Enron Heightens Job Worries for Accounting Students
Job worries and career concerns are uppermost in the minds of today’s accounting students. Tarnished images, low starting salaries, and declining enrollments are symptoms of the times. But help is on the way.
“Business Students Fret Over Job Prospects” (New York Times, January 26, 2002) describes college reactions to the Enron collapse and ensuing calls for reform of the accounting profession. A few highlights:
- Job prospects. Most students appear to be worried most about their job prospects. A student at Columbia notes there are fewer corporations recruiting on campus these days, and the last thing his classmates need is another cloud on their career horizons. “Many fear they will be out of job within a year,” he said. “A recession, the Sept. 11 disaster and now this. That’s a lot of blows.”
The chairman of the accounting department at the Stern Graduate School of Business at New York University confirms that his students feel the same way. “I’ve received several e-mails from students in the throes of recruiting,” he said. “Everyone wants to know how endemic the problem is and how they should deal with the issue in interviews.”
- Career concerns. Some are also thinking twice about careers in accounting. Young professionals are said to be “feverishly comparing notes,” and MBA students who are full-time professionals at Stern’s executive MBA program are said to be “incredulous of how basic principles have been violated and at the same time questioning whether what they do for a living is indeed tainted.”
Arthur Bowman, editor of Bowman’s Accounting Report is quoted as saying that the Enron affair is likely to discourage young people from entering a career with an age-old reputation for dullness: "It’s been historically perceived as a boring job, with traditional firms working new hires as much as 100 hours a week and turnover as high as 25 percent." Bowman sees the Enron-Andersen debacle as one more reason why the decline in accounting students could continue.
Low Starting Salaries and Dwindling Enrollments
An article in the Fall 2001 issue of the Journal of State Taxation entitled “The Future of the Accounting Profession” challenges the anticipated growth in employment of accountants. David Doran, an associate accounting professor at Penn State, and Charles Brown, an accounting instructor at Kent State, sum up the predictions and trends, along with their analysis of the reasons:
- The most recent edition of the government’s Occupational Outlook Handbook predicts growth in employment for accountants and auditors to be 10 to 20 percent during the period from 1998 to 2008.
- There is evidence, however, that the number of accounting graduates has significantly declined. Current enrollment is down and the portion of high school students planning on majoring in accounting has declined by 75 percent in the past decade.
- Reasons for the dwindling enrollments may include the fact that starting salaries for accounting graduates are relatively low, especially in comparison with the increased cost of an accounting education. Currently, 35 states have increased the cost of becoming a licensed CPA by requiring a minimum of 150 hours of education. Only seven states have no such current of future requirement.
Help for a Tarnished Image
Help for the accounting profession’s tarnished image is available to educators from a variety of sources:
- The Financial Accounting Standards Board (FASB) has released an educational video called “Financially Correct,” which explains why financial reporting is important to investors and the economy. You can download excerpts from the video or order a copy of the video along with an instructor’s guide at the FASB’s web site.
- The American Institute of CPAs has launched a $25 million marketing campaign aimed at 16 to 22 year olds to improve perceptions about the accounting profession. The theme is Start here, Go Places.
- Arguably the most innovative solution, though, is a web site created by W. David Albrecht, a professor of accounting at Bowling Green State University in Ohio. Professor Albrecht lists films that portray accountants in a positive light. His list of Accountants in the Movies includes: “The Apartment,” “Look Who’s Talking,” and “Nick of Time.” There are also lists of research papers and links for anyone who wants a more comprehensive list.
Don’t look to the Big Five for help, though. An article in the New York Times Magazine on January 27, 2002, entitled “This Doesn’t Add Up” points out that accounting firm web sites seem determined to downplay the word “accounting” and to hide what the firms actually do. As an example, the article points to Ernst & Young’s home page that begins, “Welcome to Ernst & Young. Your source for global business solutions.” You have to look hard, says the Times, to find the dread A word: Accounting.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.