| Certified
Public Accounting
It Isn’t Just About Numbers
MARCH
2006 - Over the past 20 years I’ve had the opportunity
to consider accounting as both an academic discipline and
a profession. My experience has shown me that the academic
curricula of most accounting programs do little to address
the needs of the profession. Although the “traditional”
accounting curriculum may teach the basic concepts and principles
that a student needs to know, it hasn’t adapted to
the changes in the present business, economic, and regulatory
environment. There seems to be a disconnect, almost like
a multiple-personality disorder, between accounting education
and the current skills needed to survive in the profession.
Ask most accounting students why they decided to major in
public accounting, and invariably they’ll tell you,
“I’m good with numbers,” or “I like
math.” Yet CPAs know, or should know, that succeeding
in this profession takes more than a facility with numbers.
Unfortunately, many of our future professionals haven’t
quite gotten the message that accounting isn’t just
about numbers.
Recruitment
and Retention
While
the realm of academe and the world of business may seem
miles apart, they share a common concern: how to attract
the best and the brightest to the accounting profession.
By now, many of us realize that we’re not likely to
recruit or retain an adequate number of the finest students
by focusing on debits and credits. Debits and credits just
aren’t sexy enough. Accounting evokes images of someone
burning the midnight oil with only their trusty calculator
for companionship. Admittedly, not a very appealing thought
for most. Why, then, do many accounting students choose
accounting? Usually for a very mundane reason: job opportunities.
In
considering how we can make accounting attractive to a larger
number of students and, at the same time, enhance the practical
aspects of accounting education, the F word comes to mind:
fraud. Fraud is a lot more compelling and, yes, sexier than
debits and credits. The names of many of the companies associated
with the not-so-distant corporate scandals are still fresh
in our memories, but the lessons about the skills needed
to survive in the CPA profession appear to have faded. The
Sarbanes-Oxley Act; SAS 99, Consideration of Fraud in
an Audit of Financial Statements; and the courts have
made it clear that accountants are responsible for assuming
the role of the public’s financial watchdogs. CPAs
can no longer afford to be ignorant about fraud. Yet a draft
proposal last spring by the National Association of State
Boards of Accountancy (NASBA) to change the educational
requirements of the Uniform Accountancy Act contained no
mention of a fraud-detection course among the litany of
other detailed requirements. How do we expect our future
accountants to be able to detect fraud if they’ve
never been taught how and where to look for it? This requires
a change in mind-set, from one of professional skepticism
to one of professional suspicion. Unlike errors and unintentional
omissions, fraud is unique because it involves deception
and concealment. As such, a whole different skill-set must
be developed to effectively fulfill our professional responsibility
to the public in this regard.
Changing
Skills, Changing Perceptions
As
Joseph T. Wells, CPA, CFE, founder and chairman of the Association
of Certified Fraud Examiners (ACFE), has said many times,
“The books and records of an organization don’t
commit fraud, people do.” Furthermore, according to
the ACFE’s 2004 National Fraud Survey, tips from individuals
are the most common detection method. CPAs must therefore
develop effective interviewing skills to assist in uncovering
fraud. Courses addressing psychology and criminology, which
can help students understand why, under identical circumstances,
some individuals will commit fraud and others will not,
would also be helpful. Communicating, both orally and in
writing, is essential when gathering information and reporting
the results of an engagement.
If
we are to regain the respect and credibility of the general
public, we need to change the perception of accountants
as “bean counters” or “soldiers,”
both inside and outside of our profession. Accounting firms
need to encourage their staffs to think independently, analytically,
creatively, and, most important, ethically, in the conduct
of their business. This may require a major change in the
culture of some firms. The survivors will be those who are
able to adapt to a dynamic environment and demonstrate that
our profession’s services add value to a business.
Those who cannot or will not meet the changing needs of
our society will go the way of the dinosaurs.
A few
months ago, someone asked my five-year-old grandson what
he wants to be when he grows up. His response was, “Either
a paleontologist or a Power Ranger.” Perhaps, someday,
the accounting profession will supersede one of those choices.
I welcome
your comments and suggestions on these and other issues.
Mary-Jo
Kranacher, MBA, CPA, CFE
Editor-in-Chief
mkranacher@nysscpa.org
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