It started with a simple question: What is an accountant? Fortunately, my conversation with Paul Sharman, President and CEO of the Institute of Management Accountants (IMA), didn’t end there. Instead, it evolved into a discussion of the image of accountants and the future of accounting as a career in the U.S. and around the world.
Sharman has established an entirely new direction for the IMA since being asked to manage the association’s operations. According to his biography on the IMA website, “His mission is to advance the management accounting and finance profession through certification, superior professionals ethical standards, and competence-based continuing education.”
AccountingWEB had the honor of sitting down with him during the IMA’s annual Conference in June.
“The vast majority of management accountants don’t know they are management accountants,” Sharman explains.
He attributes this lack of self-recognition among American accountants to three factors:
- A deceptive perception of what an accountant is
- Marketing is more effective than fact and
- Undergraduate degrees define what an accountant is.
In the United States, what is taught as part of the undergraduate degree program is controlled by the state licensing board, which in turn is controlled by accounting firms. This is a situation that doesn’t exist anywhere else in the world, according to Sharman.
“The price of success is failure,” Sharman says. The undergraduate curriculum succeeds in educating CPAs, but not other types of accountants. This leaves a gap in the education of accountants, as those who do not pursue careers as CPAs are not informed about what an accountant in industry does.
Sharman goes on to point out that the majority of accountants working in industry will not do public accounting work during their careers. Even among certified public accountant (CPA) lifers, those who make a career out of public accounting, eventually becoming partners in their firms, are not practicing CPAs – they are managers and salespeople.
The current method of educating accountants, the undergraduate degree, doesn’t sufficiently recognize that different roles require different skills. For example, the management accounting courses taught as part of the undergraduate accounting curriculum is cost accounting, not true management accounting.
Accounting, particularly in industry is, according to Sharman, a “value-adding creation of information job that contributes to society.”
The massive influx of interest in and attention to accounting resulting from Sarbanes-Oxley Act has led to the creation of a lot of external auditors. Auditing, however, is only part of the accounting function. The role and responsibilities of accountants, other than auditors, is to design, implement, manage and report financial information. Auditors just check.
“At some point, very soon, the government is going to say AS 2 is causing us to be uncompetitive,” Sharman explains. “The crisis is looming for accounting firms doing audit work as industry internalizes the processes.
“Challenges arise [when discussing accounting internationally] because of the difference in American perspective of what an accountant is,” Sharman says.
Whether this crisis comes to pass or not, the fact remains that the American image of who an accountant is and what they do, is changing. And the change from CPA or auditor to an accountant in industry is a career change, as their careers take them into completely different subjects.
What started with a silly question, turned out to be a complex exploration of what an accountant is, where the profession is going and the place of American accountants in the increasingly global business world.