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CHARTING THE FUTURE Bachelor of Science in Business Administration Department of Accounting November 26, 2003 PART I: PAST: REFLECTING ON THE ACCOUNTING DEPARTMENT’S HERITAGE History and Development of Program/Service Colorado State College of Education began offering accounting courses fall quarter of 1941 in conjunction with the National Defense Program of Education in Accounting and Clerical Skills. As the Business Education Department evolved, a Business Education Major with a specialization in accounting resulting in a Bachelor of Arts Degree was added during the 1965- 1966 academic year. This degree was dropped from the curriculum in 1974-1975. During the 1967-1968 year, a Bachelor of Science Degree with a specialization in accounting was added to the curriculum. The specialization and the Accounting Department were approved under the State Accountancy Law of Colorado, and students completing this degree qualified to take the CPA Exam. The undergraduate program in accounting was accredited by the American Assembly of Collegiate Schools of Business (AACSB, International) in 1991-1992, and has retained its accreditation to this day. The accounting program was the first publicly funded accounting program in Colorado to receive the accreditation joining the University of Denver as the only two accredited programs in Colorado. The information below is reported in two time segments, 1992-1997, taken from the AACSB self-study, and 1997-2002, taken from institutional research. The Accounting Department enrollments have been stable. From 1992 through 2002 accounting emphasis enrollments have ranged from a low of 196 in 1998-1999 to a high of 249 in 1994, with an average of 224 students. The majority of students have been traditional and Colorado residents. From 1992 through 2002, 86% of the students were full-time students and a majority were recent high school graduates. Between 1992-1997, 90% were Colorado residents. This has dropped slightly to 87%. The number of minority accounting majors has been trending upward. From 1992 to 1997, 11% of accounting emphasis students were of minority origin, whereas, from 1997 to the present the number of minorities has increased to 18%. Since 1992, 56% of the students have been female and 44% male, on average. The number of total degree recipients from 1992 to the present has averaged 42 annually. Historically, the Accounting Department has attracted very high quality students who have performed well at the University. The average cumulative GPA for all accounting majors and degree recipients from 1997-1998 through 2001-2002 was 3.02 and 3.14 respectively. Although it is no longer available, one of the measures used by the Accounting Department to assess student quality was the AICPA Level II Exam published by the American Institute of Certified Public Accountants (AICPA). It measured a student’s knowledge in five accounting subject areas. According to the AACSB self study report covering 1992-1997, “Since 1994-1995, UNC accounting students have been at or above the national norm in every assessment area of this exam, with one close exception in Auditing in 1995-1996.” The exam was discontinued by the AICPA in 2001. The uniform CPA Exam is another assessment measure that has been used by the Accounting Department. UNC accounting graduates have compared favorably with other undergraduate candidates writing for the first time as indicated in the following table. UNC candidates exceeded the national average, which includes candidates with masters degrees, on half the exams from May, 1997 through November, 2002, and exceeded the undergraduate average on 58% of the exams during the same time period. Groups UNC AACSB All Programs National Level(s) UG UG UG UG & GR Time Periods 1992 – 2002 1992 – 1995 1997 – 2002 1992 – 2002 Pass Rate 25% - 80% 39% - 55% 37% - 48% 39% - 51% The ETS Exam is a third assessment tool that has been used by the Accounting Department. From 1992-1993 through 1996-1997 an average of 84% of accounting students exceeded the national mean. This high performance has continued with UNC accounting students exceeding the national average on all parts of the exam for the most recent time period (Fall 2003). UNC accounting majors have been professionally active outside the classroom. The Theta Psi Chapter of Beta Alpha Psi (BAP) was installed in May 1996, and has received national recognition as a Superior Chapter in four of the past five years. In addition, the chapter was national runner-up in a BAP brochure contest in 2001-2002. In 1997, the department began sending four-member undergraduate teams to the Arthur Andersen Tax Challenge (subsequently renamed the Deloitte Team Tax Case Competition). The teams from 1997-1998 and 1998-1999 became national finalists finishing higher than students from accounting programs at the University of Michigan, The Ohio State University, and the University of Texas, to name but a few. The Accounting Department has always been known for its job placement of graduating seniors and has worked closely with Career Services. From 1992 through 1997, 81% of graduates were employed, attending graduate school, or not seeking employment. This was supported by a Career Services survey completed eight months after each graduation term. The survey reported that accounting majors were employed in their preferred field at a much higher rate than the University average. Data gathered from 1997 through 2002, revealed that, on average, 88% of accounting graduates have been employed in their preferred field. Eighty-five percent reported they were employed in a position related to their program and 81% were employed in Colorado. Furthermore, 92% believed the program enhanced their ability to get/keep their job, and 90% believed the program met their educational goals. The accounting faculty has consistently met the stringent AACSB requirements for being academically/professionally qualified and instructionally current since 1992. All faculty members were professionally certified, with either the C.P.A. or C.M.A. designation. PART II: PRESENT DESCRIPTION The Accounting Department is one of five departments in the Monfort College of Business (MCB) which offer an undergraduate B.S. degree in Business Administration within an emphasis area. The Accounting Department and MCB are both AACSB accredited, which is the highest level of business and accounting program accreditation available in the United States. The Accounting Department recognizes the significance of its mission, vision, and the importance of its program objectives. What the Department does today and what it must do in the future are shaped by what it seeks to accomplish as described in the next two sections. As the business world and the accounting profession continue to evolve, the Accounting Department must adapt to the changing needs of its constituents. Accounting Program Mission and Vision Statement (In the process of being revised.) The Accounting Department mission is to deliver high quality instruction that prepares students for entry into a wide variety of accounting and business careers, or to enter graduate school. Its vision is to build an excellent reputation for preparing accounting professionals and business leaders for Colorado and beyond. Accounting Program Objectives The accounting program's primary objective is to facilitate the development of broadly educated graduates. Accordingly, the accounting program's curriculum objectives are to assure that graduates possess the following: • Broad liberal arts background • Broad understanding of the functional areas of business, including finance, marketing management, and information systems • Concepts and technical accounting knowledge • Concepts of technology management • Ethical dimension of business and accounting • Global dimension of business and accounting • Written and oral communications skills • Strategic and critical thinking skills • Interpersonal and leadership skills • Research skills In addition to the knowledge and skill objectives above, the accounting program will: • provide placement assistance, • prepare graduates to take and pass the CPA and other professional exams, • provide high quality instruction, • provide a supportive learning environment, • maintain small class sizes and professional physical facilities, and • employ instructionally current and professionally or academically qualified faculty. External and Internal Demand for Program The demand for accounting majors declined throughout the 1990s, but the demand has steadily increased since 2001. Much of the decline in demand during the 1990s was due to increased efficiencies in business practices, increased salaries in other business fields, such as CIS, and the shift away from technical fields, such as accounting. All businesses need good accountants. This, coupled with recent federal legislation, has increased the need for more accountants. The demand for accounting majors should continue to increase over the next decade. Quality of the Program Inputs and Outcomes Faculty The Accounting Department currently has seven full-time and one part-time faculty member. The part-time member retired in Spring 2003 and will end her teaching duties at the end of this semester. An additional tenured faculty member will retire at the end of spring semester 2004. Accounting faculty members are committed to the Department and are dedicated professionals. All but one of the current faculty members have been at the University for over 12 years. All of the accounting faculty members are academically or professionally qualified with either terminal degrees or the necessary professional experience. All are Certified Public Accountants and instructionally current in their fields of teaching. Each faculty member teaches nine to twelve credit hours and generally has at least two preparations. Everyone teaches Principles of Accounting I (BAAC 220) or II (BAAC 221) and additional upper level classes in at least one specialty area. Typically accounting programs prepare accounting majors for entry into the accounting profession. The broad areas of accounting specialty are: financial accounting, managerial accounting, auditing, tax, accounting information systems (AIS) and government/not-for-profit. Each broad area of accounting is a complex area of knowledge and requires faculty to specialize. All of the faculty are actively involved in research and scholarly activities. Below is a table that reflects the Department’s research and publication record from 1998 to 2003. ALL ARTICLES, REFEREED ARTICLES PROCEEDINGS, BOOKS, & PRESENTATIONS 32 total 93 total Average 4 per faculty Average 11 per faculty member member The Accounting Department received the UNC Service Recognition Award in 2001. Individual faculty members are involved in service activities within the Department, College, University, profession, and community. Their service activities include: MCB Technology Committee; Faculty Senate; Faculty Senate Executive Committee; Salary Equity Committee; faculty advisor to the Beta Alpha Psi/Professional Accounting Association; faculty advisor to the Beta Gamma Sigma Honorary Business Society; faculty advisor Deloitte Team Tax Case Competition; Delta Chi Academic Advisor; Faculty Affairs Committee; University Scholarship Committee; Board of Athletic Control; American Accounting Association; American Taxation Association (Nominations and Technology Committees); Colorado Society of CPAs (various committees); Financial Executives International; College Credit Union Supervisory Committee; Hospice and Palliative Care of Northern Colorado (Board of Directors, Finance, Bereavement, and Parents Who Have Lost Children Committees); Weld County Partners; AIS Educators Association (Founder and Board of Directors Member); Hispanic Chamber of Commerce Small Business Loan Committee; Unitarian Universalist Church (Accountant and Budget Committee); and Accounting Advisory Board at Aims Community College. In recent years individual faculty members have been recognized for their service and contributions including: the 2003 Colorado Society of CPAs (CSCPAs) “Making a Difference” Award; CSCPA’s Outstanding Accounting Educator Award; MCB Scholar of the Year; MCB Professor of the Year; MCB Instructional Awards; Mortar Board Professors; Honors Program Advisor of the Year; Golden Key Honor Society Advisor of the Year – Mountain States Region; UNC Service Award: and UNC Advisor of the Year. As a group, the accounting faculty members are actively involved in research, service to internal and external constituents, and providing high quality instruction to their students. Curriculum The accounting curriculum is deployed within a 120 credit hour degree program, of which 60 credit hours are required outside the Monfort College of Business. Of the 60 business credit hours, 51 credit hours are required business courses and 9 are electives. Principles of Accounting I (BAAC 220) and II (BAAC 221) are required of all business majors and are taught by all accounting faculty. Accounting majors are required to take 24 credit hours of upper level accounting courses. These courses are: BAAC 320 Intermediate Accounting I, BAAC 321 Intermediate Accounting II, BAAC 323 Cost and Managerial Accounting I, BAAC 328 Accounting Systems, BAAC 420 Advanced Accounting I, BAAC 421 Advanced Accounting II, BAAC 425 Auditing I, and BAAC 428 Income Tax I. The Accounting Department offers five accounting elective courses: BAAC 324 Cost and Managerial Accounting II, BAAC 426 Auditing II, BAAC 429 Income Tax II, BAAC 326 Governmental and Not-for-Profit Accounting, and BAAC 298 Fraud Examination and Forensic Accounting. The accounting curriculum has remained current with technology. Most of the courses include a variety of computer technology tools. Students have access to the current professional literature through a variety of databases such as CCH’s Financial Accounting Research System, CCH’s Tax Research System, and the AICPA’s Resource Online which includes Statements on Auditing Standards and Statements on Accounting and Review Services. The classrooms have state of the art technology with full access to the internet and many software packages. Students The undergraduate accounting program has a strong reputation and is very successful in attracting quality students, educating them, and placing them in high quality accounting positions. The average ACT score for entering freshman in Fall 2003 was 23 and the average SAT score was 1138. The accounting students have a Beta Alpha Psi (BAP) Chapter and a Professional Accounting Association (PAA). These two organizations are combined into one functional group. The Beta Alpha Psi chapter has consistently received an award for Superior Chapter by the national organization. The group provides community service to a variety of external not-for-profit groups and provides numerous activities to the accounting majors. They participate in VITA, the Volunteer Income Tax Assistance Program that assists in preparing income tax returns for specific groups in Greeley. The students provide tutoring services for the Principles of Accounting students. BAP/PAA also hosts a “Meet the Firms Evening” and an “Opportunities in Accounting Careers Day” each year. They host weekly meetings with many different professionals from a wide variety of companies and organizations. Tax students participate in the Deloitte Team Tax Competition. This participation is a nationally invited competition. Students who participate receive a scholarship to the University of Denver’s Graduate Tax Program. Accounting enrollments have been steady. The following table indicates that enrollments have been in the range of 188 to 217 since 1998/1999. Year 98/99 99/00 00/01 01/02 02/03 03/04 Enrollment 196 217 215 208 188 183 The following tables provide information on the credit hour production of the Accounting Department by lower and upper level classes. Year 98/99 99/00 00/01 01/02 02/03 100/200 Level 2523 2622 3003 2928 2598 300/400 Level 1323 1473 1465 2031 1806 Total 3846 4095 4468 4959 4404 The degrees granted for the 1998/1999 to 2002/2003 fiscal years have remained steady. Year 98/99 99/00 00/01 01/02 02/03 Degrees 43 36 38 32 47 About 30 to 40% of accounting graduates take the CPA exam. The pass rates on the Uniform CPA exam for first time candidates have ranged from a high of 30% to a low of 0%. The rate on passing at least one part of the exam is approximately 80%. As a result, most students that are serious about passing the CPA exam do so in one to three sittings. Although data is not available, anecdotal evidence suggests this pattern. Placement rates have been very positive. Generally, over 90% of the students are placed within three months of graduation. The pattern of employment over the years has been approximately 50% employed in CPA firms, 40% in private industry positions, and 10% in graduate programs or government positions. There are over 20 companies and organizations that recruit accounting majors on campus. They range from the Big Four CPA firms, Deloitte; KPMG; Ernst & Young; and PricewaterhouseCoopers; to national CPA firms, such as Grant Thornton; and Clifton Gunderson; to local CPA firms such as Anderson and Whitney; Kennedy and Coe; GHP Financial; Anton, Collins, and Mitchell; and many more. The GAO, IRS, Colorado State Auditor’s Office, and Colorado State Department of Revenue are examples of governmental organizations that recruit accounting majors. Students have gone on to graduate school including programs at the University of Denver, CU-Denver, and CSU. PART THREE: IDEAS FOR THE FUTURE Section 1: Ideas for the Future of the Accounting Department The UNC Accounting Department strives to achieve three overall goals in today’s environment as well as into the future. These goals are to: • attract high quality students into the accounting program, • deliver a high quality educational experience to prepare them to enter the accounting profession and be successful, and • provide students with job placement opportunities of their choosing, that are indicative of the quality of the accounting program. The professional world that accountants work in today is dynamic and the core body of knowledge for every entry level accountant is increasing. The educational requirements for an accounting emphasis are more than a 120 credit hour program provides. We believe there are three major movements that are influencing the direction of accounting education and impact the accounting program at UNC. These three major movements are: technology, the Sarbanes-Oxley Act, and the 150 credit-hour requirement to become a CPA that has been adopted in by nearly all states. Technology Since the beginning of the 1990s, technology has dramatically influenced and changed the world in which accountants work. Organizations use technology and accounting information systems (AIS) to capture, process, and produce financial information. In addition to working within AISs, accountants are involved in the design and implementation of these systems. They are also involved in the auditing of AISs, whether they are internal or external auditors. Moreover, many accountants are involved in analyzing the results and assisting management in making rational business decisions to manage, direct, plan, and control the resources of an organization. Finally, many accountants are involved in using current technology in providing tax advice to their companies or to their clients. The Sarbanes-Oxley Act Another major set of events that has influenced the accounting profession are the recent accounting scandals, such as Enron and WorldCom. These events have led to major federal legislation, referred to as the Sarbanes-Oxley Act. These events have demonstrated how complex business environments have become. They have also placed a renewed emphasis on ethics in the profession as well as the accountant’s/auditor’s responsibility for detecting and reporting fraud and material misstatement in an organization’s financial statements. Furthermore, CPAs are becoming responsible for assisting management of publicly-held companies in evaluating their internal control structures since management has to report on the effectiveness of their internal controls to the SEC. CPA Exam Requirements: 150 credit hours in 43 states UNC’s Accounting Program is an undergraduate Bachelor of Science (BS) degree in Business with an emphasis in Accounting, which requires 120 credit hours. Currently, in most states, 150 credit hours are required to obtain a CPA certificate. We believe students need to be prepared for this requirement in order to have mobility within the accounting profession as well as having the knowledge to enter and excel within the profession. In addition, the new CPA examination format, starting in 2004 will be developed for students with 150 hours of education. Suggestions for the Future of the Accounting Department at UNC Currently, the primary mission of the UNC Accounting Program is to facilitate the development of broadly educated graduates with an emphasis in accounting. Graduates are prepared to enter a wide variety of accounting and business careers or to enter graduate school. The program emphasizes high-quality instruction and interaction among students, faculty, and the professional community. The suggestions presented encourage the development of a graduate program, creating a placement director in MCB to attract high quality employers, and to develop an environment of more interaction and integration across disciplines. Suggestion #1 Attracting quality students into the accounting program and MCB is a high priority. This necessitates having quality placement and quality recruiters hiring UNC graduates. The Accounting Department has done an excellent job attracting quality CPA firms to UNC. The department and MCB need to attract a wider array of employers from industry and government. A placement director in MCB is needed to work directly with potential high-quality employers to hire students. This person would be responsible for identifying and networking with corporate employers to build a larger base of potential employers who will hire accounting and other business majors. Faculty must be involved in the building of employment contacts. Strong employment ties can only be accomplished if the MCB leadership and faculty are fully committed to making the college a premier employee source for Colorado, regional, and national employers. Suggestion #2 An opportunity exists to create a niche in attracting students to public accounting by placing more emphasis on passing the CPA Examination and other professional exams. The Department should strive to have the highest pass rate on the CPA examination of all schools in Colorado. This goal is attainable and requires faculty members to emphasize competencies required for the exam in the courses taught. These competencies are articulated in the AICPA Core Competency Framework for Entry into the Accounting Profession (the Framework). The Framework supports a paradigm shift from a content-driven to a skills-based curriculum. Suggestion #3 The Accounting Department should develop an innovative degree in accounting to better prepare students for entry into the public accounting profession. Colorado is one of only three states that does not require 150 hours to sit for the CPA examination. Eventually Colorado will also require it. The new degree may involve offering a masters degree. The emphasis would be on passing the CPA exam, obtaining internship credit, and providing a unique opportunity for those who choose this path. Most of the existing courses would be retained. Several new courses would be added. The program would allow flexibility to encourage students to incorporate other areas such as Computer Information Systems, Finance, and Business Law into their program. The goal would be to provide students that obtain 150 credit hours with a degree as well as an improved chance of passing the CPA exam and an opportunity to gain practical experience. The program would better prepare the students to deal with the ethical and other professional issues that have been created with the Sarbanes-Oxley Act. Opportunities to partner with other programs at UNC should be pursued to develop other unique master degree programs. For example the Accounting Department could partner with the Criminal Justice Department to create a graduate forensic accounting program. Another opportunity to better prepare students is to develop a comprehensive internship program. One of the issues that the current Accounting program faces is that many accounting internships are available from January to April, the busy season for most CPA firms. Students that desire to obtain an internship during this period often need to withdraw for a semester. This situation creates several drawbacks for students. It slows their progress toward graduation and it may have financial aid consequences. To complement the internship program, faculty could deliver courses in a nontraditional format such as a five week course starting the beginning of April and running through the end of the semester. This process, along with offering upper division summer courses, would allow students to take an internship and still progress toward their target graduation date. Suggestion #4 Improve the technology area of the department. The first possibility is to hire a new faculty member in accounting that can address both the accounting and computer information systems. This individual would be responsible for addressing technology issues from both accounting and Computer Information Systems (CIS) perspectives. Improve interdepartmental interaction and communication. Currently departments are being stretched to the limit delivering their own programs, and do not have the resources or faculty to deliver interdisciplinary courses. Departments need to strive to develop a more interdisciplinary and integrated curriculum. Interdepartmental interaction and cooperation should be encouraged in the Accounting Department and throughout the MCB. Create a minor in accounting to support and strengthen other business and non-business programs. Additional course work in accounting often provides students with more marketable skill. New courses may have to be developed and staffed to provide a curriculum that would support the needs of students enrolling in the accounting minor. Section 2: Ideas for the Future of MCB and the University UNC and the MCB need to address the role of Department Chairs. It is time to decide if the department chair is an extension of the administration or an extension of the faculty. Department chairs are called on to lead departments and faculty, they are asked to develop and build programs, and at the same time they are not given the authority to make decisions related to curriculum, finances and faculty within the department. Greater authority would mean they should be held to a higher level of accountability for how well the department operates and for the success and/or shortcomings of the department/program. A new compensation system needs to be developed to properly evaluate and compensate them for their new responsibilities. Currently, department chairs are caught between being faculty and administrators. In most cases, they are evaluated under a faculty model rather than a manager model. They are the individuals who should provide department leadership. The University and the MCB must revise its overall faculty evaluation model and processes. Currently the University and the MCB tend to have a one size fits all workload allocation and evaluation model. In many cases, this does not encourage faculty to use their skills and limits individuals from building on their strengths. The current system does not adequately reflect the contributions and responsibilities of individual faculty members. Individual strengths of faculty members should be incorporated into the workload allocation model. Establish teaching and learning centers in all of the colleges. UNC emphasizes that it is a teaching and learning University but only a minimal amount of resources are allocated to incorporating improved learning and teaching models into the classrooms. Teaching should be the most important element of a faculty member’s professional career and must be rewarded in the evaluation system. The MCB has achieved regional recognition as a quality undergraduate business program, but it will be difficult to achieve national recognition without an excellent graduate program. An excellent graduate program would allow competition on a broader scale. A high quality graduate program that is adequately marketed would help attract quality faculty, students, and employers.
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