What do 21st century accountants need?
NOTE: This post was authored by MACPA member Mikhail Pevzner, Ph.D., Associate Professor and Ernst & Young Chair in Accounting at the University of Baltimore.
During the 2016-17 academic year, I served as an Academic Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission. I’d like to share some reflections on this experience which are relevant to accounting educators and others concerned about the future of the accounting profession.
Disruption requires overhaul of educationThrough my work at the SEC, I obtained a very clear understanding that the auditing and accounting profession is on the cusp of significant disruption, driven by the extensive introduction of technology, and looming structural changes over the entire U.S. financial sector.
Tomorrow’s accounting, auditing, and finance fields will be very different from today. Much of the debits, credits and “busy work” will be done by computer programs and robots; humans will have to focus on things that computers and robots have a hard time doing: these things are nuanced and require significant thinking; a computer algorithm is not necessarily able to provide the best solution.
21st century accountants, auditors need a wider skill-setTechnological disruption necessitates a significant future overhaul in accounting and auditing education, and significant expansion of the knowledge base by today’s aspiring accountants and auditors.
In addition to deep accounting knowledge, students also have to be great critical thinkers to exercise professional judgment. Additionally, they would benefit from a good understanding of basic computer languages, such as Python, as well as coursework to build written communication and analytical skills such as advanced writing or even logic and philosophy, and classes emphasizing verbal presentation skills.
Auditing today increasingly revolves around valuation estimates. Students need to be able to understand valuation modeling and the data underlying the calculations. Hence, the importance of data analytics and finance.
The bottom line is that to be a successful 21st century accountant, you need a lot more learning than a traditional undergraduate accounting degree provides, often focusing primarily on CPA exam preparation.
We need to start instilling in our students the idea that passing the CPA exam is just the first step in their career; to continue successfully growing in that career, they need to know a lot more. I’d strongly encourage students consider pursuing a master’s degree in accounting, finance or data analytics.
Educators must stay connected to practiceMany educators (myself included), have been out of public accounting practice for a long time. Auditing today is very different than it was 15-20 years ago because of the impact of the Sarbanes-Oxley Act and the PCAOB inspection process, on top of technological change. We cannot continue teaching accounting disciplines the same way we were taught them.
My advice to my colleagues is to engage with practitioners as much as possible, and keep asking them how we need to grow and change in our teaching.
Here are some resources available to students and educators:.
- State CPA societies such as the Maryland Association of CPAs (MACPA) offer student memberships. The MACPA holds an annual conference for educators, and a student leadership academy. See also the upcoming CPA Summit and New e-books offering steps toward future-readiness for CPAs, finance professionals
- The PCAOB sponsors two academic conferences each year; see their resources for educators.
- The SEC is conveniently located next to Union Station in Washington D.C., and arranges some student group visits.
- The Center for Audit Quality is also located in Washington DC.; see their programs for academics.
Opportunities for educators to stay connected with practice are out there; we should take advantage of them, and quickly adjust our teaching to the needs of the marketplace.