While reading a recent article, Paul B. was struck by an uncanny similarity between the push to change the profession's educational requirements that started more than 20 years ago and current efforts by the large auditing firms and the American Institute of CPAs to promote International Financial Reporting Standards "convergence." (In this context, "convergence" means, "Dump the Financial Accounting Standards Board and put the International Accounting Standards Board in charge.")

As near as we can tell, these two initiatives are pretty much alike, but not in a good way. This deja vu has us shaking our heads in disappointment because the first time around was, shall we say, less than positive.

The article ("The Ongoing Debate about the Impact of the 150-Hour Education Requirement on the Supply of Certified Public Accountants," by Lawrence Gramlin and Andy Rosman, Issues in Accounting Education, November 2009) provides a perspective on the effects of the 150-hour requirement. It's not exactly a newsworthy scoop that there has been a decline in new entrants to accounting in recent years. The study and several others done earlier examine whether this trend is linked to the change in the education requirements. This most recent study, which looked at the supply side of the equation (student enrollments), instead of demand (new jobs), found no statistical relationship contradicting the findings of several earlier ones. Mixed evidence like this generally spawns more research and eventually the scale tips to one side or the other.

KNOWING VS. PROVING

In the meantime, it's human nature to side with a position that makes sense through one's own experience. Ours says that the change in educational requirements and the shrinking supply of new accountants are inextricably intertwined.

The 150-hour requirement was an up-close-and-personal issue for us. For one thing, we have a combined 60-plus years of helping students prepare to join the accounting profession. Today's students in Idaho are totally conscious that the additional year of study imposes significant added cost at the very time that tuition bills are rising far faster than inflation and when financial aid (besides loans) has fallen victim to budget-cutting.

For many, it's a real hardship to add another year of school and student loans, instead of harvesting a year's salary as a new graduate. Of course, their sacrifice would be only a temporary nuisance if their employers added enough compensation to make the additional education worthwhile. However, salary surveys consistently show almost no increment is paid for the extra education. For well-informed students, this lack of return for the upfront cost undoubtedly makes other pastures (majors) look a whole lot greener.

OTHER FLAWS

The second reason this issue is personal lies in our connection to the origins of the 150-hour requirement. In the 1970s, the University of Utah created (at notable cost and effort) a five-year program in accounting. There was every reason to expect it to do well, except for the unfortunate fact that less than 10 people signed up in each of the first two years. (Paul M. was a member of that project development team, and Paul B. was one of his doctoral students in the 1980s.)

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