Information technology (IT) and information systems are pervasive in today's business environment. CPAs, therefore, have to understand IT processes and controls. What are accounting educators doing to prepare students as they enter an environment in which data moves through computerized accounting packages, intranet portals, or enterprise resource planning (ERP) systems? More importantly, though, are accounting educators and professionals even on the same page with respect to IT education?
Technology generation upgrades: Are educators and employers on the same page?
By Susan C. Borkowski, PhD, Rose Marie L. Bukics, CPA, and Mary Jeanne Welsh, CPA, PhD
Partners and managers at each of the Big 4 accounting firms and at some mid-sized firms were interviewed to determine what technology skills entry-level staff are expected to have and what IT skills they would like to see taught in business schools. Those responses were then compared with the accounting information systems (AIS) courses at 11 Pennsylvania universities. An AIS course is typically where accounting students are introduced to IT controls, including the COBIT (Control Objectives for Information and Related Technology) framework, as well as specific accounting packages. Since students develop IT skills in computer science and management information systems (MIS) courses, we also asked for information about those courses.
Accounting firms seem to be in agreement in their expectations for technology skills of entry-level accountants, and these expectations are shared by new hires, too. Cutting edge technology is important to young accounting professionals, both as they enter the profession and as they progress through their careers. In a Commerce Clearing House whitepaper, based upon a 2006 survey of young accounting professionals, two compelling statistics were revealed:
- Close to 70 percent of those surveyed believe access to the right technological resources was critically important to them.
- Fifty-five percent of young CPAs surveyed believed access to technology as an aid to improving productivity was essential to their work environment.
AICPA Core Competency Framework
AICPA's Core Competency Framework defines skill-based competencies for entry-level professionals, and is intended to give educators guidance in developing accounting curricula that can help students develop the professional skills they need. The effective use of technology is one core competency, which AICPA states is evidenced by the following skills:
- Identifying risks associated with technology and automated business processes
- Accessing electronic databases to obtain decision-supporting information
- Using electronic spreadsheets and other software for modeling and simulations
- Assessing technology risk
- Developing strategic uses of technology
- Adopting new technology over time.
Based on our interviews, students who demonstrate these skills as new staff will meet firm expectations.
What CPA Firms Are Saying
In 2000, the American Accounting Association, AICPA, IMA, and the then Big 5 accounting firms published a study on accounting education. When faculty and practitioners were asked to rate specific technology skills for new hires, the most highly rated skill by both groups was "spreadsheet software." Much has changed in the profession over the past seven years, but the importance of spreadsheet software has not. All the practitioners we interviewed cited proficiency in Microsoft Excel as a critical skill, which includes the ability to use some of the more complex functions, not just the ability to create charts and graphs. They noted that if new hires came in knowing Excel, they could "hit the ground running" and focus on learning firm-specific technology.
The managers and partners we interviewed believe new staff usually arrive with the necessary skills in basic business software. Some staff, however, commented that they would have been better prepared if Excel had been integrated into the accounting curriculum and used on a regular basis for projects and assignments.
Staff who work in both assurance and tax said that they did not realize that they would be using Excel on a daily basis. They said they would have been more efficient and delivered better quality work products if they had developed more advanced Excel skills in their accounting programs.
Partners and managers did not recommend that students should develop proficiency in a specific accounting package, since they will encounter many different types. What is more important, they say, is a general understanding of how accounting systems operate, including accounting software structure and controls. Firms provide training in their own technology platforms, and have found that those who have a general understanding of accounting systems could learn the specifics of a package, such as Great Plains, when they encountered the package at a client's site.
There was less consensus on whether new staff needed to be proficient with database software, such as Microsoft Access. Only one partner mentioned proficiency with Access as important for new staff. Another said that it was less important than other general business software, such as word processing and presentation software. There was agreement among Big 4 partners that knowledge of ERP systems, such as SAP and PeopleSoft, would be a significant advantage to new staff since many clients use those packages. In fact, one interviewee noted that an entire advanced course could probably be built around just ERP systems. One audit partner said, "understanding how ERPs work would really give a student the perspective on what our clients do and would demystify the black box."
IT controls is another area where students could benefit from more exposure. There is a sense that students learn basic IT operating controls, but not controls such as security, computer operations, program development, and program changes. Students have not had to think about who has access to information or who can make changes to certain programs.
Several managers and partners in firms of various size stated that student exposure to some of the commonly used audit software that drives and supports both the operational aspects of the audit and the management of the audit process itself, would be beneficial. These conversations indicated that exposure to audit management software, such as CCH Pro System FX Engagement or PPC Engagement Manager, would offer insight into the technology used on a daily basis in an audit engagement.
Another critical skill for future auditors to develop is an understanding of how client data can be accessed and filtered to drive and support the audit objective. Whether analyzing client accounts or selecting specific accounts receivable for confirmation, file interrogation tools, such as Audit Control Language, are used by many large firms.
Looking forward, the trend toward the use of XBRL (Extensible Business Reporting Language) and its impact on the preparation and submission of financial reporting data needs to be considered. Long recognized and used outside of the United States, XBRL is gaining acceptance in this country, spurred on by the Security and Exchange Commission's 2006 voluntary test program initiative. HTML transformed and standardized the presentation of material on the Web, and XBRL, likewise, could have the same effect on how financial statement data is created, stored, accessed, manipulated, analyzed, and reported.
What's Happening in the Classroom?
Eleven of the largest Pennsylvania universities offering an undergraduate major in accounting were contacted, and we received information from 10 of them. We e-mailed the faculty member identified on each university's Web site as teaching an AIS course, requesting a copy of the most recent AIS syllabus. If we did not receive a response within two weeks, or if the identity of the AIS faculty member could not be discerned, the same request for an AIS syllabus was e-mailed to the accounting department chair. In that e-mail, the following question also was posed: "How do (university name) accounting majors acquire their Excel expertise? Is it through a first-year computer science course, through a non-credit stand-alone module where the student must pass a competency test, or in the introductory financial accounting course? Or, do you have a different approach? Please provide as much detail as you can about how Excel competency is achieved by your accounting majors."
AIS Course Content
General information about AIS courses was obtained from the 11 schools' Web sites. Nine schools require an AIS course for the accounting major: two require it in the sophomore year, five in the junior year, and two in the senior year. The remaining two schools offer AIS as an elective to senior accounting majors. Complete information was received from 10 universities, with only partial information coming from the remaining university.
Course characteristics varied, including topics covered, grading criteria, and required assignments. Partners stressed the importance of familiarity with ERP systems, and most AIS courses included some coverage of ERP. Two universities, however, did not include any ERP-related content. Instead, these courses included hands-on use of a traditional accounting system, such as QuickBooks or Great Plains. This is surprising, given the omnipresence of ERP systems in large and mid-sized companies in 2007.
To determine course content, we looked at the textbooks used in the AIS courses. There is a preference for traditional AIS textbooks. Four schools use Hall's Accounting Information Systems (Hall), three use Romney and Steinbart's Accounting Information Systems (R&S), and two use Bagranoff, Simkin and Strand Norman's Core Concepts of Accounting Information Systems (BSS). One uses the nontraditional Enterprise Information Systems: A Pattern-Based Approach by Dunn, Cherrington, and Hollander (DCH), and one course is designed around weekly readings centered on specific topics in lieu of a formal textbook. The tables of contents for the four textbooks show the diversity in approach to teaching AIS.
The partners interviewed noted that new staff did not appear to have had much exposure to general IT controls. Our review of AIS textbooks and syllabi suggest their perception is correct. The percentage of course time spent on control issues varies widely, from as much as 40 percent of an AIS course, to as little as 6 percent. There is the possibility that control issues are addressed elsewhere in the accounting curriculum, but our review suggests that this is an area of the accounting curriculum that needs more consideration.
Based on the review of tables of contents, computer crime and ethical issues also do not appear to be major course components of AIS courses. Textbook coverage is limited to a single chapter, with titles such as "Ethics, fraud and internal control" and "Computer crime and ethics" respectively.
Many courses emphasize hands-on experience with traditional accounting and ERP systems in both the syllabi and catalog course descriptions, but traditional examinations are the primary component (greater than 40 percent) of the final grade at eight of the 10 schools. Hands-on experience is crucial to learning and understanding accounting and other information systems, so we thought assignments such as projects and case studies would have accounted for a higher percentage of the final grade.
There is no uniform approach used by Pennsylvania universities in developing Excel proficiency. Five of the 11 universities require business majors to take a core computer science course. Four universities require a three-credit general introduction to computers course, which includes an Excel component. The fifth requires a one-credit, Excel-specific course.
An equal number of respondents require a formal competency/proficiency test in Excel and its more sophisticated functions. One of these five allows students to take a proficiency test without taking its one-credit, Excel-specific course. If students fail the proficiency test - which most do, since the test includes a section on pivot tables - then they must complete the one-credit course. Only one school surveyed requires neither an introductory computer course nor a competency exam.
A number of universities indicated that Excel was used in accounting courses, but we did not get detailed information about advanced Excel functions in course assignments. Most of the accounting textbooks include problems designed to be solved using Excel spreadsheets, but they do not necessarily require the use of advanced functions, such as pivot tables. This requires faculty to develop their own assignments or find supplemental material. The feedback we received from newer staff accountants suggests that students would benefit from more assignments that use advanced functions. This is an area in which educators could benefit from working with practitioners to develop assignments and projects that help students gain the spreadsheet skills they will need.
We all recognize that IT continues to grow in its use and applications, and is constantly changing. This presents a continual challenge for educators to deliver the very best students, with the very best skill sets, to the marketplace. To solve this conundrum, accounting firms and educators need to maintain close and frequent consultation to make sure everyone is on the same page with respect to providing the right exposure to the right technology.
Reprinted with permission from the Pennsylvania CPA Journal
Susan C. Borkowski, PhD, is professor of accounting and joint faculty, integrated science, business and technology program at La Salle University. She can be reached at [email protected].
Rose Marie L. Bukics, CPA, is the Thomas Roy and Lura Forrest Jones Professor of Economics and Business at Lafayette College in Easton, and is a member of the Pennsylvania CPA Journal Editorial Board. She can be reached at [email protected].
Mary Jeanne Welsh, CPA, PhD, is chair of the accounting department at La Salle University, and is a member of the Pennsylvania CPA Journal Editorial Board. She can be reached at [email protected].