Baruch College, the nation's largest producer of CPA candidates, is downsizing its commitment to CPA training.The college currently graduates some 450 exam-takers each year, many times more than its next New York rival, and slightly more than the entire California State University system. Baruch's cutback will accentuate an already serious supply problem that began with a 30 percent nationwide drop-off after the introduction of the new computer-based exam format.

Baruch's contraction will end a long and distinguished record. Its alumni include some of the most illustrious figures in U.S. accounting history: Abraham Briloff, Charles Dreyfus, Eli Mason, Stan Ross, Larry Zicklin, and many more.

Baruch's mission statement echoes that of the City University of New York: "To provide educational opportunities for talented yet poor and disadvantaged New Yorkers - and their families - with career opportunities that give access to the city's middle class."

Unfortunately, in recent years, the college has undergone "mission creep," where the accounting faculty has now become "hooked" on salary supplements from MBA and other graduate courses. In order to retain this flow of soft money (and the commensurate flow of new MBA students) the college must safeguard its ranking in U.S. News & World Report, Business Week, etc., by publicizing high GMAT and grade point average entry requirements for new student applicants. These publicized rankings are a centerpiece to marketing the school's Master's-level programs.

Baruch's accounting department estimates that very few of its existing undergraduates will meet these entry requirements. It isn't that these students are inferior; it's because most cannot afford the cost of the "test prep" route (i.e., over $3,000 for Becker) for upping their GMAT scores. Baruch student CPA Exam performance is already suffering because teaching support is being bled dry to boost the "research" largesse.

In 2009, the 150-hour requirement takes effect in New York. Thereafter, most Baruch undergraduate accounting majors will need to look elsewhere to complete their 150-hour studies.

Unfortunately, there are few options. Other public schools don't have the capacity to absorb Baruch's fallout. In addition to the capacity problem, private schools like Columbia, New York University and Fordham are too expensive. Overall, in New York, there will be a further flight by high school students into non-accounting careers.

While Baruch's withdrawal from CPA preparation will dramatically reduce the college's size, downsizing has a definite appeal to its tenured accounting faculty. Layoffs will occur mostly among untenured (mainly CPA-qualified) adjuncts, and elsewhere in this liberal arts college. The accounting department will be free to concentrate its staff recruitment on (non-CPA) research candidates.

Ironically, Baruch's new direction is being heavily financed by the very New Yorkers whom it is penalizing. An MBA from Baruch is cheap because the college receives tax-levied monies from the city and the state - taxes paid by those very New Yorkers who will be barred from access.

Nor do Baruch's MBA fees reflect the full cost of buildings and other facilities. Baruch's MBA soft-money slush fund is an attractive program because its tax subsidy allows Baruch to lowball the local New York competition with a massive discount. Pace University's MBA is nearly double the price of Baruch's, and Columbia University's and New York University's are nearly four times more expensive.

Hence, in the end, New York taxpayers are paying for their own funeral.

Tony Tinker is a professor of accounting at Baruch College.

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