overall significant finding emerged indicating differences between practitioners and educators regarding appropriate authority to prescribe curriculum among five stakeholder groups that included accounting educators, accounting practitioners, accountants in industry, State boards, and accrediting agencies. • There are significant differences between practitioners and educators concerning the level of authority in prescribing curriculum for accounting educators, accounting practitioners, State boards of accountancy (NASBA), and accrediting agencies such as AACSB. Conclusions and Discussion Conclusions Conclusions are best developed from evidence gained through research. The findings outlined above represent a summary of evidence that supports several concluding implications from the study. 1. The 150-hour requirement affects the time commitment and kind of educational structure preferred by practitioners and educators. When presented with no 150-hour requirement, a majority from both groups chose a four-year bachelor's degree in accounting over other program structures. However, when given a 150-hour requirement, the practitioners preferred a five-year bachelor's degree in accounting while educators chose an integrated five-year bachelor/masters type of program. 94 2. Practitioners and educators do not support specialization within the formal educational structure. A clear majority of educators favored no specialization within the educational format while practitioners chose no specialization over other alternatives but at a lower rate than practitioners. 3. Majorities from both groups—practitioners and educators—prefer two years of work experience prior to licensure for entry-level accountants. A majority of practitioners chose all types of public accounting as the preferred type of experience while educators were more inclined to choose other categories of experience in addition to public accounting. 4. There are differences between practitioners and educators as to appropriate subject/course offerings at both the undergraduate and graduate level. However, while specific differences can be identified at the undergraduate level of education, findings are more ambiguous at the graduate level. 5. There are differences between practitioners and educators as to the level of authority that certain stakeholder groups should have in prescribing accounting curriculum. Each group—practitioners and educators—ranked themselves as highest among four other stakeholder groups regarding level of authority to prescribe curriculum. Discussion Acknowledging that additional higher education was desirable for CPAs, most states have passed legislation implementing a 150-hour requirement as a matter of law. However, legislative mandates have done little to quiet debate surrounding the structure and content of accounting programs. With little or no comparative information regarding 95 stakeholder preferences since widespread implementation of the 150-hour requirement, this study adds to the knowledge base in that area. Findings from this study indicate that the amount of required education for certification and licensure influences how practitioners and educators view time commitments and program structure at universities and that those views differ between the two groups. First, given a scenario of no 150-hour requirement, a majority from both groups selected a four-year bachelor's degree in accounting as the preferred educational structure. Of those not choosing that structure, the next choice among practitioners was a five-year bachelor's degree while the educators preferred a five-year integration of the bachelor's and master's degrees. Second, when the scenario changes to a 150-hour requirement, the practitioner's first choice was a five-year bachelor's degree in accounting whereas the educators clearly chose an integrated bachelor/masters structure over five years. Practitioners and educators are influenced by the amount of required education and each group has different opinions about the educational structure and time commitment that best meets those requirements. Ideally, reason would dictate that additional educational requirements help to protect the public from incompetent practitioners by increasing quality while simultaneously adding to the professional status of public accounting. However, given findings from this study, one might query whether CPAs recognize much value in additional education other than to meet the mandated requirements. Such a conclusion supports assertions of earlier research and promotes an unsettling perspective among those advocating additional education for more profound reasons than merely meeting legislative requirements. No doubt, there is partiality from both groups given predominant educational levels of an undergraduate degree for practitioners and a 96 graduate degree for educators. While the accounting profession has traditionally required a four-year undergraduate degree for practice, one might assert that the 150-hour requirement is an intermediary step leading to a graduate degree for the next generation of CPAs. As more practitioners meet the mandated requirement via graduate education, the notion of a required master's degree will evolve as the accepted educational prerequisite for public accounting. Although no such outright acceptance exists at this time, there is reason to believe that it is not far off. Acceptance of a master's degree for public practice will solidify the educational format in a way that meets the long-term strategic intent of the 150-hour requirement. The generalist versus specialist debate has continued over the years with most literature supporting liberal arts followed by accounting education (Ferrara, 1975; Flaherty, 1979) while largely flouting any clear suggestion as to amount and level of education dedicated to specialization. The debate has not disappeared completely, but the trend appears to be in favor of educating the accountant as generalist. This study finds that both practitioners and educators continue to agree with the notion of educating the generalist accountant as was evident when the 150-hour requirement passed. Educators overwhelmingly indicated their support for no specialization within the academic structure, and practitioners, while less adamant, have also chosen no specialty over other categories of concentration. Breadth of knowledge seems to be favored over depth of specific content knowledge during the student's academic experience. Most stakeholders would agree that specialists are needed within the actual practice of accounting. However, there is little evidence supporting specialization during the formal educational process. The pragmatic accountant concedes that specialization is 97 not easily attained given the time constraints of formal education. While a few stakeholders might advocate for specialization within the extra year of study that the 150hour requirement affords, the great majority understand that this is unrealistic and would result, at best, in superficial coverage of what specialists really need for practice. In short, the education of specialists for accountancy cannot be sensibly produced in five or even six years of college. Stakeholders have accepted an experience requirement following formal education but preceding certification and licensure as an important part of the accounting curriculum for CPAs. While there have been calls for elimination of experience in favor of increased formal education (Commission on Standards, 1956), the requirements have remained entrenched. Initially, CPA firms relied upon apprenticeships to train young recruits because of limited accounting courses at the collegiate level as well as limited college access for most people. Responding to these limitations, early accountancy laws included experience requirements out of necessity (American Institute of Certified Public Accountants, 1969). However, there is ongoing disagreement over the length of time, type, and quality, of experience that should be required. Findings from this study support the continuation of experience requirements as part of the learning process preceding licensure as CPAs. A clear majority of both practitioners and educators prefer two years of experience with second choices of three years and one year from each group respectively. Additionally, a majority of practitioners prefer public accounting to other types of experience while educators chose public accounting as the first choice but are open to accepting other types of accounting experience as viable alternatives. Both practitioners and educators value experience by a 98 margin that offers little support for the notion of substituting additional education in lieu of experience. Most likely, accountants view this initial work experience as part of the educational process and implicit curriculum that contributes to the continuation of valued relationships between practitioners and academics. Indeed, the idea of relevant experience complementing education in a way that promotes intellectual growth asserted by Dewey decades ago appears to be embraced by 21 st century CPAs. Since widespread acceptance and implementation of the 150-hour requirement, there has been little research supporting what the core curriculum should look like. Most 150-hour accounting programs were developed with flexibility for those institutions that would be unable to garner support for graduate programs. According to Wheeler (1991), such "tinkering with the accounting curriculum" (p. 135) without real structural changes would stymie further developments of accounting as a profession. Therefore, given the emerging dual nature of accounting education at both the undergraduate and graduate level and a dearth of evidence based information, a need to investigate this issue became apparent. This study found that significant differences exist between accounting practitioners and educators with regard to what the most appropriate subject/course offerings are. At the undergraduate level, the significant findings include a moderate effect size of .366 with contribution by five specific subject/courses that were individually significant. The five undergraduate subjects found to comprise differences between practitioners and educators at a significance level of .004 or less were Cost Accounting, Auditing, Accounting Theory, Governmental/Fund Accounting, and Advanced Information Systems. Nine other undergraduate subjects were not found to be 99 significant which denotes no major differences between practitioner and educator ratings for those courses. Of the five courses with significant findings, practitioner mean scores were higher for Accounting Theory and Advanced Information Systems than were educators, while educators rated Cost Accounting, Governmental, and Auditing higher than the practicing accountants. Although the differences were significant, the mean scores from both practitioners and educators for Governmental and Advanced Information Systems were rated lower than four on a five point scale indicating that neither group found them to be particularly appropriate (important) at the undergraduate level. Additionally, Auditing was statistically significant but was also rated highly (above four) by both groups. Subject matter viewed through the practitioner lens versus that of the educator will certainly shape perceptions and offers a viable explanation for many of the course preferences. Therefore, perceptions of coursework from the vantage point of either group must be considered when discussing reasons for ratings diversity. Cost Accounting, also known as Managerial Accounting, emphasizes internal management accounting and control and was rated at 3.78 by practitioners and 4.63 by educators. The differences between the group rankings can be explained intuitively given population characteristics. In this study, practitioners were selected from CPA firms rather than industry. CPAs in public practice view Cost Accounting as less appropriate (less important) relative to many of the other subjects due to requirements of their job. Indeed, this finding might be expected given the nature of a professional practice oriented towards external financial accounting with little emphasis on the internal managerial function. Additionally, educators tend to perceive undergraduate education from a 100 broader perspective that prepares accounting majors for a number of vocational career paths and would likely have a higher regard for Cost Accounting because of this role. Practitioners rated the subject matter in Accounting Theory above four on a five point scale and notably higher than educators. From the educator viewpoint, theory is often covered in related class work and many programs do not include this as a separate course. Practitioners, on the other hand, might perceive an Accounting Theory course as highly appropriate because of the conceptual nature of accounting that acknowledges theory as the foundation for practice. Arguably, this finding, while somewhat surprising, maintains the perception that accounting is a conceptual discipline, even by those who practice on a day-to-day basis. Using data from the five point Likert scale rating for question four, selection of courses with mean scores of four or higher provided a convenient and meaningful ranking system. While courses with a mean score of at least four did not all represent significant findings statistically, such a ranking allowed for a representation of the most appropriate subjects and courses at the undergraduate level as selected by both practitioners and educators. The ranked courses in Table 15 provide a synopsis for those charged with developing undergraduate core accounting curriculum or modification of program structures that are acceptable to both practicing accountants as well as academicians. Many undergraduate accounting programs are already inclusive of most of these courses and would require only slight modification to conform to the general template presented in Table 15. 101 Table 15, Rankings of Undergraduate Courses With Mean (M) Ratings of 4.00 or Higher. Practitioners M Educators M 1. Intermediate financial accounting 4.79 4.90 2. Auditing 4.38 4.82 3. Introductory taxation 4.47 4.57 4. Accounting systems 4.29 4.49 5. Accounting ethics 4.28 4.10 6. Advanced financial accounting 4.05 4.12 Undergraduate Subject/Course Table 16. Rankings of Graduate Courses With Mean (M) Ratings of 4.00 or Higher. Practitioners M Educators M 1. Advanced financial accounting 4.36 4.25 2. Advanced taxation 4.26 4.27 3. Accounting research 4.17 4.35 4. Accounting ethics 4.29 4.17 5. Accounting theory 4.10 4.25 6. Auditing 4.02 4.06 Graduate Subject/Course Upon analysis of data from practitioners and educators, graduate level accounting education was also found to be statistically significant but with a much smaller effect size 102 (.098) than undergraduate education. There were no specific subject/course findings meeting the .004 significance level while only one course, Accounting Systems, at .024 approached a reliable level of significance. Therefore, it is not possible from this study to discern clear differences between practitioners and educators regarding graduate level curriculum. However, while specific differences were not explicitly identified, potentially useful information emerges from the overall results. There is likely more ambiguity among stakeholders when considering graduate accounting education because, until recently, the common education for practicing accountants was a four-year undergraduate degree. Therefore, the fact that preferences regarding graduate curriculum are harder to delineate might stem from little history of post-graduate education among practitioners. Given this lack of history, it would appear to be more difficult for stakeholders to form firm opinions regarding appropriate courses for graduate level scholarship. Although there are no major differences between practitioners and educators, a viable ranking system for graduate education became apparent by selecting courses with a mean score of 4.0 or higher from the five point Likert rating scale. The ranked courses in Table 16 represent a meaningful starting point as to appropriate subjects for consideration by those involved in curriculum and program development that incorporates graduate study. The questionnaires for undergraduate and graduate level courses were purposefully constructed with 14 identical subject/course categories. Therefore, some overlap between rankings was anticipated since the questions were not intended to be mutually exclusive. Overlap between undergraduate and graduate course preferences did occur with respect to Auditing, Accounting Ethics, and Advanced Accounting indicating 103 that theses particular subjects were important enough for participants to rate highly in both undergraduate and graduate level curriculum. Information presented in Tables 15 and 16 is not intended to represent a complete accounting curriculum at ether the undergraduate or graduate level. Rather, the information includes courses that should be considered for inclusion among the core accounting curriculum at each level. Accounting practitioners and educators rank Auditing as important at both the undergraduate and graduate level. This placement is not surprising given the important early role that independent assurance played in driving certification and licensure requirements of public accountants. Closely tied to the notion of public protection from incompetent practitioners, auditing has been credited as the key service that drove development of accounting as a profession. Auditing is protected by Federal legislation allowing only licensed CPA's to perform such services, therefore, it seems logical to have graduates who are well grounded in this area. High ranking of Auditing in this study can be interpreted as a need to expose students to a core professional service at the undergraduate level while building upon those principles at the graduate level. More than one course in auditing seems appropriate conceptually and appears to be desirable by both accounting groups given the high relative ranking at the undergraduate and graduate level. Respondents viewed Accounting Ethics as an important component of curriculum at both the undergraduate and graduate levels of education. While historically there have been limited offerings of separate courses in Accounting Ethics, most programs have weaved the topic into other courses as stakeholders have come to expect integration of ethics into the collegiate experience. Recently, controversy over ethical failures in 104 accounting has prompted some stakeholder groups like NASBA to press for separate ethics courses in the curriculum (National Association of State Boards of Accountancy, 2005). There is a good chance that many institutions will offer separate courses that cover this topic in the future. According to Mintz & Morris (2008), Texas currently requires an Ethics course for CPA exam candidates and other states are likely to follow. Accounting ethics is a topic that should have considerable emphasis and it seems likely that other jurisdictions will continue to press academic programs into adding the topic as a required separate course. Advanced (financial) Accounting has traditionally been offered for one semester during the final year of study following a full-year sequence of Intermediate (financial) Accounting. Advanced Accounting courses usually focus on business combinations and then consider an assortment of financial topics not found elsewhere in the curriculum. Although this course was ranked highly at both the undergraduate and graduate level, the relative ranking and scores place it much higher at the graduate level. Given the rigorous nature of Advanced Accounting, practitioners and educators considered the content important enough to include the subject at either the undergraduate or graduate level of education. According to respondents, Advanced Accounting appears to be appropriate during either a traditional four-year undergraduate program or, ideally, at the graduate level, if additional study is required. In 2005, a prescriptive curriculum proposal by NASBA created a backlash among many in the academic community who see themselves as the primary authority on curricular matters. Such reaction is not unlike what happened on a larger scale when educators reacted unfavorably to the No Child Left Behind legislation resulting in 105 prescriptive changes being forced on our nation's schools. Given the importance of higher education to the accounting profession, the notion of who should have primary authority over curriculum is a matter of opinion shared by many stakeholder groups. This study addressed the issue of curricular authority by soliciting the views of accounting practitioners and educators who reported interesting but perhaps expected outcomes. This study revealed significant findings in four of five stakeholder groups regarding prescriptive curricular authority. Respondents rated five different stakeholder groups that influence accounting education on a five point Likert scale. Four of the five stakeholder groups—accounting educators, accounting practitioners, State boards, and accrediting agencies—were found to have significantly different levels of authority in prescribing accounting curriculum while accountants in industry were not significant. Not surprisingly, the practitioner and educator groups each ranked themselves highest among the five choices. Accounting educators rated themselves highest with a mean score of 4.55 versus practitioners (3.55), industry accountants (3.41), State boards of accountancy (3.00), and accrediting agencies (2.53). Practitioners favored their own group with a mean score of 4.32 over others including accountants in industry (3.68), accounting educators (3.67), State boards of accountancy (3.49) and accrediting agencies (3.12). While the findings from this study indicate that neither group—practitioners and educators—believe in absolute authoritative control over accounting curriculum, the data represent significant differences. The central message from ranking stakeholder groups might be that while both practitioners and educators want input into important curriculum matters, they recognize that it is necessary to share this responsibility. The future of 106 accounting as a viable profession grounded in theory but responsive to practice implies that curricular responsibility should not be delegated to any one group. The Cohen Commission (American Institute of Certified Public Accountants, 1978) and others (Patten & Williams, 1990) observed a split between practitioners and educators that has existed for many years but were unable to determine the exact cause. While the split has likely stymied or slowed implementation of some key professional initiatives over the years, it is also observed that disagreement can be healthy when it leads to debate rendering rigorous scrutiny that ultimately results in quality improvement. Sterling (1973) noted harmony of curricular content in accounting because of continuous influences of both practice and theory. Ijiri and Sunder (1991) echo this harmonious or "symbiotic relationship" (p. 11) of both education and practice that are dependent on a continual evolutionary process necessary in a good system of education. Therefore, to say that differences between practitioners and educators lead to a defective educative process that reflects poorly on the profession would be a dangerous, and, perhaps, incorrect interpretation. Limitations of the Study Findings from this study are limited to a population in an eleven state area located in a Midwest geographical region of the United States. Therefore, such findings should not be generalized beyond the area represented by this population. Recommendations for Further Study This study has prompted recommendations for additional inquiry that should be considered in the future. The following recommendations were made after considering this study and others that suggest a need for further research: 107 1. Researchers should consider replicating this study among the other six regional (AAA) accounting associations in the United States to confirm and contrast the findings in this study to those geographical regions. 2. Future studies should consider analyzing differences between accountants in industry (rather than public accounting) and educators to determine if there are considerable variations from preferences of participants in this study. 3. This study used quantitative methodology for conducting the research. Future researchers might wish to explore and use qualitative methods for a study with similar questions while employing different methodology to discern if findings and conclusions are similar. 4. This study surveyed educators by using accounting chairpersons to represent that group. Future research might consider using faculty other than chairpersons as the primary respondents. 5. Future studies should consider the delineation of results by accredited versus non-accredited accounting and business programs when surveying educators. Concluding Comments Recognizing the unique and important influence that practitioners and educators exert on accounting curriculum, this study focused on preferential differences between those groups. Additionally, the recent implementation of a 150-hour requirement among all jurisdictions in the selected population resulted in certain curricular issues emerging as timely topics for examination. While numerous significant findings between educators and practitioners became apparent, other complementary information, representing no material differences between these groups was also recognized as important. Critics may 108 question a system that appears to generate continuous controversy fueled by different opinions among stakeholder groups. However, with checks and balances in place, responsible debate can strengthen accounting education by generating a dynamic and responsive curriculum that avoids haphazard change while seeking improvement. Indeed, debate can be useful to the accounting profession when accompanied by evidence-based research that lends clarity to issues contemplated by curriculum developers, policy makers, and other stakeholders, involved in implementation, modification, and evaluation of educational programs in accountancy. 109 APPENDICES Appendix A Cover Letter, Accounting Practitioners May, 2007 Dear Accounting Practitioner: As a practicing CPA and member of the AICPA, your participation and input regarding the education of public accounting professionals is of vital importance. This survey provides you with an opportunity to potentially impact the future direction of accounting education. Research indicates that two groups— accounting practitioners and accounting educators—are most influential in shaping the direction of accounting education and it is the goal of this study to seek input from both groups. The purpose of this study is to determine if there are significant differences in preferences between public accounting practitioners and accounting educators regarding curriculum structure and content, program specialization, and experience requirements preceding licensure. Additionally, preferences related to the appropriateness of course subjects and curriculum content will be examined at both the undergraduate and graduate level. Results from this survey will provide information useful to policy makers involved in educational change. Clarification of practitioner and educator preferences with respect to accounting education will lend insight as to where curriculum developers should focus at academic institutions striving to provide quality education. Information will be useful in advising and meeting the demands of students wishing to acquire certification upon completion of formal accounting education including the 150-hour educational requirement. Additionally, as a doctoral student at the University of North Dakota, this data will be used in my dissertation research. Your responses will be strictly confidential and only summary data from survey respondents will be used for reporting purposes. Statistical analysis of results will be reported in total or in groupings; neither you nor your employer's name will be identified individually. Demographic and other information will be used in aggregate and not individually. The survey includes a code for mailing purposes so that your status can be checked off as you respond. This coding system will be destroyed after the final data is collected. Aggregate data will be stored for a minimum of three years after the data analysis is complete. The responses will remain private except for limited access by the principal investigator and researcher (David Crawford) and any auditors of the Institutional Research Board at the University of North Dakota. Analysis of the data collected for the study will be summarized and a copy of the findings will be available to you upon request. Your participation in this study is voluntary and your name is not required on the survey instrument. Return mailing of a completed survey instrument designates your consent to participate in this study. The survey should take approximately ten minutes to complete and I am requesting a response at your earliest convenience. If you are unable to personally complete the survey, please forward it to someone in your firm most interested and knowledgeable regarding accounting curriculum and educational preparation. A self-addressed postage paid envelope has been provided for your convenience. Please feel free to contact me directly if you have questions regarding this study. Thank you very much for your expert assistance in this research. Researcher's contact information: Principal Investigator: David L. Crawford, CPA, MPA, Ph.D. candidate Telephone: 218-281-8284; Email: dcrawfor(5),mail.crk.urnn.edu Student Advisor: Dr. David Yearwood, Associate Professor, University of North Dakota Telephone: 701-777-3061; Email: Yearwood(q),und.nodak.edu Office of Research and Program Development: Telephone: 701-777-4279 111 Appendix B Survey Questionnaire, Accounting Practitioners code Survey Questionnaire Public Accounting Practitioners Demographic and background information Directions: Please circle only one answer for each question: 1. What is your position or job title? A. B. C. D. E. F. 6. What is your area of specialization? Partner or firm owner Principal Manager Senior Staff Junior Staff Other A. Financial Accounting and Reporting B. Management Advisory and Consulting C. Audit and Assurance D. Accounting Systems E. Taxation F. Other specialty G. No specialty 2. What is your Gender? A. Male B. Female 7. What is your employment status? A. Full-time B. Part-time 3. What is your age category? A. B. C. D. E. 20-29 30-39 40-49 50-59 60 or over 8. How many full-time accounting professionals are employed by your firm? A. B. C. D. E. 4. What is the highest educational level achieved? A. B. C. D. 9. How many people do you supervise on a yearly basis? Doctorate (terminal) degree Master's degree Bachelor's degree Other 5. How many years of experience do you have in public accounting? A. B. C. D. Less than three Three-five Six-ten Eleven-twenty Over twenty A. B. C. D. E. None One-Five Six-ten Eleven-twenty More than twenty 0-five years Six-ten years Eleven-twenty years More than twenty years (continued on back of page) 112 Parti Time Commitments and Program Structure of Accounting Education Directions Part I: Please circle only one answer for each question: 1. Assuming there is no 150-hour educational requirement for certification or licensure, which time commitment and program structure do you believe is most appropriate preceding entry into the public accounting profession? A. Four years - baccalaureate degree in accounting (120-130 hours) B. Five years - baccalaureate degree in accounting (150 hours minimum) C. Five years - four-year baccalaureate degree in accounting integrated with master's degree in accounting D. Six years - four year baccalaureate degree in accounting plus two-year master's degree in accounting E. Six years - four year baccalaureate degree in liberal arts plus two-year master's degree in accounting 2. Assuming there is a 150-hour educational requirement for certification or licensure, which time commitment and program structure do you believe is most appropriate preceding entry into the public accounting profession? A. Four years - baccalaureate degree in accounting (120-130 hours) B. Five years — baccalaureate degree in accounting (150 hours minimum) C. Five years — four year baccalaureate degree in accounting integrated with master's degree in accounting D. Six years - four year baccalaureate degree in accounting plus two-year master's degree in accounting E. Six years - four year baccalaureate degree in liberal arts plus two-year master's degree in accounting 113 Part II Type and Amount of Specialization in Accounting Education Directions Part II; Please circle only one answer for each question: 1. Within the formal educational structure, which specialization area do you believe is most appropriate preceding entry into the public accounting profession? A. B. C. D. E. None—no specialization Accounting systems Auditing and assurance services Taxation Financial accounting and reporting 2. Considering the specialization area you chose in question one, which time commitment devoted to that area do you believe is most appropriate precedin g entry into the public accounting profession? A. B. C. D. E. None—no time commitment for specialization One year or less of full-time study Two years of full-time study Three years of full-time study More than three years of full-time study Part III Experience Requirements Directions Part III: Please circle only one answer for each question: 1. Following formal education, how much work experience do you believe should precede a license to practice public accounting? A. B. C. D. E. No experience necessary No experience necessary if minimum of 150-hours of education achieved One year of experience regardless of education Two years of experience regardless of education Three years of experience regardless of education 2. Following formal education, which type of work experience requirement do you believe should precede a license to practice public accounting? A. B. C. D. E. Public accounting experience only - accounting and assurance experience only Public accounting experience only - any type of public accounting experience Public or private accounting of any kind Public, private or governmental accounting of any kind Public, private, governmental or academic (teaching or research in higher education) accounting experience 114 Part IV Accounting Subjects and Courses Directions Part IV: There are two questions for this part. The first question pertains to undergraduate education and the second pertains to graduate education. After reading each question, please indicate your preference as to appropriateness of the categories related to that question by circling one number from 1 through 5 to the right of each category. The following scale may be useful in making your decision. 1 = Not Appropriate; 2 = Somewhat /^appropriate; 3 = Neutral; 4 = Somewhat Appropriate; 5 = Very Appropriate. (continued on back of page) 115 Part IV (continued) Accounting Subjects and Courses - Undergraduate Common Core 1. How appropriate are the following subject matter and related coursework categories in comprising common core content knowledge (following elementary principles) for all accounting majors at the undergraduate level? Category Subject Matter Financial accounting/reporting Customary Course Title Circle only one answer for each category Not Appropriate Very Appropriate Intermediate Accounting 1 2 3 4 5 Advanced Accounting 1 2 3 4 5 Cost control for decision making Cost/Managerial Accounting 1 2 3 4 5 Accounting information systems Accounting Systems 1 2 3 4 5 Introductory taxation Individual Federal Taxation (Tax I) 1 2 3 4 5 Advanced taxation Business Tax Concepts/Problems (Tax II) 1 2 3 4 5 Auditing principles Auditing 1 2 3 4 5 Assurance services Other Assurance Services 1 2 3 4 5 Accounting Theory 1 2 3 4 5 Research in accounting Accounting Research 1 2 3 4 5 Government/Nonprofit fund accounting Governmental and Nonprofit Accounting 1 2 3 4 5 Ethics in accounting Accounting/Business Ethics 1 2 3 4 5 Internal Auditing 1 2 3 4 5 Advanced Information Systems 1 2 3 4 5 Business combinations and other topics Theory of accounting Internal auditing Information systems 116 Part IV (continued) Accounting Subjects and Courses - Graduate 2. Considering your responses to question 1 of Part IV pertaining to the undergraduate core, how appropriate are the following subject matter and related coursework categories for study by accounting majors at the post-baccalaureate or graduate level (following the undergraduate common core)? Category Subject Matter Financial accounting/reporting Customary Course Title Circle only one answer for each category Not Appropriate Very Appropriate Intermediate Accounting 2 3 4 5 Advanced Accounting 2 3 4 5 Cost control for decision making Cost/Managerial Accounting 2 3 4 5 Accounting information systems Accounting Systems 2 3 4 5 Introductory taxation Individual Federal Taxation (Tax I) 2 3 4 5 Advanced taxation Business Tax Concepts/Problems (Tax II) 2 3 4 5 Auditing principles Auditing 2 3 4 5 Assurance services Other Assurance Services 2 3 4 5 Accounting Theory 2 3 4 5 Research in accounting Accounting Research 2 3 4 5 Government/Nonprofit fund accounting Governmental and Nonprofit Accounting 2 3 4 5 Ethics in accounting Accounting/Business Ethics 2 3 4 5 Internal Auditing 2 3 4 5 Advanced Information Systems 2 3 4 5 Business combinations and other topics Theory of accounting Internal auditing Information systems (continued on back of page) 117 Part V Authority to Prescribe Curriculum Directions Part V: There is only one question for this part. Please indicate your preference relating to that question by circling one number from 1 through 5 to the right of each category. 1. What level of authority should the following stakeholders have in prescribing accounting curriculum? Stakeholder Category Circle only one answer for each category Little Authority Much Authority Accounting educators 1 2 3 4 5 Public accounting practitioners (CPAs) 1 2 3 4 5 Accountants working in industry or government 1 2 3 4 5 State Boards of Accountancy (NASBA) 1 2 3 4 5 Educational accrediting agencies (AACSB) 1 2 3 4 5 Thank you for completing this survey. Please return in the postage-paid envelope provided. 118 Appendix C Cover Letter, Accounting Educators May, 2007 Dear Accounting Educator: As an accounting educator, your participation and input regarding the education of public accounting professionals is of vital importance. This survey provides you with an opportunity to potentially impact the future direction of accounting education. Research indicates that two groups—accounting practitioners and accounting educators—are most influential in shaping the direction of accounting education and it is the goal of this study to seek input from both groups. The purpose of this study is to determine if there are significant differences in preferences between public accounting practitioners and accounting educators regarding curriculum structure and content, program specialization, and experience requirements preceding licensure. Additionally, preferences related to the appropriateness of course subjects and curriculum content will be examined at both the undergraduate and graduate level. Results from this survey will provide information useful to policy makers involved in educational change. Clarification of practitioner and educator preferences with respect to accounting education will lend insight as to where curriculum developers should focus at academic institutions striving to provide quality education. Information will be useful in advising and meeting the demands of students wishing to acquire certification upon completion of formal accounting education including the 150-hour educational requirement. Additionally, as a doctoral student at the University of North Dakota, this data will be used in my dissertation research. Your responses will be strictly confidential and only summary data from survey respondents will be used for reporting purposes. Statistical analysis of results will be reported in total or in groupings; neither you nor your employer's name will be identified individually. Demographic and other information will be used in aggregate and not individually. The survey includes a code for mailing purposes so that your status can be checked off as you respond. This coding system will be destroyed after the final data is collected. Aggregate data will be stored for a minimum of three years after the data analysis is complete. The responses will remain private except for limited access by the principal investigator and researcher (David Crawford) and any auditors of the Institutional Research Board at the University of North Dakota. Analysis of the data collected for the study will be summarized and a copy of the findings will be available to you upon request. Your participation in this study is voluntary and your name is not required on the survey instrument. Return mailing of a completed survey instrument designates your consent to participate in this study. The survey should take approximately ten minutes to complete and I am requesting a response at your earliest convenience. If you are unable to personally complete the survey, please forward it to someone in your department most interested and knowledgeable regarding accounting curriculum and educational preparation. A self-addressed postage paid envelope has been provided for your convenience. Please feel free to contact me directly if you have questions regarding this study. Thank you very much for your expert assistance in this research. Researcher's contact information: Principal Investigator: David L. Crawford, CPA, MPA, Ph.D. candidate Telephone: 218-281-8284; Email: dcrawfor(5>,mail.crk.umn.edu Student Advisor: Dr. David Yearwood, Associate Professor, University of North Dakota Telephone: 701-777-3061; Email: Yearwood(a>,und.nodak.edu Office of Research and Program Development: Telephone: 701-777-4279 119 Appendix D Survey Questionnaire, Accounting Educators code Accounting Educators Demographic and background information Directions: Please circle only one answer for each question: 1. What is your position or faculty rank? A. B. C. D. E. F. 6. What is your area of specialization? Administrator with rank Professor Associate Professor Assistant Professor Instructor Other A. Financial Accounting and Reporting B. Managerial or Cost Accounting C. Audit and Assurance D. Accounting Systems E. Taxation F. Other specialty G. No specialty 2. What is your Gender? A. Male B. Female 7. What is your employment status? A. Full-time (at least nine months per year) B. Part-time 3. What is your age category? A. B. C. D. E. 20-29 30-39 40-49 50-59 60 or over 8. What is the number of full-time accounting faculty in your department? A. B. C. D. E. 4. What is the highest educational level achieved? A. B. C. D. Doctorate (terminal) degree Master's degree Bachelor's degree Other 9. How many accounting majors do you advise/supervise on a yearly basis? 5. How many years of work experience do you have in higher education? A. B. C. D. Less than three Three-five Six-ten Eleven-twenty Over twenty 0-five years Six-ten years Eleven-twenty years More than twenty years A. B. C. D. E. None One-Five Six-ten Eleven-twenty More than twenty (continued on back of page) 120 Part I Time Commitments and Program Structure of Accounting Education Directions Part I: Please circle only one answer for each question: 1. Assuming there is no 150-hour educational requirement for certification or licensure, which time commitment and program structure do you believe is most appropriate preceding entry into the public accounting profession? A.. Four years - baccalaureate degree in accounting (120-130 hours) B. Five years - baccalaureate degree in accounting (150 hours minimum) C. Five years - four-year baccalaureate degree in accounting integrated with master's degree in accounting D. Six years - four year baccalaureate degree in accounting plus two-year master's degree in accounting E. Six years - four year baccalaureate degree in liberal arts plus two-year master's degree in accounting 2. Assuming there is a 150-hour educational requirement for certification or licensure, which time commitment and program structure do you believe is most appropriate preceding entry into the public accounting profession? A. Four years - baccalaureate degree in accounting (120-130 hours) B. Five years - baccalaureate degree in accounting (150 hours minimum) C. Five years - four-year baccalaureate degree in accounting integrated with master's degree in accounting D. Six years - four year baccalaureate degree in accounting plus two-year master's degree in accounting E. Six years - four year baccalaureate degree in liberal arts plus two-year master's degree in accounting 121 Part II Type and Amount of Specialization in Accounting Education Directions Part II: Please circle only one answer for each question: 1. Within the formal educational structure, which specialization area do you believe is most appropriate preceding entry into the public accounting profession? A. B. C. D. E. None—no specialization Accounting systems Auditing and assurance services Taxation Financial accounting and reporting 2. Considering the specialization area you chose in question one, which time commitment devoted to that area do you believe is most appropriate preceding entry into the public accounting profession? A. B. C. D. E. None—no time commitment for specialization One year or less of full-time study Two years of full-time study Three years of full-time study More than three years of full-time study Part m Experience Requirements Directions Part III: Please circle only one answer for each question: 1. Following formal education, how much work experience do you believe should precede a license to practice public accounting? A. B. C. D. E. No experience necessary No experience necessary if minimum of 150-hours of education achieved One year of experience regardless of education Two years of experience regardless of education Three years of experience regardless of education 2. Following formal education, which type of work experience requirement do you believe should precede a license to practice public accounting? A. B. C. D. E. Public accounting experience only - accounting and assurance experience only Public accounting experience only - any type of public accounting experience Public or private accounting of any kind Public, private or governmental accounting of any kind Public, private, governmental or academic (teaching or research in higher education) accounting experience 122 PartIV Accounting Subjects and Courses Directions Part IV: There are two questions for this part. The first question pertains to undergraduate education and the second pertains to graduate education. After reading each question, please indicate your preference as to appropriateness of the categories related to that question by circling one number from 1 through 5 to the right of each category. The following scale may be useful in making your decision. 1 = Not Appropriate; 2 = Somewhat inappropriate; 3 = Neutral; 4 = Somewhat Appropriate; 5 = Very Appropriate. (continued on back of page) 123 Part IV (continued) Accounting Subjects and Courses — Undergraduate Common Core 1. How appropriate are the following subject matter and related coursework categories in comprising common core content knowledge (following elementary principles) for all accounting majors at the undergraduate level? Subject Matter Financial accounting/reporting Category Customary Course Title Circle only one answer for each category Not Appropriate Very Appropriate Intermediate Accounting 2 3 4 5 Advanced Accounting 2 3 4 5 Cost/Managerial Accounting 2 3 4 5 Accounting Systems 2 3 4 5 Introductory taxation Individual Federal Taxation (Tax I) 2 3 4 5 Advanced taxation Business Tax Concepts/Problems (Tax II) 2 3 4 5 Auditing principles Auditing 2 3 4 5 Assurance services Other Assurance Services 2 3 4 5 Accounting Theory 2 3 4 5 Research in accounting Accounting Research 2 3 4 5 Government/Nonprofit fund accounting Governmental and Nonprofit Accounting 2 3 4 5 Ethics in accounting Accounting/Business Ethics 2 3 4 5 Internal Auditing 2 3 4 5 Advanced Information Systems 2 3 4 5 Business combinations and other topics Cost control for decision making Accounting information systems Theory of accounting Internal auditing Information systems 124 Part IV (continued) Accounting Subjects and Courses - Graduate 2. Considering your responses to question 1 of Part IV pertaining to the undergraduate core, how appropriate are the following subject matter and related coursework categories for study by accounting majors at the post-baccalaureate or graduate level (following the undergraduate common core)? Subject Matter Financial accounting/reporting Category Customary Course Title Circle only one answer for each category Not Appropriate Very Appropriate Intermediate Accounting 1 2 3 4 5 Advanced Accounting 1 2 3 4 5 Cost/Managerial Accounting 1 2 3 4 5 Accounting information systems Accounting Systems 1 2 3 4 5 Introductory taxation Individual Federal Taxation (Tax I) 1 2 3 4 5 Advanced taxation Business Tax Concepts/Problems (Tax II) 1 2 3 4 5 Auditing principles Auditing 1 2 3 4 5 Assurance services Other Assurance Services 1 2 3 4 5 Accounting Theory 1 2 3 4 5 Research in accounting Accounting Research 1 2 3 4 5 Government/Nonprofit fund accounting Governmental and Nonprofit Accounting 1 2 3 4 5 Ethics in*accounting Accounting/Business Ethics 1 2 3 4 5 Internal Auditing 1 2 3 4 5 Advanced Information Systems 1 2 3 4 5 Business combinations and other topics Cost control for decision making Theory of accounting Internal auditing Information systems (continued on back of page) 125 PartV Authority to Prescribe Curriculum Directions Part V: There is only one question for this part. Please indicate your preference relating to that question by circling one number from 1 through 5 to the right of each category. 1. What level of authority should the following stakeholders have in prescribing accounting curriculum? • Stakeholder Category Circle only one answer for each category Little Authority Much Authority Accounting educators 2 3 4 5 Public accounting practitioners (CPAs) 2 3 4 5 Accountants working in industry or government 2 3 4 5 State Boards of Accountancy (NASBA) 2 3 4 5 Educational accrediting agencies (AACSB) 2 3 4 5 Thank you for completing this survey. Please return in the postage-paid envelope provided. 126 Appendix E Survey Follow-up Cards Dear Accounting Educator: Approximately three weeks ago I mailed you a questionnaire asking for your expert opinions about accounting education. If you have already returned the survey, "Thank You". Your opinions will be helpful and potentially influence the nature of accounting curriculum. If you have not had a chance to do so, please take a few minutes to complete and return the questionnaire in the postage-paid envelope supplied. Your response is important and I appreciate your cooperation. Sincerely, David L. Crawford CPA, MP A, Ph.D. candidate Dear Accounting Practitioner: Approximately three weeks ago I mailed you a questionnaire asking for your expert opinions about accounting education. If you have already returned the survey, "Thank You". Your opinions will be helpful and potentially influence the nature of accounting curriculum. If you have not had a chance to do so, please take a few minutes to complete and return the questionnaire in the postage-paid envelope supplied. Your response is important and I appreciate your cooperation. Sincerely, David L. Crawford CPA, MP A, Ph.D. candidate 127 REFERENCES Abels, P. B. (2004). The 150-hour requirement and its effect on student enrollment. The CPA Journal, 74(4), 56. Albrecht, W. S., & Sack, R. J. (2000). 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Boards of Accountancy (NASBA): An organization serving as a forum for the 55 U.S boards of accountancy (National Association of State Boards of Accountancy, n.d.) The state boards of accountancy are jurisdictions that regulate the certification and licensure of accountants working in public accounting 14 CHAPTER II REVIEW OF THE LITERATURE Reviewed in this chapter are literature and research related... is the primary accounting educator organization American Assembly of Collegiate Schools of Business (AACSB): An international accrediting agency founded in 1916 with adoption of accreditation standards in 1919 for business schools and programs (Association to Advance Collegiate Schools of 13 Business—International, n.d.) The name was later changed and currently the acronym stands for Association to Advance... adopted requirements of collegiate education for accountants and universities responded by providing 19 predominantly undergraduate education in accounting to meet the demand For many years, the standard education of accountants was a four-year baccalaureate degree with a major, or emphasis, in accounting Largely, the need for college-educated accountants came about because of the state CPA law requirements... research, concerned stakeholders (i.e., practitioners, educators, and others) will continue to be at odds with politically motivated special interest whims having little concern regarding the appropriate academic preparation of CPAs 9 A considerable amount has been written about the 150- hour requirement but there is little comparative analysis of practitioner and educator preferences since actual adoption... require 150 hours prior to licensure Accounting educators: Accounting instructors and professors working in higher education Accounting practitioners: For purposes of this study, CPAs presumed to be working in the profession of public accounting American Accounting Association (AAA): A voluntary, national organization of persons interested in accounting education and research (American Accounting Association,... accounting educators Therefore, regardless of how one views the curriculum, it is clear that educators and practitioners play a vital role in shaping, defining, and implementing the curriculum the stated (explicit), implied and null curriculum The fact that the stated curriculum includes a sequence of courses (American Accounting Association, 1954; American Accounting Association, 1956; American Institute of. .. emerged as appropriate given the historical and current controversy regarding accounting curriculum and experience requirements This investigation imparts insight into what educators and practitioners believe regarding program form, structure, and content that meets the 150- hour requirement and at which level—undergraduate versus graduate— core accounting courses should be offered This analysis also contributes... practice public accounting as a profession, based on having passed the CPA examination and having met certain educational and experience requirements (Whittington & Pany, 2006, p 23) The individual may or may not be engaged in the practice of public accounting Entry level accountant: A recent college graduate who is looking for the first job as an accountant or is in the first year of employment as an... not cited, the researcher has developed the definition as it relates to this study 150- hour requirement: A legal requirement that any candidate for the CPA exam must have completed 150 semester hours of collegiate education including a baccalaureate degree Most jurisdictions require 150 hours to take the exam while a few have enacted legislation allowing candidates to take the exam with 120 hours but... within an accounting program of study The dynamic nature of curriculum suggests a need for scholarship that examines preferred course content at the undergraduate and the post-baccalaureate graduate level while considering the 150- hour requirement that pervades the current status of accounting education 3 Theoretical Underpinnings Sterling (1973) asserts that harmony exists between education and practice