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... with permission of the copyright owner Further reproduction prohibited without permission ACCOUNTING SKILLS AND PROGRAMS NEEDED FOR THE NEXT CENTURY AS VIEWED BY COLLEGES AND UNIVERSITIES RALPH... with permission of the copyright owner Further reproduction prohibited without permission ACCOUNTING SKILLS AND PROGRAMS NEEDED FOR THE NEXT CENTURY AS VIEWED BY COLLEGES AND UNIVERSITIES Ralph... awarded by all colleges and universities as reported by the AICPA’s report on The Supply of Accounting Graduates and the Demand for Public Accounting Recruits— 1995 for Academic Year 1993-94 The
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Each original is also photographed in one exposure and is included in reduced form at the back o f the book. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6” x 9” black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. UMI A Bell & Howell Information Company 300 North Zeeb Road, Ann Arbor MI 48106-1346 USA 313/761-4700 800/521-0600 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACCOUNTING SKILLS AND PROGRAMS NEEDED FOR THE NEXT CENTURY AS VIEWED BY COLLEGES AND UNIVERSITIES RALPH W. RUMBLE A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY Department of Educational Administration and Foundations ILLINOIS STATE UNIVERSITY 1998 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 9914572 UMI Microform 9914572 Copyright 1999, by UMI Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. UMI 300 North Zeeb Road Ann Arbor, MI 48103 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. DISSERTATION APPROVED: Date Edward R. Hines, Chair Robert Arnold Date ^ James E. Moon 7/ 2 /% Date *++*/ Kenneth H. Strand Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACCOUNTING SKILLS AND PROGRAMS NEEDED FOR THE NEXT CENTURY AS VIEWED BY COLLEGES AND UNIVERSITIES Ralph W. Rumble 140 Pages August 1998 Concerns by the accounting profession about accountants lacking necessary skills and competencies to meet the demands of a changing society became the basis for the 150semester hour requirement. Through several major studies, the accounting profession identified areas where accountants lacked necessary skills and competencies to meet the accounting demands of business. After the year 2000, accounting students must complete 150 semester hours to be eligible to take the CPA examination. The accounting profession and the Accounting Education Change Commission provided recommendations and models on how to change accounting programs and curricula that met the 150-hour requirement These recommendations were suggestive and not prescriptive, giving colleges and uni versities flexibility on how to change accounting programs and curricula that met the 150hour requirement. A questionnaire was utilized to determine how respondents at Midwestern colleges and universities viewed the relative importance of the 150-hour requirement Respondents were asked to indicate the relative importance o f changes to accounting programs and cur ricula as defined by the literature and the 150-hour requirement Descriptive statistics, one way multivariate analysis of variance, and multiple regression analyses were utilized to analyze the collected data from private and public colleges and universities. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Private and public colleges and universities both viewed the 150-hour accounting requirement as important Private and public institutions changed accounting programs and curricula to meet the requirements to take the CPA examination and to meet student expecta tions. Private and public colleges and universities determined communication skills, problem solving skills, and analytical skills were important skills and competencies for accountants. Findings were compatible with the accounting profession and literature on the 150-hour requirement Colleges and universities had not used a particular model in changing accounting programs and curricula that met the 150-hour requirement Signifi cant statistics were obtained with regard to the linear relationship between enrollment size in four-year bachelors accounting programs and responses to 9 of the 55 importance of program change variables. APPROVED: Edward R. Hines, Chair Robert Arnold ames E. Moon Date Kenneth H. Strand Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CONTENTS CONTENTS TABLES CHAPTER I. THE PROBLEM AND ITS BACKGROUND Purpose Statement Definition of Terms Assumptions of the Study Delimitations of the Study Research Questions Background of the Study 150-Hour Accounting Program Justification Studies Supportive of the 150-Hour Requirement Role of the Accounting Education Change Commission Private versus Public Accounting Conflict Need for the Study Methodology Sample Instrumentation Data Collection Data Analysis Organization o f the Study II. REVIEW OF THE LITERATURE Review of the 150-Hour Requirement Bedford Committee Report Accounting Education Change Commission Support and Objectives for 150-Hour Programs Support for 150-Hour Programs Enrollment History i Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Objectives of 150-Hour Accounting Programs Bedford Committee Report Arthur Anderson Study Accounting Education Change Committee General and Specific Proposals for 150-Hour Programs General Proposals Specific Proposals Accounting Education Change Commission Objectives of Introductory Accounting Courses Proposals for Fifth-Year Courses Changes to Classroom Delivery Systems Advantages and Disadvantages of 150-Hour Programs Proponents’ Arguments for 150-Hour Programs Arguments and Rebuttals Against 150-Hour Programs Summary m . RESEARCH METHDOLOGY 31 31 33 34 37 37 41 50 50 55 55 59 59 60 67 69 Research Procedures 69 Sample Instrumentation Data Collection Data Analysis 69 71 72 73 Respondents’ Demographics Summary 74 75 IV. ANALYSIS OF DATA Research Question 1 Research Question 2 Research Question 3 Research Question 4 Research Question 5 Research Question 6 Research Question 7 Research Question 8 Research Question 9 Research Question 10 Summary V. SUMMARY, CONCLUSIONS, DISCUSSION, AND RECOMMENDATIONS ii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 76 76 78 79 80 82 83 84 85 86 90 92 94 Overview of the Study Statement of the Problem Purpose of the Study Research Methodology Summary of Findings Conclusions and Discussion Perceptions of the 150-hour Requirement as Indicated by Sampled Colleges and Universities Use of Accounting Models by Colleges and Universities in Changing Accounting Programs and Curricula Relative Importance of Identified Accountant Skills and Competencies Recommendations Recommendations for Further Research Recommendations for Institutional Policy-Making REFERENCES 94 94 96 96 98 104 105 108 110 112 112 113 114 APPENDIX A: Accounting Education Change Commission Mission Statement APPENDIX B: American Accounting Association Objectives 123 APPENDIX C: American Assembly of Collegiate Schools o f Business Purpose Statement 125 American Institute of Certified Public Accountants State of Policy 127 APPENDIX E: Federation of Schools of Accountancy Charter 129 APPENDIX F: Study Questionnaire 131 APPENDIX G: Study Cover Letter 137 APPENDIX H: Postcard Follow-up Reminder 139 APPENDIX D: Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 121 TABLES Page Table 1. Common Body o f Knowledge—General Education 47 2. Common Body of Knowledge—Business Education 48 3. AICPA’s Illustrative Program—Accounting Education 49 4. State Requirements for 150-Hour Accounting Programs 70 5. Survey Instrument Response Demographics 74 6. Frequencies and Percentages for Each Item Relative to Instrument Question 7 77 7. Means and Standard Deviations for Each Item Relative to Instrument Question 8 79 8. Means and Standard Deviations for Each Item Relative to Instrument Question 9 80 9. Means and Standard Deviations for Each Item Relative to Instrument Question 10 81 10. Means and Standard Deviations for Each Item Relative to Instrument Question 11 82 11. Means and Standard Deviations for Each Item Relative to Instrument Question 12 84 12. Means and Standard Deviations for Each Item Relative to Instrument Question 13 85 13. Means and Standard Deviations for Each Item Relative to Instrument Question 14 86 14. Results Concerning MANOVAs Relative to Private and Public Institution Differences for Sets of Importance of Program Change Instrument Items 87 15. Means, F, and Other Statistics Concerning Selected Public and Private Institution Differences 88 16. Results Concerning Multiple Regression Analyses Pertaining to Relationship between Number of Students in Four-Year Bachelors Programs and Sets of Importance of Program Change Instrument Variables 90 iv Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER I THE PROBLEM AND ITS BACKGROUND Accounting services are becoming both broader and more specialized. Services demanded of accountants are no longer simply those based on understanding, interpreting, and applying standards. Creativity and inno vation are increasingly required to meet the changing demands of an internationally competitive world. (Bedford Committee, 1986) As the United States economy has become more complex, so have the complexities and requirements of the accounting profession in order to support the changing informa tional needs of business. Professional accounting organizations, such as the American Institute of Certified Public Accountants (AICPA) and American Accounting Association (AAA), commissioned several studies in the 1980s for the purpose of identifying skills and competencies needed by professional accountants to serve properly the needs of clients. The accounting profession used these studies in recognizing that accounting graduates did not possess some of the skills and competencies needed for providing high quality, profes sional services to clients as well as the skills necessary for successful careers in accounting. Based upon the conclusions of these studies, the professional accounting organiza tions called upon colleges and universities to address the identified needs for accountants by implementing changes to accounting programs and curricula. Specifically, the professional accounting organizations called for an increase in accounting programs to 150 semester hours. The 150-hour requirement had the most impact on accounting students who, after graduation, intended to enter public accounting. For those graduating accounting students who planned on entering public accounting, after the year 2000, eligibility to take the Certified Public Accountant (CPA) examination would be 150 semester hours of college. While the need was specific in regard to 150-hour accounting programs, the 1 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2 professional accounting organizations provided only general guidance to colleges and universities on how accounting programs were to be changed to meet the expanded require ments of professional accountants. The professional accounting organizations left it to the colleges and universities to determine how to change accounting programs and curricula that met the 150-hour requirement Colleges and universities had latitude to determine how to change accounting programs and curricula that met the 150-hour requirement Colleges and universities had to determine how to effectively change accounting programs that met the 150-hour requirement The largest, so-called “big six” public accounting firms aided some colleges and universities by providing funds to the Accounting Education Change Commission (AECC), who then awarded these monies to selected schools for the purpose o f examining and changing accounting programs. The funds supported the colleges’ study of how to change accounting programs and curricula that met the profession’s 150-hour requirement Difficulties faced by colleges and universities were identifying critical skills and competencies needed by accountants, determining how to change accounting programs and curricula, and deciding how to implement the changes. Colleges and universities faced the critical problem o f how to change accounting programs and curricula that met the 150-hour requirement Specifically, colleges needed to adjust accounting programs and curricula that met the new requirement by the accounting profession, while recognizing that these changes primarily impacted only those graduates who entered the public accounting realm. An AICPA study indicated that only 26% of accounting graduates entered public accounting work (Seigel & Kulesza, 1996). If the colleges and universities did not change accounting programs that met the 150-hour requirement, then this decision may impact the status of the college and prospective students. This was the dilemma faced by colleges and universities. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Purpose Statement The purpose of the study was to determine if public and private colleges and univer sities in the Midwest changed accounting programs and curricula to be in accordance with the 150-hour requirement. Other purposes of the study were to determine how colleges and universities interpreted the relative importance of necessary accountant skills and competencies as defined by the 150-hour requirement and supporting literature, and how these identified skills and competencies resulted in changes to colleges’ accounting pro grams and curricula. Another purpose of the study was to ascertain the relative importance o f reasons why some colleges and universities did not change accounting programs and curricula that met the 150-hour requirement Purpose of the study also was to determine the difference between public and private institutions’ responses to the importance of pro gram change questions. A further purpose of the study was to determine the relationship between enrollment size of accounting programs and the importance of program change questions. Definition of Tenns The following definitions were used throughout the study. They have been included to facilitate consistency in the use of these terms as used in this study. Accounting Curriculum. The collection of courses that have been formally estab lished by the college as presenting the requirements of knowledge, principles, values, and skills as defined by the accounting program. The professional accounting organizations have called for changes in accounting curricula to include more emphasis on liberal arts courses in years one and two, and teaching of specialized accounting courses in year five. Accounting Education Change Commission (AECC). The AECC is a not-for-profit organization that was appointed in 1989 by the American Accounting Association. The big six accounting firms financially support the AECC The objective of the AECC (Appendix A) is to be a catalyst for improving the academic preparation of accountants so that entrants Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4 to the accounting profession possess the skill, knowledge, and attitudes required for success in accounting career paths. The AECC administered the process of selecting and distributing funds to chosen colleges. Accounting Education Change Commission fAECQ Funded Colleges. Thirteen colleges were chosen through a selection process for receipt of funds to assist them to bring about needed changes in accounting education. Included in the total o f 13 colleges were 2 community colleges. Selection criteria, by the AECC, for colleges to receive funding were based on a variety of different factors. More than one criterion was used by the AECC for awarding of funds to selected colleges. Accounting Practitioner. An accounting professional, usually a CPA, that is employed by a public accounting firm. The practitioner is subject to the professional and ethical standards of the accounting profession while providing auditing, accounting, tax, and management advisory services to clients. Accounting Program. Programs of accounting studies that are within an accredited institution of higher education. Completion of the accounting program culminates in a terminal degree. The accounting program consists of courses in general education, business, and accounting related areas. American Accounting Association (AAA). An association of people, primarily in academia, that is interested in promoting the knowledge of accounting among qualified stu dents and the public. The objectives o f the AAA (Appendix B) are to initiate, encourage, and sponsor research in accounting, and to advance accounting instruction. In addition, the AAA encourages qualified individuals to enter into careers in accounting education. Also, the AAA advances the development and adoption of accounting concepts for financial statement preparation for external reporting as well as the development and uses of accounting for internal management purposes. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5 American Assembly of Collegiate Schoolsof Business (AACSB). Established as a not-for-profit corporation composed of member organizations and institutions devoted to the promotion and continuous improvement of higher education for business administration and management (Appendix C). The AACSB is recognized by the Commission on Recog nition of Postsecondary Accreditation as the sole accrediting agency for programs in busi ness adm inistration and accounting. In 1980, the AACSB adopted additional standards for bachelor’s and master’s programs in accountancy that address the special needs o f the pro fession. The AACSB and its member schools share a common purpose of preparing the student to enter useful professional and societal lives. Note that the AACSB is now known as the International Association of Management Education. American Institute of Certified Public Accountants (AICPA). The AICPA is the national professional organization for all certified public accountants. The mission (Appendix D) of the AICPA is to act on behalf of members and to provide support in ensuring that CPAs serve the public interest by providing the highest-quality professional service. The AICPA works with higher education and state boards of accountancy to improve the pre-licensure education required of CPAs. Big Six Accounting Firms. The largest international accounting firms that provide auditing, accounting, taxation, and management advisory services to clients. These firms employ professional accountants, e.g., CPAs. These accounting firms are supporters of 150-hour accounting programs as a requirement for taking the CPA examination. Certified Public Accountant (CPA) Examination. A uniform national examination for professional accountants administered by the respective state boards of accounting. The examination encompasses two days of tests in areas of financial accounting, auditing, business law, and taxation, managerial, and government The CPA examination is the recognized standard for entrance of accountants into public accounting work. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 6 Federation of Schools of Accountancy (FS A). Established in 1977 with a primary objective (Appendix E) to encourage and assist in the development of quality professional accounting programs culminating in postbaccalaureate degrees within universities (Bloom, Debessay, & Markell, 1986). Its primary membership requirement is the achievement of accreditation of a graduate program in accounting. The FS A is committed to preparing welleducated accounting professionals having a broad intellectual base and in-depth training in professional accounting courses that concentrate more on the conceptual than the technical and procedural aspects of accounting practice. As of 1994, the FSA had over 60 members with more than 25 affiliates. Illinois Certified Public Accountants Society (TCPAS). Established in 1903, the ICPAS is the premier association for CPAs in Illinois. The ICPAS is a professional organization of CPAs which, as part o f its activities, assists the students of today, to become the accounting professionals of tomorrow. The ICPAS also sponsors programs to help accounting students become well prepared for a rapidly changing and challenging accounting work environment. Institute of Management Accountants (TMA1. A professional association of private accountants that represents management accountants. The IMA represents accountants that work in for profit, government, or not-for-profit organizations. More than 70% of accounting graduates enter management accounting careers. Private Accounting. Accounting graduates who, upon graduation from college, go to work for profit, government, or not-for-profit organizations. The prevalent professional credential for private accountants is the Certified Management Accountant (CMA) designa tion. More than 70% of all accounting graduates go into private accounting (Seigel & Kulesza, 1996). The private accountants’ activities include preparing financial statements, auditing company records, developing accounting systems, preparing tax returns, and providing financial information for management decision making. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 7 Public Accounting. Professional accountants who are self-employed, or employed by a public accounting firm and provide accounting services to the public. The typical pro fessional credential for public accountants is the CPA designation. The CPA serves clients by providing services in the realm of accounting, auditing, tax, and management consulting areas. Currently, less than 30% of all accounting graduates enter the public accounting area. Assumptions of the Study The following assumptions were used in this study as the basis for the investigation that was conducted at public and private four-year colleges and universities. The study focused on how Midwestern four-year colleges and universities changed accounting pro grams and curricula as a result of the 150-hour requirement that met accountant skills and competencies levels required by the professional accounting organizations. The assump tions used for this study were: 1. The four-year colleges and universities addressed the degree to which the 150hour accounting program requirement changed the colleges’ accounting programs and curricula. 2. The four-year colleges and universities addressed the degree to which traditional classroom delivery systems by faculty changed to meet the AECC’s recommendations. 3. The colleges and universities finalized changes to accounting programs to accommodate these accounting students graduating after the year 2000 that were subject to the 150-hour requirement 4. Colleges and universities considered the needs of all constituents affected by the 150-hour requirement before making changes to accounting programs. 5. New accounting skills and competencies, as identified by the accounting profession, can best be identified and integrated into accounting curricula by the colleges’ administration and faculty for accounting programs. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 8 6. Some colleges and universities that did not change accounting programs and curricula that met the 150-hour requirement formed articulation agreements with other schools to satisfy the 150-hour program requirement 7. Colleges and universities interpreted and defined from the 150-hour require ment and supporting literature what were the relative importance of necessary accountant skills and competencies. Delimitations of the Study In this study, changes were investigated in accounting programs and curricula at 10 Midwestern four-year private and public colleges and universities that occurred as a result of the 150-hour accounting program requirement by the professional accounting organiza tions. Study delimitations were: 1. Larger private and public colleges and universities had more incentive than smaller colleges to change accounting programs that met the 150-hour requirement in order to maintain image and status quo. The results of accounting program changes at the larger colleges and universities may be different than changes made at smaller colleges as a result of the 150-hour requirement This study, however, was delimited to those institutions in the states that were sampled. 2. Another factor impacting smaller colleges, more than the larger schools, was the use of articulation agreements with other colleges and universities as a means of satisfying the 150-hour requirement Smaller colleges would typically make arrangements with larger colleges as a cost/benefit effective means of satisfying the 150-hour requirement Due to the cost of changing accounting programs and curricula, some colleges chose not to change accounting programs that met the 150-hour requirement Another reason for not imple menting changes to the colleges’ accounting programs and curricula that met the 150-hour requirement might have been because of low student enrollment in accounting programs. Also, some colleges may focus more on private, rather than public accounting, in the Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. colleges' accounting programs and, thus, did not have an incentive to change accounting programs that met the 150-hour requirement. This study, however, was delimited by the questions contained within the survey instrument 3. Disparity in identification of critical skills and competencies for accountants will evolve as each college and university make their own interpretation o f needed skills and competencies that met the 150-hour requirement These factors provide a rationale to the colleges and universities for not changing accounting programs and curricula. These considerations may apply more to the smaller, rather than larger, colleges and universities in this study. Research Questions Research questions were formulated to determine the degree to which Midwestern four-year colleges and universities identified the level of importance of accountant skills and competencies and how these skills and competencies were incorporated into accounting pro grams and curricula that met the 150-hour requirement. The research questions also addressed how accounting programs and curricula changed as a result of meeting the 150hour requirement. 1. What accounting models were used to change accounting programs and curricula that met the 150-hour requirement? 2. What was the level of importance o f reasons for not changing accounting pro grams and curricula that met the 150-hour requirement? 3. What was the level of importance o f the accountant skills and competencies identified by colleges and universities from the 150-hour requirement and accompanying literature? 4. What was the level of importance for each of the groups of people that identified the necessary accountant skills and competencies? Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 10 5. What was the level of importance of reasons for changing accounting programs and curricula that met the 150-hour requirement? 6. What was the level of importance for changes made to the structure and content of accounting courses that resulted from adding hours to accounting programs and curricula that met the 150-hour requirement? 7. What was the level of importance for added areas to accounting programs and curricula to include identified accountant skills and competencies? 8. What was the level of importance of changes made to faculties’ classroom delivery methods for teaching of identified important accountant skills and competencies? 9. What were the differences between sampled public and private colleges and universities responses to the importance of program change questions? 10. What was the relationship between the enrollment size of accounting programs, and the seven sets of importance of program change variables? Background of the Study 150-Hour Accounting Program Justification In 1988, the American Institute of Certified Public Accountants (AICPA) passed a resolution stating that, after the year 2000, to be eligible to take the Certified Public Accountant (CPA) examination, accounting graduates must complete 150 semester hours of college. The 150-hour requirement did not mandate that the CPA exam candidates complete a master’s degree in accounting. The AICPA’s educational requirements for meeting the CPA examination requirements were a bachelor’s degree plus 30 semester hours. Other professional accounting organizations, such as the American Accounting Association (AAA), concurred with the AICPA’s 150-hour requirement for a CPA candidate to meet the eligibility requirements of the CPA examination (Needles & Powers, 1990). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 11 Studies Supportive of the 150-Hour Requirement The need for 150-hour accounting program requirement resulted from the conclu sions of several studies sponsored in the 1980s by the professional accounting organiza tions. One study, the Bedford Committee report, indicated a need for a 150-hour program that would prepare accounting professionals to meet the changing needs of accounting clients (American Accounting Association, 1986). The Committee’s findings showed the need for accounting professionals to have better communication, analytical, and inter personal skills that met the challenges of the dynamic accounting profession. The report indicated the need for colleges and universities to prepare accounting students with skills and competencies that extended beyond traditional technical expertise. The Committee reported that the challenges facing accountants and colleges and universities came about as a result of the rapid growth of new accounting concepts and applications and the need for edu cation to close the gap between what accountants practiced and what accounting educators taught. Colleges and universities were charged with changing the focus of accounting pro grams from a preparer’s perspective to that of a user concept and with increased emphasis on accounting programs that prepared accounting graduates for life-long learning. Another recommendation from the Committee’s report was for more general education emphasis in the curriculum. The Bedford Committee and the accounting profession called for a more liberal arts undergraduate education with specialized accounting courses offered in the fifthyear of education. The Perspectives on Education: Capabilities for Success in the Accounting Profes sion booklet published by the “big six” accounting firms supported the Bedford Commit tee’s findings (Andersen et al., 1989). Conclusions from the Perspectives on Education: Capabilities for Success in the Accounting Profession report were that accountants needed broader skills to meet the future challenges o f the accounting profession. The report findings showed a need for greater attention in accounting programs by colleges and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 12 universities to communication, intellectual, and interpersonal skills. This study outlined the challenges that educational institutions faced in terms of changing curriculum, and the need for faculty to meet the demands of a changing profession. The Bedford Committee report and Perspectives on Education: Capabilities for Success in the Accounting Profession booklet findings became the foundation and support for 150-hour accounting programs for accounting students. These reports indicated that accounting graduates had the necessary technical expertise, but lacked other skills needed by professional accountants to provide quality professional service to clients. These reports listed critical areas where educational institutions were deficient, and where improvements were to be made to bring accounting students up to the skill levels established by the pro fessional accounting organizations. These noted deficiencies of accounting graduates were in part to be resolved by the move to 150-hour accounting programs. Some of the deficiencies of accounting graduates, and where the accounting profession looked to colleges and universities to remedy, included the following: 1. Accounting students need to develop analytical, synthesis, problem-solving, and communication capabilities that include written, oral, and interpersonal skills. 2. Greater program and curriculum focus on the skills and capacities needed for life-long learning and to become successful accounting professionals. 3. Helping students learn to leam, to think, and to be creative. 4. Accounting students are to be procedurally orientated in their approach to solving problems. 5. The traditional classroom delivery systems and focus of course material does not expose accounting students to real-world accounting situations in the classrooms. The areas of deficiency for accounting students were discussed and defined by the Bedford Committee report, the Perspectives on Education: Capabilities for Success in the Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 13 Accounting Profession booklet, and by the professional accounting organizations. Further descriptions of these areas of deficiencies are provided in the following paragraphs. Com m unication skills identified by the accounting profession were the ability to transfer and receive information with ease. Accounting practitioners were to be able to present and defend accounting positions to clients through formal and informal, written and oral, presentation. Practitioners needed the ability to locate, obtain and organize information from both human and electronic sources. Intellectual skills involved the use of problem solving skills where practitioners solved diverse and unstructured problems in unfamiliar settings. Intellectual skills involved inductive thought processes, and good judgment capabilities. Additionally, practitioners were to identify ethical issues and apply a value-based reasoning system to these ethical questions and situations. The interpersonal skill area recognized the need to work with other people as an im portant part of public practice. The practitioners were to possess skills to influence others, organize and delegate tasks, motivate and develop other people, and withstand and resolve conflict. Accounting practitioners worked in a dynamic profession with changing demands that required accountants to be problem solvers with analytical skills and a wide knowledge base to meet the professional demands of clients. Knowledge skills were classified into the areas of general knowledge, organizational and business knowledge, and accounting and auditing knowledge. These were the areas identified by the accounting profession as lacking in accounting graduates. Colleges and universities prepared the accounting graduate with sufficient technical skills, but it was other skills, such as analytical, communication and interpersonal skills, that the accounting profession identified as areas for improvement The professional accounting organizations looked to colleges and universities to remedy Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 14 these deficiency areas by making appropriate changes to accounting programs and curricula. Colleges’ schools of business supported the need for change and improvement in accounting programs and curricula that met the accounting profession’s recommendations. The challenges to colleges and universities were identifying needed accountant skills and competencies as a result of the 150-hour requirement, and how to change accounting programs and curricula that met the 150-hour requirement Role of the Accounting Education Change Commission The “big six” accounting firms established funding, amounting to about $5 million, to create the Accounting Education Change Commission (AECC) (Accounting Education News. June 1993). The AECC was charged with reviewing proposals from schools on how these colleges and universities proposed to change accounting programs and curricula that supported changes in accounting education. The AECC reviewed submittals from 111 colleges on proposed changes to accounting programs (Ernst & Young, 1992). From these 111 proposals, the AECC selected 13 colleges, including 2 community colleges, for receipt of funds. The awards were to financially support colleges and universities to bring about needed changes in accounting education. The AECC proposals contained diverse suggestions on how to meet the accounting profession’s objectives. That is, the selected college and university proposals had different objectives and targeted different areas for changes that met the 150-hour requirement. There was not consensus among the selected 13 colleges and universities on how accounting programs were to be changed that met the 150-hour requirement, since each college and university’s proposal was different. Some of the colleges and universities that received AECC grants published the results o f their study, and subsequent changes to accounting programs and curricula, so that other colleges and universities could utilize the results. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 15 Some general conclusions were drawn from the findings at these colleges and universities that received AECC funds. General findings were that the focus of accounting programs needed to be more on the need of accounting users and away from emphasis on teaching accounting procedures. That is, colleges and universities were to teach how users utilized accounting, and less focus on basic accounting methodology and procedures. Another conclusion indicated that colleges and universities should focus on activities that encouraged the accounting student to be an active learner. Accounting students’ involve ment in activities such as team projects and presentations were encouraged by the proposals and helped accounting students to be active learners in the classroom. More classroom activities that simulated real-world situations and problems were recommended by the accounting profession and by the findings of the AECC funded colleges. Some of the colleges used the AECC awards to address needed improvements in the sequence and structure of accounting programs and curricula. Other colleges and universities used the AECC’s funds to develop an integrated approach for accounting curricula. Another thrust of the accounting profession, and included in the finding of the AECC funded colleges and universities, was to reduce faculties’ focus on teaching from the text. Private versus Public Accounting Conflict Historically, the Financial Executives Institute (FEI) has reported that less than 33% of all accounting graduates chose to go into public accounting (Accounting Today. August 24, 1994). Accounting students that planned upon graduation on entering public accounting were the focus of the 150-hour programs. This meant that colleges and universities had to consider the needs of the more than 67% of students not impacted by the 150-hour require ment when changes were made to accounting programs and curricula. The Institute of Management Accountants, which did not support the 150-hour requirement, addressed this issue by calling on colleges and universities to change accounting programs to meet the needs of the non-public accountants, e.g., management accounting students, who consti Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 16 tuted the majority of accounting students. The IMA stated that accounting programs were too focused on meeting needs of students that take the CPA examination and then entered public accounting. The focus of accounting programs, per the IMA, should be on the needs of accounting students that were not going into public accounting. Focus o f accounting programs was to be on the more than 67% of accounting students who planned to work in private accounting. The IMA’s position was that colleges and universities should consider the needs of all accounting students before changes were made to accounting programs and curricula that met the 150-hour program requirement. Need for the Study The accounting profession through various studies identified areas of deficiencies in accounting graduates that affected the graduates’ ability to professionally serve accounting clients and to grow as accounting professionals. These studies identified skill and competency areas needed by accountants to adequately service clients. Rnom these studies, colleges and universities, through analysis of the 150-hour requirement, interpreted what accountant skills and competencies were necessary to correct areas of deficiencies that the accounting profession identified. How these skills and competencies were identified, as well as what were the relative importance of these identified skills and competencies areas for private and public accountants, were the purpose for the study. Also supporting the purpose for the study was how colleges and universities incorporated identified skills and competencies into accounting programs and curricula by making changes to the existing programs and curricula. The accounting profession looked to colleges and universities as the catalyst to initiate changes in accounting programs and curricula that addressed and corrected the noted deficiencies in accounting graduates. The AICPA recommended that accounting programs be changed for the year 2000 accounting graduates, so that these graduates meet the new requirements to take the CPA examination. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 17 The year 2000 requirement provided justification for this study which investigated the change process and progress at Midwestern colleges and universities that intended to meet, and those that did not, the 150-hour requirement. The study also addressed the changes to accounting programs and curricula that resulted from the 150-hour requirement Methodology Sample The research surveyed Midwestern private and public colleges and universities in the states of Indiana, Illinois, Iowa, North Dakota, South Dakota, Kansas, Nebraska, Wisconsin, Missouri, and Ohio. The sample contained 159 four-year private and public colleges and universities that had business and/or accounting departments. Research questionnaires were mailed to Business or Accounting Chairpersons at the selected Midwestern four-year private and public colleges and universities. The ques tionnaires contained information on the need for the study and instructions on completion of the survey instrument. Instrumentation From an extensive review of the literature, the researcher developed the survey questions. The questionnaire was divided into two main sections. The first section pertained to respondents providing demographic information relating to the status of the college or university and number of accounting students by program area. Additional survey questions pertained to respondents at the sampled colleges and universities indicating if an existing model was used to aid them in changing accounting programs. Respondents in the second section of the questionnaire indicated the relative impor tance of program and curricula change information questions. Respondents indicated the relative importance of identified accountant skills and competencies and level of importance of reasons for changing accounting programs and curricula that met the 150-hour require ment. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 18 Data Collection The methodology used in data collection was through questionnaires sent to sampled colleges and universities in the states of Indiana, Iowa, North Dakota, South Dakota, Wisconsin, Nebraska, Kansas, Illinois, Missouri, and Ohio. A cover letter explaining the need and importance of the study was included with the questionnaire. A follow-up reminder card was sent three weeks after the initial m ailin g date to those colleges and universities that had not responded to the questionnaire. Follow-up telephone calls were made to the Accounting or Business Department Chairperson at the sampled colleges and universities that still had not responded to the questionnaire. Data Analysis Survey questions and statistical tests were designed to answer the research questions. For all the statistical tests performed, the .05 level of significance was utilized for statistical significance. The SPSS for Windows software, Version 7.5, was used for the statistical computations. Chapter in contains a full explanation of the research procedures. Organization of the Study Chapter I included the purpose of the study, the research questions, the background of the study, the need for the study, and the methodology. Chapter n includes the review of the literature. Chapter m includes the research methodology, and Chapter IV pertains to the analysis of the data and results of the study. The summary, conclusions, discussions, and recommendations are included in Chapter V. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTERn REVIEW OF THE LITERATURE This chapter reviews the literature on the 150-hour accounting program requirement as recommended by the accounting profession. The review focuses on five major areas concerning the 150-hour accounting program requirement. First, a historical review including the major studies that support the need for the 150-hour accounting program is presented. Next, support for and objectives of the 150-hour program are discussed. Third, general and specific program proposals for the 150-hour program requirement are covered. Fourth, specific Accounting Education Change Commission (AECC) recommen dations on objectives of the introductory accounting course, accounting courses in the fifthyear, and delivery systems, are discussed. Finally, discussion of the advantages and disadvantages of the 150-hour accounting program is presented. Review of the 150-Hour Requirement As early as the 1880s, accountants recognized and supported the need for profes sional schools of accountancy. The first public accounting firm was established in 1883 in New York. The American Association of Public Accountants (AAPA), the predecessor of the America Institute of Certified Public Accountants (AICPA), was founded in 1887. One of the primary objectives in establishing the American Association of Public Accountants was to improve the public image of the accounting profession and establish a high standard of professional attainment through general education and knowledge (Carey, 1969,1970). Dean Johnson of New York University reported a need for a liberal arts education for the accounting profession in 1907. During the 1930s, the American Institute of Accountants made a specific recommendation that four years of collegiate training beyond high school 19 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 20 was the m inim um education requirement for the profession (Windal, 1994). Although this w»rr>mmffnrfatinn by the American Institute of Accountants was not approved, the proposal showed that since the early part of this century the professional accounting organizations tried to increase the professional image and requirements of the profession. In 1959, a Ford Foundation study criticized business education for being too technical and failing to develop higher level thinking skills in accounting graduates (Nelson, 1995). The Ford Foundation study recommended a broader and more liberal arts education for accountants and emphasized the need for the common body of knowledge for the accounting profession. Since 1959, the American Institute of Certified Public Accountants has advocated the need for advanced postgraduate education as a requirement for sitting for the CPA certification (Nelson, 1995). In 1963, a 12-person commission sponsored by the Carnegie Corporation and AICPA was established, in response to the Ford Foundation recommenda tion, to look at the common body o f knowledge needed by CPAs. The study was directed by Roy and MacNeill and took five years to complete. The objective of the study was development of recommendations that would guide educational institutions in deciding which accounting courses should be taught in business schools. The work of this Commis sion was published in Horizons for a Profession: The Common Body of Knowledge for Certified Public Accountants which has been described as one of the most extensive studies ever undertaken on any aspects of the accounting profession (Carey, 1969, 1970). The Commission’s findings called for an education level for public accountants that helped accountants provide accounting services of at least a minimum necessary scope and quality. Education was needed to provide accountants with a broad intellectual based service that was essential to keep pace with the requirements of the changing accounting environment. The common body of knowledge recommended by this Commission included courses in humanities, economics, behavioral sciences, law, mathematics, statistics, probability Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 21 theory as well as business courses in finance, production, marketing, personnel relations, and business management. In 1968, an American Accounting Association (AAA) study indicated that accounting students should have both undergraduate and graduate work to prepare the accountant for the profession (Needles & Powers, 1990). In 1969, the AICPA-appointed Bearner Committee reported findings that served as a follow-up to the Horizons for a Profession: The Common Body of Knowledge for Certified Public Accountants report. The Bearner Committee report indicated that accounting students have at least five years of college and that states should adopt the five-year requirement by 1975. In 1982, a Federation Schools o f Accountancy (FS A) supported a 150-hour program for accountants that provided students with the knowledge and means of developing information, knowl edge o f the conceptual framework of accounting, and the necessary technical accounting skills (Federation of Schools of Accountancy Curriculum Committee, 1982). Since the late 1970s, many FSA schools developed five-year programs which expanded not only techni cal coverage of accounting, but also added depth to accounting programs (Nelson, 1995). Another report showed that the central purpose of the university was to provide students with a liberal education with the core of that education being the arts, sciences, and humani ties (Livingston, 1992). In 1984, the AAA formed the Bedford Committee to address major changes needed by accounting education for the 21st century. The results and con clusions from the Bedford Committee are reported in a following section. A 1986 National Association of Accountants (NAA) study called for 150-hour programs that would guide practicing management accountants in expanding or updating professional knowledge, and which developed a foundation for continuing education for accountants. The 1987 Treadway Commission study supported the previous studies by reporting the need for substantial changes in the quality and quantity of courses offered to accounting students (Albin & Crockett, 1991). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 22 In 1988, the AICPA approved a proposal that required applicants for AICPA membership to have 150 semester hours of education. The new requirement, as reported by the 1994 AICPA/NASBA Guide for the Implementation of the 150-Hour Education Requirement, became effective for accounting graduates after the year 2000. The 150-hour requirement included a baccalaureate or higher degree conferred by a college or university acceptable to the AICPA. The 150-hour programs were to include an accounting concentra tion or equivalent Support for the AICPA’s position on 150-hour programs was realization that the changing, dynamic accounting environment caused greater complexity in the profession that mandated additional education to meet the new professional requirements (Arthur Anderson & Co. et al, 1989). Also, the AICPA was concerned about the declining enrollment in accounting programs. In 1989, the AAA, with financial support by the big six accounting firms, formed the AECC. The AECC’s mission was to channel funds to selected colleges and universities for bringing about needed changes in accounting education. The AECC’s role in changes to accounting education will be explained in a later section. Bedford Committee Report In 1984, the AAA’s Executive Committee appointed what became known as the Bedford Committee. This committee consisted of individuals from varying backgrounds that was charged with looking at the future structure, content, and scope of accounting education. The Committee’s findings indicated that accounting education required major changes by the year 2000. The Committee recommended that colleges and universities approach accounting education as an information development and distribution function for economic decision making, which emphasized students’ “learning to learn” as the primary classroom objective. These general recommendations by the Committee were intended to serve as broad guidelines and to provide direction for colleges that initiated changes in accounting education. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 23 Conclusions from the 1986 Bedford Committee report indicated the need for changes to accounting programs. The findings from the Committee covered some 28 recommendations, including: 1. The accounting profession was expanding and entering into a new era with new functions within organizations and within society, and with increased expectations of those who entered the profession. 2. The current state of most professional accounting education programs was inadequate to meet the needs of the expanded profession. 3. The future scope, content, and structure of accounting education must undergo reassessment and redirection that met the needs of the expanded accounting profession and the future accounting professional. The Bedford report indicated that accounting services were becoming broader and more specialized, with many of the new accounting services being more innovative intensive than standard-intensive. Accountants needed broader based skills to meet the new accounting requirements which involved continuous maintenance, frequent updating of skills, and a pursuit of life-long learning. The origin o f the call for a broader, more liberal arts focused accounting education as reported by the Bedford Committee, dates back to the inception of university accounting programs near the turn of the 20th century (Nelson, 1995). Nelson reported that practi tioners criticized accounting education as being too narrow and technical, and which did not prepare accounting students for the rapidly changing and expanding profession. Accounting Education Change Commission In 1989, the AAA, with financial support from the “big six” major international accounting firms, formed the Accounting Education Exchange Commission (AECC). The June 1990 issue of The Journal of Accountancy reported that the mission of the AECC was to channel funding to colleges that developed innovative programs in accounting education Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 24 which were supportive of 150-hour programs. The objectives of the AECC were to foster changes in the academic preparation of accountants that improved the accountant’s capabili ties for a successful professional career in accounting practice (Mueller & Simmons, 1989). The AECC stated that the goals of the Commission were to enlist the cooperation and creativity of the academic community and other stakeholders to bring about needed changes in accounting education. The AECC reported that the need for change in accounting educa tion came about because accounting programs had not kept pace with the dynamic, complex, expanding, and constantly changing profession for which students were being educated. The big six accounting firms provided about $5 million to the AECC. The AECC selected and provided funding to 11 four-year colleges and universities and to two com munity colleges (Accounting Education News. June, 1993). Support and Objectives for 150-Hour Programs Support for 150-Hour Programs Many articles in the literature supported the need for, and adoption of, 150-hour accounting programs. The accounting profession, educators, and practitioners supported the need of expanded programs that prepared accounting students for the accounting profession. There was a need for change in accounting programs, as very few changes in course content were made in the last 25 years (Smith & Usry, 1989). The need was not only for greater depth in accounting education but also for greater breadth (Williams, 1990). Also, changes in accounting programs were needed because the business world had become more dynamic and complex (Elliott, 1991). Advancing technology, prolifer ating regulations, globalization of commerce, and complex transactions made the environment in which public accountants practiced extremely challenging which required accountants to have more than just technical skills. Elliott stated that public accountants needed skills that included knowledge of different cultures, ability to interact with diverse groups at the highest intellectual exchange, and an understanding of economic, social, and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 25 political forces in the world. Also advocated was that public accountants should possess organizational and business knowledge (Elliott, 1994). In this 1994 article, Elliott described that the changing role of accountants in society resulted from changes in tech nology. Financial statements, as reported by Elliott, were not as important to investors as they once were as technology changed how businesses created value for companies and for the owners. Because of these changes, the traditional auditor role of the accountant also changed, which resulted in accountants providing other services to clients. Forces driving change included not only globalization and increased complexities of technology and laws, but also competition within the profession and from outside sources (Chenok, 1995). According to the literature, accounting and information systems had changed dynamically over the last several decades in response to both society and the accounting profession (Smith & Usry, 1989). Factors such as growth o f international competition and the mushrooming of computer technology were driving the needed changes in accounting (Schultz, 1989). With international competition and globalization, tomorrow’s profes sional accountants had to be sensitive to diverse cultures, the Third World, and the concerns of minorities (Livingston, 1992). Another change that happened in the accounting profession was the increase in accounting for technology and information systems within organizations. Historically, accounting was used to measure the cost of rendered products and services. With increased use of technology and information in the business world, accountants were being called upon to come up with accounting methods that measured these new activities. This increased focus on information technology and how to measure it was called “The Third Wave” of accounting (Elliott, 1992). Accounting’s wave one was elementary, single entry accounting for labor components. The second wave of accounting was double entry accounting for labor and products. Elliott noted that accounting systems, i.e., wave one and two, which were based upon cost accounting concepts, no longer applied appropriate Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 26 reporting practices. The new accounting systems, i.e., the Third Wave, focused on knowl edge and value created concepts, i.e., the customer side o f the organization. Accounting in the 1990s needed to support knowledge based technology (Fish, 1995). Accounting systems had to change to meet the new information requirements. Accounting education needed to make changes that met the accounting needs of the profession and clients. Elliott stated that these new demands on accounting for information technology created a wave of change that crashed across the accounting profession in the 1990s. The new accounting demands changed the way business was conducted, and the problems faced by manage m ent The accounting challenge was to develop accounting concepts that handled the thirdwave accounting paradigm. Colleges and universities were challenged with educating accounting students that could function effectively in third-wave organizations. Accounting professionals and colleges and universities faced challenges that called for changes to educational programs that included sufficient breath of education (Chandra & Clayton, 1992). Accounting education needed to reflect the evolving nature of economic, social, political, and regulatory environments in which organizations operated (Baldwin & Ingram, 1994). Also, accounting education’s focus was to be directed towards a userorientated approach. The focus of accounting education was to be on why accounting was done and how accounting assisted business managers, and not focused on the mechanical side of accounting. Accounting education changed from a procedural approach to a concen tration on conceptual and interpretive issues that provided information needed by manage ment to run businesses. A more market driven approach in changing accounting programs was needed (Beaver, 1992). Analysis was to be initiated to ascertain what was wrong with the present system, determine what the market wanted in an accounting program, and then revise the accounting programs to be in accordance with the needs of the market The accounting profession’s leaders stated that accounting required people with a wide range of knowledge and that accounting students were to be trained to think Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 27 analytically and critically. The focus of accounting education was not to prepare the student to pass a professional examination, e.g., CPA examination, but was to be broad-based that focused on preparing students for a professional career. Previts and Merino reported that as the common body of accounting knowledge expanded so did the number of specialized accounting courses (Nelson, 1995). The increased number of specialized accounting courses in accounting programs had the effect of further reducing the liberal education component of the accounting programs and narrowing the breath of accounting education. The focus of accounting education from 1920-1960 had an emphasis that prepared accounting students for the CPA examination. This focus on the requirements of the CPA examination strongly influenced accounting programs and curricula (Williams, 1991). In 1991, the AECC responded to the focus of accounting programs on preparing students for professional examinations by Issues Statement No. 2 titled AECC Urges the Decoupling of Academic Studies and Professional Accounting Examination Preparation. Historically, the influence of the CPA examination impacted accounting curricula as colleges and univer sities structured accounting curricula to cover the subjects included in the CPA exam (Nelson, 1995). Changes took place in the accounting profession and in accounting education that required a shift in accounting education toward more broad based education rather than the prevalent technical skills based education of the last 20 years (Ernst & Young, 1992). Ernst & Young reported that: 1. The body of knowledge identified with accounting, and with success in the profession continued to expand rapidly which pressured changes in accounting education. 2. Individuals that entered the profession lacked the breadth of interests and knowledge required for success. 3. The number of students attracted into university accounting programs had declined. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 28 The Ernst & Young report commented also on the decline in the quality of the accounting student, as measured by SAT and ACT scores. This report showed that enrollment had declined in accounting programs. Another study indicated that socioeconomic environment changes created a need for more academic training and skills for life-long learning (Chandra & Clayton, 1992). Colleges and universities needed to prepare accounting students with more than just the technical skills needed for the beginning job, but needed also to prepare the person with life skills such as life-long learning. Supporting these findings was a study that showed that accounting programs were to be broad, not over-specialized, and prepare the student for life-long learning (Chesser, Conway, & Harrison, 1991). Changes in society impacted the accounting profession and accounting education. Society and changes in society caused a shift in education requirements to correspond with the changes in the environment (Elliott, 1992). Structural changes caused the economy to become service oriented, and away from manufacturing. Accounting had to change in order to continue to be relevant and useful to management The change to a service economy demanded revisions to accounting education that met service organizations needs for information which were different than information needs of manufacturing organizations. The accounting firm of KPMG Peat Marwick supported Ohio’s Senate Bill 165 on the 150-Semester-hour Requirement for Practice as a Certified Public Accountant This Ohio bill, and KPMG’s position, supported the big six accounting firms’ position for increased public accounting skills of communication, intellectual, and interpersonal skills. KPMG also supported that public accountants’ knowledge consisted of general, organiza tional and business, and accounting and auditing elements. The need for integration of communication skills into the accounting curriculum was also needed (May & May, 1989). The Institute of Management Accountants (IMA) issued a report on the need for change in accounting education in the 1994 report titled Colleges are not Adequately Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 29 Preparing Accounting Graduates. The report showed that college graduates in accounting were undeiprepared for positions in corporate accounting. Another finding of the report was that accounting education did not meet the needs of corporate America. The report indicated that CPA firms normally hired only about one-third of the accounting graduates each year which meant that the corporate world, government, non-profit groups, and other organizations hired two-thirds of the annual accounting graduates. Thus, the needs of other client groups and not just public accounting needs had to be considered when colleges made changes to accounting programs and curricula. A summary of the arguments in support o f the fifth year of accounting education was summarized in a 1989 article (Hermanson & Carcello, 1989). This summary showed the need for a fifth year o f education. Reasons supportive of the 150-hour requirement were: 1. An enhanced professional commitment to education. 2. Better prepared accounting graduates to take and pass professional certification examinations. 3. The rapidly expanding knowledge base required of accountants required further education. 4. The expanded requirements allowed students to acquire expertise in one or more specialized areas. 5. The additional hours provided students with a greater awareness of the ethical aspects of the accounting profession. 6. Students were provided enhanced communication, analytical, and computer skills. 7. The additional program hours raised the accounting profession’s status to that of law or medicine which required graduate degrees. Another study showed that the 150-hour accounting requirement better prepared accounting students for entry into public practice, achieved higher rates of success in public Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 30 accounting, assisted students in passing the CPA exam, and attracted better students to accounting (Novin & Tucker, 1992). A past president of the AICPA summarized that accounting changes were caused by: 1. Internal and external competition to the accounting profession. 2. Technological advances that included developments in computers, information exchange and the resulting impact on people and organizations. 3. Increased complexity that resulted from more sophisticated financing techniques and changing tax laws. 4. Human resource challenges that resulted from a changing work force. 5. Globalization that resulted from increased international trade and investment (Chenok, 1995). The accounting profession, professional organizations, and employers of accountants supported the need for changes to accounting programs that resulted in 150hour programs that encompassed a fifth year of education. Other reasons, beyond those previously reported, that supported the increased hours in accounting programs were professionalism, prestige, and efficiency (Reeve, 1983). Enrollment History Declining enrollment in accounting programs reduced the total number of account ing degrees awarded by all colleges and universities as reported by the AICPA’s report on The Supply of Accounting Graduates and the Demand for Public Accounting Recruits— 1995 for Academic Year 1993-94. The number of degrees awarded to accounting graduates had been relatively flat since the early to mid 1980s. The only increase in the number of accounting graduates from the 1980s to present was at the master’s degree level that grew at a rate of 10% to 35% in the 1990s. Thus, college and university accounting programs faced flat enrollment levels for accounting programs. Colleges and universities faced with Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 31 level enrollment of accounting students initiated programs to attract more students into accounting. Enrollment trend forecasts for accounting programs were not optimistic about future growth in the number of accounting students. The AICPA’s survey results from The Supply of Accounting Graduates and the Demand for Public Accounting Recruits— 1995 for Academic Year 1993-94 pertained to colleges and universities’ forecasted enrollment in accounting programs. About two out of every three colleges surveyed indicated that accounting program enrollment at the bachelor’s degree level would be at the current level of enrollment or lower. The survey results indicated enrollment increases only at the master’s degree leveL Also showed by the survey was that the total number of candidates taking the CPA examination had steadily declined and was now at the same level of the early 1980s. The need for changes to accounting programs was discussed above. The focus of this literature review now turns to what should be the objectives of 150-hour accounting programs to meet the 150-hour requirement Objectives of 150-Hour Accounting Programs The objectives of 150-hour programs were widely debated in the literature. The different professional accounting organizations published articles and booklets contained information on what were the most important objectives of 150-hour accounting programs. The 150-hour program requirement greatly influenced changes to accounting program objectives by educational institutions. While some of the objectives by the different accounting organizations were different, there were still similarities in the recommendations as shown in the following Bedford Committee, Arthur Anderson, and Accounting Education Change Committee reports. Bedford Committee Report The 1986 Bedford Committee report was viewed as the foundation document that formulated the need for changes in accounting programs that met challenges of the 150- Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 32 hour requirement Objectives of 150-hour programs, as shown in the Bedford Committee report, were for effective educational programs that met the accounting demands o f the next century. Meeting these objectives required revised and expanded curricula, more effective education delivery process in the classroom, and better articulated structure for education institutions through which programs were offered. The Committee findings showed that the minimum objective of accounting education programs was to prepare and develop students for a wide range of professional accounting careers. The Committee’s view was that accounting curricula would span areas of general education, general professional accounting education, and specialized professional accounting education. The Bedford Committee’s report compiled 28 recommendations that covered the scope, content, and structure of accounting education. The more important recommenda tions of the Bedford Committee’s report were: 1. Rigorous general accounting education and the development of broad personal capacities and skills were preferred to premature specialization in accounting. 2. Accounting faculties needed to establish high expectations for students and should adjust curricula content and learning methods to what students were expected to learn. 3. Implement a broad educational structure that spanned the humanities, arts, and sciences. 4. Specialized professional accounting education was to be offered only at the graduate level. Another study supported this position by indicating that specialized accounting courses were to be deferred until the fifth-year of education (Schultz, 1989). 5. Faculties were to design educational experiences for students that required students to be active and not passive learners. 6. Assign senior faculty members to teach the introductory accounting courses in small class sizes. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 33 7. Minimize the amount of procedural accounting in courses or areas required for accreditation. 8. Develop skills needed for lifelong learning. The Committee supported other changes in accounting courses that reduced col leges’ focus on teaching students information needed to pass professional examinations. The Committee found that faculty were too reliant upon teaching from textbooks. Also, effective accounting programs were to include revised, expanded curriculum and more effective delivery system in classrooms. Arthur Anderson Study This major study supported the development of 150-hour accounting programs (Arthur Anderson & Co. et. al., 1989). This study did not list specific objectives for educational institutions but instead showed the current state of accountancy, present deficiencies, and challenges for education. While the study did not specifically list objec tives for the 150-hour program, the stated deficiencies and challenges that education faced represented substantive objectives for higher education. The report’s findings helped explain the need and support for 150-hour accounting programs. This study showed that accountants needed broader skills that supported a lifetime of professional success. The study listed communication, intellectual, and interpersonal skills as necessary skills and competencies for public accountants. The communication skills included formal and informal, as well as written and oral, elements. Intellectual skills were defined as creative problem solving skills. Interpersonal skills included ability of accounting practitioners to influence others, organize and delegate tasks, motivate and develop people, resolve conflicts, and possess skills of a good manager. The challenges education faced as indicated in the Arthur Anderson & Co. et al. study were in areas of curricula, faculty, students, universities, and accreditation. Accounting curricula were not to be textbook based or rule intensive. Study findings Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 34 showed the need for cases and simulations that reflected real world situations. Also indicated by the study was that major accounting skills and knowledge needed to be integrated throughout curricula. The findings of the Arthur Anderson study indicated that faculty were not to be dependent upon the use of secondary sources, e.g., textbooks, as the source of information. Instead, faculty needed to look at alternative ways to maintain knowledge such as real-world experiences in the field of expertise. Other findings from this study indicated that students were to be motivated by development and implementation o f stimulating curriculum. Also students were to have an increased expectation of job opportunities after college. Students were to be able to see the increased employment opportunities from spending one more year in college. Also indi cated by this study was that colleges and universities needed to develop a reward system for effective teaching. Faculty needed a salary system that rewarded effective teaching. Faculty needed to be rewarded for efforts that involved curriculum revisions that met the 150-hour program requirement. Finally, the study showed that accreditation standards were to be in alignment with desired outcomes of educational preparation. Since accreditation standards had significant impact on accounting education, then they were to be supportive o f new curriculum initia tives that supported 150-hour programs. Accounting Education Change Committee The AECC was created in 1989 by funding from the big six accounting firms. The AECC’s charter (Appendix A) was to promote changes in academic preparation of accountants that were consistent with the findings of the Bedford Committee report and the accounting firms “white paper” report (Ernst & Young, 1992). Ernst & Young indicated that the AECC was engaged in a variety of activities that were designed to improve the quality of accounting education. Activities by the AECC included issuance of formal Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 35 statements on subjects that concerned improvement in accounting education and provided grant funds for curriculum revisions at colleges and universities. The AECC also engaged accounting education leaders in a series of task forces that had specific agendas, and dis seminated in a variety of different ways, information about accounting education changes. The AECC in the 1990 Issues Statement No. 1 dded AECC Urges Priority for Teaching in Higher Education urged that teaching was to be a top priority for higher education. The AECC recommended that higher education needed to focus on teaching, curriculum, and course development The AECC encouraged all parties interested in the future of higher education to become involved in helping colleges and universities refocus on teaching, curriculum, and course development The priority o f teaching was reinforced by the AECC’s 1993 Issues Statement No. 5 titled Evaluating and Rewarding Effective Teaching, which re-emphasized the importance of effective teaching. In these Issues State ments the AECC identified effective teaching elements as curriculum design and course development, use of well-conceived course materials, presentation skills, well chosen pedagogical methods and assessment devices, presentation skills, and guidance and advising students. In 1991, the AECC published Issues Statement No. 2 titled AECC Urges Decoupling of Academic Studies and Professional Accounting Examination Preparation which urged a decoupling of academic studies from professional accounting examination preparation by colleges and universities. The curriculum objectives of colleges and universities needed to be more broadly based, and not just focused on preparing accounting students to pass the professional examinations, e.g., the CPA exam. Also, the AECC suggested that accounting students needed to complete all academic requirements before sitting for a professional exam. In 1990, the AECC published Position Statement No. One titled Objectives of Education for Accountants. The purpose of this statement was to establish what the AECC Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 36 viewed as the objectives of education for accountants. The aim of the AECC was to enlist the cooperation and creativity of the academic community and others to bring about changes in accounting education that were needed to accomplish stated AECC objectives. The AECC stated that the thrust of accounting programs was to prepare students to become professional accountants. Accounting students needed skills for, and a base for, life-long learning. The AECC identified that an overriding objective of accounting programs was to teach students to leam on their own. Faculty focus was to not to be on teaching students to pass professional examinations. Faculty focus was to help students develop the skills necessary to leam more effectively and be able to use these skills through a lifetime of learning. The life-long learning base was to be built upon the components of skill, knowledge, and professional orientation. The AECC’s objective for course content was to build a professional base for students on which continued learning could be accomplished. The components o f this professional accounting base were general education, general business education, general accounting education, and specialized accounting education. In Position Statement No. One, the AECC recognized the importance of the first accounting course for setting students’ perceptions about the profession. The AECC stated that the first course in accounting was to be an introduction to accounting rather than an introductory accounting course. Primary objective of the first course was for students to leam about accounting as an information development and communication function that supported economic decision-making in businesses. The first accounting course needed to facilitate subsequent learning, even if students took no additional academic work in accounting. Completion of the first course in accounting was to provide students with a broad view of accounting’s role in satisfying society’s need for information and function in business. The first accounting course was to provide accounting students with the basic features of accounting and reporting by organizations and fundamental accounting concepts. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 37 The AECC further commented on the importance of the introductory course in accounting by stating that the highest priority of teaching was to be given to this course. The AECC recommended that the most effective instructors were to teach the introductory accounting courses. Teachers o f these introductory courses needed to place a high priority on interaction with students and on interaction among students. Student involvement in the classroom was to be encouraged through cases, simulations, and group projects. The objectives of 150-hour programs that were presented in the literature were sum marized above. These objectives for 150-hour programs by the professional organizations were fairly broad and general. The next section of the literature review addresses how colleges and universities changed accounting programs to meet the 150-hour requirement. General and Specific Proposals for 150-Hour Programs General Proposals Many proposals for 150-hour programs in accounting were developed by different professional organizations and by respective colleges and universities. The AECC-funded colleges used the AECC funds to develop program models that met the 150-hour require m ent Several of the AECC funded colleges published articles that described the process and results of their efforts to develop 150-hour programs. Model programs at these AECC funded colleges were compared, where possible, with model programs that were advanced by professional organizations. The professional accounting organizations’ model programs were by necessity broad in nature and were used as guidelines by colleges and universities in developing 150-hour programs. Even though the model programs were broad, and fairly general in scope, these models offered guidance to colleges and universities as to the recommended curriculum make-up for 150-hour programs. The accounting profession provided broad guidelines to colleges and universities that implemented 150-hour accounting programs. Professional accounting organizations supported the need for more program emphasis to be placed on general education Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 38 requirements. The 1992 AICPA’s model program recommended a minimum of 60 hours in general education: 24-50 hours in business administration and 24-50 hours in accounting education (AICPA, 1992). The general education hours were to be in areas of ethics, globalization, communication, behavioral sciences, economics, elementary accounting, computers, mathematics, and statistics. Business administration hours were to help the student understand the concepts, processes, and institutions involved in the production and marketing of goods and services, and understanding of organizational forms. Business financing was to be included in the business administration hours. Additional, the CPAs were to understand the administrative processes of the business organization, including strategic decision making and planning, and policy determination. Business administration hours included coverage of govern ment, not-for-profit organizations, and for-profit businesses. The accounting education section of the AICPA’s model program included teaching technical, analytical, communication, and interpersonal skills. Courses included in the accounting education curriculum were financial and managerial accounting, taxation, auditing, information systems, professional ethics, global dimensions, and total-quality management The 1986 Bedford Committee report did not make specific program recommenda tions but did indicate that all college graduates needed a strong, broad-based general education. Liberal aits education requirements were to be expanded and reinvigorated, and all bachelor degree recipients needed at least two full years o f liberal arts education. Accounting curricula needed more breadth in professional education before special ized courses were taken (Williams, 1990). Curriculum focus was to be on broader skills that supported a lifetime of professional success. Williams cited examples of accounting law and medical programs where specialized education and training took place only after a broad education had first been accomplished. Curriculum recommendation by Williams Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 39 included 60-80 hours in general education, 35-50 hours in business administration, and 2540 hours in accounting education. The AECC did not recommend specific curriculum for 150-hour programs. The AECC established broad program guidelines that allowed colleges and universities flexibil ity in development of accounting programs. The AECC’s 1990 Position Statement No. One titled Objectives of Education for Accountants, identified skill areas needed by accounting graduates which were general knowledge, intellectual skills, interpersonal skills, communi cation skills, organizational and business knowledge, accounting knowledge, accounting skills, and personal capacities and attitudes. These needed skills, identified by the AECC, were grouped into component areas o f general education, general business education, general accounting education, and specialized accounting education. The AECC’s guide lines were purposely broad to serve as a guide for colleges and universities to follow in changing and developing accounting programs that met the 150-hour requirement. The American Assembly of Collegiate Schools of Business (AACSB) also did not prescribe a specific model for colleges and universities to follow in developing 150-hour accounting programs. The AACSB stated that one-half of the four-year curriculum was to be devoted to general education, with the remaining portion of the accounting program dedicated to professional education (Chandra & Hock, 1992). Topics to be covered in the undergraduate and graduate curricula included ethical and global issues, political and social issues, regulatory and environmental issues, and the impact of demographic diversity on organizations. The AACSB left curriculum design to the colleges and universities to formulate. The AACSB presented some general guidelines for curriculum development in the 1994 Achieving Quality and Continuous Improvement through Self-Evaluation and Peer Review brochure. This AACSB brochure indicated that curriculum was to include foundation knowledge for business in areas of accounting, behavioral science, economics, and mathematics and statistics. For specialized master’s programs, e.g., accounting, the Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 40 AACSB required a m inim u m of 30 semester hours in accounting with at least 12 hours to be in the area of specialization. Even though the different professional accounting organizations made specific recommendations as to skill areas covered in proposed programs, colleges and universities had broad latitude to develop overall curricula that met the 150-hour program requirement. The recommendations by the AECC, and others, were used as guidelines by colleges and universities in developing 150-hour accounting programs. A survey was sent to 1,000 public accountants representing local, national, and international CPA firms (Novin & Tucker, 1993). The study objectives were to identify the relative importance of various academic subjects for accounting students that sought a career in public accounting, and to determine the degree of additional education needed in each subject area. The survey results indicated those communication skills o f written and verbal were the most important areas where entry-level public accountants needed addi tional hours. This study showed other areas of importance as financial accounting, taxa tion, computer software and spreadsheets, and business communications. Least important areas indicated by this survey were international accounting and international business. Study findings indicated that public accountants wanted accounting students with a broad, well-rounded perspective, rather than a narrow, technical accounting perspective. The message to colleges and universities from this study was that a broad-based perspective for accounting students was to be a critical element in curriculum design. In addition, the design of 150-hour programs had to consider all clients of accounting graduates that included for-profit, government, and not-for-profit organizations. Also, faculty had to be involved and supportive of changes to accounting programs (Albin & Crockett, 1991). Another study showed the characteristics of existing five-year accounting programs (Harrison, Chesser, & Conway, 1991). This study sent a questionnaire to the administra tors of 13 five-year accounting programs that requested information on background and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 41 goals, administration, admission, funding, curriculum, placement, and future direction of accounting programs. Accounting programs at the surveyed colleges and universities had been in existence for an average of 10 years. Results from the survey were: 1. The primary motivation by colleges and universities to establish five-year accounting programs was to improve student education. 2. The main goal of the programs was to improve student education. 3. The degree awarded most by these programs was a MS in Accounting. A MBA with a concentration in accounting was the second most commonly awarded degree. 4. There was no, or very little, interface between the five-year accounting programs and MBA programs. 5. The junior year was the typical year of admission into the five-year program (Harrison, Chesser, & Conway, 1991). Specific Proposals The AECC provided funding to 13 colleges and universities, including two com munity colleges, to support curriculum development that met the 150-hour program requirement The 13 awarded grants were based on a competitive process from a total of 111 submitted proposals (Emst & Young, 1992). The AECC selection process for award o f funds to colleges and universities was based on several different criteria bases. The selected proposals contained a diversity of project goals. No single project goal determined the grant selection process. The AECC selected proposals based upon purpose of the proj e c t description and scope, desired results, strategies and timeline of implementation, and budget and commitment (Williams & Sundem, 1990). The main uses by colleges and uni versities of AECC funds were for faculty release time and summer support for curriculum re-examination (Williams & Sundem, 1990). Other uses of the AECC funds included faculty training, educational consultants, outcome measurement software development, and project administration. Some of these colleges and universities shared these program Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 42 changes and development experiences by documenting and reporting their results in the literature. For example, the grant awarded to Brigham Young University was to identify the competencies accounting graduates should possess, develop faculty understanding of the competencies, and develop and implement a core curriculum that effectively developed these competencies in accounting students (Ernst & Young, 1992). The focus of the grant to the University of North Texas was for integration of the accounting curriculum with the liberal arts and business curriculum. The grant awarded to Arizona State University was for re structuring introductory accounting courses, providing an information systems foundation for upper-division accounting courses, adopting a laboratory science model of instruction, and incorporating a heavy reliance on the case method into the classroom. These examples showed that AECC awarded grants were based upon different proposals and objectives. Kansas State University experience. Several of the colleges that received AECC grants documented the results from changing accounting programs that met objectives of the 150-hour program requirement The changes implemented in the accounting program at Kansas State University (KSU) were documented by the university and reported in the literature (Williams & Sundem, 1990). The objectives by KSU for changing their accounting program were: 1. Provide accounting students with sufficient technical and professional knowledge that formed the foundation for professional accounting careers. 2. Provide accounting students with skills needed to increase knowledge in the professional accounting environment 3. Attract and retain students with the talents required for success in the accounting profession (Williams & Sundem, 1990). About 23% o f the total KSU budget of $400,588 for implementing 150-hour program changes were from an AECC grant. Most of the AECC grant was used by KSU Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 43 for personnel costs such as faculty release time. The KSU experience, described below, was a classic example of an accounting program that had not changed significantly over the last 75 years. The accounting program at KSU had not considered the program’s impact on students’ ability to learn and understand. The main focus of the program had been on preparing accounting students to pass the CPA examination. The KSU process for changing the accounting program began with establishing a set o f objectives and then developing a framework that sequenced the content of the accounting curriculum that led to achievement of the objectives. The knowledge and skills that KSU students needed to be successful graduates were identified and became the guiding force for program changes. A program structure was developed that included these identified knowl edge and skill components. A logical sequencing of accounting curriculum content was developed which aided students in learning accounting in a more comprehensive and coherent manner. Kansas State University resequenced courses in the accounting program because they found that the program’s current approach had not provided students with an adequate accounting foundation before exposure to more complex accounting areas. The revised accounting program allowed KSU students to learn within a coherent and complete knowledge structure instead of the piece-meal learning that was contained in prior curricu lum. The new curriculum included courses for development of communication and analyti cal skills. Entrance into the accounting program at KSU was after two years of college. The accounting program culminated with a Masters of Accountancy degree after five years of study. Students were able to choose one o f three tracks to follow in their fifth year. The accounting program choices were financial accounting/auditing, managerial/controllership track, or taxation track. At KSU, the accounting students’ first two years emphasized a liberal arts educa tion that formed a foundation for the later accounting curriculum sequence (Ainsworth & Plumlee, 1993). After two years, the accounting student entered the resequenced Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 44 accounting portion of the program curriculum. The new accounting curriculum sequence started with introductory level courses followed by accounting processes and controls level courses, core accounting level courses then followed, research level courses were then offered, and concluded with specialized level courses. Course sequencing was accom plished by using the criteria of subject related and learner related principles. Activities used by KSU to sequence the courses were operating, financing, or investing activities; record ing or reporting activities; decision-making or decision-facilitating activities; and specializa tion or general accounting knowledge was used to group related topics within a course. The delivery method of instruction was also addressed by KSU for assessment and change. Kansas State University found that the lecture method of teaching with objective testing was appropriate for lower level classes where student knowledge and comprehen sion were the desired objectives. In higher content level courses that required higher cogni tive skills KSU found that these courses were best taught using problem solving methods. In courses where content elements were to be synthesized and evaluated, and professional skills developed, then case analysis that involved oral and written assessment was the preferred approach. Brigham Young University experience. Another school that received AECC funds was Brigham Young University (BYU) (Williams & Sundem, 1990). The AECC grant to BYU stressed that curriculum development was to be designed, as much as possible, so that other institutions could benefit from BYU’s experience. An outcome of B YU’s project was that their experience in curriculum and program development could be transferred to other institutions. The focus of BYU’s program changes was on a restructured curriculum that included the five basic business cycles of auditing, sales and collection, acquisition and payment, conversion, personnel, and financing cycles. Based upon program change experience, BYU developed 10 recommendations that could be tried in whole, or in part, at other colleges and universities. The 10 recommendations by BYU were: Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 45 1. Accounting courses were to be taught from a systems perspective. BYU con cluded that the traditional functional areas of accounting could be taught with more realworld relevance if taught from a systems framework. 2. Functional accounting subject matter was to be integrated. The University used a business events framework to integrate common topics into courses. 3. Projects were introduced into courses that developed written and oral communi cation skills. Communication skills, written and oral, were identified as needed skills and competencies by accountants. BYU incorporated projects and activities in the junior year core courses that gave students an opportunity to develop communication competencies. 4. Group learning was to be utilized as a class activity. Group learning was con sidered to be an important competency that students must learn in order to produce effective professional work. BYU recommended that all institutions increase group work in courses. 5. Written teaching plans were to be used in all courses that clearly established course objectives. The teaching plan expanded the traditional course objectives and served as a focus of learning objectives for both students and faculty. 6. The grading system was to be expanded to include assessment o f non-technical competencies. The expanded grading criteria included assessment of accounting compe tencies beyond just tests for grade assessment. Measurement of other competencies for assessment of grades gave students the message that other skills were important 7. Examinations that tested students’ ability to think and reason rather than simply the ability to regurgitate memorized textbook material were to be used. In BYU’s curricu lum changes, a conscious effort was made to avoid short-term memorization. The focus was on providing opportunities for students to develop reasoning powers. For example, examinations contained very few multiple-choice questions. Examinations included more open-ended questions where students used reasoning power and general accounting Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 46 concepts in answering the questions. In addition to using written examinations, one oral examination was conducted as part of the course grade. 8. Business law, ethics, international concepts, and current event topics were inte grated into all courses. Purpose o f this recommendation was to get away from textbook learning. In addition ethical considerations and international events were brought into the course material 9. Students were invited to give honest and useful feedback on courses and teach ing methodology that was used. The students were asked what they liked best, and worst about the courses, and what should BYU do differently. Brown bag luncheons were con ducted with students by faculty for more open discussion and feedback from the students. 10. A faculty development program that rewarded faculty for innovative teaching was to be initiated (Accounting Education News. June 1993). Brigham Young University study results showed that additional faculty training was necessary to help facilitate curriculum changes. Areas where additional training was deemed necessary included how to manage change, how to integrate material across functional lines, how to teach expanded competencies such as communication skills and group dynamics, and how to evaluate student performance of expanded competencies. Program models. A major comparative study comparing 17 models for accounting education by different organizations showed common trends in changes to accounting programs (Needles & Powers, 1990). This study showed the slow rate of change by colleges and universities towards meeting recommended objectives and structure for model accounting programs. Needles and Powers’ comparison of the different education models was based upon dimensions of program objectives, general education requirements, business education requirements, and accounting education requirements. The general education requirements included courses in English, communications, behavioral science, economics, elementary accounting, introduction to computers, mathematics, logic and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 47 ethics, humanities, and political science. Needles and Powers stated that the most com monly referenced set o f general education requirements was the AACSB model. Table 1 shows the general education requirements by the different organizations in the Needles and Powers study. When compiling general education requirements from the different organiza tions, Needles and Powers found many commonalties among the models as illustrated by Table 1. Table 1 Common Body of Knowledge—General Education Component NAA Selected models AICPA FSA Recommended total 60 60 60 60 Communication X X X X Behavioral sciences X X X X X X — X X X — Economics Mathematics Logic and ethics X X X X X X Elementary Accounting X X X AACSB Note. X = inclusion of item in the model. Except for business policy and some unique recommendations by the National Association of Accountants (NAA), Needles and Powers’ study showed that most of the business education models closely mirrored the AACSB model requirements. These business education models are presented in Table 2. This table includes appropriate updates of Needles and Powers data when more recent information was available. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 48 Table 2 Common Body of Knowledge— Business Education Component NAA Selected models AICPA FSA Recommended total 36 24-50 30-38 36 X X X -- X X X X X X X X X Economics Business law Marketing Finance Organizational behavior Communication Quantitative applications — X X X X X X X X X X X X X X AACSB Note. X = inclusion of item in the model. The common body of knowledge presented for business education contained many similarities between the different illustrative programs. Other suggested courses to be included in the business education component of an illustrative accounting program included total-quality-management, globalization, and business ethics courses. The common body of knowledge presented for the accounting education require ment included courses in the traditional areas of financial accounting, cost accounting, taxation, auditing, and computers and systems. While agreement was achieved on the areas to be included in the accounting education component, there was a wide variation in the total number of recommended hours in the accounting education component. Beyond the five traditional areas of accounting, there was no consensus on inclusion o f other accounting subject areas. The AICPA avoided mandating a prescribed accounting curriculum for the 150-hour program requirement. Instead the AICPA proposed a model accounting curriculum in Table 3 that colleges and universities might follow. The model program established by the AICPA specified a required minimum number of accounting and business hours that allowed colleges and universities flexibility Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 49 in designing accounting curricula. The AICPA’s model accounting program, provided in the publication Academic Preparation to Become a CPA (1992), indicated that accounting curricula contain a certain number of hours in general education, business administration, and accounting education courses, but did not propose what was taught in the fifth year of education. This AICPA model program by the accounting profession gave curriculum flex ibility to colleges and universities and avoided specific recommendations for courses for the fifth year of education. The AICPA’s model accounting program is presented in Table 3. Table 3 AICPA’s Illustrative Program—Accounting Education AICPA Component Recommended total Financial accounting Financial accounting theory Applied financial accounting problems Managerial accounting 24-40 hours Accounting for decision making Cost determination and analysis Management accounting controls X X X X X Taxes Tax theory Tax problems Auditing X X Audit theory and practice The computer in auditing Audit problems and case studies Information systems X X X Professional ethics and responsibility Globalization Total-quality-management Internships and cooperative programs Electives Note. Not all courses were to be included in the program total. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. X X X X X X 50 Accounting Education Change Commission Objectives o f Introductory Accounting Courses In 1992, the AECC published Position Statement No. Two titled The First Course in Accounting that addressed the importance of the first course in accounting. The AECC’s Position Statement No. Two indicated that the first course in accounting was important to non-accountants, as well as accountants, as it shaped students’ perception of the profes sion, aptitudes and skills needed for successful careers in accounting, and career oppor tunities in accounting. The AECC’s objective for the first course in accounting was for students to leam about accounting as an information development and communication function that supported economic decision making in business activities. The first course laid the foundation and facilitated subsequent learning for accounting courses that followed. Objectives that the AECC identified for students completing the first course in accounting were to: 1. Gain a broad overview of accounting and accounting’s role in satisfying organizations’ need for information. 2. Understand the basic features and reporting of accounting by organizations. 3. Understand basic accounting concepts as well as the elements of financial statements. 4. Appreciate the role of accounting in preparation of taxes and economic measurements. 5. Enhance analytical skills and the ability to solve unstructured problems. 6. Gain an appreciation of accounting as a dynamic profession (Accounting Education Change Commission, June 1992). The AECC recommended to colleges and universities that the best teachers teach the introductory course in order to get the students off on the right foot in accounting. Another priority for teachers was interaction with and among students. The first course was Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 51 intended to be a positive experience for the students. Typically the first accounting course taken by students was financial accounting (Smith & Usry, 1989). In 1990, the AECC in Position Statement No. One titled Objectives of Education for Accountants stated that the introductory course must serve the interests of both the stu dent who will enter the accounting profession and the student who will not. At Brock Uni versity, the introductory accounting course was developed with a wider focus then just the traditional financial perspective for the introductory course (Accounting Education News. June, 1993). The AECC’s Position Statement No. One stated that students were to be active participants in the learning process and not passive recipients of information. These recommendations were guidelines for colleges and universities when making changes to introductory accounting courses to make this course interesting, relevant, and useful to students. Another study pertained to the use of the Monopoly game in the introductory accounting courses as an interesting and exciting activity that simulated actual business experiences to students and which met some o f the AECC’s recommendations (Knechel & Rand, 1994). Students were required to record the simulated business transactions that occurred by playing the Monopoly game. Knechel and Rand reported on a study that compared the motivation level of students in introductory accounting classes where the Monopoly game was used, and students in introductory accounting classes where a practice set was used. Study results indicated that a higher level of motivation was showed from students who used Monopoly to simulate business activity than from students who used the traditional approach of practice sets in introductory accounting courses. Effective oral and written communication skills were another needed competency by accountants as identified by the AICPA and AAA. Another study looked at ways of incor porating these written communication skills into traditional financial accounting courses (Wygal & Stout, 1989). Wygal and Stout experimented with informal techniques such as Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 52 students responding to focused and open-ended questions. An example of a question used by Wygal and Stout was to ask students to respond in writing to the question of “what is accounting.” Wygal and Stout concluded that using informal written techniques in accounting courses added positively to students learning experience. The study indicated that using informal written techniques opened up lines o f communications in classrooms and identified areas where students had deficiencies. Arizona State University (ASU) was awarded an AECC grant to study the restructuring of introductory accounting courses (Williams & Sundem, 1991). Goals established by ASU for the study of introductory accounting courses were to expose all students to the multiple uses of accounting information and prepare accounting students for subsequent accounting courses. A key concept developed from ASU’s study was the use o f a laboratory format for introductory accounting courses. The lab concept gave account ing students hands-on experience of accounting material discussed in the lecture period, and fulfilled the AECC’s recommendation for active participation of students in the learning process. The lab concept freed up classroom time for further interaction between professors and students. Another reason for supporting the lab concept was that it allowed classroom time for addressing of other needed skills (Schultz, 1989). Also the lab concept allowed tests and quizzes to be given in the lab period thus further freeing-up classroom time. Arizona State University concluded that creation of the lab format was the most unique feature of their accounting curriculum development project. A further study pertained to curriculum changes that occurred at two community colleges that received AECC grants (Williams, 1992). Williams reported that Kirkwood Community College in Cedar Rapids, Iowa, used the AECC award to implement changes to their two-semester Accounting Principles course. Kirkwood’s objectives for accounting principles courses were: 1. Encouragement of the brightest students to become professional accountants. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 53 2. Improvement of students’ communication skills. 3. Development of students’ critical thinking skills. 4. Increasing students’ knowledge of the influence that the business environment had on accounting. 5. Improving students’ ability to work in groups. 6. Improving accounting instructors’ teaching methods (Williams, 1992). Kirkwood College developed a lab requirement for the accounting principles courses. Kirkwood College also changed the perspective and scope of the principles course to be in alignment with the accounting profession’s recommendations. To meet professional recommendations, the accounting program focus changed to understanding accounting concepts from a user instead of a preparer perspective. Kirkwood Community College changed the program’s pedagogical approach from a lecture and routine problem solving approach to where students were more active learners, solved more unstructured problems, and worked in groups. An AECC grant was awarded to Mesa Community College in Arizona for study of delivery system methods for introductory accounting courses (Williams, 1992). A result of this study was a change for introductory accounting courses from a knowledge-oriented to a process-oriented approach. Another curriculum change at Mesa Community College was development of introductory accounting courses that focused on the competencies and skills required of transfer students. Mesa Community College developed a computeroriented laboratory for hands-on applications by students that reinforced concepts learned in the classroom. Some of the mechanical and procedural accounting material traditional taught in the classroom was transferred to the lab which freed-up classroom time. Another study showed what should be the objectives of the elementary (introductory) accounting courses (Baldwin & Ingram, 1994). Baldwin and Ingram reported that although the introductory classes were key to the accounting curriculum they Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 54 were frequently neglected by colleges and universities. This study showed that, although the introductory accounting classes comprised about 50% of total student credit hours in accounting, the courses were typically taught by part-timers, short-timers, or graduate stu dents. This way of staffing introductory accounting courses by colleges and universities had a negative effect on accounting students which discouraged them from pursuing an accounting degree. The study showed that the typical teaching mode for elementary accounting courses was textbook driven. A result of this study was that the elementary accounting courses had become too limited, and that the only purpose of the course was to prepare students for intermediate accounting. The study showed that new objectives were needed for the introductory accounting courses such as: 1. Establishment of the role and function of organizations in society. 2. Development of how information was used in business organizations. 3. Understanding how accounting fulfilled information needs. 4. Attract students that had excellent reasoning and analytical skills. 5. Understand how historical events within the organization impacted future decisions (Baldwin & Ingram, 1994). This study showed that the focus of introductory accounting courses needed to be changed to a user and not a preparer perspective. Also needed was the introductory accounting course to emphasize accounting from a conceptual and interpretive perspective rather than a procedural approach. The focus in the course should not be how accounting was done, e.g., the procedural basis, but rather emphasis was on why accounting was done. The focus in the classroom should be on teaching from a user perspective so accounting students understand the conceptual nature and importance of accounting to business management. Accounting was to be taught as a profession and not as a bookkeeping, procedural activity. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 55 Proposals for Fifth-Year Courses A general agreement between the professional accounting organizations and col leges and universities was that the fifth-year of 150-hour programs focused on specialized accounting courses. Part of the general agreement was that accounting students took gen eral education and business administration courses before the fifth-year of education. These general education and business administration classes built a foundation for accounting students that prepared them for the specialized accounting classes taught in the fifth-year. A survey of CPAs in public practice was conducted to ascertain if there was a con sensus from CPAs on what courses should be emphasized in the fifth year of education (Leinicke, Ostrosky, & Fish, 1992). Survey results showed that federal taxation and inter personal skills were the most important subjects in the fifth year of education. The high ranking for federal taxation reflected the complexity of tax laws. The high ranking given to interpersonal skills supported the Bedford Committee report findings that greater emphasis was to be placed on written and oral communication skills for accountants. The study’s findings showed that the surveyed CPAs were generally satisfied with beginning accountants’ technical skills, but that communication skills needed improvement. The report indicated that over 90% of the respondent CPAs believed that an internship require ment was to be included in the accounting program. Changes to Classroom Delivery Systems The 1986 Bedford Committee’s report questioned the effectiveness of traditional teaching and learning methods. The lecture method combined with routine problem solving techniques had dominated teaching of accounting for the last 50 years. These teaching methods were no longer adequate in preparing accounting students with the necessary skills and competencies that met the challenges of the dynamic accounting profession. Students should be challenged and required to learn, think, and be creative (Ernst & Young, 1992). In 1989 the then big eight accounting firms called for faculty to develop relevant and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 56 stim ulating curriculum with state-of-the-art teaching methods that met accounting graduates requirements for a successful accounting career. The curriculum focus was to be on developing analytical and conceptual thinking skills in accounting students. Focus of curriculum was learning information, not memorization and regurgitation of facts (Winn, 1996). Winn reported that Project Discovery at the University of Illinois achieved success in getting students to realize that there was not always just one, clear-cut answer to a given situation. This project forced students to understand given assumptions of situations and to develop answers that were supportable. The Bedford report was critical of the excessive reliance on textbooks that reduced instructor and student effectiveness. This over-reliance on textbooks and textbook content was called “the textbook dilemma” (Korb & Wright, 1993). Textbook emphasis needed to be on the use o f accounting information and away from the procedural aspects of accounting. Korb and Wright reported on the need for accounting educators to provide feedback to textbook authors and publishers so that they can incorporate accounting changes into textbooks. The Bedford Committee and AECC recommended that faculty design educational experiences for students which required them to be active and not passive learners. The Committee also recommended more interaction between faculty and students. The report indicated that every accounting teacher had the responsibility to search for useful knowl edge and to integrate this knowledge into learning objectives of accounting programs. The 1989 big eight accounting paper pertained to innovative methods that could be used to increase interaction between practitioners and accounting professionals. One innovative way to bridge the gap between practice and education was the Securities and Exchange Commission (SEC) Academic Fellows program. The SEC selected accounting professors to work in the SEC for one year to gain hands-on experience. The AECC, in the 1990 Issues Statement No. 1, called for higher education to give renewed emphasis to teaching, curriculum, and course development Faculty were to be Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 57 rewarded for these activities. In Issues Statement No. 5, the AECC stated that effective teaching was to be a primary consideration in the tenure, promotion, and merit evaluation process for faculty. The AECC defined the effective teaching characteristics as curriculum design and course development, use of well conceived course materials, presentation skills, well chosen pedagogical methods and assessment devices, and guidance and advising of students. The AACSB also defined faculty instructional characteristics and responsibilities as being effective creation and delivery of instruction, evaluation of instructional effective ness and student achievement, continued improvement of instructional programs, and innovation in instructional processes. Individual faculty instruction responsibilities per the AACSB were currency in their instructional fields, delivery of effective instruction, and accessibility to students consistent with the school’s expectation. A study of AACSB colleges supported that it was difficult for faculty members to achieve tenure if they did not publish (Street, Baril, & Benke, 1993). This study indicated an apparent conflict with the AECC’s position that teaching should be given the top priority of faculty. The percentage of support for the study’s findings varied with the type of insti tution. Research and doctorate-granting institutions were more inclined to support these findings than were the more comprehensive college where research and publishing was not as high of a priority. However the findings from a different study presented that research and teaching were complimentary and not necessarily competitive activities (Beaver, 1992). At an elementary level, research was the production of knowledge while teaching was the dissemination of that knowledge. Good teaching, according to Beaver, involved a blend of research and teaching. Proposals were made by the AECC funded colleges on changes to teacher’s delivery methods that increased student participation in the classroom. Activities such as assigning cases, group projects, and oral and written assignments encouraged students to become active participants in class. The AECC-funded colleges did incorporate some of Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 58 these recommendations into revised accounting programs. North Carolina A&T University, for example, incorporated these activities into accounting courses (Benke & Hermanson, 1993). At North Carolina A&T University, business professionals were invited to visit the campus for discussions about work, and to serve as role models for accounting students. Another innovative delivery method for accounting education was having students interact with local businesses on the resolution of real-world business problems (Khani, Edwards, Read, Pope, & Freeman, 1994). Encouraged was student usage o f current tech nology such as the use of electronic databases and CD-ROM software. Other techniques used in courses were assignment of problems that required students to look at the social, economic, and political influences in business problem solutions. Brigham Young University reported innovative teaching techniques that used faculty team planning, teaching, and evaluation which used a business-events systems approach to teaching (Smith, 1993). Brigham Young University reported experimenting with the use of new pedagogy such as obtaining student feedback on courses, and assign ment of course grades. Course grades, at BYU, were based on criteria that included more than just examination results such as oral examinations, group presentations, written assignments, cases, group participation as well as the traditional examination criteria. A compilation of 17 education models developed over the last 20 years showed that the focus of the recommended models had been on curriculum content and not on develop ment of analytical and communication skills (Needles & Powers, 1990). The report by Needles and Powers showed that colleges needed to respond to the need for development of analytical and communication skills by addressing the need for (a) faculty training to develop innovations in teaching, learning, and student evaluation, (b) balancing the time demands of innovation with curriculum content, and (c) for departments, schools, and colleges to devote additional resources in support of these efforts. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 59 Advantages and Disadvantages of 150-Hour Programs Proponents’ Arguments for 150-Hour Programs The 150-hour program requirement received generally positive reception by profes sional accounting organizations and colleges and universities. However, 150-hour pro grams were not without shortfalls and critics. State boards o f accounting accepted 150hour program s by initiating action at state levels for legislative approval of the 150-hour accounting program requirement About 40 states adopted legislature that required CPA examination applicants to complete 150 credit hours of education in order to meet the CPA examination requirements (Public Accounting Report, 1995). Reasons supportive of 150-hour programs were that the extra 30 hours aided students’ preparation and ability to pass the CPA examination. The fifth-year accounting graduates from Florida, which established the 150-hour requirement over 10 years ago, had some of the highest pass rates of any state on the CPA examination (The CPA Personnel Report, 1994). The first-time pass rate for Florida CPA candidates increased from 14% to 34% since Florida enacted the 150-hour requirement (C leveland Plain Dealer. 1992; Snow ball, 1990). Other states that enacted the 150-hour requirement also reported an increased success rate for first-time takers of the CPA examination. States that had five-year education requirements reported passing rates for first time CPA examination takers increased from 12% to 30% (Pavton Daily News. 1992). Graduates from states that had a five-year requirement were better prepared to sit for the CPA exam as evidenced by the increased pass rate on the examination. Statistics by the NASBA showed that those candidates with master’s degrees performed significantly better on the CPA examination. Candidates with master’s degrees, as reported by the FSA, were more likely to pass all areas of the CPA examination at the first sitting than were candidates possessing bachelor’s degree. Other benefits of 150-hour programs were that graduates were more efficient and better qualified to meet present and future demands of accounting (Elam, 1992). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 60 Accounting graduates from 150-hour programs were able to adjust more quickly to changes in the economic environment These 150-hour program graduates were prepared to learn and had an intellectual breadth that helped them absorb new knowledge and the ability to cope with new situations. Advocates for five-year programs indicated that these graduates were more efficient, and technically better able to serve clients (Reeve, 1983). Graduates from 150-hour accounting programs were better prepared to deal with situations that required an overall business perspective (Cincinnati Post. 1992). This article showed that the body of knowledge required of current CPAs was more extensive than a decade or so ago which further supports the 150-hour program requirement. The broadened education requirements of 150-hour programs provided graduates with skills to cope with initial employment demands and improved early employment experience (Patten, 1995). Another reported benefits for accounting graduates from 150-hour programs were reduced employee turnover, and faster advancement (Tennessee CPA. October 1986). Additional support for 150-hour programs was that the licensing criteria for CPAs helped filter out incompetent individuals (Public Accounting Record. 1991). That is, people holding a CPA certificate were judged by society as having a certain degree of competency, and that the 150-hour requirement increased the favorable perception of CPAs. The AICPA stated that the only reason for licensing and regulating CPAs was to protea the public from incompetent and unscrupulous individuals who might attempt to sell auditing services to the public. This was not a trivial matter as the accounting profession had come under strong criticism for lack of quality in financial reporting and audits. Also, the increased educational requirements elevated the accounting profession to the professional status of medicine and law (Holder, Larsen & Williams, 1985). Arguments and Rebuttals Against 150-Hour Programs Initial results from Florida’s experience with the 150-hour requirement for Florida’s accounting graduates were mixed (Yost, 1986). After adoption of the 150-hour requirement Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 61 to take the CPA examination, Florida experienced a reduction in the number of candidates taking the CPA exam. Florida lost CPA candidates to neighboring states that did not have the 150-hour requirement. This loss to neighboring states was especially acute in the area o f Florida that bordered other states. Florida’s loss of CPA candidates to other states was reduced when more states adopted the 150-hour requirement In 1995, the AICPA reported that in five states, including Florida, that implemented the 150-hour requirement the number of accounting students had not decreased (Journal of Accountancy. 1995). An argument against 150-hour accounting programs was that the extra 30 hours of education caused an additional cost to colleges and universities and to accounting students. The FSA responded to this point in the 1996 Position Statement on the 150-semester Hour Education Requirement which cited a 1995 AICPA survey that indicated that most account ing students already took more than 120 hours to receive a baccalaureate degree. Thus the 150-hour requirement did not necessarily mean an additional 30 hours of college work for most accounting students. The AICPA in the Position Statement on the 150-semester Hour Education Requirement reiterated that most accounting students needed less than one addi tional semester of education to meet the 150-hour program requirement. The AICPA reported that accounting students did not need to forego employment while fulfilling the additional requirements o f 150-hour programs as they could work during this period. The extra time needed to complete the additional 30 hours of accounting education was also supportable from a cost/benefit analysis. A newspaper article reported that results from a survey estimated that each year of college added on the average 16% to an individ ual’s lifetime earnings (New York Times. 1992). Also reported by the New York Times was that the earnings for college graduates were better than the wages for high school grad uates during the period 1979 through 1991 (New York Times. 1993). Further evidence o f the beneficial aspect of increased college hours was that college graduates earned about 80% more than high school graduates (Wall Street Journal. August 19, 1996). The Wall Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 62 Street Journal article showed that a person's earnings increased about 10% for every year of school, high school or college. A survey of public CPAs showed that over 80% of the respondents indicated that graduates from 150-hour programs commanded salaries that were at least 5% higher than graduates from 120-hour programs (Leinicke, Ostrosky, & Fish, 1992). Thus, from a cost/benefit standpoint, the payback from the extra year of col lege that resulted from 150-hour programs more than paid for itself over the individual’s lifetime. A letter to the editor of Accounting Today showed that the additional cost to students from the 150-hour requirement must be put into perspective of earnings (Elliott, 1992). This meant that the additional cost was to be viewed over a lifetime of increased earnings. Additionally, an AICPA survey revealed that 43% of colleges had existing programs in place that met the 150-hour requirement. This indicated that the marginal cost of implementing the fifth-year of education by colleges and universities was low. A question asked of the accounting profession was how 150-hour programs would impact accounting program enrollment by minority and economically disadvantaged stu dents? The AICPA reported that the number of minority CPAs was less than 1% of total CPAs. Surveys of student characteristics at 29 Federation of Schools of Accountancy (FSA), yielded over 2,000 useable results which indicated that a very low percentage of accounting students at these colleges and universities were minorities (Graves & Nelson, 1992,1993). The survey showed that the largest ethnic minority in accounting programs was Asian American with about 4% of the accounting enrollment followed closely by African-Americans with 3%. To increase the number of minority students in accounting, the AICPA provided about $500,000 per year to support minority colleges. Scholarship funds, internship programs and even stepped-up student recruitment efforts to recruit minority accounting students were tried, but with limited results (Florida CPA, 1993). The AICPA in the Facts about the 150-Hour Education Requirement stated that minority enroll ment in professional schools such as medicine and law was not affected by the increased Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 63 education requirement. These results indicated to the AICPA that a decrease in minority enrollment in accounting programs should not be expected from requiring 150-hour pro grams. The AICPA awarded minorities some 210 scholarships totaling $396,500 for the 1993-94 academic year (Florida CPA & Flintall, 1993). The awards to minority students in accounting were as much as $5,000 per each academic year. Each scholarship recipient was assigned to a CPA mentor that provided guidance and support during the students’ academic years. The AICPA made available fellowships of $12,000 for minority doctoral students. Fintall identified other activities that could help recruit minorities into 150-hour accounting programs. These activities included cooperative arrangements with larger uni versities, increased financial support for historically black colleges (HBCs) and students, HBC faculty fellowships, HBC student internships, and increased recruitment efforts at HBCs (Flintall, 1993). Reported reasons why African Americans rejected the accounting profession and the 150-hour requirement were: 1. African Americans with high academic potential were encouraged to select other professions. 2. Financial burdens of historically black colleges and students had increased. 3. Access by qualified African Americans to the profession was limited. Flintall reported on findings from a study by the New York State Society of CPAs on the status of African-American CPAs in public accounting. The study was a national survey of African-American CPAs at the largest domestic CPA firms, African-Americanowned firms, and historically black colleges on African Americans’ participation in the accounting profession. Study results indicated that despite 20 years of commitment by the accounting profession to increasing minority representation in public accounting only 1% of all CPAs were African American. The 1% representation was an increase from only 0.15 of 1% of all CPAs in 1969 and 0.3 of 1% in 1976 (Mitchell & Flintall, 1990). While Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 64 the 1% represented a dramatic increase from previous years, it was still less than the percent of minorities in the general population. Reasons stated for the low percentage of African Americas in the accounting profession were racial bias, lack of upward mobility, lack of strong affirmative action, and lack of awareness o f accounting career opportunities by African American youngsters (Mitchell & Flintall, 1990). Other reports on minority representation in accounting stated that the increased program requirements were not a deterrent to minorities. For example, one study indicated that over 80% of minority CPAs had advanced degrees (Mitchell, 1986). The results of this study indicated that additional requirements from 150-hour programs were not deter rents to minorities. Also supportive of the additional education requirements for accounting was a study that showed that CPA firms hired more people with advanced degrees than with bachelor’s degrees (Cleveland Plain Dealer. February 22, 1993). Florida’s experience since adopting the 150-hour accounting program requirement showed a substantial increase in minority enrollment in accounting programs which indi cated that the additional educational requirements were not a deterrent to minorities (FS A, 1996). The FSA’s study results showed that a higher percentage of minorities were attracted to programs that had higher education requirements such as law and medicine. The publication of the National Association o f Black Accountants, Incorporated, New Plus, showed support for the additional education and quality of education contained in the 150-hour program requirement. Another question that arose because of the 150-hour requirement was whether starting salaries for graduates of 150-hour programs would be higher and would this addi tional cost be reflected in higher billing rates to clients? The AICPA in Facts About the 150-Hour Education Requirement addressed this question by stating that salary increases were expected which reflected the additional experience and knowledge of the graduates from 150-hour programs. However, billing rates to clients were not expected to rise sig Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 65 nificantly because of the increased quality and proficiency of 150-hour program graduates. Expectations were that new hires from 150-hour programs were more efficient and required less supervision with the result being fewer hours billed to client Another study that supported additional hours requirement indicated that accountants with master’s degrees reportedly had the best job opportunities (Kleiman, 1991). The graduates from 150-hour programs had an edge in the job market over accountants that possessed bachelor degrees. Other literature articles showed that the 150-hour requirement was not preventing students from selecting an accounting profession. A 1991 Gallup Poll Survey asked high school students to indicate if their professional career choices were influenced by an addi tional year of college requirement. Responses to the question indicated that 87% of high school students still chose the same career even with the extra year of college requirement. Opponents of the new requirements presented arguments against the 150-hour program requirement One argument against the 150-hour requirement was the reduced reciprocity between the states for CPAs. Would states with 150-hour programs for CPAs accept CPAs from states without the 150-hour requirement? The State of Florida used to recruit a higher percent of CPAs from out of state before they implemented the 150-hour requirement (CPA Personnel Report. 1994). Minnesota’s CPA society raised a similar question on the reciprocity issue for CPAs, but from a different viewpoint (Schwieger, 1992). Minnesota’s CPA society took the position that accounting graduates from state’s which did not adopt the 150-hour requirement were not viewed with the same prestige as accounting graduates from states with the 150-hour requirement Minnesota’s CPA society concluded that there would be a reduced demand for Minnesota’s accounting graduates if the state did not implement the 150-hour requirement The Institute of Management Accountants (IMA) and Financial Executives Institute (FEI) reported opposition to 150-hour programs (Accounting Today. August 24, 1994). This report showed that the 150-hour requirement and resulting programs contained Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 66 deficiencies for those accounting students that were not going into public accounting. The IMA and FEI indicated that about 67% of accounting students did not go into public accounting and that the new accounting programs, which were directed at students entering public accounting, did not meet these students’ accounting objectives. A more recent AICPA study showed that only 26% of accounting graduates began careers in public accounting (Seigel & Kulesza, 1996). The findings of this report reinforced the IMA and FEI’s position that too much attention was given to public accounting by colleges and universities in their accounting programs. The IMA and FEI supported the need for greater focus in accounting curricula and programs that were related to the needs of industry. In 1994, the IMA and FEI published What Corporate America Wants in Entrv-Level Accountants which served as a guideline for changes to accounting programs that met the demands of management accounting. In this article, the IMA announced opposition to the AICPA’s position for a fifth-year of college for CPA candidates. Another point of opposition to the 150-hour requirement was how to properly assess the effectiveness of changes to accounting programs that met the 150-hour require m ent Assessment weakness was addressed by the FSA when they formed a committee on assessment of curriculum changes (Bayer, Clark, Herring, & Thomas, 1991). This com mittee reported that, although the AECC funded colleges changed accounting curriculum with a goal of improved student competencies, these colleges had not developed programs that evaluated the effectiveness of these changes. The Committee listed five issues that colleges must resolve in developing a successful evaluation program. A follow-up report on the evolution of assessment showed that evaluation programs that assessed accounting curriculum change were in an embryonic stage (Bayer, Clark, Herring, & Thomas, 1994). Assessment measures at the AECC funded colleges were also in an infancy state. Assess ment techniques tended to be imprecise which required the need to employ a number of different assessment techniques (Benke & Hermanson, 1994). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 67 Another argument against 150-hour programs was presented by Brigham Young University. Their contention was that faculty’s focus on skills and competencies needed by accounting graduates required significantly more faculty time than did the more traditional lecture courses. Also, faculty required more preparation time for the 150-hour program requirement than with traditional programs. The revised accounting program at BYU also required more teaching assistants and graders. Another weakness of traditional accounting programs was that accounting students tended to be more focused on problem solving skills while the profession called for more innovative problem solvers (Wolk & Cates, 1994). Wolk and Cates’ report indicated that students with innovative problem-solver skills tended not to go into accounting. This report addressed the problem of how to attract the caliber of students that the profession desired. Also addressed by several colleges, and by the AECC, was lack of suitable text books that supported curriculum changes that resulted because from the 150-hour program requirement (Accounting Education News. June, 1993). Availability of acceptable text books that supported the 150-hour program requirement had not keep pace with changes to accounting programs and curricula. Summary This chapter included a review of the literature related to 150-hour accounting pro grams and the need for change in accounting programs and curricula. First presented was a chronological review of the literature that recapped the support for changing accounting programs to include 150-hour programs. This section showed the findings of important studies commissioned to study and report on the need for 150-hour programs to prepare accountants for the dynamic changing accounting profession. Conclusions from these studies indicated that professional accounting education programs were inadequate to meet the needs of the profession and that accounting education must undergo reassessment and change. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 68 Next the literature review provided support that accounting education must change to meet the needs of the accounting profession. Support for 150-hour programs from the accounting profession was directed at colleges and universities for changes to accounting programs. Objectives of 150-hour accounting programs to correct noted accounting pro gram deficiencies were development o f communication skills, lifelong learning skills, less emphasize on learning from books, and broad-based education with liberal arts courses. General and specific proposals for revised accounting programs by colleges and universities and by the AECC were covered in the literature review. The focus, intent, and content o f these proposed programs were presented. Specific proposals for revised accounting programs at Kansas State University and Brigham Young University were reviewed in this section. Covered in the review were proposed changes by the AECC to the introductory accounting courses and changes proposed for the fifth-year of accounting education. Presented were new objectives for introductory accounting courses. Proposed content for fifth-year courses was also presented. The literature review concluded with arguments for and against 150-hour accounting programs. Reasons against 150-hour programs had rebuttal arguments presented in support of 150-hour accounting programs. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER m RESEARCH METHODOLOGY This chapter contains the methodology for this study: the sample, instrument, method of data collection, and how the data were analyzed. The sample section describes how the colleges and universities in the sample were selected and surveyed. The instru mentation section pertains to how the survey questions were developed through a literature review and a pilot study. The data collection section contains the method used in collecting the responses from the representatives o f the sampled colleges and universities. The data analysis section contains the statistical methods used to analyze the responses from the questionnaire. Research Procedures Sample The sample consisted of 159 four-year public and private colleges and universities from 10 Midwestern states: Ohio, Indiana, Illinois, Wisconsin, North Dakota, South Dakota, Missouri, Nebraska, Iowa, and Kansas. These states, except for Ohio, were part of the Midwest Region of the American Accounting Association (AAA). The study sample excluded colleges and universities from these 10 states that were non-business vocational colleges, bible schools, and colleges related to the arts. Included in the sample was each campus of multi-campus colleges and universities. Information on the 150-hour requirement for the 10 states in the sample are listed in Table 4 (American Institute of Certified Public Accountants & National Association of State Boards of Accountancy, 1996). 69 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 70 Table 4 State Requirements for 150-Hour Accounting Programs Program hours Bachelor’s degree or higher State Implementation date Illinois January 1, 2000 24 accounting hours 24 business hours Yes Indiana January 1, 2000 20 accounting hours 20 business hours Yes Iowa January 1, 2001 24 accounting hours 24 business hours Yes Kansas July 1, 1997 30 accounting hours 42 business hours Yes Missouri July 1, 1999 27 accounting hours 33 business hours Yes Nebraska January 1, 1998 30 accounting hours 36 business hours Yes North Dakota January 1, 2000 24 accounting hours 24 business hours Yes Ohio January 1, 2000 24 accounting hours 24 business hours Yes South Dakota January 1, 1998 24 accounting hours 24 business hours Yes Wisconsin January 1, 2001 24 accounting hours 24 business hours Yes Questionnaires were mailed to Business or Accounting chairpersons at the selected Midwestern four-year private and public colleges and universities. A cover letter accom panying the questionnaire contained information on the need for the study and instructions on completion of the survey instrument The mailing list for the respective Business or Accounting Chairpersons at these private and public colleges and universities was obtained Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 71 from Prentice Hall’s 1996 Accounting Faculty Directory. The author of this directory sorted the listing by college and university for the states in the sample (Hasselback, 1996). Instrumentation Instrumentation for the study consisted of a questionnaire designed by the researcher. The questions on the instrument were developed through an extensive review of the literature and discussions with accounting personnel and committee members. The instrument was piloted at the Department of Accounting at Illinois State University. Feedback from the pilot study was used to refine the survey before m ailing to the colleges and universities in the study. Pilot study participants were asked to comment on clarity and understandability of instrument questions. Pilot study contributors commented on the completeness of the instrument, time to complete the questionnaire, and additions needed to the instrument. Questions on the instrument were divided into two sections. The first section titled “College or University Background Information” contained questions to determine the status and size of college and university accounting programs. Contained in this section were questions to determine if the colleges or universities planned to change, or not change, accounting programs that met their State’s 150-hour CPA examination require m ent Respondents were asked the number of students in accounting programs and the percentage of accounting students taking the CPA examination. Respondents were also asked if a particular model was used when changing accounting programs that met the 150hour requirement The second section of the instrument titled “Importance o f Program Change” pertained to respondents indicating the level of importance of reasons for changing, or not changing, accounting programs that met the 150-hour requirement. Department heads were asked the level of importance of accounting skills and competencies contained in 150-hour accounting programs, and the level of importance of the parties that determined these Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 72 accounting skills and competencies. Respondents were asked the level of importance of reasons for changing accounting programs that met the 150-hour requirement, and level of importance for areas of study when adding hours to their existing accounting programs. Respondents were asked the level of importance of adding the identified accounting skills and competencies into accounting program areas and level of importance for making changes to classroom delivery methods. A cover letter accompanied each questionnaire (Appendix G) sent to the Business and/or Accounting department head of the colleges and universities in the study. A post card (Appendix H) reminder was mailed to the colleges and universities that had not responded. The follow-up postcard was sent within three weeks of the original mailing. Next, telephone follow-up calls were made to the respondents at colleges and universities that had not responded to the mailings. The telephone calls explained the need for the study and the importance o f receiving completed questionnaires. An additional questionnaire was sent to those colleges and universities that agreed via phone to complete the survey instrument. Data Collection Permission to conduct this study was granted by Illinois State University’s Institu tional Review Board in October 1997. Data were collected for this study by use of the questionnaire described in the previous section that was sent to the Business and/or Accounting chairperson at 159 colleges and universities in 10 Midwestern states. A cover letter that described the study and the importance of response from each respondent accompanied the survey. A self-addressed, pre-paid envelope was included with the survey for return o f the questionnaire. Surveys were sent in November 1997, with a follow-up postcard to non-responders in late November 1997. Follow-up phone calls were made in January 1998 to those department chairpersons at institutions that had responded to the survey. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 73 Data Analysis Relative to Research Question 1, frequencies and percentages were computed for each category relative to Item 7 from the instrument. Relative to Research Questions 2 through 8, means and standard deviations were computed for each instrument item with the exception o f the “other” items contained within the instrument questions. Relative to Research Question 9, representatives of the sampled public and private colleges and universities were asked to identify the level of importance of program changes that met the 150-hour requirement. A one-way multivariate analysis of variance (MANOVA) and a corresponding discriminant analysis were performed for each of the seven sets o f importance of program change items, and a two-independent sample t test was performed for each of the 55 importance of program change items. Type of college and university, private or public, was treated as the independent variable, and the 55 importance of program change variables were treated as the dependent variables. Relative to Research Question 10 that pertained to the relationship between the enrollment size of accounting programs and the importance of program change variables, seven multiple regression analyses (MRA) were performed The Y variable was the number of students enrolled in four-year bachelors’ accounting programs; the X variable set consisted of the importance of program change variables in one of the seven sets of variables. No MRA was performed relative to the remaining three classifications for types of accounting programs, since the number of responses for each of these program classifications was low. Attention was focused on R2, the test of significance regarding R2, |3 values, and the t test of significance relative to the (3 values. Furthermore, 55 Pearson product-moment correlation coefficients were computed and tested to determine the linear relationship between four-year bachelors’ accounting program size and each importance of program change variable. For all the statistical tests performed the .05 level of significance was utilized Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 74 The SPSS for Windows software, Version 7.5, was used for the statistical computations. Respondents’ Demographics The sample represented 159 four-year private and public colleges and universities in 10 Midwestern states. Response from the survey was 96 out of a sample of 159. Table 5 shows the demographics of the responses. Table 5 Survey Instrument Response Demographics N % 96 60.4 47 37 12 49.0 38.5 12.5 94 97.9 17 38 28 13 17.7 39.6 29.2 13.5 Accounting program changed or will change to meet the 150-hour requirement 84 87.5 Accounting program not changed to meet the 150-hour requirement 12 12.5 Number of responses Highest degree offered Bachelors Masters Doctorate Types of accounting programs 4-year bachelors Accounting students taking CPA examination Less than 25% 25 to 50% 50 to 75% greater than 75% Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 75 Summary Chapter ID presented the research methodology for this study. The research sample, instrument, and method of data collection were described. Statistical methods used to analyze the collected data for each research question were described. In addition, demographic data on the respondents were presented. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER IV ANALYSIS OF DATA The survey instrument, which was designed by the researcher and described in Chapter IH, was used to collect data from 159 colleges and universities in 10 Midwestern states. A total of 96 responses were received from the sampled colleges and universities for a response rate of 60.4%. The background information section of the instrument (Appendix F) contained seven questions for respondents to complete. The second section o f the instrument contained seven importance of program change questions for respondents to answer. Respondents rated the relative importance of the 55 importance of program change instrument items when answering these seven instrument questions. The 14 instru ment questions were derived in order to provide answers to the 10 research questions of this study. This chapter contains analysis of the data received from the 96 respondents. Data from respondents for the “other” item of the instrument questions were not used in the statistical analyses. In addition to results, some explanation and discussion are provided. The data results, explanation, and discussion are provided for each research question and corresponding instrument question pertaining to that research question. Research Question 1 Research Question 1 was “What accounting models were used to change accounting programs and curricula that met the 150-hour requirement?” Research Question 1 pertains to Instrument Question 7. Table 6 contains frequencies and percentages for each item rela tive to Instrument Question 7. Responses to this question were received from 84 colleges and universities from a total response of 96. Response rate indicated that 87.5% o f 76 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 77 colleges and universities that returned the survey instrument had changed accounting curricula and programs that met the 150-hour requirement. The 12 (12.5%) colleges and universities and universities that did not respond to this question had not changed accounting programs and curricula that met the 150-hour requirement Table 6 Frequencies and Percentages for Each Item Relative to Instrument Question 7 Item f % AICPA model 11 13 Model from an AECC funded college or university AASCB model 0 5 63 0 6 75 5 6 No particular model was used Another model was used Notes. Research Question 1 = What accounting models were used to change accounting programs and curricula that met the 150-hour requirement? N = 84. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement Responses indicated that 75% of the respondents had not used a particular accounting model when changing accounting programs and curricula that met the 150-hour requirement The AICPA accounting model was the most used model, as indicated by 13% of the respondents. Six percent of the respondents indicated that the AASCB model was used, while another 6% identified that another model was used to change accounting programs and curricula that met the 150-hour requirement None of the respondents identified using a model from an AECC-funded college or university in changing accounting programs and curricula that met the 150-hour requirement. Results indicated the freedom that colleges and universities were given in developing accounting curricula and programs that fulfilled the 150-hour Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 78 requirement Colleges and universities did not have to follow prescribed accounting models when changing accounting programs and curricula that met the 150-hour require ment (AACSB, 1994; AECC, 1990; Bedford Committee, 1986). Research Question 2 Research Question 2 was “What was the level of importance of reasons for not changing accounting programs and curricula that met the 150-hour requirement?” Research Question 2 pertains to Instrument Question 8. Table 7 contains means and standard devia tions for each item relative to Instrument Question 8. The response from sampled colleges and universities to this question was 12 out of a total return of 96 survey instruments. These 12 responses were from colleges and universities that had not changed accounting programs and curricula that met the 150-hour requirement Responses to Instrument Question 8 indicated that 12.5% of respondents had not changed accounting curricula and programs, while 87.5% of respondents had changed accounting curricula and programs that met the 150-hour requirement These 12 respondents that had not met the 150-hour requirement indicated that lack of fiscal resources and student interest were the most important reasons for not changing programs and curricula that met the new accounting requirements. The lack of fiscal resources, M = 4.25, needed to change accounting cur ricula and programs that met 150-hour requirements was consistent with a delimitation of the study listed in Chapter L Hence, some colleges and universities may not have the fiscal resources to change accounting curricula and programs that met the 150-hour requirement The least important reason for not changing accounting programs and curricula that met the 150-hour requirement was that the program focused on private, not public, accounting, M = 2.83. Respondents indicated that forming an articulation agreement, M = 3.08, with other institutions and college or university administration was an additional reason for not changing accounting programs that met the 150-hour requirement The small response rate Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 79 for Instrument Question 8, N = 12, reduced the significance of the data received from these 12 respondents. Table 7 Means and Standard Deviations for Each Item Relative to Instrument Question 8 M SD Lack of fiscal resources Lack of student interest 4.25 Program focus on private accounting Formed articulation agreement 2.83 3.08 2.53 2.04 2.04 College or university administration 3.17 Item 4.00 2.68 2.04 Notes. Research Question 2 = What was the level of importance of reasons for not changing accounting programs and curricula that met the 150-hour requirement? N = 12. The measurement scale for all the items was: 1 = least important and 7 = most important Research Question 3 Research Question 3 was “What was the level of importance of the accountant skills and competencies identified by colleges and universities from the 150-hour requirement and accompanying literature?” Research Question 3 pertains to Instrument Question 9. Table 8 contains means and standard deviations for each item relative to Instrument Question 9. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement Respondents indicated that all skill and competency items listed on the instrument were considered to be important M > 4.00. Respondents indicated that problem solving skills, M = 6.19, and analytical skills, M = 6.13, were the most important accountant skills and competencies. Respondents iden tified research skills, M = 4.82, and management skills, M = 4.88, as the least important accountant skills and competencies. Respondents indicated that accountant skills and competencies of written communication, M = 5.89; presentation, M = 5.48; interpersonal, Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 80 M = 5.38; deductive, M = 5.77; oral communication, M = 5.81; computer, M = 5.74; ethics, M = 5.52; and learning to learn, M = 5.44 were important. Results were consistent with the level of importance for accountant skills and competencies that was contained in the literature on the 150-hour requirement (Arthur Anderson & Co. et al., 1989; Bedford Committee, 1986; Chenok, 1995; Chandra & Clayton, 1993; Herman son & Carcello, 1989; Williams, 1990). Table 8 Means and Standard Deviations for Each Item Relative to Instrument Question 9 Item M SD Written communication skills 5.89 0.81 Presentation skills Interpersonal skills Analytical skills Deductive skills Oral communication skills 5.48 5.38 6.13 5.77 5.81 0.96 1.12 0.90 1.01 0.96 Problem solving skills 6.19 0.83 Research skills 4.82 1.31 Management skills 4.88 5.74 1.12 Computer skills Ethics Learning to leam skills 5.52 5.44 0.88 1.11 1.26 Notes. Research Question 3 = What was the level of importance of the accountant skills and competencies identified by colleges and universities from the 150-hour requirements and accompanying literature? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most important Research Question 4 Research Question 4 was “What was the level of importance for each of the groups of people that identified the necessary accountant skills and competencies?” Research Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 81 Question 4 pertains to Instrument Question 10. Table 9 contains means and standard devia tions for each item relative to Instrument Question 10. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement. Respondents indicated that all groups of people listed on the survey instrument were important in identifying necessary accountant skills and compe tencies, M > 4.00, except for college or university administrators, M = 3.10. Respondents indicated that accounting faculty, M = 6.36, was the most important group of people in identifying necessary accountant skills and competencies for accounting curricula and pro grams that met the 150-hour requirement. The next important groups o f people in identi fying necessary accountant skills and competencies were public accountants, M = 5.85; accounting chairperson, M = 5.48; and industry personnel, M = 5.12. Respondents iden tified that business faculty, M = 4.71, and business division chairpersons, M = 4.00, were also important groups of people in identifying necessary accountant skills and competencies. Table 9 Means and Standard Deviations for Each Item Relative to Instrument Question 10 M SD Industry 5.12 Public accountants Business faculty 5.85 1.38 1.02 Item Business division chairpersons College or university administrators Accounting chairperson Accounting faculty 1.74 4.71 4.00 1.76 3.10 1.48 5.48 1.58 0.97 6.36 Notes. Research Question 4 = What was the level of importance for each o f the groups of people that identified the necessary accountant skills and competencies? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most important Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 82 Research Question 5 Research Question 5 was “What was the level of importance of reasons for changing accounting programs and curricula that met the 150-hour requirement?” Research Question 5 pertains to Instrument Question 11. Table 10 contains means and standard devi ations for each item relative to Instrument Question 11. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement Respondents indicated that all Instrument Question 11 items were important M > 4.00, for changing accounting programs that met the 150-hour requirement except for the reason of maintaining status quo, M = 3.67. Requirement to take the CPA examination, M = 6.36, and meeting students’ expectations, M = 6.02, were the most important reasons given by respondents for changing accounting programs that met the 150-hour requirement. Hence colleges and universities changed accounting curricula and programs that met the 150-hour requirement so that accounting students met eligibility requirements to take the CPA exam (Hermanson & Carcello, 1989). Table 10 Means and Standard Deviations for Each Item Relative to Instrument Question 11 M SD Professional image 4.98 1.47 Maintain status quo 3.67 2.05 Meet student expectations 6.02 1.08 Prestige Competition from other colleges or universities Requirement to take the CPA examination Employer expectation 4.73 5.85 6.36 5.60 1.47 Item 1.15 1.05 1.43 Notes. Research Question 5 = What was the level of importance of reasons for changing accounting programs and curricula that met the 150-hour requirement? N = 12. The measurement scale for all the items was: 1 = least important and 7 = most important Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 83 The other important reasons given by respondents for changing accounting pro grams that met the 150-hour requirement were competition from other colleges or univer sities, M = 5.85; employer expectation, M = 5.60; professional image, M = 4.98; and prestige, M = 4.73. Survey results were consistent with the accounting profession’s requirement that accounting students complete 150 semester hours to be eligible to take the CPA exam after the year 2000. Research Question 6 Research Question 6 was “What was the level of importance for changes made to the structure and content of accounting courses that resulted from adding hours to account ing programs and curricula that met the 150-hour requirement?” Research Question 6 per tains to Instrument Question 12. Table 11 contains means and standard deviations for each item relative to Instrument Question 12. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150hour requirement. Respondents indicated that all Instrument Question 12 items were impor tant, M > 4.00, for adding hours to accounting programs that met the 150-hour requirement except for math, M = 3.93, which was just slightly under the average mean importance level of 4.00. Respondents indicated that analytical thinking, M = 5.49; communications, M = 5.44; writing, M = 5.42; and computers, M = 5.12, were the most important areas for adding hours to accounting programs that met the 150-hour requirement These results were consistent with the literature and the accounting profession as areas where accounting students needed improvement. Also rated by respondents as being important areas in adding hours to accounting programs that met the 150-hour requirement were accounting theory, M = 4.74; learning to learn, M = 4.79; tax, M = 4.70; professional ethics, M = 4.65; financial analysis, M = 4.65; and advanced accounting, M = 4.49. Results were con sistent with the literature and accounting profession’s stance on the 150-hour program re quirement (AECC, 1990; Arthur Anderson & Co. et al., 1989; Bedford Committee, 1986). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 84 Table 11 Means and Standard Deviations for Each Item Relative to Instrument Question 12 Item M SD Tax 4.70 1.43 Computers Accounting theory Advanced accounting 5.12 4.74 1.52 4.49 1.51 1.52 Professional ethics Analytical thinking Learning to learn Financial analysis Writing Communications Math 1.59 4.65 5.49 4.79 1.27 1.62 4.65 5.42 5.44 1.60 1.51 1.52 3.93 1.47 Notes. Research Question 6 = What was the level of importance for changes made to the structure and content of accounting courses that resulted from adding hours to accounting programs and curricula that met the 150-hour requirement? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most im portant Research Question 7 Research Question 7 was “What was the level of importance for added areas to accounting programs and curricula to include identified accountant skills and competen cies?” Research Question 7 pertains to Instrument Question 13. Table 12 contains means and standard deviations for each item relative to Instrument Question 13. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement. Respondents indicated that all Instrument Question 13 items were important, M > 4.00, for including identified accountant skills and competencies into program areas except for team teaching, M = 3.21. Respondents indicated writing assignments, M = 5.48; group assignments, M = 5.36; existing course material, M = 5.30; and redesigned course material, M = 5.05, were the most important Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 85 program areas to include identified accountant skills and competencies. Least important areas as identified by respondents for including accountant skills and competencies were case study, M = 4.89, and fifth year of program, M = 4.76. Results were consistent with the literature and accounting profession’s areas of importance concerning the 150-hour requirement (AECC, 1990; Arthur Anderson & Co. et al., 1989; Bedford Committee, 1986). Table 12 Means and Standard Deviations for Each Item Relative to Instrument Question 13 Item M Existing course material Writing assignments Fifth year of program 5.30 5.48 4.76 5.36 1.16 1.09 1.71 3.21 5.05 1.47 1.54 4.89 1.38 Group assignments Team teaching Redesigned course material Case study SD 1.09 Notes. Research Question 7 = What was the level of importance for added areas to accounting programs and curricula to include identified accountant skills and competencies? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most important. Research Question 8 Research Question 8 was “What was the level of importance of changes made to faculties’ classroom delivery methods for teaching of identified important accountant skills and competencies?” Research Question 8 pertains to Instrument Question 14. Table 13 contains means and standard deviations for each item relative to Instrument Question 14. The 84 responses to this question were from colleges and universities that changed accounting curricula and programs that met the 150-hour requirement Respondents indicated that all Instrument Question 14 items were important M > 4.00, classroom Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 86 delivery methods for meeting 150-hour requirements except for distance learning, M = 2.42, and lab concept, M = 3.14. Respondents reported that the most important changes to classroom delivery methods that met the 150-hour requirement were utilized team projects, M = 5.50; used case studies, M = 5.05; presented accounting from a user perspective, M = 4.95; and assigned Internet work, M = 4.50. Results were consistent with the literature and accounting profession’s position on the 150-hour requirement (Arthur Anderson & Co. et al., 1989; AECC, 1990). Table 13 Means and Standard Deviations for Each Item Relative to Instrument Question 14 Item M SD Used case studies 1.34 Used team projects Presented accounting from a user perspective Used lab concept 5.05 5.50 4.95 3.14 Used distance learning 2.42 1.75 1.60 Assigned Internet work 4.50 1.60 1.02 1.26 Notes. Research Question 8 = What was the level of importance of changes made to faculties’ classroom delivery methods for teaching of identified important accountant skills and competencies? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most important. Research Question 9 Research Question 9 was “What were the differences between public and private colleges and universities responses to the importance of program change questions?” For each of the seven sets of importance of program change instrument questions a one-way multivariate analysis of variance (MANOVA) was performed in order to determine the multivariate difference between the private and public institutions. Table 14 contains the results o f these MANOVAs. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 87 Each Wilks’ lambda (A) pertained to the multivariate difference between the private and public institutions for the items that pertained to one of the seven importance of program change instrument questions. Lambda values range from 0 to 1. A value o f 0 is reflective of a large multivariate difference, and a value of 1 is reflective of no multivariate difference between the two groups. Table 14 Sets of Importance of Program Change Instrument Items Instrument question item A df Not changing accounting programs .38 5,6 2.00 Accountant skills and competencies People identifying skills and competencies Changing accounting programs .79 .93 .89 12,71 7,76 7,76 1.58 0.86 1.34 Areas added to accounting programs .90 11,72 0.72 Skills and competencies added to programs Classroom delivery methods .96 .96 7,76 0.50 0.47 6,77 F P .21 .12 .54 .25 .71 .83 .83 Notes. Research Question 9 = What were the differences between sampled public and private colleges and universities responses to the importance of program change questions? N = 12 for “Not changing accounting programs” and N = 84 for the remaining Instrument Question items. The measurement scale for all the items was: 1 = least important and 7 = most important. All seven A values were nonsignificant, p > .05; however, the A value relative to reasons for not changing accounting programs (Instrument Question 8) set of variables reflected a multivariate difference between the private and public groups, A =.38. For Instrument Question 8, only 12 responses were received from respondents. The responses to Instrument Question 8 represented the 12 colleges and universities that did change accounting curricula and programs that met the 150-hour requirement. Hence, relative to Instrument Question 8, low statistical power resulted, N=12, and the A value that did Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 88 reflect a multivariate difference was nonsignificant. Results indicated no significant difference, except for Instrument Question 8, between responses from private and public colleges and universities pertaining to the seven importance of program change questions. Since all the A values were nonsignificant, p > .05, no accompanying discriminant analysis was performed. Even though all the A values were nonsignificant, 55 one-way analyses of vari ances were performed for each item contained within Instrument Questions 8 to 14. Table 15 contains means, F, and other statistics concerning differences between private and public colleges and universities for items that resulted in a significant F test, p < .05. Table 15 Means. F. and Other Statistics Concerning Selected Public and Private Institution Differences Instrument question Item Group n M SD df 2.20 6.00 1.55 0.00 1,10 5.03 5.62 1.09 1.09 1,82 5.98 .02 4.53 3.64 1.58 1.79 1,82 5.47 .02 8 Focus on private accounting Private Public 9 Interpersonal skills Private Public 10 2 34 50 Business division Private chairperson Public 34 50 10 F P 11.14 .01 Notes. Research Question 9 = What were the differences between sampled public and private colleges and universities responses to the importance of program change questions? N = 12 for Instrument Question 8 and 84 for Instrument Questions 9 and 10. The measure ment scale for all the items was: 1 = least important and 7 = most important Relative to the 55 one-way analyses of variances that were performed, the mean for the public institutions was significantly, p < .05, greater than the mean for the private institutions for the following items: 1. Question 8, “Focus on private accounting” 2. Question 9, “Interpersonal skills” Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 89 The mean for the private institutions was significantly, p < .05, greater than the mean for the public institutions for question 10, “Business division chairperson.” The mean for Instrument Question 8, “What was the level of importance regarding each of the following reasons for not changing accounting program to meet the 150-hour requirement?”, Item c, “Focus on private accounting,” was significantly different for respondents from private versus public institutions. Respondents from private institutions indicated for Instrument Question 8 that focused on private accounting was a less important reason, M = 2.20, for not changing accounting programs that met the 150-hour require m ent Respondents from public institutions indicated that focus on private accounting was the most important reason, M = 6.00, for not changing accounting programs that m et the 150-hour requirement The difference between the private and public institution means for Instrument Question 9, “What was the level of importance for each of the accountant skills and competencies identified below in meeting the 150-hour program requirement?”, Item c, “Interpersonal skills,” was significant. Even though a significant difference was obtained, respondents from both private, M = 5.03, and public institutions, M = 5.62, indicated that interpersonal skills were important accountant skills and competencies that should be included in the 150-hour accounting program requirement. Respondents from public insti tutions generally indicated that interpersonal skills were more important than respondents from private institutions. The mean for Instrument Question 10, “What was the level of importance for each of the following groups of people involved in identifying necessary accountant skills and competencies?”, Item d, “Business division chairperson,” was significantly different for respondents from private, M = 4.53, versus public institutions, M = 3.64. Respondents from public institutions generally indicated that the business division chairperson was less Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 90 important for identifying necessary accountant skills and competencies than respondents from private institutions. Research Question 10 Research Question 10 was “What was the relationship between the enrollment size of accounting programs, and the seven sets of importance o f program change variables?” Analysis relative to Research Question 10 was delimited to the four-year bachelors accounting program classification since the number of responses concerning the remaining three classifications for types of accounting programs were low. For each of the seven sets of importance of program change instrument questions, a multiple regression analysis (MRA) was performed in order to determine the relationship between number of students in four-year bachelors accounting programs and importance of program change instrument questions. Table 16 contains the results of these MRAs. The R2 values ranged from .05 to .37. Table 16 Results Concerning Multiple Regression Analyses Pertaining to Relationship between rsumoer or atuaents in rour-y ear tsacneiors programs ana sets or importance oi proeram Change Instrument .Variables Variable set R* df F P Not changing accounting programs .37 5,6 0.69 .65 Accountant skills and competencies .20 .07 1.43 0.79 1.82 .18 .15 .16 .08 12,69 7,74 7,74 11,70 7,74 1.18 0.86 .05 6,75 0.70 People identifying skills and competencies Changing accounting programs Areas added to accounting programs Skills and competencies added to programs Classroom delivery methods .60 .10 .31 .55 .65 Notes. Research Question 10 = What was the relationship between the enrollment size o f accounting programs, and the seven sets of importance of program change variables? N = 84. The measurement scale for all the items was: 1 = least important and 7 = most important Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 91 The highest relationship between number of students in four-year bachelors accounting program and a variable set were for Instrument Question 8, “not changing accounting programs,” R2 = .37, and Instrument Question 9, “accountant skills and competencies,” R2 = .20. The lowest relationship between number o f students in four-year bachelors accounting programs and a variable set were Instrument Question 14, “classroom delivery methods,” R2 = .05; Instrument Question 10, “people identifying skills and competencies,” R2 =.07; and Instrument Question 13, “skills and competencies added to programs,” R2 = .08. However, all the R2 values were nonsignificant, p > .05. Since all the R2 values were nonsignificant, the (3 values produced in each MRA were not evaluated. Pearson product-moment correlation coefficients (r) were computed and tested to determine the linear relationship between the number of students in four-year bachelors accounting programs and each of the 55 importance of program change instrument items. The r values were significant, p (one-tailed tests) 4.00, for those importance of program change instrument items pertaining to Research Questions 2 through 8 were identified and discussed. MANOVAs and ANOVAs were performed to determine the differences between the private and public institutions relative to the 55 importance of program change instrument items. The MANOVAs were performed for each of the seven sets o f importance of Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 93 program change instrument questions. All the multivariate differences were nonsignificant, p > .05. The means for the public institutions were significantly greater than the means for the private institutions for Instrument Question 8, Item c, “Focus on private accounting” and Instrument Question 9, Item c, “Interpersonal skills,” p < .05. The mean for the private institutions was significantly greater than the mean for die public institutions for Instrument Question 10, Item d, “Business division chairperson,” p < .05. Multiple regression analyses (MRAs) were performed to determine the relationship between four-year bachelors accounting programs and each of the seven sets of importance of program change instrument questions. Pearson product-moment correlation coefficients were computed and tested in order to determine the linear relationship between number of students in four-year bachelors accounting programs and each o f the 55 importance of program change instrument items. All the R2 values produced in the MRAs were nonsignificant, p > .05. The r values were significant, p (one-tailed tests) < .05, and positive for Instrument Question 9, Item h, and Instrument Question 13, Item c. The r values were significant, p (one-tailed tests) < .05, and negative for Instrument Question 10, Item c; Instrument Question 11, Items a and c; and Instrument Question 12, Items c, d, e, and 1. Chapter V contains the summary, conclusions, discussion and recommendations from the study. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. CHAPTER V SUMMARY, CONCLUSIONS, DISCUSSION, AND RECOMMENDATIONS This chapter summarizes the study results pertaining to the literature on the 150hour requirement Pertinent study results, conclusions, and recommendations for further study are included. The chapter contains four sections. The first section presents an over view of the study, including statement o f the study problem, purpose of the study, and research methodology. The second section is a summary of the findings relating to the research questions. Significant study findings as they pertain to the research questions are presented. The third section presents conclusions and discussion from the study of col leges and universities on the 150-hour accounting requirement The final section presents recommendations for follow-up studies on 150-hour accounting curricula and programs. Overview of the Study This study focused on the degree to which respondents at colleges and universities viewed the relative importance of the 150-hour requirement and how accounting programs and curricula were changed that met the 150-hour requirement The sample consisted o f 159 colleges and universities in 10 Midwestern states. The study results showed the con sistency between respondents and literature on important accountant skills and compe tencies and changing accounting curricular and program that met the 150-hour requirement Statement of the Problem The growing complexity of the U.S. business environment created a demand for accountants that possessed the necessary skills and competencies to meet the accounting needs of American businesses. The accounting profession commissioned several studies 94 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 95 that addressed the need for increased accountant skills and competencies (Anderson & Co., et al., 1989; Bedford Committee, 1986). Findings from these studies indicated that accountants possessed the necessary technical skills to meet the demands of business but lacked other skills and competencies demanded by U.S. business. Additional skills and competencies were needed by accountants to provide high quality, professional services to clients. The conclusions relative to these and other studies prompted the accounting profes sion to call for an increase in accounting programs to 150 semester hours. The additional hours past the traditional bachelors degree were to be used by colleges and universities to prepare accounting students with the necessary skills and competencies that met the needs and expectations of clients. Starting after the year 2000, accounting students must have completed 150 semester hours of college to meet the eligibility requirements to take the CPA examination. What was not clear from the accounting profession’s 150-hour requirement was how colleges and universities were to change accounting curricula and programs that met the 150-hour requirement. The accounting profession did not mandate the method of change. Instead, the profession offered a model program and sponsored activities to assist colleges and universities in changing accounting curricula and programs that met the 150hour requirement The largest public accounting firms provided about $5 million to create the Accounting Education Change Commission (AECC) (Accounting Education News. June 1993). Purpose of the AECC was to provide financial assistance to selected colleges and universities to support changes in accounting curricula and programs that met the 150-hour requirement (Ernst & Young, 1992). Several of the AECC-funded colleges and uni versities published the results of their findings so that other institutions could utilize the results. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 96 The accounting profession mandated changes in accounting curricula and programs for colleges and universities after the year 2000 by making 150 semester hours the require ment for taking the CPA examination. The need for colleges and universities to establish 150-hour accounting programs that met the accounting profession’s recommendations for improved accountant skills and competencies was clear. The problem was how colleges and universities were to change accounting curricula and programs that met the 150-hour requirement Colleges and universities were given considerable latitude in regard to changing accounting curricula and programs that met the 150-hour requirement, since the accounting profession had not prescribed a model for institutions to follow. Purpose of the Study The purpose of this study was to determine the degree to which respondents at colleges and universities viewed the relative importance of the 150-hour requirement. Purpose of the study was to determine the relative importance of changes to accounting programs and curricula by colleges and universities as defined by the literature and the 150hour requirement Research Methodology Sample. The sample included 159 private and public four-year colleges and uni versities in 10 Midwestern states. These states, except for Ohio, were part of the Midwest Region of the American Accounting Association. The sample states had adopted the 150hour requirement for taking the CPA examination. The sample included all colleges and universities that had accounting programs. Excluded from the sample were vocational colleges, bible schools, and colleges related to the arts. All branch campuses of the sampled colleges and universities were included in the study. Instrumentation. A questionnaire consisting of two sections and 14 questions was the instrument for the study. Instrument Section 1 titled “College or University Back ground Information” contained seven questions to ascertain whether the institution was Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 97 public or private, highest accounting degree offered, and number o f accounting students in the different types of degree programs. This section pertained to respondents identifying what percent of accounting students took the CPA examination. Respondents indicated if their college or university had changed accounting programs and curricula that met the 150hour requirement, and if so, what accounting model was used to m ake changes to accounting curriculum and program. Section 2 of the instrument titled ‘Importance of Program Change” pertained to respondents identifying the relative importance of accountant skills and competencies. Respondents indicated the level o f importance for groups of people that identified these skills and competencies. Respondents were asked to indicate the level o f importance of reasons for changing accounting programs that met the 150-hour requirement Data Collection. A questionnaire designed by the researcher based upon a literature review of the 150-hour requirement was sent to the Business and/or Accounting chair person at 159 colleges and universities in 10 Midwestern states. A cover letter explaining the importance of the study accompanied the questionnaire. The questionnaire was designed to answer the 10 research questions contained in this study. Data Analysis. Appropriate statistics were used to analyze the data and to help explain the results of the study. Relative to Research Question 1, frequencies and percent ages were computed. Relative to Research Questions 2 through 8, means and standard deviations were computed. For Research Question 9, a one-way multivariate analysis of variance and a corresponding discriminant analysis were performed for each o f the seven sets of importance of program change questions contained on the survey instrument. A two-independent sample t test was performed for each of the 55 items contained within these seven sets of importance of program change questions. Relative to Research Question 10, multiple regression analyses were performed with regard to the relationship between enrollment size in four-year bachelor’s accounting Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 98 programs and each of the seven sets of importance of program change variables. Further, 55 Pearson product-moment correlation coefficients were computed to determine the relationship between enrollment in four-year bachelor’s accounting programs and each item contained in the seven sets of importance of program change questions. Summary of Findings The presented findings are based on the analysis o f the data from the surveyed colleges and universities pertaining to the 10 research questions. The survey instrument contained 14 questions that related to the 10 research questions. Statistically significant findings are presented in the following discussions. 1. Findings indicated that colleges and universities, when changing accounting programs and curricula, did not use a particular m odel O f the 84 responses received which indicated changes to accounting programs and curricula that met the 150-hour requirement, 75% of the respondents indicated that no particular model was used in changing accounting programs and curricula. The AICPA model was used by 13% of the respondents when changing accounting programs and curricula that met the 150-hour requirement The AASCB model was used by 6% of the respondents. Another 6% of the respondents indicated use of an “other” model to change accounting programs and curricula. Results indicated the latitude that the accounting profession gave colleges and universities in developing accounting programs and curricula that met the 150-hour require m ent Results reflected the view of the accounting profession that changes to accounting programs and curricula were not to be directive but rather suggestive by the profession (AACSB, 1994; AECC, 1990; Bedford Committee, 1986). 2. Colleges and universities indicated the importance of changing accounting pro grams and curricula that met the 150-hour requirement O f the 96 responses, only 12.5% of the respondents indicated that accounting programs and curricula had not been changed to meet the 150-hour requirement; hence, 87.5% of the respondents indicated that Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 99 accounting programs and curricula were changed that met the 150-hour requirement Institutions indicated that lack of fiscal resources, M = 4.25, and lack of student interest M = 4.00, were the most important reasons for not changing accounting programs and curricula that met the 150-hour requirement The measurement scale for the items was: 1 = least important and 7 = most important Nine of the 12 colleges and universities that had not changed accounting programs and curricula were private institutions with smaller accounting programs. Reasons given by these institutions for not changing accounting programs and curricula were: formed articulation agreement, accounting programs were not part of the college mission, and students could transfer to other colleges and universities in the area that offered graduate degrees in accounting. Enrollment in accounting programs at these nine colleges and universities averaged about 25 students. Results were consistent with a delimitation of the study which was that smaller colleges and universities did not have the fiscal resources or inclinations to change accounting programs and curricula that met the 150-hour requirement 3. Respondents at the surveyed colleges and universities indicated that all of the accountant skills and competencies listed on the survey instrument were considered to be important, M > 4.00. Respondents indicated that problem solving skills, M = 6.19, and analytical skills, M = 6.13, were the most important accountant skills and competencies. Communication skills were also considered to be important accountant skills. Level o f importance for written communication was M = 5.89, and for oral communication, M = 5.81. Results were consistent with the level of importance for accountant skills and competencies presented in the literature and by the accounting profession for the 150-hour requirement (Anderson & Co. et al., 1989; Bedford Committee, 1986; Chandra & Clayton, 1993; Chenok, 1995; Herman son & Carcello, 1989; Williams, 1990). Hence, colleges and universities that changed accounting programs and curricula that met the 150-hour require ment were consistent with the accounting profession and literature on the level of im portance Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 100 o f necessary accountant skills and competencies. Results indicated that colleges and universities had identified as important those accountant skills and competencies that the accounting profession and literature had identified as areas of deficiency for accountants. 4. Respondents indicated that the most important groups of people for identifying necessary accountant skills and competencies were accounting faculty, M = 6.36, and pub lic accountants, M = 5.85. Accounting chairpersons, M = 5.48, and industry personnel, M = 5.12, were also important groups of people for identifying necessary accountant skills and competencies. Results were consistent with reasons for changing accounting programs and curricula. Colleges and universities changed accounting programs and curricula to meet the 150-hour requirement, which was a prerequisite for being eligible to take the CPA examination. Hence, accounting faculty and public accountants were the groups o f people in the best position for identifying necessary accountant skills and competencies that met the 150-hour requirement 5. Colleges and universities changed accounting programs and curricula that met the requirements to take the CPA examination and student expectations. Respondents indi cated that meeting the requirements to take the CPA examination was the most important reason for changing accounting programs and curricula, M = 6.36. After the year 2000, CPA examinations requirements mandate that candidates have completed 150 semester hours. Hence, colleges and universities had to change accounting programs and curricula to meet the CPA examination requirements and student expectations. Competition firm other colleges and universities was indicated by respondents, M = 5.85, as an important reason for changing accounting programs and curricula that met the 150-hour requirement Maintaining professional image of the institution was cited by respondents as an important reason for changing accounting programs and curricula, M = 4.98. Hence colleges and universities had to meet the new accounting requirements as mandated by the accounting Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 101 profession in order to offer a competitive accounting program that was attractive to students and met students’ expectations. 6. Respondents indicated that analytical thinking, M = 5.49; communications, M = 5.44; and writing, M = 5.42 were the most important areas for changing structure and content of accounting courses that met the 150-hour requirement. Colleges and universities indicated that these were the most important areas for adding hours to accounting programs and curricula that met the 150-hour requirement The importance of these areas for adding hours to accounting programs and curricula that met the 150-hour requirement were consistent with the level of importance indicated in the literature and accounting profession (AECC, 1990; Anderson & Co. et al., 1989; Bedford Committee, 1986). 7. Results were mixed concerning how to include identified accountant skills and competencies into accounting programs and curricula that met the 150-hour requirement Respondents indicated the importance of different ways for including identified accountant skills and competencies into accounting programs and curricula. These included more writing assignments, M = 5.48; more group assignments, M = 5.36; into existing course material, M = 5.30; redesigning course material, M = 5.05; and more case studies, M = 4.89. Colleges and universities indicated that there were many areas of accounting programs and curricula to include the identified accountant skills and competencies. Respondents also indicated that including identified accountant skills and competencies into the fifth year of accounting programs was feasible. 8. Classroom delivery methods by faculty were changed to include more team projects, M = 5.50, and case studies, M = 5.05, for teaching of identified accountant skills and competencies. Faculty delivery methods for teaching of accountant skills and compe tencies changed to present accounting from a user perspective and not from a preparer perspective, M = 4.95, and to assign work requiring Internet access, M = 4.50. Faculty Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 102 delivery methods using distance learning activities, M = 2.42, were not important for including identified accountant skills and competencies. 9. Results for the seven importance of program change questions on the survey instrument, except for Instrument Question 8, were not significant for private and public institutions, p > .05. For Instrument Question 8, a significant result was found between responses for private and public institutions regarding reasons for not changing accounting programs and curricula that met the 150-hour requirement, A =.38. The difference was muted because of the low statistical power o f the results, N = 12. Hence the low statistical power resulted in the difference being nonsignificant. 10. Means for three of the 55 items contained within the seven importance of program change instrument questions were significantly different for public and private institutions, p < .05. The mean for public colleges and universities, M = 6.00, regarding Instrument Question 8, item “focus on private accounting” was significantly greater than the mean for private institutions, M = 2.20. Hence public colleges and universities considered focus on private accounting to be a significantly more important reason for not changing accounting programs and curricula that met the 150-hour requirement than private institutions. Private colleges and universities indicated that focus on private accounting was the least important reason for not changing accounting programs and curricula that met the 150-hour requirement. A significant difference resulted for Instrument Question 9, item “interpersonal skills,” between responses from public and private colleges and universities, p < .05. Both public and private colleges and universities considered this item to be an important accountant skill and competency, M > 5.00. However, a statistically significant difference between the means resulted from the responses from public and private colleges and universities to this item. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 103 A significant difference between the means resulted for Instrument Question 10, item “business division chairperson,” between responses from private and public colleges and universities, p < .05. Means from public institutions, M = 3.64, importance of business chairpersons for identifying necessary accountant skills and competencies, was significantly different from the means from private institutions, M = 4.53. 11. No significant R2 values were found confirming the relationship between number of students in four-year bachelors accounting programs and the seven importance o f program change instrument questions, p > .05. The R2 values ranged from .05 to .37. The highest statistic reflecting relationship between number of students in four-year bachelors accounting programs and an instrument question was for Instrument Question 8, “not changing accounting programs,” R2 = .37. The lowest statistic reflecting relationship between number of students in four-year accounting programs and an instrument question was for Instrument Question 14, “classroom delivery methods,” R2 = .05. Significant Pearson product-moment correlation coefficients (r) were found for nine of the 55 importance of program change instrument items contained within the seven importance of program change instrument questions, p < .05. The r values were signifi cant, p (one-tailed tests) < .05, and positive for two importance of program change instrument items. The r values were significant and negative for seven importance of program change instrument items. A significant positive r value was obtained with regard to the linear relationship between number of students in four-year bachelors accounting programs and Instrument Question 9, Item h “research skills,” r = .25. A significant positive r value was obtained with regard to the linear relationship between enrollment size in four-year bachelors accounting programs and Instrument Question 13, Item c “fifth year of program,” r = .21. Significant negative r values, p < .05, were obtained with regard to the relationship between number of students in four-year bachelors programs and responses to items in Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 104 three importance of program change instrument questions. First, Instrument Question 10, importance of groups of people involved in identifying the necessary accountant skills and competencies, Item c “business faculty,” r = -.19, indicated a significant negative correlation between number of students in four-year bachelors programs and responses to the importance of using business faculty as a group o f people for identifying necessary accountant skills and competencies. Second, Instrument Question 11, importance of areas for changing accounting programs that met the 150-hour requirement had two items with a significant r value: Item a “professional image,” r = -.22, and Item c “meet student expectations,” r = -.24. Hence, two significant negative correlations were obtained with regard to the relationship between number of students in four-year bachelors programs and responses to the importance of reasons for changing accounting programs that met the 150-hour requirement Two vari ables regarding the response to the importance of areas for changing accounting programs that met the 150-hour requirement professional image and meeting student expectation, explained enrollment in four-year bachelors accounting programs. Third, Instrument Question 12, importance of areas when adding hours to account ing programs that met the 150-hour requirement had four items with significant negative r values: Item c “accounting theory,” r = -.22; Item d “advanced accounting,” r = -.20; Item e “professional ethics,” r = -.25; and Item 1“math,” r = -.20. Four variables regarding the response to the importance of areas for adding hours to accounting programs that met the 150-hour requirement—accounting theory, advanced accounting, professional ethics, and math—explained enrollment in four-year bachelors accounting programs. Conclusions and Discussion The purpose of this study was to determine the level of importance o f reasons for Midwestern colleges and universities changing or not changing accounting programs and curricula that met the 150-hour requirement Findings of the study, described in Chapter Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 105 IV, were organized into the following major conclusions. Each major conclusion, includ ing study implications, was discussed in relation to the literature reviewed in Chapter II. Perceptions of the 150-hour Requirement as Indicated bv Sampled Colleges and Universities In response to Research Question 2 and Instrument Question 8 on importance of not changing accounting programs and curricula, study results indicated that colleges and universities changed accounting programs and curricula that met the 150-hour requirement Study finding two indicated that 87.5% of respondents changed accounting programs and curricula that met the 150-hour requirement The acceptance o f the 150-hour requirement by states supported the need for change in accounting programs and curricula (Smith & Usry, 1989). Findings supported that the majority of states (80%) had adopted legislature that required 150 semester hours of education in order to meet CPA examination require ments (Public Accounting Report, 1995). Changes in accounting programs were needed because the business world had become more dynamic and complex (Elliott, 1991). O f the 12.5% of colleges and universities that had not changed accounting programs and curricula that met the 150-hour requirement, 75% were private institutions that had smaller accounting programs. Respondents at those colleges and universities not meeting the 150hour requirement indicated lack of fiscal resources and lack of student interest as important reasons for not changing accounting programs and curricula. Private institutions cited forming articulation agreements and other local colleges that provided graduate accounting programs as reasons for not changing accounting programs and curricula that met the 150hour requirement. Only one public institution with a large accounting program responded that they did not change accounting program and curriculum that met the 150-hour requirement This institution responded that accounting program and curriculum did not have to be changed since accounting students could simply take an additional 30 hours in accounting/business courses to meet the 150-hour requirement Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 106 Survey results clearly indicated that larger public and private accounting programs changed accounting programs and curricula that met the 150-hour requirement Only institutions with smaller accounting programs, mainly private colleges and universities did not change accounting programs that met the 150-hour requirement because of lack of fiscal resources. These smaller accounting programs at private colleges and universities indicated a willingness to form articulation agreements with other institutions as an economically feasible alternative for students to meet the 150-hour requirement In response to Research Question 5 and Instrument Question 11 on level of impor tance of reasons for changing accounting programs and curricula, study results indicated the following. Study finding five reflected college and university acceptance of the account ing profession’s 150-hour requirement by changing accounting programs and curricula. Respondents indicated that the most important reason for changing accounting programs and curricula was to meet the requirements of taking the CPA examination, M = 6.36. This result correlated with meeting student expectations, M = 6.02, as a reason why colleges and universities changed accounting programs and curricula that met the 150-hour require m ent Results of this study were in agreement with the accounting profession’s require ment of additional hours for accountants (AICPA, 1969; Bedford Committee, 1984; FSA Curriculum Committee, 1982). After the year 2000, students must complete 150 hours of semester work to be eligible to take the CPA examination (AICPA, 1988; AICPA & NASBA, 1994). Colleges and universities indicated that the most important reason for changing accounting programs and curricula that met the 150-hour requirement was to meet the requirements for taking the CPA examination and to meet student expectations. While meeting the CPA examination requirements was the most frequently given response by colleges and universities for changing accounting programs and curricula, these institutions were influenced by competition from other institutions, M = 5.85, and meeting employer expectation for accounting graduates, M = 5.60. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 107 In response to Research Question 6 and Instrument Question 12 on the level of importance for different areas when adding hours to accounting programs and curricula that met the 150-hour requirement, results indicated the following. Study finding six indicated that colleges and universities found analytical thinking, communication, and writing to be the most important areas for adding hours to accounting programs and curricula that met the 150-hour requirement The importance of these areas for adding hours to accounting programs and curricula that met the 150-hour requirement were consistent with the level of importance indicated by the literature and accounting profession (AECC, 1990; Anderson & Co. et al., 1989; Bedford Committee, 1986). Research Question 9 pertained to the differences between public and private colleges and universities responses to the seven importance of program change instrument questions. Study findings 9 and 10 indicated that no significant difference in means existed, except for Instrument Question 8, between public and private colleges and universities on responses to the seven importance of program change instrument questions, p > .05. The statistically significant result between mean responses from private and public institutions regarding reasons for not changing accounting programs and curricula that met the 150-hour require ment, Instrument Question 8, was muted because of low statistical power of the results, N = 12. Findings from the remaining importance of program change instrument questions from public and private colleges and universities indicated that both types of institutions viewed the 150-hour requirement and changes to accounting programs and curricula to meet the 150-hour requirement as important. Research Question 10 ascertained the relationship with regard to enrollment size of accounting programs and the seven importance of program change questions. Study finding 11 indicated that no significant R2 values were found with regard to the relationship between number of students in four-year bachelors accounting programs and responses to the seven importance of program change instrument question, p > .05. Significant r values Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 108 were obtained with respect to the linear relationship between enrollment size in four-year bachelors accounting programs and responses to nine o f the 55 importance of program change variables. Use of Accountine Models by Colleges and Universities in Changing Accounting Programs and Curricula In response to Research Question 1 and Instrument Question 7, respondents at colleges and universities were asked to indicate the model used when changing accounting programs and curricula that met the 150-hour requirement. Study finding one found that colleges and universities indicated that no particular model was used when changing accounting programs and curricula. Responses indicated that 75% of respondents had not used a model when changing accounting programs and curricula, while 25% of the respondents used a model for changing accounting programs and curricula that met the 150-hour requirement. When changing accounting programs and curricula that met the 150hour requirement, 13% of the respondents indicated the use of the AICPA model. The AICPA’s model program recommended a minimum of 60 hours in general education: 2450 hours in business administration and 25-50 hours in accounting education (AICPA, 1992). Use of the AICPA model reflected the accounting profession’s support for greater breath in accounting curricula and the need for more program emphasis on general education requirements (Bedford Committee, 1986; Williams, 1990). Responses from 6% of the respondents indicated use of the AASCB model when changing accounting programs and curricula. In 1994, the AACSB published general guidelines for curriculum development in Achieving Quality and Continuous Improvement through Self-Evaluation and Peer Review. This brochure indicated that curriculum was to include foundation knowledge for business in areas of accounting, behavioral science, eco nomics, and mathematics and statistics. The AACSB curriculum devoted 50% to general education with the remaining portion of the accounting program dedicated to professional Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 109 education (Chandra & Hock, 1992). The remaining 6% o f respondents indicated that an “other'1model was used to change accounting programs and curricula. Results indicated that none of the respondents had used a model from an AECC funded college or university when changing accounting programs and curricula. The AECC was created in 1989 through $5 million of funding from the big six accounting firms (Accounting Education News. June 1993). The AECC channeled these funds to selected colleges and universities to finance innovative changes to accounting programs and curricula (Journal of Accountancy. June 1990). The AECC objectives were to promote changes in academic preparation of accountants that improved an accountant's capabilities for a successful professional career in accounting practice (Mueller & Simmons). The AECC selected 13 colleges for receipt of funds from 111 submittals (Ernst & Young, 1992). The AECC-funded colleges used these funds to develop model programs that met the 150-hour requirement. Several of the AECC-funded colleges published articles that described the process and results of their efforts in developing 150-hour programs. These model programs, while broad and general in scope, offered guidance to other colleges and universities as to recommended curriculum for 150-hour programs. TJie AECC also promoted changes in accounting programs and curricula through issuance of six Issues Statements and two Position Statements. The AECC was active in enlisting the cooperation and creativity of the academic community and others to enact changes in accounting education. Hence, given the extensive AECC activities, a surprising study conclusion was that colleges and universities had not used an AECC model when changing accounting programs and curriculum that met the 150-hour requirement. Study findings supported the literature and studies that colleges and universities were given flexibility and latitude in changing accounting programs and curricula that met the 150-hour requirement (AACSB, 1994; AECC, 1990; AICPA, 1992; Bedford Commit tee, 1986). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 110 Relative Importance of Identified Accountant Skills and Competencies Research Question 3 and Instrument Question 9 addressed the level of importance for accountant skills and competencies that met the 150-hour requirement. Respondents were asked to identify the level of importance for accountant skills and competencies. As indicated in study finding three, respondents identified all accountant skills and compe tencies listed on the instrument as important, M > 4.00. Skills and competencies listed on the instrument were compiled from the literature. Hence, study results were consistent with what the various accounting studies and literature had indicated to be important accountant skills and competencies. Study finding three indicated that problem solving skills, M = 6.19, and analytical skills, M = 6.13, were the most important accountant skills and competencies in meeting the 150-hour requirement These results were consistent with the literature that reported the need for accounting professionals to have better analytical skills that met the challenges of the dynamic accounting profession (Bedford Committee, 1986). In 1959, a Ford Founda tion study criticized business education as being too technical and failing to develop higher level thinking skills in accounting graduates (Nelson, 1995). Accountants needed to develop analytical and problem solving skills (Andersen, et al., 1989). These were areas of deficiencies in accountants which the accounting profession looked to colleges and universities to remedy. Changes in accounting programs were needed because the business world had become more complex and dynamic (Elliott, 1991). Accounting and information systems had changed dynamically (Smith & Usry, 1989). Accounting in the 1990s needed to support knowledge-based technology (Fish, 1995). Society and changes in society caused a shift in education requirements to correspond with the changes in the environment (Elliott, 1992). Education was necessary to provide accountants with a broad intellectual based service that was essential to keep pace with the requirements of the changing accounting environment (Carey, 1969,1970). Study results indicated that colleges and Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Ill universities had identified these areas as important accountant skills and competencies when changing accounting programs and curricula that met the 150-hour requirement Respondents indicated that communication skills were important accountant skills and competencies. Written communication skills, M = 5.89; oral communication skills, M = 5.81; and interpersonal skills, M = 5.38, were considered important accountant skills and competencies by respondents. The accounting profession identified communication skills as the ability to transfer and receive information at ease. The AICPA and AAA identi fied that effective oral and written communication skills were needed areas of competency by accountants. Interpersonal skills and the need to work with other people were recog nized as an important part of public practice. The accounting profession identified that accountants had the necessary technical expertise but lacked other needed skills to provide quality professional service to clients (Bedford Committee, 1986). Greater attention must be given by colleges and universities to interpersonal skills (Andersen et al., 1989). Kirkwood Community College, an institution receiving AECC funds, established improve ment of students’ communication skills as an objective for accounting principles courses. Study results were consistent with the accounting profession and literature that oral and written communication skills were important accountant skills and competencies that colleges and universities must address when changing accounting programs and curricula that met the 150-hour requirement (Novin & Tucker, 1993). Learning to learn skills, M = 5.44, was identified by respondents as an important accountant skill and competency. This study result was consistent with the accounting profession literature on the needed competency of life long learning. The 1986 Bedford Committee findings showed that learning to leam skills were a primary classroom objec tive. Colleges and universities because of socioeconomic environment changes created a need for lifelong learning skills (Chandra & Clayton, 1992. Accounting programs needed to be broad and prepare students for lifelong learning (Chesser, Conway, & Harrison, Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 112 1991). Education had to correspond to changes in society which created a need for lifelong learning skills (Elliott, 1992). The AECC in Position Statement No. One titled Objectives o f Education for Accountants stated that accounting students needed skills for, and a base for, lifelong learning. Study results indicated that colleges and universities were in congru ence with the accounting profession and literature on the importance of learning to learn skills as a necessary accountant competency. In response to Research Question 7 and Instrument Question 13 on the level of importance for including identified accountant skills and competencies into program areas, study results were mixed. Study finding seven indicated that colleges and universities used different methods for including identified accountant skills and competencies into program areas. Identified accountant skills and competencies were included in writing assignments, M = 5.48; group assignments, M = 5.36; existing course material, M = 5.30; and redesigned course material, M = 5.05. Recommendations Recommendations for Further Research Additional study on how colleges and universities changed accounting programs and curricula that met the 150-hour requirement include the following recommendations: 1. The study could be replicated in similar colleges and universities to confirm the results found here. 2. The study could be replicated in states that have not adopted the 150-hour requirement to confirm the results found here. 3. Part of the study could be replicated with public accounting firms to confirm the consistency of the results found here for necessary accountant skills and competencies. 4. A follow-up study o f accounting graduates could be conducted to ascertain accounting graduates' perception o f the 150-hour requirement and preparation for the professional accounting environment Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 113 5. While this study focused on changes to accounting programs and curricula, a follow-up study could be conducted that focused on changes to course content as a result of meeting the 150-hour requirement 6. The study could be replicated to ascertain the consistency of accounting programs and curricula that met the 150-hour requirement 7. The study could be replicated at two-year colleges to ascertain changes made to accounting programs and curricula as a result of the 150-hour requirement 8. A study could be conducted to ascertain why the AECC model was not used by colleges and universities when changing accounting programs and curricula Recommendations for Institutional Policy-Making 1. A review of the literature on the 150-hour requirement should be made before implementing changes to accounting programs and curricula to meet the 150-hour requirement 2. At smaller colleges and universities, an economic analysis of using an articula tion agreement with another institution as a means of meeting the 150-hour requirement should be analyzed. 3. 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A joint IMA/FEI position statement on the results of the survey: “What corporate America wants in entry-level accountants.” Management Accounting. 76(3). 25-31. Khani, P. E., Edwards, J. D., Read, W. J., Pope, R. A., & Freeman, R. J. (1994). Focus on: Accounting education, how do you prepare your students to find solutions to the real-world problems they will face in the work place. Journal of Accountancy. 177(6). 44-45. Kleiman, C. (1991, June 2). In accounting jobs, master’s a real plus. Chicago Tribune. Knechel, W. R., & Rand, R. S., Jr. (1994). Will the AECC’s course delivery recommendations work in the introductory accounting course? Some preliminary evidence. Journal of Accounting Education. 12(3). 175-191. Kren, L, Tatum, K. W. & Phillips, L. C. (1993). Separate accreditation of accounting programs: An empirical investigation. Issues in Accounting Education. 8(21. 260271. Leinicke, L. M., Ostrosky, J. A., & Fish, G. L. (1992). The 150-hour requirement: The practitioners’ viewpoint. Journal of Accountancy. 174(3). 97-100. Letter from the chairman of the American institute of CPAs special committee on financial reporting. (1994). Journal of Accountancy. 178(41. 39-109. Livingston, W. S. (1992). Looming demands on higher education. Issues in Accounting Education. 7fli. May, G. S., & May, C. B. (1989). Communication instruction: What is being done to develop the communication skills of accounting students? Journal of Accounting Education. 7. 233-244. Mitchell, B. N. (1986). Minorities and postbaccalaureate education requirements (Letter to the editor). Journal of Accountancy. 168(41. Mitchell, B. N. & FlintaU, V. L. (1990). The status of the black CPA: Twenty year update. Journal of Accountancy. 172(21. 59-69. Mueller, G. G., & Simmons, J. K. (1989). Change in accounting education. Issues in Accounting Education. 4(21. 247-251. Mulford, C. W., Smith, D. B., Stout, D. E., Stone, M. S., & Weirich, T. R. (1992). Bridging the gap between accounting education and practice: The SEC academic fellow program. Accounting Horizons. 6(41. 86-92. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 119 Needles, B. E., Jr., & Powers, M. (1990). A comparative study o f the common body of knowledge for accountants. Issues in Accounting Education. 5(2). 250-267. Nelson, A. T. (1989). A new direction in accounting education—The AICPA steps out. Issues in Accounting Education. 4 (1). 211-217. Nelson, A T. (1995). What’s new about accounting education change? An historical perspective on the change movement Accounting Horizons. 9(4). 62-75. Novin, A. M., & Tucker, J. M. (1993). The composition of 150-hour accounting programs: The public accountants’ point of view. Issues in Accounting Education. &(2), 273-291. Patten, D. M. (1995). Supervisory actions and job satisfaction: An analysis o f differences between large and small public accounting firms. Accounting Horizons. 9(2). 17Perspectives on accounting education: Capabilities for success in the accounting profession, (booklet). (1989). New York: Managing Partners of the Big Eight Accounting Firms. Post Baccalaureate Education Requirement (1986, September). Tennessee CPA. Raising accounting standards. (1992, March 4). The Cleveland Plain Dealer. Reeve, J. M., (1983). The five-year accounting program as a quality signal. The Accounting Review. 58(3). 639-646. Schultz, J. J., Jr. (1989). The Bedford committee report: Prospects for implementation. Issues in Accounting Education. 4 (1). 218-221. Siegel, G., & Kulesza, C. S. (1996). The coming changes in management accounting education. Management Accounting. 68(71. 43-47). Smith, J. M., & Usry, M. F. (1989). Changes in accounting education. Journal of Accounting Education. 7. 1-7. Snowball, D. A. (1990). When the 150 takes effect New Accountant pp. 34-35. States weigh 150 semester hour law. (1995, April 30). Public Accounting R eport p. 3. Street D. L., Baril, C. P., & Benke, R. L., Jr. (1993). Research, teaching, and service in promotion and tenure decisions of accounting faculty. Journal o f Accounting Education. 11. 43-60. The undereducated American. (1996, August 19). The Wall Street Journal, p. A12. Twins study shows school is sound investm ent (1992, August 19). The New York rimes. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 120 Update on Developments in Accounting Education. (1992). Ernst & Young, New York, NY. Williams, D. Z. (1992). Grants awarded to two-year colleges for implementing improve ments in accounting education. Issues in Accounting Education. 7(2). 241-248. Williams, D. Z., & Sundem, G. L. (1990). Grants awarded for implementing improve ments in accounting education. Issues in Accounting Education. 6(2). 314-329. Williams, D. Z., & Sundem, G. L. (1991). Additional grants awarded for implementation o f improvements in accounting education. Issues in Accounting Education. 6(2). 315-330. Williams, J. R. (1990). Curriculum innovation and 150-hour legislation: Friends or foes? Issues in Accounting Education. 5(1). 1-5. Winn, J. (1996). Accounting education begins to teach students how to leam. Insight. December/January, 20-23. Windal, F. W. (1994). Handbook for establishing a school of accountancy. Federation of Schools of Accountancy, St. Louis, MO. Wolk, C. M., & Cates, T. A. (1994). Problem-solving styles o f accounting students: Are expectations of innovation reasonable. Journal of Accounting Education. 12(41. 269-281. Wygal, D. E., & Stout, D. E. (1989). Incorporating writing techniques in the accounting classroom: Experience in financial, managerial, and cost curves. Journal of Accounting Education. 7. 245-252. Yost, G. C. (1986). The fifth year: Reaction in Florida. Journal of Accounting Education. 4(1), 45-54. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX A ACCOUNTING EDUCATION CHANGE COMMISSION MISSION STATEMENT 121 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 122 The AECC was established in 1989 and is directed to: 1. Act as a forum for the identification, examination, and discussion of issues related to academic preparation of future accounting professionals. 2. Provide a focal point for learning, assimilating, and synthesizing the interestsNconcems, and priorities of the various parties at interest with respect to higher education in accounting and prospective changes thereto. 3. Serve as a catalyst to bring about demonstrable improvements in the education of accountants through curriculum restructuring, alternative education processes, development of new and different education materials, different utilization of faculty resources, and new and different ways of educating future accounting faculty. 4. Award grants to departments or schools of accounting, colleges, or universities for the purpose of achieving the objectives of the Commission. 5. Act as a responsible steward o f all resources at its disposal and exercise oversight concerning all awards and grants made to third parties. 6. Disseminate all results achieved widely, in timely fashion, and as effectively as available means permit 7. Respond to reasonable public inquiry, communicate freely among interested segments of society, and generally operate under sunshine principles. 8. Report to the AAA Executive Committee on a timely basis concerning the activities and programs of the Commission and meet annually with the Executive Committee (Mueller & Simmons, 1989). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX B AMERICAN ACCOUNTING ASSOCIATION OBJECTIVES 123 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 124 The American Accounting Association objectives are: 1. To initiate, encourage, and sponsor research in accounting and to publish or aid in the publications o f the results of research. 2. To advance accounting instruction and to encourage qualified individuals to enter careers in the teaching of accounting. 3. To advance the development and application of accounting concepts and standards and seek their adoption for financial statements prepared for external purposes. 4. To advance the development and uses of accounting for internal management purposes. 5. To advance a widespread knowledge of accounting among qualified students and the public generally. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX C AMERICAN ASSEMBLY OF COLLEGIATE SCHOOLS OF BUSINESS PURPOSE STATEMENT 125 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 126 The American Assembly of Collegiate Schools of Business (AACSB) (now known as the International Association of Management Education) accreditation promotes continuous quality improvement in collegiate schools of business. Standards for business administration were first set in 1919. In 1980, AACSB adopted additional standards for bachelor’s and master’s programs in accountancy to address special needs of the profession. In April 1991, AACSB members overwhelmingly adopted new “mission-linked” accreditation standards and procedures that support institutional diversity in management education. Any institutionally accredited collegiate institution offering degrees in business administration and accounting may volunteer for AACSB accreditation review. The initial accreditation process includes the preparation of a self-evaluation report as well as a peer review. The AACSB is a not-for-profit corporation comprised of member organizations and institutions devoted to the promotion and continuous improvement o f higher education for business administration and management The Commission recognizes the AACSB on Recognition of Postsecondary Accreditation as the sole accrediting agency for programs in business administration and accounting. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX D AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS STATE OF POLICY Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 128 The AICPA has established the following policies relating to the pre-licensure education of certified public accountants. 1. The CPA certificate is evidence of basic competence in accountancy. This basic competence is demonstrated by acquiring the body of knowledge common to the profession and passing the Uniform CPA Examination. 2. At least 150 semester of college study are needed to obtain the body of knowledge common to the profession and should be the statutory education requirement 3. The scope and content of the pre-certification education program for CPAs should be consistent with the curriculum described in Academic Preparation to Become a CPA and lead to the awarding of a graduate degree. 4. CPA candidates should be required to fulfill their pre-certification education requirements before applying to take the Uniform CPA Examination. 5. Practical experience is encouraged as part of the educational program. 6. The AICPA encourages the development of quality academic programs designed specifically for the preparation of CPAs and participates in their accreditation. The programs should consist of a faculty group with a portfolio of skills including teaching, applied and empirical research, as well as service and professional involvement. 7. The AICPA will periodically review the education requirements for CPAs and publish revisions to the common body of knowledge. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX E FEDERATION OF SCHOOLS OF ACCOUNTANCY CHARTER 129 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 130 The Federation of Schools of Accountancy is dedicated to enhancing, through collegiate education, the capabilities and performance of those entering the accounting profession. Its mission is to encourage, promote, assist, and support the development of high quality accredited programs of education for the accounting profession that lead to a master’s degree. The specific objectives of the FSA are to: 1. Encourage and assist in developing high-quality programs of education for the accounting profession that lead to a Master’s degree. 2. Develop and promote appropriate standards for programs o f education for the accounting profession that extend through the Master’s level. 3. Be a leading voice of accredited accounting programs on accreditation issues. 4. Promote the concept of accounting accreditation, and monitor and influence the establishment of accreditation standards. 5. Devise and implement programs to attract high quality students to accounting education programs that extend through the Master’s level 6. Assist in the implementation of the School o f Accountancy concept as an organizational model for providing accounting educational programs that extend through the Master’s level 7. Assist and cooperate with other organizations in achieving the mission of the FSA and provide a forum for the exchange of views and the sharing o f information with others interested in programs of education for the accounting profession that extend through the Master’s level. 8. Encourage and support research related to the mission of the FSA. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX F STUDY QUESTIONNAIRE 131 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 132 SECTION 1 - COLLEGE OR UNIVERSITY BACKGROUND INFORMATION Please check or fill-in the appropriate information. 1. What is the classification of your college or university? a)___Private college or university b)__ Public college or university 2. What is the highest accounting degree offered by your institution? a)__ Bachelors degree b )__ Masters degree c )__ Doctorate 3. At the start of their junior year how many accounting students are enrolled in the following types of programs? a)____ 4-year bachelors program b)____ 5-year bachelors program c )____ Masters program d )____ Joint bachelors / masters program e )_____ Other, please identify___________________________ 4. Approximately what percent of your accounting students take the CPA examination? a )____less than 25% b)___ 25 to 50% c )___50 to 75% d )___75 to 100% e)___ program does not prepare students to take the CPA examination f)___ data not available 5. Has the accounting program at your college or university changed to one that meets your state’s 150-hour CPA examination requirement? a ) ___Yes; if you checked yes, then go to question seven b) ___No; if you checked no, then go to question six 6. If your college or university has not changed to meet the 150-hour requirement, does it plan to do so in the future? a)__ Yes: if you checked yes, then go to question seven b )___No; if you checked no, then go to question eight c )___ No, already in compliance; if you checked no, then go to question seven 7. Was an existing accounting program used as a model by your college or university in changing your accounting program to meet the 150-hour requirement? a)___AICPA Model b)___An AECC funded College or University was used as a model c) AASCB d)___No particular model was used e) Other__________________________ Please go to the next page. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 133 SECTION 2 - IMPORTANCE OF PROGRAM CHANGE Please respond to question eight ONLY IF your college or university has not changed or does not plan to be in compliance with the 150-hour requirements. Please circle the appropriate numerical response in answering question eight After completing question eight, you are finished. DO NOT answer any of the other questions. TTiank you for completing this survey. PLEASE SKIP question eight if your college or university is in compliance with or plans to change the accounting program to meet the 150-hour requirements. Please circle the appropriate numerical response in answering all remaining questions. 8. What was the level of importance regarding each of the following reasons for not changing your accounting program to meet the 150-hour requirements? a) Lack of fiscal resources b) Lack of student interest c) Program focus is on private accounting d) Formed articulation agreement e) College or University administration Other f) 9. Most Least Important — 1i 1i I 4 1 2 3 1 2 4 3 11 5 5 Imponan i 6 6 i 7 7 1 1 2 2 3 3 4 4 5 5 6 6 7 7 1 1 2 2 3 3 4 4 5 5 6 6 7 7 What was the level of importance for each of the accountant skills and competencies identified below in meeting the 150-hour program requirements? a) b) c) d) e) f) g) h) i) j) k) 1) m) Written communication skills Presentation skills Interpersonal skills Analytical skills Deductive skills Oral communication skills Problem solving skills Research skills Management skills Computer skills Ethics Learning to learn skills Additional skills - identify . . Least Most Important__________ Important 1___ !___ !___ !___ !___ ! I 2 3 4 5 6 7 2 3 4 5 6 7 4 2 3 5 6 7 2 3 4 5 6 7 2 3 4 5 6 7 2 3 4 5 6 7 4 2 3 5 6 7 4 2 3 5 6 7 4 2 3 5 6 7 4 2 3 5 6 7 2 3 4 5 6 7 2 3 4 5 6 7 2 2 3 3 4 4 5 5 6 6 Please go to the next page. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 7 7 134 10. What was the level o f importance for each of the following groups of people who were involved in identifying the necessary accountant skills and competencies? Industry (non public) Public accountants Business faculty Business Division chairperson College or University administrators f) Accounting chairperson g) Accounting faculty h) Other a) b) c) d) e) Least Most Im nortant Inrrportan 1 1 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 1 1 5 5 5 5 6 6 6 6 7 7 7 7 5 5 5 5 5 6 6 6 6 6 7 7 7 7 7 11. What was the level of importance for each of the reasons identified below for changing your accounting program to meet the 150-hour requirement? Least Most Importa nt__________ Important a) Professional image b) Maintain status quo c) Meet student expectations d) Prestige e) Competition from other colleges or universities Requirement to take the f) CPA examination g) Employer expectations h) Other 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 1 2 3 4 5 6 7 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 Please go to the next page. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 135 12. What was the level of importance for each of the areas identified below when hours were added to your accounting program to meet the 150-hour requirement? Least Most Important___________ Important I I I I I 1 I a) b) c) d) e) f) g) h) i) Tax Computers Accounting theory Advanced accounting Professional ethics Analytical thinking Learning to learn approah Financial analysis Other Liberal Arts j) Writing k) Communications 1) Math ml Other 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 7 7 7 7 7 13. What was the level of importance for including identified accountant skills and competencies into each of the following areas? Least Most Important___________ Important a) Existing course material b) Writing assignments c) Fifth year of program d) Group assignments e) Team teaching f) Redesigned course material g) Case study h) Other 1 1 1 1 1 1 1 2 2 2 2 2 2 2 3 3 3 3 3 3 3 4 4 4 4 4 4 4 5 5 5 5 5 5 5 6 6 6 6 6 6 6 1 2 3 4 5 6 Please go to the next page. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 136 14. What was the level of importance for each classroom delivery method identified below to meet the 150-hour requirements? a) 1 1 used more case studies that simulate real-world problems 1 2 1 3 1 4 1 5 1 6 1 7 b) included more projects that required team effort for resolution Least Imooitant Most Important 1 1 1 1 1 1 1 1 2 3 4 6 7 5 c) accounting material now presented more from a user perspective Least Important Most Important 1 1 1 1 1 1 1 1 2 3 4 6 7 5 d) went to a lab concept for financial accounting Least Important 1 1 1 2 1 3 1 4 1 5 Most Important 1 1 6 7 e) used distance learning format for accounting classes Least Important 1 1 1 2 1 3 1 4 1 5 Most Important 1 1 6 7 0 assigned work requiring Internet access Least Important 1 1 1 2 1 3 1 4 1 5 Most Important 1 1 6 7 1 3 1 4 1 5 Most Important 1 1 6 7 pi other Least Important 1 1 1 2 hi other Least Important I I 3 I 5 Most Important I Thank you for completing this survey. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX G STUDY COVER LETTER 137 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 138 November 3, 1997 Dear Accounting Educator Your participation in a study of accounting educators is requested. The data generated from this study will form the empirical base for my doctoral dissertation. Dr. Ed Hines, Distinguished Professor at Illinois State University, and Dr. James Moon, Accounting Chairperson at Illinois State University, are the project consultants. The research focuses on changes that colleges and universities in the Midwest Region of the AAA, plus the State of Ohio, have made to accounting programs and curricula in response to the 150-hour accounting requirements. Your response to the questionnaire will assist me in determining the importance o f accountant skills and competencies as identified by four-year public and private colleges and universities, and what changes schools have made to accounting programs and curricula as a result of the 150-hour requirements. The questionnaire should be completed by yourself, and should take about 10 minutes to complete. All responses will be held in strict confidence. The number appearing at the end of the questionnaire is for the purpose of a follow-up should that be necessary. Aggregate responses will be presented only for statistical compilations. No details regarding individual identity or an individual college or university will be identified. For your convenience, a postage-paid envelope is provided for return of the questionnaire. Your prompt completion of the questionnaire will be very much appreciated as I hope to receive your responses by November 20,1997. As an expression of my appreciation for your participation in this study, I would be happy to send you a copy of the results if you so request on the front page of the questionnaire. Thank you in advance for your help in this study. Ralph W. Rumble Principal Researcher Dr. Ed Hines Distinguished Professor College of Education Dr. James Moon Chairperson Department of Accounting Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. APPENDIX H POSTCARD FOLLOW-UP REMINDER 139 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 140 Dear Accounting Educator A follow-up to the questionnaire that was sent to you earlier this month on changes that colleges and universities have made to accounting programs and curricula in response to the 150-hour accounting requirements. To date, I have not received your response. Please take a moment to com plete the questionnaire and return it to me. Your response is important to this study. I may be contacted at the following address and phone number if you need assistance on the survey. Thanks for your help in this study! Ralph Rumble 325 S. Luxford Court Bourbonnais, IL 60914 (815) 939-3454 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. IMAGE EVALUATION TEST TARGET (Q A -3 ) 150mm IM/4GE . Inc 1653 East Main Street Rochester. NY 14609 USA Phone: 716/482-0300 Fax: 716/288-5989 O 1993. Applied Im age. Inc.. All Rights R eserved Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. [...]... How these skills and competencies were identified, as well as what were the relative importance of these identified skills and competencies areas for private and public accountants, were the purpose for the study Also supporting the purpose for the study was how colleges and universities incorporated identified skills and competencies into accounting programs and curricula by making changes to the. .. knowledge These were the areas identified by the accounting profession as lacking in accounting graduates Colleges and universities prepared the accounting graduate with sufficient technical skills, but it was other skills, such as analytical, communication and interpersonal skills, that the accounting profession identified as areas for improvement The professional accounting organizations looked to colleges. .. how colleges and universities interpreted the relative importance of necessary accountant skills and competencies as defined by the 150-hour requirement and supporting literature, and how these identified skills and competencies resulted in changes to colleges accounting pro grams and curricula Another purpose of the study was to ascertain the relative importance o f reasons why some colleges and universities. .. encouraged by the proposals and helped accounting students to be active learners in the classroom More classroom activities that simulated real-world situations and problems were recommended by the accounting profession and by the findings of the AECC funded colleges Some of the colleges used the AECC awards to address needed improvements in the sequence and structure of accounting programs and curricula Other... of the 150-hour requirement that met accountant skills and competencies levels required by the professional accounting organizations The assump tions used for this study were: 1 The four-year colleges and universities addressed the degree to which the 150hour accounting program requirement changed the colleges accounting programs and curricula 2 The four-year colleges and universities addressed the. .. consulting areas Currently, less than 30% of all accounting graduates enter the public accounting area Assumptions of the Study The following assumptions were used in this study as the basis for the investigation that was conducted at public and private four-year colleges and universities The study focused on how Midwestern four-year colleges and universities changed accounting pro grams and curricula as a... to accounting programs 5 New accounting skills and competencies, as identified by the accounting profession, can best be identified and integrated into accounting curricula by the colleges administration and faculty for accounting programs Reproduced with permission of the copyright owner Further reproduction prohibited without permission 8 6 Some colleges and universities that did not change accounting. .. requirement There was not consensus among the selected 13 colleges and universities on how accounting programs were to be changed that met the 150-hour requirement, since each college and university’s proposal was different Some of the colleges and universities that received AECC grants published the results o f their study, and subsequent changes to accounting programs and curricula, so that other colleges and. .. existing programs and curricula The accounting profession looked to colleges and universities as the catalyst to initiate changes in accounting programs and curricula that addressed and corrected the noted deficiencies in accounting graduates The AICPA recommended that accounting programs be changed for the year 2000 accounting graduates, so that these graduates meet the new requirements to take the CPA... The big six accounting firms provided about $5 million to the AECC The AECC selected and provided funding to 11 four-year colleges and universities and to two com munity colleges (Accounting Education News June, 1993) Support and Objectives for 150-Hour Programs Support for 150-Hour Programs Many articles in the literature supported the need for, and adoption of, 150-hour accounting programs The accounting