Some Thoughts on Students and Faculty

On July 1, 1997, after 26 years in public accounting and 10 years at the FASB, I became an accounting professor at the University of Georgia. This “third act” in my career has been both interesting and rewarding. Many ask me which job I have enjoyed the most; I greatly enjoyed each at the time. Although I wouldn’t want to go back to either earlier position, I certainly wouldn’t have wanted to miss the wonderful opportunities they provided. Friends in public accounting and the cor-porate world also ask me frequently, What is it really like to be a professor? This brief report contains some of my impressions of students and faculty after six years of teaching accounting at a leading university.

Despite a great deal of contact with accounting educators while at both Ernst & Young and the FASB, one fact wasn’t entirely clear to me until I became an “insider”: Success in the higher echelons of accounting education is almost entirely a function of an individual’s research and publication record. While reasonable teaching skills and professional service are expected, tenure and promotion decisions are highly correlated with one’s record of research published in the leading academic journals. The quantitative skills needed to earn a PhD in accounting in recent years are very different from those needed to excel in practice. Whether this is a generally good or bad thing is beyond the scope of this article, but it may suggest reasons for some of these observations.

At present, at the University of Georgia, I teach introductory financial accounting in the MBA program, including a special section conducted mainly on the Internet. I also teach a class called accounting policy for our Master’s of Accountancy (MAcc) students. Rather than introducing new accounting topics, the class concentrates on having students apply what they’ve already learned to real-world problems.

The MAcc students read about and discuss emerging issues such as accounting for trade allowances from vendors, a major practice problem earlier this year. I also develop cases that require comprehensive written and oral reports, based again on current problems. For example, a recent case covered the accounting for LeBron James’ Nike contract.

I work the students pretty hard and try to make my assignments as realistic as possible. Nevertheless, I’m still learning how to mesh my students’ expectations and abilities with my own, and I certainly haven’t gotten it quite right yet. To illustrate, I always ask for anonymous feedback about midway through my MAcc class; I recently received the following comment from one student: “I appreciate that you are trying hard to prepare us for the real world. But I know the people I’m going to work with in public accounting and they’re much nicer than you!” So it’s possible to have just as many critics on campus as I had at the FASB!

In addition to teaching, I do a fair amount of speaking and writing. I’m also involved in a number of professional committees, including IMA’s Financial Reporting Committee and the FEI Committee on Corporate Reporting. And in the past few years, I’ve joined three public companies’ boards of directors.

All this doesn’t necessarily make me a “typical” academic, especially because I am not a researcher. Nevertheless, I’ll share some observations about students and faculty. My experiences, of course, are based mainly at the University of Georgia, but I’ve discussed them enough to make me feel they are reasonably representative.

My comments relate primarily to accounting students and faculty, although I’ve noticed one important distinction between the accounting and MBA programs. The MBA students need at least a general knowledge of accounting to be successful business executives, while the MAcc students need broad business knowledge without becoming overly focused on technical accounting matters. I’ll say more about this later.

With respect to accounting students, I’ve noted the following: They are bright, reasonably mature, well grounded in information technology, and excited about their burgeoning careers. But they’ve spent too much time focusing on detailed accounting rules, including those excruciating FASB standards. As a result, students are uncomfortable dealing with issues that require professional judgment or are otherwise ambiguous.

Also, they are too narrowly focused on accounting matters, rather than broader business or societal issues. Furthermore, while my students have good verbal skills, too many have difficulty expressing a clear thought process in writing. I’ll elaborate somewhat on these matters, but first a few general comments about faculty members.

Faculty members are extremely smart and principled and they are absolutely dedicated to students’ well-being. But they also tend to be narrowly focused on their own research or interests, and not nearly enough on what I call group success. My biggest surprise and disappointment has been the general lack of interest in current professional issues. It also appears that many faculty members are overly comfortable with teaching techniques and contents that have worked in the past but are not well suited to prepare today’s graduates.

Let me explore each of those points a little more, starting with the student matters. I want to stress, however, that these are simply my personal observations, and I don’t mean to indicate they are right or wrong. Some readers will disagree with my observations. That’s healthy, and I enjoy discussing these ideas with anyone.

The accounting program at the University of Georgia, like many other top schools, focuses on preparing students for a career in public accounting. A very important metric is having all of our graduates hired, mainly by such firms; student success on the CPA exam is another one.

Therefore, our program is very traditional. It emphasizes rule-based classes, such as three semesters of intermediate accounting. In most cases I see the MAcc students only in the second semester of their final year. By that time, they have gotten quite comfortable with lease accounting, pensions, income taxes, and the many other things specified by GAAP.

While it’s dangerous to generalize, too many students believe accounting has a rule for everything. When I tell them there are acceptable alternatives to account for a transaction, they get uncomfortable. They squirm even more when I say that an accountant may suggest revising a transaction’s structure in order to achieve a desired result. And when they find that a great deal of accounting depends on applying professional judgment, they really sweat.

Here is an actual quote from one of my best students. He wrote, “Whenever the word subjective is used to describe a requirement or evaluative procedure, I feel a sense of dread!”

While I don’t know if all interested parties share my feelings on this point, I know at least some do. My basis for this is an outstanding article by Professor Moses Pava in the IMA’s “Student Supplement” winter 1998 issue, “The Seven Deadly Myths of Accounting” (http://web.imanet.org/academia/library/pava.htm). Professor Pava’s first myth is: “Learning accounting is like learning the rules of a game.” In rebutting this myth, he says, “Had (students) wanted ambiguity, they would have chosen English literature or philosophy as majors instead of accounting.” My students read this article at each semester’s start, and it’s a great way to begin the class.

Students concentrate too much on accounting, rather than broader business or societal knowledge. When I assign cases to my students, I tell them that the principal requirement is to determine the proper financial accounting answer, together with the supporting rationale. I also ask them to prepare a report that makes general business recommendations, and this often throws them for a loop—at least the first time. The term “value-added service” has become a cliché, but I do try to stress that a bare-bones answer to questions won’t get you very far today.

This really hit home for me when I was reading Gary Siegel’s 1999 “Practice Analysis of Management Accounting” for the IMA. Management accountants reported that their work had changed dramatically in the last five years. And it will continue to do so, probably at an accelerating rate. More traditional work activities, like collecting and compiling information and preparing financial reports, are consuming less and less time. In fact, management accountants are now actually managing: they are spending more time interpreting information and making business decisions.

Our graduates will thus become more valuable corporate executives; however, we aren’t preparing students sufficiently to assume these broader responsibilities. Perhaps even more important, we aren’t even communicating to them the fact that the world has changed—in large part because the academic community hasn’t recognized those changes yet.

Let me move to my other point about students: their communication skills. Today, of course, communications means many things, including such activities as cross-functional team meetings and electronic communications. I believe most students today are superior in verbal communications to those of my era, but their writing skills are declining somewhat.

One of my students was appalled when I marked her down on a paper that included numerous spelling, grammatical, and other errors. Worse yet, the paper simply failed to communicate the point she was trying to make in any sort of understandable manner. This MAcc student said to me, “Why does my writing matter? I’m not an English major!” I assured her that throughout my career writing had mattered greatly. I suspect she thought my experience wasn’t very relevant in today’s world. A few weeks later, I received a phone call from a prospective employer of that same student. I told the recruiter that the student was bright and could carry on a good conversation about accounting matters. But if writing reports for clients or memos for the working papers was important, then I couldn’t recommend her. Needless to say, the employer didn’t consider that a glowing endorsement.

For several years, our students had a writing consultant available, but few of them took advantage of this great opportunity. Perhaps they felt that their skills were adequate, or that it was too late to change much. Perhaps their writing skills were not being challenged enough in other classes.

Moving to faculty: I’ve been generally quite impressed. In particular, I have the greatest admiration for the brainpower and tenacity it takes to earn a PhD, and then to become tenured. My hat goes off to everyone who has earned the opportunity to educate our next generation and conduct valuable research.

I have observed, however, that academics tend to be much like independent contractors. They carve out their own specialties and routines, without nearly the same focus on group success that I had previously seen in business.

It’s understandable that this “silo effect” occurs frequently; the measurement of academic success tends to be more individualistic, such as publishing research. Nevertheless, success in today’s business world, and society in general, depends more than ever on teamwork. A few superstars like Tiger Woods and Eminem can do well on their own, but most of us must rely on others. More and more, we encourage teamwork among students in the classroom; it seems natural that we faculty should try harder to do the same.

My second observation about faculty is their relative lack of interest in professional issues. While at FASB, I noted that we received very few comment letters on proposed standards from academics. A relative handful participated in our process in other ways, such as being part of project advisory task forces. I attributed that low involvement primarily to the fact that the academic reward system doesn’t give this activity much, if any, recognition.

While that’s undoubtedly true, I’ve since been surprised to see that so many faculty members don’t keep up on professional issues. Unless it’s something that directly affects an instructional matter in an accounting course or one of their personal research issues, they are relatively uninterested in current accounting events. For example, when I offered my colleagues the Special Investigative Committee’s report on the WorldCom board of directors, there was virtually no interest expressed in what was the largest accounting fraud in history.

Now, I know this is an unfair generalization; there are many faculty members who do keep fully informed. But I’ve always felt that the duty of any professional is to be reasonably aware of new developments in his or her field, even when not directly affected. Perhaps this is another consequence of the silo effect I mentioned earlier.

Last, I’ll talk about teaching techniques and contents, starting with technology. I am a real neophyte in this area. For example, I think it’s pretty sophisticated that I teach one of my MBA classes using the Internet. This involves recording my voice over PowerPoint slides for lectures that students can review at any time or place. It also involves computer-graded quizzes and exams that are processed through the Internet, as well as other gee-whiz technology.

I’ve read quite a bit and have visited with professors at other schools who are doing a great job in this area. But it appears that many of the largest and most successful accounting programs are trailing the smaller, less research-oriented schools in introducing technology to instruction. It’s my impression that many of the techniques we are using are pretty much the same as they have been for the past 10 or 20 years.

One argument is that information technology changes so quickly that it’s impractical to keep up with it. This argument continues that employers teach new hires the particular technology needed in that business. If nothing else, however, I believe our credibility in the eyes of students has to decline if they see too much of the same old blackboard and chalk.

Technology aside, I also wonder whether we are teaching quite the right things given the demands on today’s graduates. Not only could we lighten up on rule learning and provide more general business information, managerial accounting takes too much of a backseat.

The 150-hour requirement for the CPA exam has a lot to do with this. Our program, like many others, concentrates almost entirely on preparation for a public accounting career. I heard someone describe a four-year accounting degree as a sort of consolation prize for the relatively few students who couldn’t quite cut the 150-hour program.

We need to remember that the vast majority of all accounting graduates eventually end up in the corporate world, even if they don’t go directly from school. More emphasis in our programs on the exciting new developments in managerial accounting would naturally benefit these students.

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