Curricular change in response to the 150 hour law for CPA exam candidates, a case study of business departments at three colleges

... education for CPA Exam Candidates In the 1970’s, Hawaii and Florida passed legislation that required 150 hours of education to sit for the CPA exam In 1981, Utah passed a similar law (AICPA, 2002) Although... education and cautioned program administrators to “anticipate dynamic curricular change that will strain traditional conceptualization of how best to manage education changes for the discipline”... this exam and entering the profession Following is a history of the CPA exam and the events leading up to the 150- Hour Law History o f Accounting Education and the 150- Hour Law In the nineteenth

CPA EXAM CANDIDATES: A CASE STUDY OF BUSINESS

DEPARTMENTS AT THREE COLLEGES

byCourtney Baillie

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C u r r ic u l a r C hange I n R e s p o n s e t o t h e 1 50 -H o u r Law f o r CPA Exam Cand i d a t e s : A C a se S tu d y o f B u s i n e s s D e p a r tm e n ts a t T h ree C o l l e g e s

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EXAM CANDIDATES: A CASE STUDY OF BUSINESS DEPARTMENTS OF

THREE COLLEGES

Courtney Baillie, Ph.D

University of Nebraska, 2003

Advisor: Barbara Y LaCost

In the early 1990’s, Iowa and Nebraska passed legislation that requires 150 hours

of higher education to be eligible to take the Uniform Certified Public Accountants Examination At large universities, accounting students can matriculate into Master’s of Accounting programs to meet the requirement o f the law However, many small colleges and universities do not offer graduate accounting degrees and need to adapt

undergraduate accounting programs to meet the requirements of the 150-Hour Law This process requires redesigning of curriculum by accounting faculty and department chairs Revised programs need to meet state specifications, as well as student expectations, for accounting graduates to be eligible to take for the CPA exam

The purpose of this case study was to describe the process and the issues that emerged in the business departments of three small colleges as they adapted their accounting programs to comply with the educational requirements of the 150-Hour Law The grand tour question for this case study was: How do stakeholders at three small colleges describe the process and issues that emerge from adapting their respective institutions’ accounting programs to comply with 150-Hour law?

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researcher interviewed three business department chairs, three accounting professors and three recent graduates of three small colleges from February through April of 2003 The interview transcripts were coded to analyze the data, and four themes emerged from this process.

The study’s findings were grouped under four main themes: constructing the path,

on the path to the goal, guiding the routes and paths, and the finish line Subthemes and categories provided support for the main themes and expressed in the participants’ words

The summary and conclusions were presented The business department of each college demonstrated a unique strength during the process of adapting their accounting programs to comply with the 150-Hour Law One college revised their accounting major

to provide more courses for students Further, faculty at this institution advised students

o f the options available to pursue their education, including graduate school The second college consulted students when designing a 150-Hour undergraduate accounting

program The third college developed an accounting program that allowed students to earn 150 credit hours in four years at no additional tuition

I wish to sincerely thank the following individuals:

Scot, my husband, soul mate and best friend Your support and love for the past fifteen years, especially the past five, has kept me going through the tough times I couldn’t have done this without you

Reed and Quinn, my children and lights of my life You have turned out amazingly well even though you have never had homemade cookies Both of you are creative, bright, funny and special in your own way Yes, I’m finally done

Mom, my confidante, who can tell by my voice how I am feeling Thanks for always being there

Rich, my “boss” and cheerleader You pushed me to write when I did not feel like it and provided empathy and emotional support

Barbara, my advisor You taught me what research was and turned an accountant into a writer Imagine that

My committee Thank you for seeing this project through and providing guidance

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I INTRODUCTION 1

Statement of the Problem 3

Purpose 3

Significance of the Study 4

Research Question 4

Delimitations .5

Limitations 5

Definitions 6

II REVIEW OF LITERATURE 8

Organizational Change 8

Change in the Higher Education A rena 13

Institutional Change 13

Curricular Change 16

Accounting Education Change 20

History of Accounting Education and the 150-Hour Requirement 20 Reaction to the 150-Hour Requirements .24

Early 1990’s 25

Mid to Late 1990’s 26

2000 to present 29

III METHODOLOGY 33

Design of the Study 33

Investigator’s Biases 35

Procedures 35

Interviews .36

Protection of Participants 37

Site Selection .38

Participant Selection 39

Tri angulation 39

Data Reduction, Analysis and Synthesis 40

IV FINDINGS 43

Descriptions of Sites 43

Tanner College 43

Marshall State College 45

Business Department Chairs 47

Tonya 47

M ichael 48

Paul 48

Accounting Faculty 48

Tom 48

M ark 49

Peter 49

Recent Graduates 50

Taylor 50

M ary 50

Parker 50

Answers to Research Questions .51

V THEMES 57

Constructing the Path 58

Environment for Path-Building 58

Collegiality & Animosity 58

College Red Tape 60

Within the Department 62

No Big D eal 63

Status Quo 64

Outside Influences 65

The Exam 66

State Board 69

Committee Insight 71

On the Path to the Goal 74

The Goal j 74

Different Paths 76

Double M ajor 77

Academic M inor .77

Additional Accounting Classes 78

Internships 78

Elective Courses 80

Graduate Degree or Undergraduate Hours? 80

How Long on the Path? 84

The Elite (Who is on the Path) .87

Working Overtime 92

Faculty Workload 92

Load upon Hours 95

Guiding the Routes and Paths 97

Flexible Avenues 98

iii

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Beyond Traditional Scheduling .103

Students F irst 106

The Finish Line 113

Opportunities and Placement 113

First Reactions to Final Reflection: A Continuum 120

Initial Thoughts 120

Question, but Accept 122

Mixed Bag 125

Works Well/Worth I t 128

VI SUMMARY AND CONCLUSIONS 130

Constructing the Path 131

On the Path to the Goal 133

Guiding the Routes and Paths 134

The Finish Line 135

Comparison of Sites and Participants .136

Implications of Study 138

Recommendations for Future Research 140

REFERENCES 142

APPENDIXES 147

Appendix A: Interview Protocols and Demographic Data F o rm s 147

Appendix B: Pilot Study 160

Appendix C: Interview Protocols Used in Pilot Study 178

Appendix D: Informed Consent Form and Institutional Review Board Documents .189

Appendix E: Coding Grid 193

Appendix F: Accounting Program Comparison 221

Appendix G: Nebraska and Iowa Education Requirements for a CPA Certificate 222

Appendix H: Audit Report 223

In academic disciplines, college coursework is designed to prepare students for entry into their careers Educators in professional programs are charged with designing curriculum that meets state requirements or prepares students for passing professional, standardized examinations For example, law school curriculum is expected to prepare students to pass the Bar Examination, and the culmination of medical school occurs when students pass the state boards Coursework in education is designed to meet state

certification requirements In these situations, academic curriculum is intertwined with topics deemed essential by the state

Likewise, most post-secondary undergraduate accounting programs have created the curricula to prepare students for the Uniform Certified Public Accountant

Examination (CPA Exam) The typical accounting student completes 24 to 30 hours of accounting courses in addition to other business and general education classes Prior to the 1990s, earning a bachelor’s degree was sufficient to meet the education requirement

to be a CPA exam candidate The average undergraduate degree requires 125 credit hours

In 1988, in response to growing criticism of the emphasis on discipline-specific coursework for focus of accounting graduates, the members of the American Institute of Certified Public Accountants (AICPA) approved an amendment to its bylaws This amendment, which went into effect in the year 2000, required that new applicants have completed 150 hours of higher education to be eligible for membership (American Institute of Certified Public Accountants [AICPA], 1988) The amendment’s intent was

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Previously, any person who passed the CPA exam was eligible for membership in the AICPA As a result of the increased education requirement to join the AICPA, many State Societies of CPAs began promoting legislation to require the same education requirement to take the CPA exam.

Individual states vary regarding the specific requirements to become a CPA All require passage of the CPA exam, and most require one to two years of work experience Currently, forty-five states have enacted legislation that mandates CPA exam candidates

to complete 150 credit hours before they take the exam This legislation parallels the AICPA’s membership education requirement that became effective in 2000 Of the 45 states that have passed the 150-Hour law, the legislation is currently in effect in 40 of these states In the remaining five states the law will become effective at a future date (AICPA Online, 2002)

Increasing the educational requirements for CPA exam candidates directly impacts higher education institutions that offer degrees in accounting For schools with graduate accounting programs, students can matriculate into a Master’s degree program Some larger institutions already had five-year accounting programs in place before the passage of the 150-Hour Law However, small undergraduate colleges, those with enrollments of less than 5000 students, often do not offer graduate accounting programs Therefore, students at small colleges do not have the option to earn a Master’s in

Accounting at the undergraduate institution This disparity may have led to Wallace’s

larger institutions but a ‘death penalty’ for smaller institutions” (p 151).

In 1991, Nebraska was the fourteenth state to enact the 150-Hour Law under Section 1-116 of the Public Accountancy Act The education requirement took effect in

1998, giving institutions and CPA exam candidates a seven-year phase-in period Iowa passed legislation in 1992, which took effect in 2001 under Section 542.5 of the Iowa Code Have accounting programs in small colleges in these two states survived the “death sentence” given to them by critics of the 150-Hour Law? This research explored three small institutions that successfully adapted their accounting programs to the 150-Hour requirement in these two states

Statement of the ProblemMany small colleges and universities do not offer graduate degrees in accounting and need to adapt undergraduate accounting programs to meet the requirements of the 150-Hour Law This process requires redesigning of curriculum by accounting faculty and department chairs Revised programs need to meet state specifications, as well as student expectations, for accounting graduates to be eligible to sit for the CPA exam

PurposeThe purpose of this case study was to describe the process and the issues that emerged in the business departments of three small colleges as they adapted their accounting programs to comply with the educational requirements of the 150-Hour Law

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Significance of the Study Most small colleges that offer business degrees find it necessary to adapt the accounting programs to meet the 150-Hour requirement in order to stay competitive and meet student expectations This study provided information about issues that emerged during the curricular change process Colleges in states in which the law has been enacted, but is not yet effective, may find the results of this study useful as they examine their own accounting programs to determine what changes will be warranted when the 150-Hour Law goes into effect For colleges in states where the requirement is already in effect, the study may provide insights on their own curricular change process.

Research QuestionThe grand tour question for this case study was: How do stakeholders in the business departments at three small colleges describe the process and issues that emerge from adapting their respective institutions’ accounting programs to comply with 150- Hour law? The following sub-questions were also explored:

• How have the business departments of three small colleges adapted their accounting programs to the 150-Hour Law to qualify for the CPA exam?

• Who were the key players in the curricular change process? What roles did they play?

• How do accounting professors describe the curricular change process brought on

The researcher chose to focus on select participants at three institutions in a relatively small geographical area Setting parameters for the study provided the opportunity for in-depth analysis of the participants’ perceptions of the 150-Hour Law and its impact on their institution’s curriculum However, by placing boundaries on the study, the data collected provided a limited opportunity for comparing and contrasting responses between institutions In addition, as only three participants at each institution were interviewed, their remarks represented individual viewpoints and perceptions Because of the narrow focus of the study, its findings cannot be generalized to other institutions or individuals.

LimitationsThe data collected in this study were obtained from interviews with participants and represent the opinions and perceptions of those individuals at a certain point in time

In addition, what the participants chose to share and what they chose to withhold from the researcher have an impact on analysis of the data

In qualitative studies, the researcher is the primary data collection instrument (Merriman, 1998) Therefore, the results represent the researcher’s interpretations of the participants’ responses This approach provides descriptive data The human element in all aspects of the research creates potential for subjective analysis

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Below are the definitions of terminology used in this study:

150-Hour Law (Rule, Requirement) - State legislation mandating that 150 hours of

postsecondary education be completed before an individual may take the CPA Exam States vary on the implementation of the requirement and the number of credit hours allocated to general education, business and specific accounting courses

Accounting program - a set of college-level courses designed by an institution o f higher

education to impart skills and knowledge about accounting and business The accounting program can be a separate academic major or minor, or a concentration within business administration

American Institute of Certified Public Accountants (AICPA) - The national

professional association of CPAs This organization is responsible for writing and grading the uniform CPA examination

Certified Public Accountant (CPA) - A professional who holds a license to practice

public accounting To become licensed, an individual must pass the CPA examination and meet the state’s work experience requirement

CPA Examination - A uniform national examination administered by state boards of

public accountancy The two-day written exam is administered twice a year and currently contains the following four sections: (1) Law and Professional Responsibility, (2) Auditing, (3) Accounting Reporting and Taxation and (4) Financial Reporting for Business Entities In February 2004, the exam will move to a computerized format with

broadened to include other business disciplines, such as economics and finance.

Private Accounting - a profession that involves preparing and communicating financial

information for an organization Job titles include controller, treasurer, cost accountant and chief financial officer

Public Accounting - a profession in which the main activities are auditing financial

statements of organizations, preparing of and planning for income taxes, and providing consulting services Public accounting firms employ CPAs and range in size from a sole proprietorship to international firms, known as the Big Four

Small College - a post-secondary institution with student enrollment o f less than 5000

that primarily grants baccalaureate degrees

State Boards of Public Accountancy - government agencies that administer the CPA

exam and issue CPA certificates and permits to practice public accounting

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CHAPTER II REVIEW OF LITERATURE

The purpose of this study was to describe the process and the issues that emerged

in the business departments of three small colleges as they adapted their accounting programs to comply with the educational requirements of the 150-Hour Law The first topic of the literature review examines the concept of organizational change Next, the scope is narrowed to look at change in higher education, starting at the institutional level and proceeding to the curricular level Finally, the scope is further narrowed to the topic

of accounting education First, the history o f the CPA exam is explained, as well as the reasoning behind the 150-Hour Law Lastly, research about the 150-Hour Law since its passage is summarized

Organizational ChangeChange is an “elusive” concept that is difficult to accurately measure (Kanter,

1983, p 487) One perspective of organizational change, perhaps the oldest and most widely-known, is referred to as organizational development (Ott, 1996) According to Grieves (2000), the seeds of organizational development as its own discipline were planted following World War II At this time, an “altruistic concern for people in organizations” (p 56) began to develop By the late 1960’s, organizational development became a subject in its own right

According -to Ott (1996), organizational development is based on social science research within a “prescriptive value framework (p 439)” The discipline, which follows set guidelines, is concerned with deep and enduring change Organizational development

enlists the guidance of a change agent (Ott).

By the 1990’s the discipline of organizational development had recognized that effective change was a collaborative process requiring participation by those impacted by the change (Grieves, 2000) This stakeholder approach brought about an awareness of the political process, which was thought to either further or impede the progress of change efforts

According to Grieves (2000), one o f the movements in organizational development in the past 20 years has been a shift in focus from training to organizational learning This concept of an organization that learns is key to managing change in the 21st century Senge (1990) defines a learning organization as one that is “continually

expanding its capacity to create its future” (p 507) For an organization to truly excel, an environment needs to be created where people have the commitment and capacity to learn Senge has outlined five elements, or disciplines, that a learning organization must adopt These disciplines must not be developed on a piece-meal approach, but

collectively The following three paragraphs describe Senge’s five disciplines of a learning organization

Systems thinking, or an “underlying worldview” (p 508), is the first and over­aching characteristic of a learning organization Most people have been taught to break down problems into smaller, manageable pieces However, this represents the antithesis

of systems thinking A conceptual framework should be developed so organizational members can see the ‘big picture’ clearly, and thus see how to change it

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of clarifying personal vision and seeing reality without bias According to Senge (1990), personal mastery “fosters personal motivation to continually learn how our actions affect our world” (p 508) Overcoming mental models is the third element o f the learning organization Mental models represent the way individuals view reality and are based on

deeply embedded assumptions Change is often thwarted because it conflicts with the mental models of the organizational members

Although personal mastery and mental models focus on the individual’s thought processes, Senge’s final two disciplines, building a shared vision and team learning, focus on the organization as a whole Building a shared vision unites people and motivates them to excel Creating a vision cannot be mandated by leaders, but developed

at all levels to foster genuine commitment Team learning involves abandoning mental models and entering “true dialogue” (p 509) among organizational members Team learning develops systems thinking skills that emerge from setting aside individual viewpoints

Although Senge (1990) focused on characteristics that create an organization ready for change, others have focused on the causes of change Beckhard and Pritchard (1992) identified five themes that cause change in organizations The following five paragraphs describe these themes

The first theme involves a change in mission that is derived from the organization’s leaders and is directed at examining the fundamental purpose of the entity Federal Express provides an example from industry The company changed its mission from package delivery services to transportation provider This shift in mission caused a

Express shipped packages using the shortest direct route While afterwards, the company used Memphis as its hub that allowed tracking of each package’s whereabouts.

The second cause of change stems from an organizational need to increase market share to stay competitive This need causes a change in an entity’s identity and is usually the result of external pressure or technological advances A shift in identity requires a change in the outward appearance of the organization, such as a new logo or advertising campaign However, Beckhard and Pritchard (1992) stressed that a visible commitment from the organization’s leaders is essential to address the attitudes and resistances from other organization members

Although a change in identity is focused on how the organization is perceived by others, a change in the way o f work focuses on the internal operations of the business and how activities are organized This type of change should be made explicit by

management and requires an environment that rewards learning

Relationships with key stakeholders is another reason organizations change, according to Beckhard and Pritchard (1992) Many organizations make conscience decisions to change relationships with their suppliers and customers For example, an organization wishes to move towards a partnering relationship with its major supplier This change can cause many smaller changes throughout organizations Information that was once confidential can now be shared, and accounting practices may need to be altered

A change in culture is the final and most subtle of organizational changes described by Beckhard and Pritchard (1992) To shift the values and assumptions held by

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an organization requires enormous changes in the attitudes, behaviors and rewards of its members Explicit communication and educational activities are essential to overcome the usually strong resistance to culture change.

According to Beckhard and Pritchard (1992), the five themes of change described previously are interconnected, but one theme usually leads Kanter (1982) also identified five themes, or “building blocks” of change, but believes they all must be present to create and sustain successful change in an organization

The first element of organizational change involves departures from tradition These activities often occur at the lower levels of an organization when an unplanned opportunity occurs This type of an event allows entrepreneurs to demonstrate new ways

to solve problems If an organization strives to be innovative, it should allow a flexible environment where departures from tradition can occur (Kanter, 1982)

A crisis, or “galvanizing event”(p 496) that requires a response, is the second element of successful organizational change Often traditional solutions either do not solve the crisis or will not be accepted by external parties This situation calls for a more

chaotic, it provides an opportunity to bring the organization into the change process Strategic decisions made by strong leaders can turn the new strategies developed by the entrepreneurs into official plans Thus, the third element of successful change, strategic decisions, helps create a vision and provide direction for organization members In addition, these decisions help set into motion the next two forces of change: individual prime movers and action vehicles (Kanter, 1982)

individuals’ power and commitment to solidify the change Prime movers should send a clear and consistent message to the members of the organization that they believe in the new strategy In addition to strong leadership, change also needs an infrastructure to support it Training, communication and rewards provide mechanisms so change can be accomplished (Kanter, 1982).

The concept of organizational change is complex and multi-faceted Theories about precipitators and impact of change are numerous According to Grieves (2000), in the past decade, the traditional organizational development approach to change has been criticized as being too linear Currently, change models have evolved from linear and destination-oriented to temporal and process-oriented Senge’s learning organization, Beckhard and Pritchard’s themes of change , and Kanter’s building blocks of change all provide examples of innovative approaches to organizational change

Change In The Higher Education Arena

Institutional Change

Change theories are often described in their application in the business world While many business theories, such as strategic planning and environmental scanning, eventually find their way to higher education, colleges and universities differ greatly from for-profit organizations Thus, transferring business practices to higher education without taking into account these differences usually will not provide desired results

Kezar (2001) provides two main reasons to develop a distinctive approach to change in institutions of higher education First, overlooking the unique characteristics of

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college and universities may cause analysis and strategy errors Second, members of the academy will not likely be engaged in change efforts if they are implemented using concepts that are inconsistent with their values Bimbaum (1991) identified several distinguishing traits of higher education institutions that impact organizational change which are described in the following paragraph.

Colleges and universities are relatively independent of, though not immune to, their environments The unique culture of the academy is values-driven, and institutional status and image are more important than generating revenue A system of shared

governance results in multiple power and authority structures, which in turn results in complex decision-making processes Compared to business and industry, higher education has extremely low employee turnover This can be attributed to individuals’ commitment to the institution and the tenure system

Given these characteristics, higher education is best interpreted through cultural, social-cognition and political models o f change (Kezar, 2001) Morgan (1986) described cultural change as a slow, long-term process that occurs naturally in response to the human environment and results in the alteration of values and beliefs Members of the academy often view their employment as a long-term commitment, and higher education emphasizes values Given these two characteristics, cultural models seem appropriate for analyzing change

Social-cognition models focus on learning and mental processes and emphasize multiple interpretations (Kezar, 2001) This approach to change complements higher education’s characteristics of ambiguous goals and complex decision-making processes Political theories see change as a result o f conflict, which is inherent in human

(Bolman & Deal, 1991) Higher education’s system o f shared governance and conflictingadministrative and professional values lend themselves to the political theories o f change (Kezar).

By combining different theories of change, Kezar (2001) developed a set of research-based principles applicable to higher education institutions Among these are:

• “Be aware of how institutional culture affects change

• Construct opportunities for interaction to develop new mental models

• Be open to a disorderly process

• Connect the change process to the individual and institutional identity

• Create a culture of risk and help people in changing belief systems

• Realize the strategies for change vary by change initiative” (p 4)

Bonvillian and Murphy (1996) also examined change in higher education bystudying successful small colleges that overcame obstacles In the 1980’s most liberal arts colleges were confronted with “declining enrollments, limited resources, a weakened public image, unstable administration, and a lack of direction (p 124).” The colleges studied revealed the characteristics that contributed to a successful change process

Small schools have an advantage over their larger counterparts by having the ability to act quickly and decisively O f the successful small schools examined by Bonvillian and Murphy (1996), each had the urgency in decision-making and follow- though, even if meant upsetting the status quo “All institutions examined were proactive, even aggressive”(p 125)

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Bonvillian and Murphy (1996) also described the power of strong leadership to

“direct, guide and facilitate the change process” (p 125) However, the entire college community must be willing to change and participate in the process In addition, the leaders need to make clear the direction o f change to both their internal and external stakeholders Successful colleges create an environment that contributes to the change process, but does not pose a threat to the values of its constituencies

Curricular Change

According to Barnett and Coate (2001), discussion about change in higher education has been plentiful and insightful Interestingly, curriculum change, despite the fact that curriculum is the most important product of higher education, has received less attention than institutional change in the literature However, given the demands for assessment and accountability by state and accreditation agencies, more interest is likely

to be shown towards the composition and characteristics of an institution’s academic programs

In a historical perspective of curricular change in American higher education, Thelin (2000) noted that college curriculum’s reputation o f being resistant to change dates back to the Yale Report of 1828 Likewise, Kerr (as cited in Thelin, 2000) also noted the academy’s lack of responsiveness to its own issues: “Universities are conservative in their internal dealings while liberal in their external recommendations”

(p 13)

Rudolph (as cited in Thelin, 2000) identified the change cycle in college curriculum as “turf wars” (p 10) This cycle begins with students showing an interest in a subject Next, the faculty and administration do not approve of this subject and attempt to

halt the interest fails, and the administration and faculty then ignore the interest in the new subject Lastly, administration, surrendering to student interests, while

simultaneously gaining control o f their activities, adopts the new field as part o f the curriculum

Faculty often are perceived to obstruct change efforts However, Thelin (2000) believes this may be a way of exerting their influence in curricular decisions Faculty have relatively little power to start programs and make policy Thus, their primary power

is the ability to resist demands made by administrators Historical perspective demonstrates that at times “opposition to change has represented a thoughtful, responsible attempt to counter academic opportunism” (p 14) while at others it demonstrates “selfish complacence” (Thelin, p 14)

According to Thelin (2000), momentum for curricular change has often derived from those outside the academy, for example, foundations, such as Carnegie and Ford Recently, the role of consumerism has been a catalyst for curricular change by creating demand for new and affordable programs Furthermore, although criticized as thwarting change efforts, state agencies are often change agents by demanding accountability of higher education institutions

According to Clark (1983), colleges and universities find themselves in the midst

of a “triangle of forces: state authority, market and academic oligarchy” (p 143) Barnett (2000) adapted this triad to curriculum by identifying the elements as the influence of national bodies, the job market and the interest of the academic community Previously, the curriculum was most impacted by academic discipline Barnett described two

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emerging patterns of change: (a) increased diversity in the components of curriculum and (b) the influence o f business causing a shift towards performance, as opposed to knowledge.

Barnett and Coate (2001) viewed this shift towards performance measurement as

a key element o f the relationship between higher education and the job market Action isperceived to be more valuable than knowledge and understanding Academic subjectsthat once had intrinsic value, now must demonstrate their relevance to the outside world.This emphasis on curriculum that departs measurable skills in graduates, while

successful, may result in unwanted consequences in the future:

The mass higher education may be producing accomplished technicians, able to deal with real-world problems In attempting and in apparently succeeding in helping students to live in the here-and-now, curricula may fail to impart to students the ontological and epistemological resources for engaging meaningfully with others in a world in which nothing is certain (Barnett, 2000, p 262)

In addition to concern about job-oriented curriculum, Barnett (2000) also stressed the complexity of identifying specific change patterns in higher education curriculum Academic programs represent a mix of dimensions that include: developments in the discipline, debates by state lawmakers, demands of students, and desired skills sought by employers In turn, curriculum can be viewed as a set of strategies to produce certain skills in students While the definition of these skills will not be made clear to colleges and universities, society will expect higher education to be responsive to its needs (Barnett, 2000) These multiple and often conflicting demands create ambiguity and make designing appropriate curricula a challenge

specific academic disciplines also speak to the issue of change Sawyer (1994) described curricular changes in communications education and cautioned program administrators to

“anticipate dynamic curricular change that will strain traditional conceptualization of how best to manage education changes for the discipline” (p 104) Like Barnett (2000),

Sawyer noted the emphasis on the job market when designing curriculum Chairs in communications programs are pressured to design curriculum that is responsive to developing job-related talents According to Sawyer: “Students are always interested in academic training that leads to employment and/or career development” (p 106)

While Sawyer (1994) described curricular change as dynamic, Italiano-Thomas(1997) studied state mandated change in a teacher’s education program and found that only “ameliorative” (p 121) changes were made to the curriculum The findings suggested that the traditional values of the institution were not challenged by the required change to the academic program Further, the change that occurred was also described as

“illusory” (p 122), meaning that the language and documentation of change is in place, but faculty in the department appeared to be merely ‘going through the motions’

Williams (1997) described change in an undergraduate nursing program that eventually garnered 80% of the faculty’s support In light o f major changes in health care delivery systems, the public was calling for greater accountability of university-educated professionals In response, the institution formed a group o f curricular stakeholders that included faculty, students, alumnae, employers and consumers to identify problems with the current academic program Initially the group encountered “resistance, skepticism and outright hostility” (p 5) from the faculty at large This was overcome by a variety of

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means, such as holding open forums, sponsoring a faculty retreat and publishing a question and answer brochure In retrospect, the stakeholder group identified several factors that are essential to successful curricular change: having emotional and fiscal support o f the administration, spending enough time explaining the change process to faculty, and providing positive experiences early.

Accounting Education Change Although all academic subjects experience pressure to enact curricular change, the discipline of accounting is somewhat unique in that it is tied closely to its external constituents First, the public accounting profession is a regulated industry Each state has a Board of Public Accountancy that has the power to issue and revoke CPA licenses Second, the national professional organization, the AICPA, determines the content for the CPA exam Finally, most collegiate accounting programs are focused on students

passing this exam and entering the profession Following is a history of the CPA exam and the events leading up to the 150-Hour Law

History o f Accounting Education and the 150-Hour Law

In the nineteenth century, accounting education consisted of commercial courses offered by public secondary schools and private commercial colleges (Day, 1996) In

1896, New York passed legislation that resulted in public accounting becoming a govemmentally-recognized profession and was the first state to require an exam to become a CPA (Van Whye, 1981) Subsequently, in the fall of 1900, the School of Commerce, Accounts and Finance was founded at New York University (NYU) at the

baccalaureate program were so closely related in time and place that the subject matter of the CPA exam paralleled the curriculum at NYU Other states followed NYU’s lead and

by 1930, an estimated 300 colleges awarded undergraduate and graduate degrees in accountancy (Day)

In 1929, New York added another legal requirement for entry into the profession Beginning in 1938, every exam candidate would be required to provide evidence that he had graduated from an accounting program at a collegiate school of business (Day,1996) Sentiments were that if public accountancy was to be considered a profession, on the same level as dentistry and medicine, it should be based on college training (Webster, 1938) However, other states did not follow New York’s example as they had with CPA exam legislation Not until 1944 did another state require more than a high school diploma to enter the profession: California passed a law requiring two years of college to qualify to take the CPA exam Kansas and Illinois soon passed similar laws, neither of which required a bachelor’s degree The remaining states only required a high school diploma and work experience (Van Whye, 1991) Although bachelor’s degrees were not required by law, most CPAs were college graduates In 1936, 60% of accountants earned

at least a bachelor’s degree, and by 1955 the number had grown to 75% (Day)

During the late 1950’s, critics o f accounting education began to voice their opinions Nationwide studies noted several weaknesses o f collegiate accounting programs One o f the major complaints was that accounting graduates were mediocre and technically-focused, whereas liberal arts graduates were superior (Day, 1996) The efforts of the AICPA and the American Accounting Association during the 1960’s and

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1970’s focused on remedying these shortcomings In 1967, a major study was undertaken jointly by the Carnegie Foundation of New York and the AICPA, commonly

known as the Horizons study (Day) Horizons (AICPA, 1969) called for substantial

improvement in accounting education The study indicated that subjects such as statistics, mathematics, communications and computer science needed increased

emphasis The authors o f the Horizons study noted the difficulty of obtaining this

improvement without increasing the length of formal education o f accounting students

Soon after the publication of Horizons, the AICPA formed the “Committee on

Education and Experience Requirements for CPAs” to implement its recommendations

(Day, 1996) This group developed ten resolutions in what is known as the Beamer Report (AICPA, 1969) Included in the report was the recommendation that a minimum

five years of college course work was necessary to obtain the educational background necessary for an entry-level accountant, and therefore, should be a requirement to take

the CPA exam The authors of the Beamer Report further recommended that the states

adopt the five-year requirement by 1975

A series of symposia sponsored by a large public accounting firm was held to promote the 150-Hour Law to academics during 1970 and 1971 (Van Whye, 1991)

However, their response to the Beamer Report recommendations was unenthusiastic

Accounting faculty provided several reasons for their reluctance to accept a five-year requirement One reason cited was that an additional year of college would present a financial burden to some students and cause a decline in enrollments Another rationale provided by academicians was that instead of lengthening academic programs, the additional coursework could be offered by CPA firms as part o f their on-the-job training

practices did not reflect a high premium for a fifth year of study (Van Whye).

Without the support of accounting faculty, the AICPA realized that it would be a struggle to motivate the states to require the five-year programs The organization then appointed another committee in 1976 to determine if the recommendations in the 1967

Beamer Report were still relevant This committee produced a set of recommendations knows as the Albers Report, which reinforced the need for the 150-Hour Law A few

curriculum changes were suggested to lessen the number o f hours in general business courses and increase those in accounting (AICPA, 1988)

Lawmakers in a few states were finally convinced of the benefits of increased education for CPA Exam Candidates In the 1970’s, Hawaii and Florida passed legislation that required 150 hours o f education to sit for the CPA exam In 1981, Utah passed a similar law (AICPA, 2002) Although this looked like an encouraging sign for the AICPA, the national organization formed yet another committee to study the issue in

1981 This time the AICPA included accounting faculty from the outset by enlisting the help of the American Accounting Association, the national organization for accounting

academicians The resulting group that formed was named the Commission on Professional Accounting Education (AICPA, 1988) The goal of this group went beyond

studying the benefits of increased education to the profession, to formulating strategies to promote the 150-Hour Law The Commission concluded that legislative intervention was necessary to accomplish its task, and that the AICPA should provide leadership for this movement (Van Whye, 1991)

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Responding to the Commission’s findings, the AICPA budgeted $50,000

annually for the purpose of promoting the 150-Hour Law and unveiled a model accountancy bill for the states to adopt However, the states that had adopted such legislation were having difficulties (Van Whye, 1991) The number of people sitting for the CPA exam plummeted in states where legislation was enacted In Florida, the second state to pass the 150-Hour Law, recruiters from Georgia, which did not have such

legislation, were crossing state lines hiring away the top four-year graduates (Van Whye)

Undaunted, the AICPA appointed a special committee on professional conduct in

1986 (AICPA, 1988) Included in the committee’s plan was the proposition to establish a provision that would require applicants for membership after the year 2000 to have completed a post-baccalaureate education Then, in January 1988, over 20 years after the first AICPA committee recommended increased education for CPAs, 82% of the AICPA membership approved the amendment of the Institute’s By-laws to require a 150-

semester hours of education (AICPA, 1988)

States slowly began initiating legislation that mirrored the AICPA membership amendment that required candidates to have earned 150 hours o f higher education to take the CPA exam In 1991, Nebraska became the fourteenth state to enact the 150-Hour Law The education requirement took effect in 1998, giving institutions and CPA exam candidates a seven-year phase-in period Iowa passed similar legislation in 1992, which took effect in 2001

Reaction to 150-Hour Law

In the early 1990’s most of the accounting education literature regarding the 150- Hour Law was exploratory in nature For example, accounting program chairs and CPAs

mid-1990’s, the research focused on reporting the current state of affairs in accounting programs For example, academics were surveyed about which courses were included in their curriculum and how students were obtaining the additional credit hours By 2000, the year in which the 150-Hour Law became effective for membership in the AICPA, the tone of the literature changed Instead of describing how colleges were changing their programs, the 150-Hour Law was being assessed on its effectiveness Researchers asked

if the additional education was making a difference in accounting graduates

Early 1990’s Accounting programs in states that had passed 150-Hour

legislation now had the task of revising their curricula Sampsell (1992) surveyed accounting chairs of two-year, four-year and five-year programs in Illinois to determine how they were adapting to the change in educational requirements to sit for the CPA exam Overall, the study found above-average support for the 150-Hour Law from all faculty, with the highest support being from those teaching in four-year programs

However, department chairs of four-year programs expressed concerns that the new law might have a negative impact on student retention and enrollment Chairs of five-year programs predicted a positive impact on enrollment as their curricula already included enough hours to meet the requirement Directors of four-year programs surveyed were planning on increasing the number of required courses in accounting, general business and non-business areas For topics such as computer usage, interpersonal and

communication skills, and international issues, however, chairs planned to integrate these areas into existing courses instead of creating new ones To increase involvement in program revision, department chairs indicated the use of faculty committees

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Although Sampsell (1992) focused on accounting programs in one state,Schmidt (1993) surveyed schools in 23 states to determine the curriculum in graduate business and accounting programs Overall trends in state CPA licensing and academic responses to the 150-Hour Law were identified First, most states require an

undergraduate concentration in accounting, with a graduate degree in business or accounting being an acceptable method of meeting the 150 hours In addition, most state legislatures were deferring to the State Boards of Public Accountancy to determine specific course requirements Further, most State Boards indicated broad subject categories instead specific course titles Despite this lack of specificity, a majority of advanced accounting degree programs required more than 60% of their graduate courses

to be in accounting This fact moved Schmidt (1993) to question: “If the motivation for the 150-Hour program was to broaden the academic foundation of students entering the accounting profession, one could question whether we will ever accomplish the goals laid out by the organizations supporting the 150-Hour requirement” (p 40)

Mid to Late 1990’s In 1996, the Journal o f Accounting Education ran a special

issue dedicated to the topic of the 150-Hour Law While most of the articles were based

on opinion rather than research, these pieces provide insight as to how the 150-Hour Law was viewed after its implementation

Wallace (1996) discussed the concern that small schools may not have the faculty depth to offer the necessary accounting courses to meet the requirement However, the author posited one of the underlying principles of the 150-Hour Law was to allow for breadth of education, as opposed to adding more accounting course work Therefore, a

Williams (1996) hoped to stimulate academic research to help accounting programs transition the 150-Hour Law Suggested areas o f research included academic program alternatives, transition problems, advising systems, partnerships with other departments in developing new curricula, and enrollment changes associated with the requirement Skousen (1996) also called for an assessment of the degree to which the Law’s objectives were being met Skousen asked: “What type of education experience is being provided by the additional thirty hours of course work” (p 217)? In addition, Skousen believed the competencies and skills of accounting graduates should be measured Further, the pedagogical question of the amount of time spent on content versus process was identified as another area that should be explored

Perhaps heeding to the call for more research, Novin, Fetyko and Tucker (1997) explored the magnitude of the gap between the perceptions o f accounting educators and practitioners on the proper composition of 150-Hour programs These researchers found that both educators and practitioners ranked the topics of written, verbal and business communications, financial accounting and spreadsheets as very important Furthermore, the topics of computer programming, art history, music and physics were at the bottom of the list

However, ten subjects received significantly higher importance rankings from practitioners than academicians Among these ten, the three most significant differences

in rankings o f importance were the subjects of computer hardware, real estate, and life and health insurance Conversely, accounting educators ranked eight subjects

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significantly higher than practicing CPAs From these eight, two significant differences were the importance of the subjects of international business and international accounting A possible explanation for these differences is that practitioners look for job- specific skills, while educators consider more implicit and long-term benefits o f a subject Novin, Fetyko and Tucker (1997) were more disturbed by the fact that academics ranked some non-accounting areas lower than CPA’s, and concluded that accounting educators may not be aware of the complexity of the business environment as evidenced by the following comment: “Accounting educators may be slightly myopic with respect to

curriculum” (p 348)

Although Novin, Fetyko & Tucker examined specific courses and topics contained within a 150-Hour program, Rumble (1998) took a broader approach and studied if and how accounting programs in the Midwest adapted to the new requirement Twelve-and-a-half percent of respondents from 150 colleges in ten states did not change their accounting program in response to the 150-Hour Law Lack of financial resources and student interest were the most often cited reasons for leaving the accounting program unaltered For the remaining 87.5% of colleges that did change their accounting

programs, the CPA exam requirement of 150 hours was cited most often as the reason for the change, followed by students’ expectations and competition from other schools

Whereas Rumble’s (1998) research focused on the Midwest, Gumming &

Ranking (1999) examined Florida, the first state to pass the 150-Hour Law in 1983 A surplus of accounting graduates existed in 1983 that was caused by students accelerating their coursework to take the exam before the law went into effect However, a sharp decline followed in 1984 that was attributed to students enrolled in graduate programs

increased educational requirement The requirement has had a positive impact on the CPA exam pass rate In 1979,15% of candidates who sat for the exam passed In 1994, the passing rate increased to over 30%.

2000 to present Throughout the 1990’s, aside from some opinion-based pieces in

1996, most of the accounting education literature was neutral and descriptive in regards

to the 150-Hour Law Topical coverage in accounting programs was studied in-depth Commencing in the year 2000, the focus of research appeared to be on assessment Researchers posed the following questions: Is the 150-Hour Law meeting its intended objectives? Are the additional hours producing higher quality graduates? What impact has the law had on the supply of accounting programs and graduates?

Shafer and Kunkel (2001) assessed the effects of the 150-Hour Law by surveyingaccounting chairs in 114 accredited business schools They found that 65% of collegesthat responded did not revise undergraduate programs, but instead encouraged accountingstudents to complete a Master’s of Accounting Therefore, students obtain an

undergraduate degree in that includes 30 hours of accounting, plus obtain additionalgraduate hours in accounting Shafer and Kunkel argued:

This approach is diametrically opposed to the vision o f accounting education presented by the AICPA when it passed the 5-year requirement, which would have modified the focus of undergraduate programs to permit a broader, more liberal education experience (p