Accounting's Stature Undermined By 'Cookbook' Approach.

• Author: Livingston, Phil
• Position: Over-regulation - Brief Article

Accounting is losing the role of the individual, practicing the discipline's art and science, who is trained and licensed to exercise his or her judgment on behalf of the client, the employer and the public.

I am getting more distressed about telltale signs of problems at the core of the accounting profession. There may be no bigger issue facing the future of finance.

The declining number of students in college accounting programs has been well-documented, and fewer students are sitting for the CPA exam. These facts are even more troubling when taken together with the impact of retiring baby boomers and fewer young workers entering the labor market.

Of course, a strong economy, an ever-stronger entrepreneurial environment and the lure of technology-oriented careers makes alternative career paths very appealing to students. Higher compensation in other fields is a problem that accounting firms have to face up to as well.

The AICPA has been trying, in part, to address these realities with its "XYZ" credential. It hopes that a broader business certification will help the profession in the future. Much controversy exists within the AICPA over the proposal, but I applaud the AICPA leadership for not sticking its head in the sand and choosing to stay in the past. While the credential itself may not be the answer, the naysayers need to join their leadership in focusing on the future.

I think the problem rests in the fundamental shift in the nature of the work. Accounting is losing its professionalism. That is, it is losing the role of the individual, practicing the discipline's art and science, who is trained and licensed to exercise his or her judgment on behalf of the client, the employer and the public, and who is able to assess the situation, gather the facts, apply a frame work and render an answer.

Increasingly, the profession is being undermined by a cookbook approach to accounting -- one in which the rules are so detailed and complicated that the individual practitioner becomes nothing but a conduit between the client and a huge book containing all the possible...