In a previous issue of New Accountant, I outlined some of the dramatic changes taking place in the world of accounting. Because of the expanded information market, "accounting" is increasingly seen as a narrow subset of information available to managers and investors. Accountants are viewed as "bean counters" who bring relatively little value to the company. In response to this negative stereotype, accountants are reinventing their profession.

For example, consider some of the changes in public accounting. During the last five years, the nature of auditing has changed significantly, with computers now doing much of the work first-year auditors used to do. Searching for ways to increase quality and efficiency, the firms are adopting new "upside down" approaches to auditing that are radically different from those previously used (and which are still being taught in most auditing textbooks.) Auditors now utilize "analytical" approaches audits wherein they look at the "big picture" of the "whole business," including competition, strategic issues, market and technological risks, etc., before any detail work is done. Increased emphasis is also being placed on fraud detection. Additionally, the firms are beginning to offer other kinds of assurance services. (See http://www.aicpa.org and follow the link to "assurance services.") Most importantly, audits are increasingly seen as a means to "get your foot in the door" to open the way for more lucrative consulting engagements.

A similar revolution is taking place in the accounting departments of corporations. Here, also, many mundane accounting tasks have been automated. Realizing that jobs for traditional number- crunchers are drying up, management accountants and controllers are selling themselves as value- added members of the strategic management decision-making team. No longer stuck in an office computing variances, they are now heavily involved in helping the company improve its profitability in an increasingly competitive world.

In a two-part series of articles in Management Accounting ("Look Out Management Accountants," May 1996 pp 20-26 & June 1996 pp 35-41), Professor Robin Cooper predicted that to survive, accountants must move away from scorekeeping toward design and implementation of information systems, and that they will need skills in change management and cost management. Cooper also predicted that as management accounting systems become decentralized, fewer management accountants will be needed. Those who remain will need broad strategic management skills, not merely technical accounting skills.

Impacts on the Job Market

In the past, a college degree in accounting has pretty much been a passport to a job. There have always been jobs for entry-level accountants. However, technology and marketplace changes have eliminated many jobs for accounting graduates. Because the national CPA firms need fewer entry- level financial statement preparers and auditors, they have cut back on their hiring of accounting graduates.

The combined effects of increased price competition, improvements in technology, and new audit methodologies have resulted in a 25 percent decrease in audit "head count" (the number of people doing auditing) in the last five years. Much of this reduction has been at the entry level. Newly- hired auditors are now expected to do analytical work in their first year at a level that in the past would have been done by people with several years of experience. The need is now for entry-level auditors with higher levels of analytical skills and understanding of business. Increasingly, new college graduates are competing with experienced industry accountants for jobs as auditors.

Additionally, the firms' consulting practices are experiencing increasing needs for business analysts and advisors, as well as business information systems experts. Not surprisingly, they are hiring more experienced and non-accounting people with the skills they need. For example, last year, KPMG Peat Marwick hired approximately 8,000 people. Of these, only about 1,500 were entry- level accounting graduates. Who were the other 6,500? Some were experienced accountants, but most were actually non-accountants -- including many systems experts. In some firms, the number of employees who are non-accountants actually exceeds the number of accountants!

Likewise, while tax professionals are still needed for tax planning and advising services, the firms are hiring experienced tax professionals. The availability of inexpensive, sophisticated, user- friendly tax software has drastically reduced the demand for routine personal tax return preparation services. Thus, demand for entry-level tax "grunts" to crank out returns is decreasing.

What Competencies Will You Need?

Clearly, the job market for accounting graduates is becoming increasingly competitive. You will soon be competing for a job against not only other accounting graduates, but also graduates from information systems, information technology, finance, and other programs -- perhaps even liberal arts majors. What skills and knowledge will you need to bring to the table in order to successfully compete in this expanded job market?

In 1989, the then-"Big Eight" accounting firms jointly published a white paper entitled, "Perspectives Education: Capabilities for Success in the Accounting Profession." Although it is now nearly a decade old, that document was very forward-looking and its recommendations are still valid. It emphasized that graduating accounting majors need excellent communication, interpersonal, and broad thinking skills. It also stressed the need for a liberal knowledge base, including humanities, arts, sciences, and societal issues, in addition to general business and accounting knowledge. Finally, it said that graduates need the ability to make value judgments, manage stress, and be prepared for lifelong learning. One year later, the Accounting Education Change Commission concluded that the capabilities specified in the white paper were needed in all fields of accounting, not just public accounting.

In 1994, the Institute of Management Accountants (IMA) sponsored a survey of accounting professionals in industry, which reported that accounting graduates entering corporations don't "hit the ground running" when hired by corporations. It concluded that graduates don't need more number-crunching and financial accounting skills, but they do need more imaginative and strategic thinking skills, market-connected thinking, action- and results-orientation, team philosophy, communication skills, cost management skills, and systems literacy.

In 1997, the AICPA's Center for Excellence in Financial Management stated that the work of accountants in corporations now requires a strategic business orientation, the ability to manage risk and return, skills in streamlining business and human performance, and imaginative and dynamic thinking. This group produced a "Competency Model for the New Finance," which includes many skills not emphasized in traditional university accounting programs. (NOTE: these are not stated as entry-level capability requirements, but they do provide insights into the kinds of skills you should be thinking about developing.)

Personal Attributes: insight, judgment, ethics, continuous personal improvement, commitment, performance stability, interpersonal orientation, project management skills, innovative/creative thinking, presenting/speaking, and effective business writing.

Leadership Qualities: strategic thinking, facilitating, negotiating and persuading, teamwork, coaching/empowerment, problem solving, decision making, and cross-functional perspective.

Broad Business Perspective: industry knowledge, internal/external consulting, partnerships, current management practices, best practices, risk management, mergers/acquisitions/ strategic alliances, management accounting, and organizational systems.

Functional Expertise: the "traditional" technical skills of accountants (financial analysis, cost management, tax, internal control, etc.).

Implications

As an accounting graduate, to get a job in today's market, and to keep it in tomorrow's market, it is clear that you will need a set of skills much broader than was needed in the past. Memorization of volumes of "rules of accounting" (FASBs, SASs, and tax codes) will not cut it, anymore.

A systems orientation is a must. Everything in our society is wrapped up in information systems. A company's information system is more than a computer system; it is a worldwide electronic nervous system. Accounting is increasingly becoming a smaller and smaller subset of this broader global information system. Nonfinancial and forward-looking information is becoming more important, even as historical, transaction-based, dollar-measured information is shrinking in relative importance. Debits and credits are rapidly disappearing altogether. In such a world, an accounting graduate with a business information systems emphasis or minor will likely have an advantage over a traditional accounting graduate. In any case, you must be able to solve business problems where the tool used is information systems.

In addition to good systems skills, you will need a broad, liberal education. Take advantage of your general education; an understanding of the humanities, arts, and sciences is more important to your future career than you may think. As stated by the national accounting firms a few years ago:

The successful practitioner requires general knowledge that covers... an understanding of the flow of events in history and the different cultures in today's world, the ability to interact with diverse groups of people and at the highest levels of intellectual exchange, and an sense of the breadth of ideas, issues and contrasting economic, political and social forces in the world (Perspectives on Education: Capabilities For Success in the Accounting Profession, "Big Eight" CPA Firms, 1989, p. 7).

An understanding of business is also a must. You must be "value-added" starting your first day on the job. Whether you are in public accounting or industry, you will be expected to help the company or client make money. You must instill in yourself a mentality that you are always looking for strategic opportunities, ways to improve yourself and learn, opportunities to market your firm, and ways to solve business problems. Take as many courses as you can in strategy, finance, marketing, production, and other business disciplines.

You will need strong writing, speaking, critical thinking, and interpersonal skills. Don't complain when your accounting professors make you write papers or do group projects; rather, take advantage of the opportunity! You will also need state-of-the-art technical skills, which your professors may not even know how to teach because they are so new. Make yourself familiar with current best practices by regularly reading professional journals.

In general, you should seek ways to differentiate yourself from other accounting graduates. An internship, a second language, passing the CMA exam, an international experience, membership and leadership in student organizations, participation in an honors program, or other differentiating experiences may make the difference in who gets the job offer.

Finally, realize that your career path might follow a different route than those of previous generations of accounting graduates. Instead of being hired by one of the national CPA firms, working a couple of years, then moving to industry, your career path may go in the opposite direction. Even if you are an "A" student, you might not get an offer from a CPA firm. Don't let this discourage you. Take a job in industry, make yourself valuable, and a few years down the road, you may yet be hired by a CPA firm. Or, maybe you'll stay in industry. In either case, don't be surprised if they don't call you an "accountant."

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