Certified Public Accounting
It Isn’t Just About Numbers

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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




















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