of the Minds
The different “sides” of the profession—typically taken to be the educator and practitioner communities—have been at odds concerning what accounting students should know, what educators should teach, and whether accounting graduates are adequately prepared for the business world. The CPA Journal editors convened a forum, “Preparing Future Accounting Professionals,” moderated by Editor-in-Chief Mary-Jo Kranacher, in November 2007 to bring individuals representing all areas of the profession together to discuss these issues.
The first panel, “How the 150-Hour Requirement Is Affecting the Profession,” discussed various implementation, transition, and adaptation issues presented by the 150-hour requirement. The second panel, “How Academics and Practitioners Can Work Together,” discussed how to bridge the divide that has traditionally separated accounting education from accounting practice. The panelists represented specific perspectives and were selected for their individual expertise. The following article represents the highlights of the first panel discussion, including the panelists’ prepared remarks and a reaction written by a member of the audience. The April issue will include an article covering the second panel discussion.
By PCAOB Member Bill Gradison
Bill Gradison, a founding member of the Public Company Accounting Oversight Board (PCAOB), which was established by the Sarbanes-Oxley Act of 2002, spoke at the beginning of the forum proceedings. He expressed gratitude to Doug Carmichael, a professor at the City University of New York’s Baruch College (which hosted the forum) and the PCAOB’s first chief auditor, for recruiting and retaining an excellent staff at the PCAOB.
Gradison discussed the recent SEC action allowing foreign issuers of financial statements to file under International Financial Reporting Standards (IFRS). He speculated about what this shift toward international standards will mean for professionals traditionally educated and trained in U.S. GAAP. He also discussed the new advisory group established by the U.S. Department of the Treasury to consider the future of the auditing profession, to which Gradison is assigned as an observer to the subcommittee on human resources.
Gradison recognized human resources—human capital—in the accounting profession as exactly what the forum was addressing. He also observed that the changing business world—with the recent increased emphasis on areas such as ethics—was what created the need for additional education as a way to produce CPAs who are better equipped to serve the public interest.
Editors’ Note: The CPA Journal is grateful to Baruch College for providing facilities for the forum event, and to Jobsinthemoney.com for sponsoring breakfast. Part 2 of this article will appear in the April 2008 issue.
Panel Discussion: How the 150-Hour Requirement Is Affecting the Profession
You’re probably wondering what a novice could contribute to a discussion about the future of the accounting profession. After all, I’m not a professor or a well-seasoned practitioner, or even a CPA yet. However, my goal is to bring the perspective of a young professional who experienced, firsthand, the effects of the 150-hour requirement.
I recently completed the accelerated BS/MBA program at C.W. Post. This was the first year that this program was offered. Although completing the 150-hour program wasn’t required yet to qualify as a CPA candidate, my decision to enroll was easy for a few reasons. First, knowing that it was soon to be a requirement, I wanted to hold myself to the same standard that New York State expects of future incoming professionals. Also, a master’s degree was already a personal goal of mine, and I enjoy school, so the opportunity to earn two degrees in only five years was very appealing.
Overall, I believe that the 150-hour requirement will draw a higher-caliber individual to the profession, and will provide incoming professionals entering the workforce with greater maturity and better preparation on many levels. Students will have more life experience and will have a chance to hone critical skills that aren’t necessarily emphasized at the undergraduate level. Although much of the 150-hour requirement’s benefits aren’t accounting-specific, they directly impact the accounting profession.
More education generally means a higher salary. But beyond that, the type of learning that occurs at the graduate level is very different from the undergraduate experience. For example, their environments are totally different. In an undergraduate-level introductory business course, most of the students are fresh out of high school; many of them may be nodding off because they partied the night before. In a graduate-level business course, the students are generally older and more mature, with more diverse backgrounds, experiences, and perspectives. They’re more focused, and they want to learn as much as possible. Also, graduate-level courses place more emphasis on participation and class discussion, as opposed to undergraduate classes, where usually the professor lectures and the students listen, take notes, and memorize. So the interactive learning style, coupled with the type of student found in graduate classes, offers many benefits to the developing business professional. As a result, graduate students learn to speak articulately. They challenge others’ ideas, and they learn to have their ideas challenged as well. In addition to developing communication skills, graduate programs enhance research and writing skills, and help students gain proficiency in choosing a point of view and defending it with logic and specific examples to support it. These types of exercises also build self-confidence.
Graduate programs emphasize real-world and practical applications, as opposed to the predominantly conceptual learning seen at the undergraduate level. For example, graduate school projects generally require knowledge of current events and some understanding of how the related concepts can be applied to the professional arena. So, overall, what really takes graduate students to the next level is the way in which the program demands more of them and challenges them in new ways. It teaches them not just new information, but also how to analyze things in different ways. Forgive the cliché, but students start thinking “outside of the box.”
Another benefit is that graduate students often enroll in classes they might not otherwise have taken. So they can learn new things, possibly discover a new area of interest, or gain a different perspective on previously acquired knowledge. Because graduate students are typically highly focused, when they learn something new, they tend to want to figure out how to apply it in the professional arena. For example, when I first enrolled in a consulting class during my graduate program, I wasn’t too interested, but by the end of the course, I had a new perspective on how to interact with people.
Also, these different classes help students learn about career opportunities and specialties that they might previously have been unaware of. Additionally, peers and professors they meet along the way are valuable additions to their network of contacts.
One of the accounting-specific benefits of the 150-hour requirement includes being better prepared for the CPA exam. Some graduate classes touch on material from freshman or sophomore year, so you get a good refresher but with more detail. Other courses may help to prepare a student for future professional engagements. For example, a graduate finance class gave me valuable background information about mortgage-backed securities and the financials of banking institutions. Later, during an internship, I was able to apply that knowledge to an engagement involving a mortgage company. Without the fundamentals that I learned from that class, I would’ve been even more confused than I already was. Classes like advanced auditing, financial statement analysis, and fraud examination build on basic knowledge that students gain at the undergraduate level.
At the undergraduate level, the textbook questions outline the problem and expect the student to solve it. Whereas, at the graduate level, students are typically given a situation where they are expected to figure out what the problem is. For example, what’s strange about the situation, what red flags can you identify to indicate a potential problem? Then students are expected to figure out how to fix it. Those types of exercises, case studies, and class discussions develop critical-thinking skills and teach the value of challenging conventional concepts. These skills are essential to success in the accounting profession.
Under the 120-hour requirement, two years of experience were required to become certified, Conversely, with the 150-hour requirement, CPA candidates need only one year of experience. This may result in increased turnover, because many students stay at their first job only long enough to complete the requirements for certification. Eventually, this effect could be partially offset by fewer accountants leaving to pursue additional education.
In my experience, undergraduate programs generally focus more on conceptual learning. A graduate program builds on that foundation, with advanced material and practical application. For me, going straight to grad school was a great decision. It challenged me, and pushed me to a higher level that I could never imagine attaining in just one additional year. Of course, it is ultimately the responsibility of each individual school that offers a qualifying 150-hour program to maintain the quality of that program, and it’s up to accounting graduates to uphold the high standards of the profession. But, in general, it seems that the 150-hour requirement truly has the potential to raise the bar for the accounting profession.
Christie Dorsa, MS, MBA, an external auditor at Deloitte & Touche LLP, graduated magna cum laude from the C.W. Post Campus of Long Island University in the spring of 2007. She completed the 150-hour Accelerated BS/MBA program during the first year it was offered at C.W. Post. Dorsa served as president of the C.W. Post Accounting Society and Beta Alpha Psi Chapter.
I congratulate Christie
because she gave great evidence of the 150-hour program’s effectiveness.
The New York State Board for Public Accountancy has created an ad hoc
committee on education to investigate what changes need to be made to
the current regulations, including the 150-hour program. As Bill Gradison
mentioned, the U.S. Department of Treasury recently established an Advisory
Committee on the Auditing Profession
The State Board Office’s files on the 150-hour requirement have a 1960 document titled “Special Committee to Study the Matter of Including a Fifth Year of Accounting Curriculum Which Would Lead to a Graduate Degree and Better Prepare a Candidate for the CPA Examination.” I also found documents on public hearings on the subject held in 1977, 1987, and 1997. The Board of Regents, with very broad input, ultimately enacted regulatory changes in 1998 to require 150 hours of education by August 1, 2009. New York has benefited from that extended implementation period because it’s allowed us to see what other states are doing with respect to 150 hours of education. For example, 14 of the 15 states that have enacted 150 hours of education now allow candidates to sit for the exam after 120 hours. Applicants are required to complete 150 hours before the license will be issued. Individuals have raised both pros and cons for this “sit at 120, license at 150” approach.
Another factor is that New York is unique in having 66 colleges and universities. (I count a college or university as a physical site, and some colleges and universities in New York have multiple sites.) Those 66 colleges and universities offer 151 licensure-qualifying programs, which is probably more than almost any other state in the country.
The rationale for adopting the 150-hour program was to accommodate the licensees’ needs for core competencies in a business environment that has become increasingly complex. Striking a balance in education between accounting, business, and liberal arts and sciences courses is also important.
As an element of the profession’s evolving globalization, we often find that some individuals who are credentialed in a foreign country come to New York and seek licensure, but with different technical knowledge and training and not the broader liberal arts education required in the United States, particularly New York State. This raises questions: Does greater exposure to liberal arts and sciences courses result in a better-skilled professional? Does that professional have better judgment and a broader skill set, including critical thinking, communication skills, and ethics?
The second issue is flexibility regarding accounting curriculum design to meet the future needs of the public and the business community. Is the model flexible enough to address changes in the education model, in educational methods, and evolving practice in the profession?
Schools began to adopt 150-hour programs around 2004. Since then, the New York State Board has eliminated the requirement that everyone have 60 credit-hours of liberal arts and sciences, and quantitative methods was deleted as a required course. The board was trying to let colleges and universities define their programs within the framework of the regulations. We’ve often heard that the regulations were, in some ways, too restrictive. It was suggested that by letting colleges and universities exercise more academic freedom, they could focus on what is most important to them, and maybe carve out a niche within the profession that would work for them, and thereby help them attract students.
Environmental considerations at that time included the evolution of a knowledge-based economy. Attestation was the core of the profession, with a growing importance of management and other advisory services, personal financial planning, transaction analysis, and litigation support. In many ways, looking at the amount of time an accounting firm currently spends on attestation versus other services, attestation is no longer the majority of the firm’s total business. Globalization has led to necessary communication competencies, different information technology paradigms, and cultural diversity. Strategic alliances also became necessary. Multi-profession solutions, ethical considerations, disciplinary concerns, and a total-service orientation were other issues. One-stop shopping became a buzzword, and unregulated activities affected the profession with respect to recruitment and services. Nonaccounting companies like American Express, Andersen Consulting, and Booz Allen Hamilton were attracting graduates.
Mobility of practice across state lines and practicing across international boundaries are other important issues. Some of that is the result of the Sarbanes-Oxley requirements of rotating audit partners every five years. On occasion, I hear stories from large firms that they need to bring in audit partners from Western Europe with a focus on a certain industry, and we need to be able to get them into New York or into the United States more quickly. Flexibility and mobility are key.
One concern regarding the 150-hour requirement is the cost of the additional fifth year. We want candidates for licensure to have a broader skill set, but at what cost? We’ve seen a trend of candidates taking four years to sit for the exam, five years to become licensed. Individuals with 120 credit-hours of education need two years of practical experience to be licensed. Those with 150 hours of education need one year of experience.
Let’s consider how that affects the profession. NASBA just issued an exposure draft on proposed changes to the Uniform Accountancy Act (UAA). State regulatory bodies are invited to use the UAA as a guide as they change their regulations. The exposure draft proposes four levels of accreditation for accounting education:
Under NASBA’s proposal, the most streamlined way to become licensed would be to graduate from a licensure-qualifying registered program, or to graduate from an accounting program accredited by the Association to Advance Collegiate Schools of Business (AACSB), with 24 credit-hours of accounting (excluding principles or introductory courses) and 24 credit-hours of business. Currently, New York requires 33 credit-hours of accounting and 36 credit-hours of business. NASBA’s proposal also says that the education model should focus on subjects derived from the Uniform CPA Examination Content Specification Outline. That issue has raised pros and cons. On one side, “teaching to the test” may result in higher CPA exam pass rates. Whether that necessarily results in a more informed, more skilled professional is another matter.
Without getting into the fine points of the requirements, New York requires an unspecified amount of content in accounting and business communications, and either a course, or course content integrated across multiple courses, in ethics and professional responsibility. New York’s current regulations are silent on receiving credit for internships and independent study. After the 150-hour requirement takes effect in New York, the experience requirement can still be met after sitting for the CPA exam. In some cases, because the exam is taken in sections, candidates will earn their experience during the period of time when they’re taking the exam.
Questions being addressed by the ad hoc committee on accounting education include: the specificity required in accounting and business courses; the number of credit-hours required for accounting and business courses; whether ethics, communications, and research should be integrated content or discrete courses; the role of college accreditation in the overall approval of accounting programs; and the extent to which curriculum requirements should be tied to the CPA examination.
Let me leave you with this reminder: As the August 1, 2009, deadline approaches for the 150-hour requirement to take effect in New York, those who want to be grandfathered under the 120-hour model need to both complete their studies and apply for licensure (meaning their application must be postmarked) by August 1, 2009.Daniel J. Dustin, MS (Acc.), CPA, is the Executive Secretary of the New York State Board for Public Accountancy, which is responsible for assisting the New York State Board of Regents and the State Education Department on such matters as professional licensing, practice and conduct, and professional discipline. Dustin currently chairs NASBA’s Computer-based Testing Administration Committee and is a member of the Committee on National Examination Preparedness. He is the former chair of NASBA’s Accountancy Licensee Database Task Force and Executive Directors Committee. He has also served as a member of the AICPA’s Peer Review Task Force and Board of Examiners, including having chaired the BOE’s Operations Committee.
Over the past few years, the NYSSCPA’s Quality Enhancement Policy Committee (QEPC) has been looking at peer review, ethics, and now education. We’re studying education-related issues in two pieces: 1) pre-service education, meaning the preparation students need to become CPAs; and 2) post-service education, the continuing education of CPAs.
The committee includes large- and small-firm practitioners; educators; current and former regulators; and non-CPAs. The non-CPAs are valuable because they keep us grounded; for example, saying, “This is what we expect of CPAs and the kinds of skills that we expect them to have.” Our approach to thinking about the types of skills CPAs are expected to have is very conceptual. Obviously a CPA should have some audit background, some accounting background, and some tax background. But most important is a good foundation of communication skills—generally not something people think of as essential for accountants. Most people think accounting is only about math skills. But we’ve found that communication skills—reading, writing, verbal communications, and, most important of all, listening, to your clients, your colleagues, and the rest of the profession—are probably the most important attributes for a CPA to have.
As Christie Dorsa mentioned, the extra 30 credits of a graduate program develop skills that most undergraduate courses don’t. Post-Enron, the accounting profession has taken some hits, and for a period of time relatively few new accountants entered the workforce. Practitioners are worried that students will say, “A fifth year? Why would I want to be in accounting when I can go right into business?” We’ve learned that other states that have already implemented the 150-hour requirement experienced a short-term drop-off in recruiting to the accounting profession, but the numbers have rebounded and the profession became stronger than before.
The change in recruiting has already started. Marks Paneth & Shron LLP has a staff of over 400 people. Until this point, our typical new hire has had an undergraduate degree and is expected to do handle a variety of responsibilities, including both audit and tax work. As students come in with 150-hour degrees, we’ll need to adjust our recruiting efforts to recognize that level of education as the current standard. We will also need to think through what this will mean to client service and expectations, both from the firm’s and the candidates’ perspectives.
As Dan Dustin noted, it’s going to be more expensive for these students to finish the accounting curriculum to become a CPA. As a profession, we need to recognize that we may have a two-tiered program, with four-year students who will want to work only in industry and may not complete their fifth year. However, for them to take that fifth year is in a CPA firm’s best interest. Considered this way, there is an opportunity for firms to change how they recruit students. One possible answer is to hire students when they’ve had four years of college and for firms to help pay for the fifth year. I believe that this would create loyalty, to both the firm and the profession. In this way, students would still have the option of staying in the public accounting environment or moving into private industry later in their careers.
The NYSSCPA’s Quality Enhancement Policy Committee is also discussing the drop-off in the numbers of accounting educators with PhDs and how this negative trend could possibly be addressed by other means. The apparent consensus is that exposing students to educators with experience both inside and outside of the academic environment provides the most positive results. As president-elect of the New York State Society of CPAs, I and other Society officers have had the opportunity to speak with students and chapter members around the state. Students tell us that they learn the most from—and are most impressed by—professors who share firsthand, practical experience as well as their academic knowledge.
Sharon Sabba Fierstein, MBA, CPA, is a partner at Marks, Paneth & Shron, LLP, recently ranked the 15th largest accounting firm in the New York region (Crain’s New York Business) and 28th largest nationally (Accounting Today). Fierstein is currently the NYSSCPA president-elect and has previously served as vice president, secretary, and director, as well as a Foundation for Accounting Education (FAE) trustee. She is the current chair of the Quality Enhancement Policy Committee (QEPC) and has chaired and served on numerous NYSSCPA committees and task forces. Fierstein also serves as a New York delegate to AICPA Council. She has served as vice president and director-at-large of the National Board of the American Woman’s Society of Certified Public Accountants (AWSCPA) and is a member of the Accountants’ Club.
By way of background, the undergraduate program at SUNY Buffalo has about 225 juniors, roughly double our enrollment of five years ago. About 175 of those students will graduate each year. The vast majority get jobs and don’t pursue advanced degrees. Unlike most schools in the state, our undergraduate program has a CPA track as well as an internal audit track, consisting of three additional required courses: internal audit, fraud examination, and information systems audit.
We’ve used extensive recruiter input in our curriculum discussions and have benchmarked against our peer schools. We have two 150-hour registered programs. Our 3-2 program includes three years of undergraduate work and two years of MBA courses. We also have a one-year Master’s of Science (MS) degree program, which is open to students completing our undergraduate program or those who have completed an equivalent program elsewhere. With the 150-hour requirement, our undergraduate four-year degree program is no longer registered. Our MBA program, for students with no undergraduate accounting background, also no longer leads to CPA certification.
The graduate programs are not well-populated right now. Our 3-2 program has maybe five students. It’s a very elite program because they take graduate programs in their fourth year, so they need to be ready for graduate school early. Our MBA option has about 30 students. The majority of our MBA and MS students are internationals and most of them want to stay in this country.
We look forward to a major surge in our MS program in 2009. As we transition to 150 hours, we still want to retain a 120-hour program presence, so we will maintain our internal audit program, which is very well received. That is not a registered program, but a four-year program leading to corporate jobs. Also, if students want to, they can take additional courses and end up with CPA certification in addition to completing the internal audit track. Students routinely create their own programs, and the school is very open to that.
As we revise our curriculum for the 150-hour requirement, we want to retain the fairly standard course sequence in the four-year CPA track as necessary preparation for the fifth year. This provides maximum flexibility for students from other schools coming into our MS program, and students completing our undergraduate program will have the background they need for MS programs at other schools, if they wish to transfer. We’re concerned about the MBA program, however, because the MBA is our university’s flagship program and it receives funding accordingly. Because we want to maintain our presence there, we have developed a mini option from a corporate perspective, consisting of four courses: fraud examination, advanced management accounting topics, financial statement analysis, and global reporting. We’re also very willing to take MBA students who have an undergraduate accounting background, and tailor a program that meets the 150-hour requirement.
The big push is to revise the MS program, and our philosophy is that we should emphasize a broad base of education. I agree with the earlier presenters that undergraduate students learn lots of rules and regulations. Now we need to develop students who can be flexible, who can step back and think, “What do investors need to know? How does business work? When you’re identifying audit risk, what areas do you need to look at closely?” You need a broad perspective of the business world, the motivations for misstatement, where investors need more information to be able to make decisions. Undergraduates don’t want to do that; they want to be spoon-fed the answers and know whether it will be on the test. We spend as much time as possible preparing them to deal with the messy issues that are part of working in the real world. The 150-hour requirement gives us an opportunity to teach that broader perspective, plus provide advanced training in areas such as tax, reporting and assurance, and internal audit.
Susan S. Hamlen, PhD, CMA, CFM, is an associate professor and chair of the department of accounting and law in the school of management, University at Buffalo (State University of New York). Her teaching and research interests are in the areas of performance evaluation and compensation, reporting for financial derivatives, international accounting, and governmental/nonprofit reporting. She has published in the Accounting Review, Journal of Derivatives Accounting, and others, is co-author of an advanced accounting textbook, and has been a regular contributor to Compliance Week.
J. Mastracchio Jr.
I’ll give an overview of how the 150-hour requirement differs by state, and then discuss the basic curriculum from the perspective of NASBA and the Board of Examiners.
Some states have the 150-hour requirement but allow a candidate to sit for the exam after 120 hours; however, it is necessary to complete the 150 hours prior to getting the CPA license. When I was chair of the New York State Board of Accountancy, my concern was that the board should simply make up its mind, because having too many options can impact academia. For example, at the University of Albany, many students from the greater metropolitan New York area came with the intention of returning to that area to start their careers. And, if they could sit for the exam with 120 hours and then, while they were working, take the additional 30 hours, they probably wouldn’t take the 30 hours in upstate New York. They’d probably take the rest of the courses in New York City, which would make a real difference in how academic programs were structured in the two geographic areas. And in academia, change happens slowly.
In 2003, a number of the state boards of accountancy approached NASBA and asked what they should be looking for, academically, when a candidate applies for the examination. Based on that, the Uniform Accountancy Act (UAA) Committee, with the approval of the NASBA Board of Directors, asked the Education Committee to determine what kind of guidance NASBA should give state boards concerning curriculum. In the area of ethics, NASBA asked for and received the cooperation of the American Accounting Association (AAA) to conduct a survey on the extent to which ethics education is offered. We were surprised to find that not many ethics courses were out there. Within a couple of years, NASBA’s Education Committee developed very specific recommendations on credit-hours for course curriculum for accounting and business courses, and a requirement for two ethics courses—one on basic philosophical principles of ethics, and the other focused on applications to business and accounting procedures. The committee exposed those proposals, and received 178 comments, mostly against the proposal and mostly from academia saying, “This is much too specific. NASBA shouldn’t be mandating exactly how many credit-hours a financial accounting course, or any other course, should be.”
NASBA withdrew the proposal and returned to the drawing board. It formed a task force that included the AAA and AACSB. The task force reworked the proposal and presented another proposal at a forum in the spring of 2007 chaired by a former AAA president and including representatives of the AAA, the accrediting organizations, and large and mid-sized firms. The conclusion was that the state boards still need guidance from NASBA, but it wouldn’t be credit-hour specific. If an accounting program is AACSB-accredited, NASBA is generally satisfied with that. If a school’s business program is accredited but its accounting program is not, then the accounting courses would need to be looked at. NASBA recommends that states consider carefully whether to accept credit-hours from a curriculum that is accredited only by a regional accrediting association or that is unaccredited.
On ethics, NASBA recommends a three-credit-hour course, or integration of the course content. There’s broad concern in academia that although integration is a good way to teach ethics, state boards need a way to verify that the integration is happening. So NASBA suggests that schools either have a separate ethics course or integrate course content to meet the ethics requirement, and have an outside accrediting organization certify that this integration is happening. The Association of Collegiate Business Schools and Programs (ACBSP) has said that it would accept responsibility to look through course syllabi to ensure that specific content—for example, ethics—has been integrated throughout the curriculum.
On October 26, 2007, at NASBA’s annual meeting, the board of directors approved recommendations for changes to the UAA to provide for this level of accreditation and also provide for topics in accounting. The comment period [ended] January 31, 2008. Billy Atkinson, the chairman of NASBA’s Education Committee, has stated that the curriculum issue should continue to be explored to keep up with ongoing changes in the profession, such as international standards and how they should be tied to the content specifications of the CPA examination.
I’ve been on
the Board of Examiners, which is charged by the AICPA with the content
administration of the CPA exam. Every few years, to maintain the validity
of the exam, we look at what entry-level CPAs need to know and what skills
they need, and how well the exam tests those skills, not just knowledge.
In 2006, real practice analysis started.
We’ve sent out a survey, sifting through a pool of 99,000 names to focus on people working with entry-level CPAs. We sent the survey to 3,300 people, and approximately 2,100 responded. After we analyze that input, the Board of Examiners will issue new content specifications that will impact what the CPA exam tests.
The larger objectives of this survey include keeping the CPA exam up to date and also tying it back to the curriculum. This is not to say “teach to the CPA exam.” However, the exam has content that is relevant to what many graduates will encounter, and it seems reasonable to look at the CPA exam to guide the curriculum.
Nicholas J. Mastracchio Jr., PhD, CPA, has served on the NASBA nominating committee and currently serves on its education committee. He is also past chairman of the New York State Board of Accountancy and chaired its education committee. Mastracchio recently completed a three-year term on the AICPA’s Board of Examiners (BOE), which oversees the CPA exam, and he is a member of the Auditing Standards Board (ASB). He was managing partner of Marvin and Company, a large upstate New York CPA firm, for 15 years. Mastracchio was the Arthur Andersen Alumni Professor of Accounting at the University at Albany before retiring in May 2006. He is currently writing a book on valuations for the Bureau of National Affairs, while teaching a graduate-level valuation course at the University of South Florida, and has a valuation and litigation services practice. He is also a member of The CPA Journal Editorial Board.
150 - hour requirement
By Ariel Markelevich
The 150-hour education requirement, which takes effect in New York State on August 1, 2009, opens a window of opportunity to improve and enhance the accounting education received by new CPAs. I think the discussion about the 150-hour requirement should shift from whether it is needed and whether it is a good idea, to how educators can use this opportunity to improve the education we give to our students. New York State is one of the last in the nation to approve this enhanced educational requirement, and if we want our CPAs to compete on a national level, we should welcome the requirement.
The rationale for the 150-hour requirement, as presented by Daniel Dustin of the New York State Board for Public Accountancy, is to strengthen the education that accounting students receive and prepare them for a complex world by ensuring a balance between liberal arts and science courses and professional business studies.
The need for enhanced skills and education was echoed by other members of the panel. For example, Sharon Sabba Fierstein, partner at Marks, Paneth & Shron, LLP, and president-elect of the NYSSCPA, discussed the importance of professional literacy and expressed concern over how many new CPAs lack adequate reading, writing, listening, and verbal communication skills.
Practitioners and educators agree that better communication skills are much needed. Most large accounting firms recommend that universities teach students how to communicate well, both orally and in writing; the firms would accept responsibility for teaching students the more technical and practical applications of accounting through their training programs. This approach may not be shared by regional and smaller local accounting firms, whose resources for training are limited.
Given those parameters, what should we do with the additional 30 hours of education? What do we want our students to learn that they are not learning under the current program? The question seems to have no simple answer. A potential starting point can be found in the presentation given by Nick Mastracchio, who provided a detailed list of content specification outlines (CSO) adopted by the AICPA Board of Examiners. In addition to the content-specific body of knowledge, the document also defines skills required for entry-level CPAs. These skills are in the area of communication, research, analysis, judgment, and understanding. So, a potential answer to the question about content coverage may lie in the CSO prepared by the AICPA Board of Examiners. Moreover, Mastracchio reported that the Board of Examiners is conducting a practice analysis to determine what changes need to be made to the content of the CPA exam to better reflect changes in the profession.
In my opinion, although the content of the CPA exam is very important, it should be our guide for the “first” 120 hours of education, and not necessarily for the additional 30 hours. Even if some schools choose to use the additional 30 hours to teach topics they did not have enough time to cover in the first 120 hours, I believe the additional time should be used to expand students’ knowledge and skills beyond the prescribed list.
One example for the potential use of this additional time is to add special tracks. Susan Hamlen from the State University of New York at Buffalo presented her school’s plan to enhance its highly successful internal audit track. Other schools have also looked at internal audit as a possible focus, and some are looking into fraud examination as another potential focus. As discussed by Professor Hamlen and other panel members, schools should—and are likely to—develop study program specializations based on their faculties’ areas of expertise. These specific programs would serve as a means for schools to differentiate themselves.
Christie Dorsa, a recent graduate from the accelerated BS/MS program at the C.W. Post campus of Long Island University, offered her observations on how she benefited from the accelerated program, especially the graduate portion of her studies. Dorsa, who is now an external auditor with Deloitte & Touche, discussed the differences between the undergraduate and graduate portions of her studies, including the greater maturity level of the students in her graduate courses. Dorsa thought that the extra year enhanced her communication skills, and helped her expand her knowledge of accounting beyond what she had acquired in her undergraduate studies. She also offered the insight that her graduate experience included more emphasis on real-world examples. Most important, by pursuing the graduate degree, even though it was not yet technically required, she felt that she was holding herself to the same standard as other future CPAs.
What Dorsa experienced in her graduate studies resulted from significant thought and planning at the LIU–C.W. Post Campus, where we have tried to focus on areas that we felt needed some reinforcement, such as verbal and written communication skills.
One key challenge remains in planning and designing the content of the additional 30 hours: the restrictions imposed by the accrediting and governing bodies (e.g., the AACSB and the New York State Board for Public Accountancy) that tend to prescribe in painstaking detail the appropriate and allowable courses of study that qualify for accreditation of educational programs or that qualify students to sit for the CPA exam.
I think some leeway in allowing schools to distinguish themselves by offering studies they deem important during the extra 30 hours will create constructive competition between schools and improve the quality of education received by our future CPAs.
In summary, I see the 150-hour requirement as a great opportunity for educators and practitioners to take the profession to the next level by enhancing the quality of our graduates and soon-to-be-CPAs. This rule can hold great promise for the development of interesting and focused degrees and concentrations, such as internal auditing, information systems, forensic accounting, or a host of others. I believe we stand to benefit significantly from this change.
Ariel Markelevich, PhD, CMA, is an assistant professor at Long Island University–C.W. Post Campus, Brookville, N.Y.