Evaluating tax education: a survey of new hires.

• Author: Schnee, Edward J.

Accounting education appears to be experiencing a crisis. According to some practitioners, the current educational model is obsolete. Many accounting educators think likewise about tax education.

To determine the current state of affairs and predict the tax profession's future needs, in 1999-2000 the AICPA's Tax Education Committee sponsored a survey of accounting practitioners, which focused on how public accounting firms viewed professionals hired by their tax departments. Although the survey's response rate was not adequate for a detailed statistical analysis, the results indicate that new hires are not living up to firms' expectations, and suggest that universities need to reevaluate their curricula, to address technical skills, as well as critical thinking and interpersonal skills. Even schools that cover this material in-depth should find ways to improve it, because, according to the survey, few areas exist in which the performance of recent graduates is sufficient for success.

Although the survey did not specifically address continuing education, accounting firms may want to reevaluate their current requirements and curricula to eliminate deficiencies identified in the survey

The Survey

The survey was distributed to a stratified random sample of AICPA member firms. Firms were categorized into three groups: the Big 5, firms with over 20 members and all others. The population comprised 689 Big-5 offices and 359 firms with over 20 members. Of these, the number surveyed was 69 (or 10%) Big-5 offices, and 72 (or 20%) over-20-member offices. From the remaining population of firms with fewer than 20 members, 300 were selected, resulting in a total sample size of 441. Roughly one-quarter (101 firms) responded.

Profile of New Hires

Academic background. The non-Big-5 firms reported hiring 197 employees in 30 tax departments. The majority of new hires had baccalaureate degrees in accounting; a few had law or masters' degrees. The Big 5 hired 1,132. Approximately the same number who had masters' degrees in tax had baccalaureate degrees. A sizeable portion had basic or advanced law degrees.

In general, the academic backgrounds of new hires were not what the firms preferred; most would have liked new hires with advanced degrees. Unfortunately, in general, respondents misread this part of the survey; therefore, no conclusions could be drawn.

In the past, the number of masters' degree programs with a tax specialty had exploded. For example, between 1980 and 1994, they increased from 30 to 111. Although a current count is not available, anecdotal evidence indicates a decline, with student enrollment decreasing overall. This is consistent with a significant drop in the number of students who major in accounting. It may also explain why firms are not hiring as many students with advanced degrees as they would like. Given this trend, firms will likely find it difficult to recruit sufficient, qualified new hires in the future. Firms (as well as...