Is accounting education relevant? Many are questioning the quality--not to mention the quantity--of accounting graduates and their abilities to handle the onslaught of complex transactions and technical regulations. Are the schools--and the students--preparing for accounting in the "real world?".

• Author: Karr, Susan Schott
• Position: Accounting education

How relevant is today's accounting education? Are curriculums at universities adequately preparing future accountants to work in today's complex environments? These are big questions that educators, recruiters and those responsible for hiring graduates are grappling with as they cope with the increasing demands of a workplace that requires more accountants, equipped with unique skills. The demands placed on accountants continue to evolve as a result of the Sarbanes-Oxley Act and other regulatory pressures.

It's no surprise then, that public accounting firms, public and private companies, as well as regulatory agencies, are concerned with hiring the right people--with "right" defined as qualified, in terms of training.

Indeed, through education, it is critical to create a sense of relevancy and value that apply to what is actually going on in the marketplace. And, with accounting firms, companies and regulatory agencies all competing for the limited pool of suitable candidates, a big issue is finding enough qualified professionals.

Responding to early reviews from Sarbanes-Oxley Section 404 compliance, FEI President & CEO Colleen Cunningham wrote in the May issue of Financial Executive that "about 30 percent of the material weaknesses relate to personnel issues." She continues that the percentage includes "poor segregation of duties, as well as a lack of sufficient personnel with appropriate qualifications." The situation, she says, "suggests a clear opportunity for education to help address some of the shortfall."

On an optimistic note, the numbers of accounting graduates are rising for the first time since an enrollment decline that began in the 1990s. Undergraduate accounting degrees awarded in the U.S. rose 6 percent from the 2001-2002 school year to the 2002-2003 school year, reports a 2004 American Institute of Certified Public Accountants (AICPA) survey. Additionally, in the 2002-2003 school year, 6 percent more U.S. students enrolled in undergraduate accounting programs at colleges and universities.

Enrollment has been up during the past few years at the Wharton School of the University of Pennsylvania. "Students have a stronger appreciation that a more sophisticated understanding of financial statements is important," says Scott Richardson, a professor of accounting in Wharton's undergraduate program.

The trend is similar at New York University Leonard N. Stern School of Business (Stern), which has seen a 25 percent increase in enrollment for accounting majors between 2001 and 2005. Alex Dontoh, deputy chairman and associate professor of accounting, says that during the 2001-2002 school year, 63 of Stern's 500 students majored in accounting (most double-majored in finance or another area), with half of those CPA majors.

In comparison, for the 2004-2005 school year, Stern had 111 accounting...