The accounting industry is changing its own numbers, now requiring college graduates to earn 30 additional credit hours before allowing them to sit for the Certified Public Accountant exam. Rhode Island is the 42nd state to require the change to 150 credit hours, which was suggested by the American Institute of Certified Public Accountants more than a decade ago. A law passed in Rhode Island in 1992, which went into effect this year, requires all students to complete the 150 credit hours.
According to Raymond Church, executive director of the Rhode Island Society of Certified Public Accountants, the change was made to make the profession more credible.
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“In comparison to other professions, the education requirement had only been four years,” he said. “Attorneys, engineers, doctors and architects all go to school for a least five.”
Church said the additional 30 hours are intended to be in “broad-based education” such as literature, communications, and general business practices.
But for some in the industry, the change is not welcome. Richard Vangermeersch, a professor of accounting at URI said he believes the changes are eliminating potential students and creating an “inclusionary” mentality within the profession.
“It’s unfortunate that many people are excluded because they can’t afford the extra credits,” he said. “The new clause could mean an obliteration of the poor in the field of accounting, something that has always been seen as a ticket to success.”
The greatest concern for Vangermeersch and other college professors is the declining number of students entering the accounting profession.
“Accounting programs statewide are suffering in the midst of what I would call a death spiral,” Vangermeersch said. “Many schools are in jeopardy of losing their program. We’ve really been wounded here, and the students have been wounded.”
Charles Snow, chairman of the department of accounting and information at Rhode Island College said the school is currently in the process of gaining approval from the Rhode Island Board of Governors to begin a master’s program in accounting. Snow said it’s his hope the new program will draw more students in by providing a wider variety of options for the accounting field.
“From what I have gathered nationally, accounting numbers are slightly down,” he said. “The entire accounting profession seems to be in a state of flux.”
Church believes the changes eventually will solidify and strengthen the CPA field, and create a sense of uniformity across the country. Prior to the new standards, some states required a four-year college degree, others required 150 hours, and some only required a high school diploma, Church said.
“Initially, there is a little shake-up when you make a change like this,” he said. “But I don’t think the number of education requirements is the sole determining factor for students when they chose a career path.”
Unlike Vangermeersch and Snow, Henry Schwarzbach, chairperson of the accounting department at the University of Rhode Island said there might be some validity to the change.
“The profession is getting more and more complex,” Schwarzbach said. “Someone in the industry felt that students couldn’t get everything they needed to know with only 120 credit hours.”
In fact, Schwarzbach said, students who previously completed a fifth year had a three times better pass rate on the CPA exam than students who only completed four years.
“A lot of accounting practices take a fairly high level of maturity to get,” he said. “It’s really hard especially in today’s environment for students to learn the concepts, and the fifth year really allows them to get a better understanding of the profession, its standard and concepts.”
Snow said he believes the change is primarily technology driven.
“The traditional role of the CPA was an auditor and that was supplanted by software,” he said. “Accountants today are much less information providers, and more information analysts.”
A recent survey conducted by the New Jersey-based Gary Siegel Organization supports Snow’s theory that the job description is changing. The survey singled out five things necessary for success in the accounting field and communication ranked number one. Others on the list included: the ability to work on a team; analytical skills; solid understanding of accounting; and understanding how business functions.
Vangermeersch disagrees the changes in the industry are because of advanced technology. “Accounting has been involved in technology change for almost 500 years,” he said. “It never before caused a decline in the accounting industry; instead it would increase.”
Peggy Ferguson, assistant director of career services at the University of Rhode Island said the change doesn’t only affect students but also public accounting firms.
“Only about 20 percent of our graduates have said they will go on for the fifth year,” she said. “I think it’s going to have a huge impact on companies who need bodies to fill entry level positions. It will be really interesting to see how the firms fill those positions.”
Ferguson said many companies are now considering bringing students with 120 credit hours in under a different title.
Pat Canning, managing partner at KPMG Peat Maverick in Providence said the changes most likely will affect firms’ recruiting decisions, making it more competitive.
“We are focusing our recruiting primarily on schools with a masters program,” he said. “In the past if I hired ten new people, six of the ten would have undergraduate degrees and the rest would have a master’s. Now, I think those numbers will swing the other way.”
Canning said the industry has already begun to see a “shrinking” number of accounting graduates, a problem that he fears will continue with the law.
“I think some may feel it’s not worth their while to pay for a fifth year of school,” he said. “We’ve already begun to see it where local business schools used to have two to three accounting classes graduating, now there is only one or two.”
According to Snow, the majority of accounting students don’t go into public accounting and the CPA changes are just a small part of an overall shift in the field.
“People in the accounting profession have decided that the role of the accountant is much more finance oriented,” he said. “The new definition takes in a broader perspective then just accounting. This was done as a way to keep pace with the business environment.”
