The CPA Journal

December 2001

Another Perspective on Bridging the Education Gap

By Kang Cheng

Unlike Mary Ann Merryman, the accounting professor who took a sabbatical to work in a CPA firm ("Personal Viewpoint," August News & Views), I am not tenured. I passed my CPA exam while still working on my PhD in accounting, and I'm in only the third year of my first full-time teaching position. Complicating matters further is that I began as a foreign student-which is actually not that unique in the United States and is becoming even less so as more educators come from foreign backgrounds. Professor Merryman's observations, coupled with Lou Grumet's column in the same issue ("Bridging the Education Gap"), inspired me to share my own experience and perspective.

Accounting and Academics: A Social Science without Social Content

The first day of my first audit assignment happens to be a Friday, a casual day for our audit client. I know that how we as Deloitte & Touche auditors should dress isn't a big issue and won't impact my performance, and I know the other team members probably covered issues like this in their orientation with the firm. But for a moment, the issue of my attire stopped me-a 32-year-old, freshly minted PhD, with adequate theoretical and analytical training, on summer break from his first full-time teaching position, on the first day on his faculty-internship, getting his first taste of life as an entry-level Big-Five auditor-and I had to ask my 24-year-old team leader for advice. In doing so, I felt I was already learning lessons about teamwork and corporate culture, training that my PhD program lacked.

That first-day situation is not one many accounting faculty will face. Faculty internships are rare; you really have to push for the opportunity. And taking off from school for an entire summer or a regular semester, especially early in your career, is a calculated risk. For a young faculty member fresh out of a PhD program, the tenure clock is ticking fast and loud. When aiming for tenure, the best time to publish is when you are the most current on research issues and methodologies. Trying to bridge the gap between practical experience and academic training is both counterproductive and potentially detrimental, especially at research schools, where the mere mention in a job interview of practice interests is frowned upon and almost guarantees rejection.

Someone who wants to understand the gap between practice and academia can look at the typical educator's career path. For the 80% of my dissertation committee members that never needed or wanted to take the CPA test, practice and practical issues are not really of concern, but research issues are. Tests of hypotheses are by definition what academics have in mind when they talk about research. Whether an issue is researchable often depends upon the availability of empirical data. The problem isn't that accounting faculty members don't care about what's going on in practice; the problem is that those issues are tied to their personal career development. For example, many issues about recent SFASs lend themselves to hypotheses and research, but the data won't be available for several years. Meanwhile, the tenure clock continues to tick, making it more practical to focus on other, more publishable issues, such as the explanatory power in a cross-sectional time-series empirical model.

This tendency is supported by the fact that many business schools' PhD programs, including accounting programs, begin with agency theory, which basically says that individuals are their own agents that put individual utility before an organization's utility. It is human nature to perform to meet evaluation criteria, and if an accounting educator's performance evaluation isn't tied to practical issues, the gap will continue to widen. In addition, because research data can be-and often are-transplanted from the world of practice to the world of academia, using research methodologies that are accepted and familiar in academia, accounting educators can be rewarded for work with no practical context, and there is little incentive to close that gap.

Personally, I appreciate Deloitte & Touche for giving me the opportunity to work with their auditors. I now teach with more confidence because I know the structure and culture of a leading firm and the lifestyle that my students are likely to face. I also recognize the pressure I put on my team leader and the senior partner at Deloitte & Touche that accepted me in the first place. When I, an overeducated, underexperienced scholar trained in theory and research methodologies, asked to be treated like just another one of their new recruits, I knew I was imposing on them: I was a temporary employee with no future. Practices are profit-driven, and a recruit with tons of theory and methodology training is less useful than a recruit with even a little client experience. Only a small part of any practice will try to respond to a FASB exposure draft, develop a new analytical model, or propose new practices. Until accounting firms can figure out how to use accounting educators' academic training, they have little incentive to bridge the gap, either. In that respect, the issue is less one about education (either too much or too little) and more one about the mismatch between professional training and the need for higher education.

Faculty members in business schools have been trained to view the accounting discipline as a social science. That training focuses on the science, not the social, which is evident by the papers that get published and the dissertations that are accepted. Moreover, most research projects are limited by the available data and are done after the fact; the social content can be weak or even missing, but the methodological rigidity prevails. If the gap is not filled during the training process, it will only widen as the educator's career progresses.

As early as 1987, Thomas H. Johnson and Robert S. Kaplan, in a book aptly titled Relevance Lost, discussed the rise and fall of management accounting. Fifteen years later, the title can be read to apply to financial accounting as well. Practitioners know it; professors know it; students or potential students surely know it.

Is there a hope for a positive change? I hope so. In an address at the August 2001 American Accounting Association (AAA) annual meeting in Atlanta, Joel Demski, AAA president, called for "Reinvigorating Accounting Scholarship" to be the theme for the coming year. The best hope is that the academic community will reorient itself to curricula and scholarship activities that will help it regain relevance. That goal can be achieved only with the help of practitioners. Next time a new recruit fails to demonstrate a skill you deem essential, don't just call your training department-call us, we're listening.

Kang Cheng, PhD, CPA, Assistant Professor Department of Accounting, Towson University