By Jason Bramwell
After surveying and reviewing the undergraduate accounting curriculum of many universities and colleges across the United States as well as receiving input from faculty, the Institute of Management Accountants (IMA) found that the content being taught at higher-learning institutions was more CPA-oriented – and that accounting programs' management accounting content was dwindling.
"We feel that it is absolutely the wrong direction for the profession to go in", Raef Lawson, PhD, CMA, CPA, CFP, CFA, vice president of research and professor-in-residence for the IMA, told AccountingWEB. "The IMA has sponsored research that has looked at the competencies that corporate America is looking for in terms of new accounting hires, and in many cases, those skills are not being developed in students. We believe that schools should prepare students for their lifelong careers, not just for their initial jobs."
In an effort to help ensure undergraduate accounting programs and teaching resources that support the CMA exam program achieve a consistent standard of excellence, the IMA has launched a new initiative, the Higher Education Endorsement Program, to endorse university business programs that provide needed management accounting skills for students. The IMA will also help schools develop such programs that enable students to achieve the CMA designation.
The undergraduate accounting programs at Pennsylvania State (Penn State) University in University Park, Pennsylvania, and Washington State University-Vancouver in Vancouver, Washington, were the first to be recognized during the pilot phase of the endorsement program, which ended late June.
Lawson said the intent of the endorsement program is not to produce a standardized accounting or business curriculum, but rather to encourage a diversity of approaches for course design and delivery.
"One of the things I heard frequently from the academic community was that schools wanted the IMA to look at their curriculum, especially the management accounting content, and make suggestions on how to improve it in terms of how well it matched up with our CMA body of knowledge, which we believe is the gold standard of knowledge for finance and accounting professionals", Lawson said. "So, based on that demand, we initiated this program to help ensure that new management accountants are trained in the CMA body of knowledge and have the adequate educational background."
Lawson said the role of the accountant in organizations is evolving from "bean counter to bean grower."
"Accountants are assuming more of a business partner role", he added. "It's not just compiling data and reporting information, but helping in the decision-making process and engaging in strategy development and execution. The skills that we cover in the CMA exam are what finance and accounting professionals in corporations should possess."
According to Lawson, those skills include analytical thinking, knowledge of processes and cost behaviors, and leadership, among others.
"It is a quite varied set of skills that accountants need to possess nowadays", he said.
Endorsement by the IMA offers universities a measurement process that is based on self-evaluation and peer review, coupled with external evaluation by the IMA. Interested universities must first complete an application and provide any supplemental information that is required, according to Lawson, who added there is no fee involved in the process.
Under the program, IMA will endorse higher education programs that meet the following four criteria:
- The program must substantially cover the CMA exam content. "The program must cover at least 70 percent of the CMA body of knowledge at Level C, the most rigorous level", Lawson said.
- The program must have adequate faculty resources to deliver this content.
- The program must be accredited by a recognized accreditation organization, such as the Association to Advance Collegiate Schools of Business, Accreditation Council for Business Schools and Programs, or the European Quality Improvement System.
- A faculty member must be designated as an IMA campus advocate.
The program offers two tiers of endorsement:
- Full endorsement, for those university programs that meet all endorsement criteria.
- Provisional endorsement, for programs with some minor-to-moderate shortcomings in meeting all the criteria for full endorsement.
"If a program met, say, 65 percent of the CMA body of knowledge, we might give it a provisional endorsement", Lawson said. "Then over the subsequent year, the program could work on covering the body of knowledge just a little bit more to achieve a full endorsement."
The undergraduate accounting programs at Penn State University and Washington State University-Vancouver were chosen for the pilot program based on a recommendation from the IMA Committee on Academic Relations.
"The committee, which reviews these applications, had contacts at those schools and felt they would be good schools for the pilot program", Lawson said. "One is a larger program and one is a smaller program, so it gave us a good couple of schools to initially evaluate so we could refine the program and the application process."
The IMA conducts a study every two to three years to validate and further understand the knowledge, skills, and abilities required by today's management accounting professionals. Lawson believes there are two reasons why undergraduate accounting programs are offering less CMA content than in previous years.
"One, many schools, especially in the past few years, have been under financial duress, so they have been dropping courses or consolidating their curriculum", he said. "CPA courses are sacrosanct – they cannot be touched; otherwise, students cannot sit for the CPA exam. So the low-hanging fruit for elimination is typically management accounting. Plus, management accounting is now a smaller part of the CPA exam as of five years ago."
The second reason, he said, is undergraduate students are being trained more for their initial entry-level positions after graduation instead of for their lifelong careers.
"Of the students who go into public accounting after school, within three years, half of them will have moved on to corporate accounting", Lawson added. "So whether students go into public accounting initially or are driven to corporate accounting, they need [management accounting] skills for their lifelong careers."
Lawson and the IMA have high hopes that the Higher Education Endorsement Program will be a success.
"We have about two or three schools that have already applied, and we've received inquiries about it from China", he said. "I'm told Michigan State University is going to be sending us its application shortly, and the university has one of the best accounting programs in the world. So it shows the perceived value of this program, and we're really excited about it."