Give Me the Good and the Bright

By Michael K. Shaub

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FEBRUARY 2006 - Even with the string of financial frauds that led to the Sarbanes-Oxley Act of 2002 (SOX), some accounting professors continue to wring their hands not over the moral failures of the profession, but over attracting students who are “the best and the brightest.”

A study by professors Thomas Frecka and William Nichols, published in Issues in Accounting Education, found that the best MBA programs are attracting students with significantly higher test scores than are the top graduate accounting programs.

Changing the Curriculum to Attract New Recruits

The proposed solution to this is, as always, improving the creativity and relevance of graduate accounting programs. Graduate accounting programs are seen as cookie-cutter curricula that point only toward the traditional role of CPAs as auditors. Graduates are perceived as having inadequate business savvy, and the implication is that they are no match for their MBA counterparts.

Perhaps improving the relevance of graduate accounting programs is the solution to attracting the best and the brightest to the profession. Universities appear to be willing to do whatever is necessary to draw in targeted students, including classes any time of day or night (or online), hands-on experience, world travel, or an enviable lineup of guest speakers. So maybe more relevant and creative accounting programs will be enough to fix the problem.

But I would say without equivocation that the accounting profession would have been better off if CFOs Andy Fastow, of Enron, Scott Sullivan, of WorldCom, and Mark Swartz, of Tyco International, had never entered it. I would be much happier if they had never been recruited in an attempt to draw in “the best and the brightest.”

What the accounting profession lacks is a strong attraction to the good person who also happens to be exceptionally bright. This was not historically true, but the profession’s focus on individual success has undermined its historical commitment to two things: truth-telling and restraining unethical behavior. Instead, CPAs in recent years have provided the impetus for many of the major frauds that resulted in Sarbanes-Oxley. Even when the CEO can credibly deny complicity, the CFO is almost always implicated. In the case of HealthSouth, five different CFOs were complicit in the fraud. Competence has trumped integrity in the accounting profession.

I believe that the best solution is not to recruit “the best and the brightest,” but rather to recruit “the good and the bright.” By “good” I mean individuals with important virtues like honesty, individuals committed to doing the right thing and restraining liars. These people will contribute significantly to the capital markets by their goodness and by their relentless pursuit of those who mislead investors. And they will not have to work for the SEC to do so; they will be corporate accountants, controllers, auditors, and CFOs.

I believe that there is a subset of bright young people today who are looking for something meaningful to do in business, not just for personal enrichment. But when the accounting profession refuses to offer this alternative, it is rational for bright young people to instead do something that will make them richer faster.

Mandating Ethics to Differentiate the Profession

The National Association of State Boards of Accountancy (NASBA) has recommended that everyone sitting for the CPA exam take one college course in business ethics and one in accounting ethics. Most accounting professors are opposed to this because of curriculum constraints and the sense that these courses have little effect. But it sends a signal that the accounting profession is different, a message that may be helpful in attracting a new generation of people committed to truth-telling and to public protection in the capital markets. The courses could probably be worked into the curriculum, particularly because almost all states require 150 semester hours of college course work to become a CPA. But in light of the strong institutional opposition such a proposal would trigger, I expect that any such initiative would fail.

And that will be a shame. Good luck to the accounting profession in trying to outrecruit the top MBA programs for the best and the brightest. What we have to offer is clearly second-rate if all we have to offer is money.

But we could be different. And if it were up to me, we would be. You keep the best and the brightest. I’ll take the good and the bright.

Michael K. Shaub, PhD, CPA, is the Emil C.E. Jurica Professor of Accounting at St. Mary’s University in San Antonio, Texas. His e-mail is




















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