CFOs are already on record with their views on the personal traits of young people entering the accounting workforce today: too often lacking in drive and determination, gripped by a hunger for constant praise, and disturbingly prone to job-hopping at the first wisp of unhappiness.
But some senior finance executives are also frustrated with the low level of practical knowledge exhibited by new talent hired out of college or, more often, public accounting firms. This shortcoming is blamed in large part on schools’ lopsided focus on audit, compliance, and tax — the work of public accountancies — at the expense of content that will prepare students for the corporate work that will be the ultimate career direction for most of them. In those jobs, they’ll need strong backgrounds in such areas as budgeting, forecasting, internal controls, risk and performance management, and leadership development.
The Institute of Management Accountants, whose members are corporate accounting and finance professionals at every level right up to CFO, has been beating that drum louder of late. IMA recently scored a coup when it persuaded a Fortune 100 CFO, David Burritt of Caterpillar Inc., to address the issue before the Treasury Department’s Advisory Committee on the Auditing Profession.
The committee could play a meaningful role in helping to effect change, Burritt told CFO.com some time after he testified. “If they would advocate appropriate curricula for preparers of financial statements and not just focus on inspectors of financial statements, we’d be better off,” he said.
Burritt likened the career preparation of accountants to the manufacturing process, something with which he’s become quite familiar at Caterpillar. “You want your assembly line to be running very well so you can minimize inspection at the end,” he said. “If you simply strengthen the inspection, you create a lot of additional work and costs. When you look at the focus of academics as well as public accounting firms, it’s to strengthen the end of the financial reporting process. We want to pick talent that has been effectively developed and trained so we can make sure we get it right” before the auditors take over.
The need for changes in college curricula has grown more urgent because of the regulatory pressures placed on corporations by Sarbanes-Oxley, which has caused greater demand for, and thus a shortage of, accounting talent. “It’s very important to make sure that Sarbanes-Oxley methodologies are sustainable,” Burritt said.
An effective accounting curriculum would include coursework on business development and analysis, cost management, information management, and performance management, according to Burritt. “Accountants are asked to do more than just count the beans,” he said.
Asked about the outlook for meaningful change in college offerings, he said vigilance from the corporate community is the key. “I think it’s going to happen as long as we stay proactive with the universities, and we’re seeing pockets of it where they do have leadership training and internships,” he said.