Accounting Accreditation
The Process and the Practitioner’s Role

By Barry P. Arlinghaus

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AUGUST 2007 - The Association to Advance Collegiate Schools of Business (AACSB, www.aacsb.edu) accredits both schools of business and accounting programs. An accounting program cannot be separately accredited unless the business school of which it is a unit is also AACSB-accredited. Business schools, however, can be accredited without having their accounting programs separately accredited. There are 549 AACSB-accredited business schools (94 outside of the United States) and 167 AACSB-accredited accounting programs (four outside of the United States). Most U.S. accounting firms probably do most of their entry-level hiring at AACSB-accredited business schools and many recruit a significant number from AACSB-accredited accounting programs.

Accounting practitioners involved in on-campus recruiting, those who make decisions about hiring or training, and those who serve on accounting program or business school advisory boards should familiarize themselves with the basic content of the standards and the issues faced by accounting programs in meeting the AACSB-accreditation standards. Information about the accreditation process, a listing of accredited accounting programs and business schools, and the standards themselves are available at www.aacsb.edu/accreditation.

There are currently 21 business standards and 15 accounting standards. An accounting program must meet some of the business standards as a member of the business school and meet other standards as a separate academic unit. There are six accounting standards for which there are no counterparts in the business standards. For each standard the AACSB provides a basis for judgment, and guidance for documentation. The AACSB also provides interpretative material for most standards. As with any regulation, the devil is in the details. Applying the standards requires judgment.

The initial accreditation process requires the institution to apply for accreditation, provide a self-evaluation report that includes information showing compliance with the standards, and a campus visit by a peer review team. A team usually includes three business school and three accounting program members. Team members typically include deans, department chairs or senior faculty, and a practitioner.

After receiving initial accreditation, a business school or accounting program goes on a maintenance schedule. Each accredited program must provide annual reports of data and strategic management activities and go through a fifth-year campus visit by another peer review team. The emphasis is on continuous improvement.

The standards for the accreditation of an accounting program cover three broad areas: strategic management, accounting participants (students and faculty), and assurance of learning. Below is an overview of the more significant standards in each area, and suggestions about the role practitioners can play in assisting accounting programs with meeting the standards and continuously improving the quality of accounting education. Because intellectual contributions are addressed by standards in more than one of these areas, a separate section covers intellectual contributions.

Strategic Management

The standards are mission-driven and emphasize continuous improvement. The underlying philosophy is that “one size does not fit all.”

An accounting program must have a published mission statement that guides decisions and the use of resources. The mission must specify the student population served and be based on the role that the accounting discipline and profession play in society. Stakeholders, including administrators, employers, faculty, and students, must be involved in the development and ongoing review of the program’s mission. The mission must be recognized, supported, and congruent with the missions of the business school and the university. Practitioners should be active in the development of the program’s mission statement. Generally, they will be asked for input into the process.

The program’s mission is the result of a compromise—a balancing of the views of stakeholders. Accounting programs differ from other disciplines within a business school in that accounting is a profession. This is why six AACSB accounting standards have no comparable business standards. At the same time, an accounting program is part of the business school and the university’s academic community. This is why the business standards have requirements with seemingly little relevance to accounting programs.

One accounting standard that has no counterpart in the business standards provides that the accounting program’s mission should be responsive to the needs of those who employ its students. The curriculum should cover topics of technical knowledge and skills, which employers consider relevant and important. Processes should be in place to adjust the curriculum as the environment and licensure requirements change. This provides an opportunity for practitioners to affect the design of the curriculum.

One of the more difficult parts of the mission statement for many practitioners to understand or fully accept is the need for intellectual contributions by faculty members that advance the knowledge and practice of accounting through discipline-based (basic) research, contributions to practice (applied) research, and pedagogical research. How the accounting program’s mission statement addresses intellectual contributions affects how the faculty spends its time as well as how other resources are allocated. It is important to understand that this part of the mission is driven by the academic community across campus and by the business school at least as much as it is driven by accounting faculty.

The accounting program must have strategies to provide resources to achieve its mission and continuously improve the quality of education. Practitioners understand the need for financial strategies, including a plan for obtaining and allocating resources. After all, accounting firms are probably already contributing to the cause. But this is more complex than it appears.

At most institutions, most resources come not from donations but from internal allocations of university-wide resources. Provosts, business school deans, and others in the academic community do not always understand the market for accounting faculty. Some think a “vocational” subject like accounting should be taught in a large auditorium—if it should be taught at a university at all. They don’t understand that accounting is more about analysis, critical thinking, interpersonal communication, and personal interaction than about rules and recordkeeping. Practitioners, particularly alums, with contacts within the university administration need to help educate those making decisions about the allocation of resources.

Neither accounting faculty nor practitioners fully understand how donations should be spent in order for the program to achieve its mission. Many faculty members think in terms of equipment, travel, and research needs. They trust that administrators will keep the program’s mission and the bigger picture in mind when allocating resources. Many practitioners think in terms of how to get the most out of the recruiting budget, rather than where money should be spent to ensure high-quality programs in the long term.

Accounting Participants: Students and Faculty

The business standards in this area must be satisfied by the business school as a whole as well as by the accounting program. These business standards cover policies and processes for student admission, responsibility, retention, and support. They also cover policies and processes related to faculty development, qualifications, responsibilities, sufficiency, and support.

The standards are relatively straightforward. An accounting program must demonstrate, given the market or markets it serves as stated in its mission, that it is successful in placing students. Success is measured in terms of placement rates within three months of graduation and at an appropriate later time, such as five or 10 years after graduation. The business standards have no counterpart.

Practitioners can help by making sure the accounting program has a systematic plan and a functioning process for advising students about career choices, making them aware of employment opportunities, and placing them with corporations and public accounting firms. Because employers are directly involved in this from the other side of the table, CPAs in public practice can provide insights to help improve the program’s plans and processes. Employers can hire students and track their success within the organization, then send this information to the appropriate accounting program administrator on a regular basis.

The accounting faculty, as a whole, must have a sufficient number of faculty members with professional credentials or certifications. In addition, the accounting faculty must maintain a portfolio of relevant practical experience. All accounting faculty members must demonstrate ongoing professional interactions. The nature and extent of these depend upon the accounting program’s mission. The interaction and relevant experience should relate to faculty members’ areas of teaching. The accounting program should have a planning process that ensures this is happening. The business standards have no counterparts to these requirements.

These standards are focused on the real world of practice and are unique to accounting programs. They are explicit recognition that accounting is a profession. They are designed to keep faculty members current in their discipline and familiar with issues facing the profession in general. Practitioners can help tremendously in this area by providing meaningful interaction and opportunities for relevant experience. Examples include faculty’s involvement in professional organizations, CPE courses, and personal meetings with practitioners. Practical experience includes activities such as developing and presenting CPE, work experience and consulting, and field-based research. The key is that the interaction and experience are recent and meaningful. To be meaningful, a faculty member has to have significant interactions and experiences. Firms are typically eager to provide class speakers, arrange for on-campus speakers for larger student audiences, and host luncheons and dinners that include a speaker, but they are more hard-pressed to provide data required for field-based and other research projects, internships, and similar faculty activities.

Accounting faculty, as a whole, must be actively involved in making intellectual contributions consistent with the program’s mission. This participant standard has a counterpart in the business standards: the requirement that the program’s mission statement explicitly address intellectual contributions.

Intellectual Contributions and Faculty Development

The related business participant standard requires faculty to have and maintain the intellectual qualifications and current expertise needed for the business school to achieve its mission. The accounting program must separately meet this standard. At least 90% of faculty must be either academically or professionally qualified. Furthermore, at least 50% must be academically qualified. Academically qualified means that a faculty member holds an appropriate terminal degree, typically a PhD, related to the area of teaching. Professionally qualified faculty members typically hold a master’s degree related to their area of teaching and have significant professional experience in terms of duration and level of responsibility.

A faculty member who has not made sufficient intellectual contributions during the most recent five years can lose either academic or professional qualification. Intellectual contributions include learning and pedagogical research, contributions to practice (applied scholarship), and discipline-based scholarship (basic research). To enable an accounting program to achieve its mission, the nature and extent of faculty intellectual contributions needed to maintain currency and relevancy for an individual faculty member can differ from what is needed for a cross-section of the faculty as a whole.

Contributions to practice include articles published in practice-oriented journals; published reports on consulting; development and delivery of continuing professional education; and the development of discipline-based practice tools. Pedagogical research includes the development of new course materials, the creation of teaching aids, and research and experimentation with pedagogy. A mix of these activities, assuming they are related to the faculty member’s teaching discipline and are significant in amount and scope, will enable a faculty member to maintain status. The driving force is currency and relevancy of knowledge within one’s discipline and accounting and business in general.

The mix of activities described above will not necessarily enable the accounting program to achieve its mission if most faculty members are relying on these to maintain their status. Most accounting programs must also have a number of faculty members doing some discipline-based scholarship that contributes to the theory or knowledge base of accounting. Such scholarship might be published in practice-oriented journals, but more likely will be published in academic-oriented journals and the more scholarly professional journals. Appropriate outlets vary by accounting discipline and by program mission.

Today’s professional accountants must not only be familiar with rules, regulations, and techniques, but also understand the context, theory, and underlying basis for what they are doing. This is so whether the accounting program offers only an undergraduate degree, or master’s and doctoral degrees as well. Faculty members engaged in discipline-based research are able to bring this perspective into the classroom. Discipline-based research, for this purpose, is defined in a broad and encompassing sense—not restricted to research published in only so-called top-tier journals.

Discipline-based research has a significant impact on the practice of accounting and business that is not initially obvious to all practitioners. Practitioners can readily understand that much research in the biological and physical sciences leads nowhere, but that without the failures there would be few successes. The same principle applies to research in accounting and business. For example, the research on stock options that led to the recent exposure of the practice of backdating is a success story, while other academics have been writing “academic” papers dealing with options with little apparent impact. But without academics doing discipline-based research in this area, the unethical practice of backdating might not have been exposed and debated.

If a master’s level accounting education is part of an accounting program, then by virtue of its mission it will have to place more emphasis on discipline-based research. Even greater emphasis on discipline-based research is required if the program includes doctoral students. Publication in the top-tier journals is much more of an issue for programs with doctoral programs.

A university’s administration, through the provost, sets the tone for the nature and extent of faculty research. The provost will never say that teaching is secondary, even if it is. But the faculty will know. The reward structure, salary, promotion, and tenure will dictate where faculty members spend their time. Greater emphasis on research means more focus on discipline-based research rather than on contributions to practice and pedagogy or scholarship of learning. It can mean less emphasis on teaching and less emphasis on professional interaction, relevant practical experience, and professional certifications.

Business school deans start with the tone set by the provost and then either accept it as the direction to go, or adjust the business school agenda to place more or less emphasis on research. It is probably rare for a business school dean to emphasize research to a greater extent than the provost or the culture of the institution. But it is also probably the rare dean who successfully educates the provost if the emphasis on research is out of balance with the mission of the business school.

Practitioners, after developing an understanding of the mission of the accounting program within the context of the business school and the larger university community, should make sure that the emphasis on research is consistent with enabling accounting faculty to devote appropriate time to teaching and interaction with students, and to keep abreast of developments in the profession, business, and their teaching discipline. The standards take a portfolio approach in that all faculty members do not have to be doing everything. An accounting program advisory board member, alum, or recruiter who believes the allocation of faculty time has gotten out of kilter should speak up and let the department chair, dean, and university administration know.

Practitioners can also make the research part of a faculty member’s job easier and more meaningful by providing client contacts for research projects, by allowing access to firm data, and by encouraging firm members to participate in professors’ studies.

Assurance of Learning

Business standards that must be met, by the business school as a whole and by the accounting program itself, require faculty to establish learning goals for which the assurance of learning is demonstrated for key general knowledge and skills and management-specific or appropriate discipline-specific knowledge and skills. Accounting-specific standards in this area focus on the role of accounting in the development, measurement, analysis, validation, and communication of information, and the need for graduates to meet the requirements for entry into the accounting profession. The standards apply to both graduate and undergraduate programs. Goals for learning at the graduate level generally require more breadth, depth, and integration, depending upon the program.

This is the part of “the teaching job” that practitioners rarely see and that students don’t realize is ongoing. It is a significant part of a faculty member’s job to develop, monitor, evaluate, and revise the curriculum. Doing this requires that faculty members determine what they want their students to learn and then assess whether students have done so.

The assessment process should be both direct and indirect. Direct assessment includes exams, cases, and capstone projects embedded in courses, as well as stand-alone tests or presentations. Indirect assessment includes alumni and recruiter surveys and focus groups. There is no “one size fits all” in assessment; assessment tools are unique to each program and its mission.

Practitioners can bring a lot to this process. They can respond to alumni and recruiter surveys regarding what they learned as students, what they think other graduates have learned, and how this information will be needed on the job. In assessing what they learned or what they expect people they hire to have learned, they should be realistic; only so much can be done on campus. There is a role for on-the-job learning and continuing professional education.

Practitioners on advisory boards can provide input more directly. They should be specific, providing insights into how certain knowledge or skill is used on the job, and offering suggestions as to how accounting programs can help students obtain this knowledge or skill. For example, repeating that students need better communication skills and broader business knowledge does not help faculty improve the curriculum.

Regardless of how alumni, advisory board members, and recruiters provide their input, they should do their own homework. They should think about what others in their firms expect, keeping in mind differences between disciplines such as assurance services, consulting, and tax, and they should also remember that most accounting programs are designed to enable graduates to obtain entry-level positions that will lead to a career in accounting or business. Students need a certain level of knowledge and skills for the entry-level jobs that they will have upon graduation. They also need the capacity to develop additional knowledge and skills that will become necessary as they progress.


Barry P. Arlinghaus, PhD, CPA, is the Deloitte & Touche Professor of Accountancy at the Farmer School of Business of Miami University, Oxford, Ohio.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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