Because relatively few of our readers are academic accountants, we don't often address them directly in The Spirit of Accounting. However, we are reaching out to our colleagues in this column with some warnings and a bold challenge.

Undoubtedly, the academy has two crucial roles in shaping the future of the accounting profession: minting new professionals and providing influential leadership.

For various reasons, it hasn't filled that second role despite being populated by a great many strong leaders and visionaries. This shortcoming strikes us as highly regrettable in light of our observation that little or no positive leadership has come from other places over the last several decades.

For examples, better leadership was and is sorely needed from academic accountants in two areas: convergence of financial reporting standards and credentials.



Over the years, we have written at least 15 columns on the movement to "converge" the United States' generally accepted accounting principles and International Financial Reporting Standards.

As a brief history, convergence took on two forms. The first was relatively benign, calling for cooperation between the Financial Accounting Standards Board and the International Accounting Standards Board to produce new joint standards and then revise existing standards.

The second, which was not benign, was the political movement to replace FASB with the IASB as the designated standard-setter for the United States.

With regard to joint standards, the vision just didn't work out very well, primarily because the two boards, despite massive efforts, just could not get sufficiently aligned to reach consensus. While they did produce a new concept statement and the recently released standard on revenue recognition, we don't believe the overall results justify the two boards' substantial investments in money and labor.

With regard to replacing FASB with the IASB, we believe that that effort was misbegotten from the beginning. It started out with the general idea that it might be good to merge the two boards into one, but the politics proved too complicated to let that happen. Six years ago, the explicit goal became not merger, but designating the IASB as the official standard-setter in FASB's place. This direction was officially advocated in Securities and Exchange Commission Chairman Christopher Cox's 2008 plan, which he now disavows.

Especially disturbing was the obvious motivation of the proponents for this change, starting with the four large accounting firms. It's now widely acknowledged that they promoted it in order to collect huge fees from the transition and capture the last smidgen of the public company audit market they don't yet control. To persuade academic accountants to buy in, they awarded cash grants to faculty who agreed to include IFRS in their course content. Less subtly, Big Four firm PwC threatened to recruit new staff only from schools that fully incorporated IFRS. It's no surprise that many instructors responded to those incentives.

We believe that the American Institute of CPAs' management went along out of political necessity; they also may have sniffed new revenue from providing CPE courses to train up the masses. Their rhetoric was over the top in claiming that converting to international standards was not only a good thing but a done deal. They even rushed to put IFRS-related questions on the CPA Exam before anything official had happened.

Academic accountants were sucked in further when publishers wanted IFRS coverage in their textbooks so they could be promoted as being up to date. The authors readily acceded and instructors unhesitatingly followed their lead.



Of course, the real outcome differs from the spin. The two boards simply could not agree, in part because friction was created from persistent harping by the IASB's chairs (and others) who failed to notice how much they were belittling FASB. SEC Chairman Mary Schapiro never explicitly said whether designation would occur or not, thus prolonging the suspense for those who were slow to read the tea leaves that clearly signaled the possibility was dead.

Earlier this year, most finally realized that the outcome would be separate boards for separate constituencies: FASB for the U.S. and the IASB everywhere else, with promises that they would communicate and support each other.

The likely tipping point for many was the flap following the January revelation that the SEC had compelled the reluctant Financial Accounting Foundation to contribute $3 million to the IASB. When Chief Accountant Paul Beswick resigned in May, we think the movement lost its last influential U.S. advocate.

So, what does this whole episode mean to academics? First, we recommend they re-revise their curricula to downplay international standards. Second, we call on them to assess how they got so badly fooled into believing something that never was anything more than a marketing ploy.

We expect the outcome will be more thoughtfulness and better national leadership to counteract misdirected guidance provided by others.



We're also deeply concerned about two things happening with regard to credentials for academic accountants.

While "publish or perish" has long been part of the academy's culture, we fear it has deteriorated into a destructive game of "publish at any cost," literally. Specifically, we frequently receive e-mail announcements from pseudo-academic-sounding entities soliciting manuscripts for spurious conferences and journals while virtually promising acceptance within a few weeks. (Our short investigation into one sponsor revealed that its home address is actually a beach condo.) It's not incidental that they all charge an arm and a leg to publish or speak. Besides creating illegitimate organizations, the people behind these efforts are especially despicable because they prey on anxious faculty who fear their careers are doomed if they don't publish.

We warn our colleagues to avoid besmirching their CVs with any items "published" in these illegitimate outlets. Rest assured that we, and many others, will put a prospective faculty candidate's resume into the "Not suitable" pile if we see even a single entry for a publication in one of these journals.

We call for the American Accounting Association's leaders to initiate an inquiry into these organizations, while challenging its membership to higher integrity. At the same time, we encourage them to push for more sanity in expectations for publishing.



The second credentialing issue for academics just popped up only weeks before we drafted this column. Specifically, Paul Miller received an e-mail from the AICPA on July 11 with the subject line "You qualify for the CGMA designation." That struck him as bizarre because he knew he didn't meet the initially announced criteria.

It seems to us the AICPA's management is using alchemy to transmute CPAs into CGMAs by creating new eligibility requirements. Specifically, institute members are now eligible if they have a legitimate doctorate and have taught as few as four courses "in accounting or a related business field at an accredited academic institution," including classes in "economics, finance, information systems or other disciplines associated with the strategic management and operations of a business." Really?

This criterion is incredibly lame because a normal teaching load is three courses per semester, and sometimes four. Thus, a brand-new Ph.D could qualify after only one or two semesters of teaching, say, introductory accounting, systems, taxes, and auditing, but not management accounting.

To be more enticing, the e-mail also proclaimed: "Now is your best time to apply for the CGMA designation. Starting in January 2015, new applicants must pass the CGMA exam, which tests a candidate's ability to apply theoretical knowledge by making decisions and offering insights about a real- world business situation. But, by qualifying as a CGMA designation holder now, you can access CGMA resources immediately. Get your CGMA designation today." It's obvious that AICPA management is saying, "Get it now without having to actually prove your expertise!" This urging looks to us like they're persuading members to misrepresent their qualifications. We have the same bottom line: We will categorically reject any prospective faculty candidates who list CGMA among their credentials.


The future

We hereby issue a call to the accounting academy to raise up legitimate leadership that understands the crying need to fill the vacuum created when prominent practicing accountants compromised their integrity by focusing on making money through marketing malarkey involving international standards and a make-believe designation.

What's needed are true leaders who will embrace the task of re-establishing and maintaining an accounting profession comprised of ethical and competent individuals who are willing to subjugate their own interests behind the needs of those they serve.

Right now, we see this kind of integrity and leadership coming from the Institute of Management Accountants and its chief executive officer, Jeff Thomson.

We especially applaud their strong commitment to use real testing, experience, and required CPE to preserve the legitimacy of the Certified Management Accountant credential and those who hold it.

In closing, we challenge the academy to step up and do its part by displaying those same qualities and to demand more from the profession we all serve.

Paul B. W. Miller is a professor at the University of Colorado at Colorado Springs and Paul R. Bahnson is a professor at Boise State University. The authors' views are not necessarily those of their institutions. Reach them at

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