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The Future of Accounting Education: Assessing the Competency Crisis


TF Recommendation #1. The perspective of accounting education should be reoriented to a greater focus on curricular requirement for long-term careerdemands. – PowerPoint PPT presentation

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Title: The Future of Accounting Education: Assessing the Competency Crisis

The Future of Accounting EducationAssessing the
Competency Crisis
  • James E. Sorensen, Ph.D., CPA, CGMAS
  • School of Accountancy, University of Denver
  • Colorado Society of CPAs
  • Accounting Faculty Symposium
  • October 18, 2014

Development Vetting of Proposed Framework
  • Development
  • First meeting of Task Force on September 10, 2010
  • Have had virtual meetings nearly every other week
    since then
  • Numerous side meetings to focus on specific
    aspects of the framework
  • Conference Presentations
  • 2011, 2012 and 2013 AAA annual meetings
  • 2012 and 2013 IMA Annual Conference Exhibition
  • 2012 and 2013 AAA Management Accounting Section
    mid-year meeting
  • Input from numerous colleagues and members of the
    Pathways Commissions Common Body of Knowledge
    task force

Publications and Manuscripts Under Review
  • Lawson, et al. 2014. Focusing Accounting
    Curricula on Students Long-Run Careers
    Recommendations for an Integrated
    Competency-Based Framework for Accounting
    Education. Issues in Accounting Education, 29
    (2) 295-317.
  • Lawson, et al. (2015) Thoughts on Competency
    Integration in Accounting Education, Issues in
    Accounting Education, 30 (3) 149-171.
  • P. Brewer, J.E. Sorensen, D.E. Stout. (2014).
    The Future of Accounting Education Addressing
    the Competency Crisis. Strategic Finance, XCVI
    (2) 28-37.

Motivation for Development of Framework
Accountants responsibilities are expanding
But, our extensive review of the literature shows
that these responsibilities are not being met
Pathways Commission Report
  • On the education of accountants and the need for
  • Accounting education is challenged to keep pace
    with opportunities and expectations that students
    learn to think in new ways and develop the
    necessary skills and knowledge to maintain the
    professions ability to meetevolving
    opportunities. Without innovation and change, the
    discipline and profession risk becoming
    supplanted by technology or possibly rendered
    irrelevant because of mechanical rules and
    artificial contrivances. (p. 22)

Pathways Commission Report
  • On developing curriculum models 
  • accounting curricula have evolved with limited
    commitment or agreement about core learning
    objectives in recent years. Vital accounting
    programs, courses, and learning environments need
    systematic attention to foundations for
    curriculum and pedagogy and opportunities for
    renewal for accounting educators. Accounting
    educators must bring together the broad
    accounting community to develop a shared vision
    for a body of knowledge that can serve as the
    foundation for varied curriculum models, allowing
    flexibility across varied educational
    institutions and missions. (p. 36)

Pathways Commission Report
  • If the accounting community continues to
    concentrate on the financial accounting system
    and not understanding the technology and dynamic
    business processes that run companies of the 21st
    century, the accounting profession has the
    potential to become obsolete. (p. 68) (emphasis

TF Recommendation 1
  • The perspective of accounting education should be
    reoriented to a greater focus on curricular
    requirement for long-term career demands.
  • Demski (2007) "... a vast amount of the
    curriculum is arguably aimed at preparing the
    student for the initial job ... important, but so
    are the ones that follow."
  • Academic and practitioner sources have cited the
    academic need to start building competencies
    required for the long-run.

TF Recommendation 2
  • The focus of accounting education should be
    broadened to move beyond a narrow focus on public
  • over 80 of accounting graduates ultimately
    choose careers outside of public accounting
  • accounting curricula should establish the base of
    knowledge and skills needed for career
    requirements across a variety of organizations.

TF Recommendation 3
  • The educational objectives of accounting
    curricula today should reflect how accountants
    add organizational value
  • The way accountants add value within
    organizations has evolved and continues to
  • Numerous surveys of financial executives confirm
    that accountants today are being asked
    increasingly to complement traditional accounting
    competencies with broad management competencies
    that enable them to collaborate with other
    managers to improve organizational performance. 

Workplace Reality Underlying Expected Competencies
  • Overarching responsibility of ALL professional
    accountants is to ADD values to clients and
    organizations by all accounting disciplines
  • Audit
  • Tax
  • Financial accounting
  • Management accounting
  • Accounting information systems
  • Others
  • Ways to Add Value
  • Have evolved
  • Continue to evolve

TF Recommendation 4
  • The competencies (KSAs) of an accounting
    education should emerge and be developed within
    the curriculum as integrated competencies.
  • There are many ways to deliver the content
    competencies go beyond traditional "silos."
  • The challenge is achieving integration within and
    among competencies we have work to do.

Conceptual Framework of Accounting Education
  • These collective recommendations lead to a
    plausible proposed conceptual framework that
    identifies the integrated professional
    competencies necessary to create value in the
    long-run careers for all accountants.

Competency Integration Framework
Integration How Accountants Add Value
Continuum of Entry-Level and Long-Term Competency
Development and Integration
Examples of Competency Areas Preparation for Initial Job Further Development of Life-Long Competencies Further Development of Life-Long Competencies
Examples of Competency Areas Undergraduate Education Early Career and/or Additional Education Long-Term Career
Integration of Formal Coursework and Professional Development Grounding in accounting and business knowledge and foundational skills Deeper expertise in area of chosen career path increasing integration across subject matters and focus on organizational value Deeper integration across subject matters greater focus on ability to gain new knowledge and skills over time to enhance organizational value
Integration of Accounting and Broad Business Knowledge Limited integration across accounting and broad business knowledge Considerable integration of accounting and broad business knowledge   Integrate accounting and broad business knowledge in highly uncertain and evolving situations develop new ways to apply business knowledge as an accounting professional
Integration of Foundational Competencies Develop foundational competencies for a business major Use foundational competencies to enhance cross-functional work Use foundational competencies effectively to anticipate and adapt to more complex business situations
Levels of Competency Must Be Achieved Sequentially
Knowing Identifying Analyzing Prioritizing Anticipating
Demonstrate knowledge in unambiguous situations Identify ambiguous problems and relevant information Analyze relevant information, viewpoints, and alternatives Establish and apply priorities for reaching conclusions Anticipate and adapt to changing conditions
Achieve First
?Deeper Knowledge and More Contextual
Achieve Second
Achieve Third
Achieve Last

Level of Competency Integration (partial
representation of Accounting Competencies)
Accounting Competencies
Foundational Competencies
Accounting Competency 3
Topic E
Topic F
Accounting Competency 2
Accounting Competency 1
Topic C
Topic D
Topic A
Topic B
Broad Management Competencies
Capital Investment Decision-Analysis Example
Accounting Competencies
Foundational Competencies
Foundational Competencies
Foundational Competencies
Assurance Internal Control Internal and
external audit implications
External Reporting Analysis Financial
statement preparation analysis
Taxation Compliance and Planning Tax
Quantitative Methods
Quantitative Methods
Analytical Thinking Problem Solving
Analytical Thinking Problem Solving
Broad Management Competencies
Additional Core Management Competencies Cost of
capital, Capital structure, Real-options analysis
Leadership Organizational change management
Ethics Social Responsibility Corporate social
Governance, Risk Compliance Risk assessment
Inventory Management Example
Accounting Competencies
Foundational Competencies
Assurance Internal Control Internal and
external audit implications
External Reporting Analysis
Inventory accounting methods
Ratio analysis
Quantitative Methods
Planning, Analysis Control Strategic
performance measurement
Information Systems Documents and data Flows
for inventories
Quantitative Methods
Analytical Thinking Problem Solving
Analytical Thinking Problem Solving
Broad Management Competencies
Additional Core Management Competencies
Collaborative supply chain management
Ethics Social Responsibility Global sourcing
Process Management Improvement Lean Production
Governance, Risk Compliance Managing inventory
Framework for Including Integrated
Competency-Based Learning Objectives with
Accounting Curricula
What Can Practitioners Do?
  • Practice Partner Action List How Can I Help as a
  • Obtain and maintain professional credentials
  • Utilize IMA resources
  • Participate in IMA activities
  • Integrate EPM into your company

What Can Practitioners Do?
  • Academic Partner Action List How Can I Help as
    an Academic Partner?
  • Obtain and maintain professional credentials
  • Involvement in and use of IMA resources
  • Develop a CMA focus on campus
  • Participate in national activities

Moving Forward
  • What do you think?

Comments or suggestions are welcome now. If you
like, please drop a line to James
Sorensen or to Raef Lawson, Chair
of the Task Force IMA VP-Research
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