"Although able to write journal entries in the baroque style, I was not the world's best industrial accountant, and the annual audit bore witness to this sad fact." He proceeds then to tell us how he worked into "the wee hours of the morning to purge the books of the year's accumulation of errors and omissions." After three years of industrial accounting, Posnak decided to try his hand at public accounting. "Apparently the auditors had had enough of my creative bookkeeping," he observes. "With a sigh of pleasure at the prospect of never having to audit my work again, they accepted me into their ranks."
The study continues with his experiences as an auditor. With complete candor he recounts that "my first year in public accounting was a nightmare and remains so in retrospect. In the first place, I had little formal training in accounting and was ill-prepared for the work. In the second place, the night courses I took to supply this deficiency were in many cases drearily mechanistic, lacking the characteristics of a worthy academic discipline." He continues, "As I tested the ten thousandth transaction, statistically and otherwise, I still knew very little about the accounting profession and its role in society."
The situation improved significantly in the second year. "I began to work with little supervision and a great deal of latitude, and the work was suddenly exciting. Men worked for me on occasion, and it was with some glee that I assigned the test work to them. Mindful of my own recent experiences, however, and taken by the style of the partner with whom I worked, I tried to give them some insight into the nature and importance of the work."
Posnak soon learned that human factors vie with technical ability in creating the successful accountant. "With clients and with colleagues, personality dynamics soon came to be an important part of my job, but the problem was always the same: to reach someone. It was quickly apparent that accountants do not live by competence alone."
A lifetime commitment to learning also emerged as a cardinal need. Posnak observes that "accounting is a learned profession, but in a most peculiar way. Beyond a broad knowledge of accounting, auditing, and taxation, I soon realized that a successful accountant must somehow master a dozen other disciplines, and that a man who seeks the security of a discipline of limited proportions will find no sanctuary in public accounting."
"One day an auditor," he notes, "the next an accountant; tax planner; financial analyst; systems designer; executive recruiter; developer of plans of organization; general business adviser; profit planner; administrator; researcher; writer; statistical sampler; lecturer; salesman; fee-collector; arbiter of staff disputes; arbiter of client disputes; counselor to other tense accountants; Xerox mechanic; soothsayer, sage, seer and saint-the list is quite possibly endless. It became evident that in addition to having a host of technical skills, an accountant must be a generalist par excellence."
While Posnak's experiences in accounting are typical, his mode of entry into the profession is not! In common with other major professions, careers in accounting are generally preceded by formal studies in accounting which culminate in a college degree.
Roots in Education
Accounting practice has been buttressed by formal education from the very beginning. Pacioli, recognized earlier as the inventor of double-entry accounting, was an academic. He taught mathematics and business in Perugia, Rome, Naples, Assisi, and the University of Pisa. As already noted, auditing texts existed in Roman times and accounting has long been a respected academic discipline. Professor Chatfield notes that accounting was part of the Oxford University's curriculum in the 13th century, and it is well-established that accounting studies in the United States were the springboard for schools of commerce and business administration.
"An attempt was made as early as 1851 to found a school of commerce at the university level," according to Professor Edwards. "This attempt was at the University of Louisiana but was apparently abandoned in 1857." Accounting was first taught on a commercial basis at the Bryant and Stratton School in 1853. Other commercial schools of accounting began to appear rapidly along the East Coast in the ensuing years.
The Wharton School of Finance and Economics, established in 1881 through a contribution of $100,000 by Mr. Joseph Wharton, has the distinction of being the first collegiate school of business in the United States. It has been a distinguished school since its founding. This pioneering effort bore fruit during the next twenty-five years in the establishment of departments of commerce and accounts in the universities and colleges.
Today, accounting is taught in most institutions of higher learning which support professional education. Gone are the days when the bulk of those admitted to membership had only high school training. Of those admitted to the profession during the period 1917-1926, 32% had not completed high school, 37% had been graduated from high school, and only 24% possessed a college degree. Today, most states have adopted an educational requirement which serves as a prerequisite for entrance to the profession. California's educational requirement is typical in this respect: "Each applicant must present evidence satisfactory to the board that he meets the requirements set forth in Section 5081 of the Accountancy Act. Satisfactory evidence as to education qualifications will usually take the form of transcripts or photostats thereof, of the applicant's high school and/or college record which should accompany the application. However, in unusual circumstances the board shall accept such other evidence as it deems appropriate and reasonably conclusive. Section 5081 provides that one must either:
- Have a baccalaureate degree from a four year accredited university or college with a major in accounting, or if the major is not accounting, 45 semester units in accounting and related topics. The related subjects include but are not limited to the following subjects:
Economics (credit allowed up to 12 units)
Finance and all business administration subjects (credit allowed up to 18 units)
Accounting and auditing (a minimum of 10 units required)
Commercial law (credit allowed up to 6 units)
Supply and Demand
Computer sciences (credit allowed up to 3 units)
Mathematics & Statistics (credit allowed up to 10 units)
Or
- Have successfully completed two years at an accredited college or junior (community) college and have studied accounting and other subjects for at least four years (60 semester units in addition to the two years in college), of which 45 semester units have been in accounting and related subjects as in Number 1 above.
- Or
- Pass the appropriate test or tests as designated by the board in lieu of four years of college. Presently the board is using Educational Testing Service's "School and College Ability Test"-From UA(SCAT-UA) for this purpose.
Supply And Demand
Leathers and Sanders have studied the supply and demand characteristics for the public accounting sector during the period 1967-1975. A trend toward postgraduate education in accounting is evident and it is at this level where the least disparity exists between supply and demand.
The first placement of students majoring in accounting, average 1920-1967:
- Includes banking, insurance, retail, transportation, hotels, etc.
- Includes those graduates going on to graduate schools.
- Includes military services, lawyers, and other work outside the field of accounting. SOURCE: The survey is summarized by Felix P. Kollaritsch in "Job Migration Pattern of Accounting,"
Commenting further on the demand for accounting graduates with a master's degree, periodic surveys by MBA Enterprises, Inc. show that public accounting firms rank consistently among the top two or three major employers of MBAs nationally. A growing number of the MBAs who arc hired in public accounting specialize in fields other than accounting and Professor McDonough argues for the acceleration of this trend. His argument hinges in part on the need for a broadened perspective and more managerial-as opposed to technical-skill.
The annual salary survey conducted by the College Placement Council indicates a steady rise in the starting salaries for MBAs. Keller's study has shown that starting salaries for accounting majors with the master's degree averages 17% higher than with the baccalaureate degree. Hence, in 1973 starting salaries for accounting majors with the master's degree averaged about 514,000 versus $12,000 for those with the bachelor's degree. The comparable figures in 1966 were $8700 and $7500, respectively, which represents a compound growth rate of about 6.2% per annum.
