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III.
Overview of the Rapidly Changing Environment of Post-secondary
Education
Rapid changes are
taking place in the "market" for post-secondary
education in business and accounting involving employers,
deliverers, information technology, students, faculty, and
curriculum content and delivery methods.
Employers
Corporations in the United States and other parts of the
world are undergoing dramatic changes, which have fundamental
implications for post-secondary education in business and
accounting:
- Knowledge
Workers and Learning as a Core Competency - The
increasingly complex and rapidly changing business
environment places a premium on specialized knowledge and
skills. For example, some corporations now require all of
their employees to complete at least 40 hours of continuing
education per year. Companies are realizing that knowledge
and learning are core competencies that provide competitive
advantage and are, therefore, creating increasing demands,
both for "knowledge workers" themselves and for
educational programs that will maintain or enhance the
specialized knowledge and skills of their employees.
- Flat
Organizations - To be competitive in today's fast
changing environment, companies increasingly recognize that
they must be nimble, which is leading both to drastic
reductions in corporate bureaucracies and increasing use of
multidisciplinary teams of knowledge workers. These flat,
team-based organizations need knowledge workers who have the
interpersonal skills to work effectively in a team setting
and who possess an understanding of how functional areas
within a business are related.
- Globalization
- IT enables even the smallest U.S. company to serve
customers globally. For example, soon after Amazon.com began
selling books out of its Seattle location, it was serving
customers in 60 countries. In short, companies, large or
small, are rapidly adopting a global perspective regarding
customers, suppliers and employees. This is generating an
enormous demand for employees who have knowledge of foreign
cultures, skills in foreign languages, and understanding of
foreign markets.
- Information
Technology - Information technology is having a profound
impact on all facets of business activities (see: Pervasive
Impacts of Information Technology).
The above changes
are reshaping the market demand for accounting majors in
public accounting and in business and government.
a) Demand in
Public Accounting
The structure of today's public accounting firms is very
different than it was a decade ago, and it continues to
change. The day of the pyramid is gone where vast numbers of
graduates were hired by public accounting firms and forced to
fight for a smaller and smaller number of positions as they
moved up their career ladder. The "up-or-out"
philosophy on which the economics of the auditing profession
was built for many years no longer exists. Instead, the
staffing needs of public accounting today more closely
resemble a diamond. The growth in entry level positions has
diminished because much of the work previously done by
inexperienced staff has been automated. But there are many
positions at the upper-senior or junior-manager level. This is
the level where most of the "human" input to the
audit process comes into play. And, as has been the case
traditionally, the numbers dwindle as one reaches the partner
level. A result of the decline of the "up-or-out"
philosophy is a growing number of accounting firm employees
staying with the firm indefinitely in non-partner positions.
This creates fewer openings for new hires. The positions that
once were filled by graduates in their first couple of years
as accounting professionals now require more experience and
are now being filled by career staff who would previously have
been "outplaced." For example, in one of the large
firms, approximately 75 percent of recent hires in the current
year were experienced.
Another change
occurring in public accounting is the explosive growth in
consulting. Accounting career paths are increasingly including
consulting experience. In addition, the audit function is
becoming more consultative. Thus, the skills needed by a few
consultants a decade ago are needed by large numbers of
consultants and by auditors today. Additionally, new assurance
services will place increasing emphasis on this consultative
role of the professional accountant in public practice. The
results of the AICPA Visioning Project suggest that the future
role of the CPA will be more of a business advisor and
interpreter of information for business decision making.
Finally, the slots
for entry level personnel in public accounting are also being
filled by non-accounting and non-business majors. Several
large CPA firms report that they hire high GPA liberal arts
graduates and train them in accounting and business subjects.
The diminishing
growth in demand for new graduates in public accounting has
changed recruiting patterns by accounting firms. They have
targeted a smaller number of universities at which to recruit,
so some schools have seen a major decline in the number of
public accounting recruiters coming to campus.
The requirement for
150 semester hours to sit for the CPA exam is also having an
effect on hiring patterns of public accounting firms. In those
states in which the requirement is in effect, the demand for
masters degree graduates has increased significantly. The
change has not had its full impact yet, in that a majority of
states have not yet implemented the 150-hour requirement.
[Executive
Summary] [Appendix]
[Bibliography]
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