Essay/Term paper: The cpa of the 21st century

Essay, term paper, research paper:  Management

Business practices have changed during the past millenium. Businesses have

evolved over time from bartering goods and riverside trading, to small local

stores, mega malls, and business over the Internet. Through all these

changes, companies needed to keep records of their equity, assets,

liabilities, and cash flows in order to remain competitive in their field.

Accounting standards have also changed over the years, through FASB, CAP, and

APB, issuing updated efficient standards called GAAP. Due to the drastic

changes in the business world, CPA requirements for the twenty-first century

are being updated to reflect current business demands; these changes will

affect undergraduates, graduate students, and professionals in the accounting

field.

Requirements for sitting for the CPA exam are changing in Ohio as well as in

other states. William Bentz, OSU Professor and Legislative Task Force Member

says, "A total of 41 states, including New York, Florida, Ohio, Illinois, and

Texas have passed similar legislation.1" The change requires candidates to

have 150 semester hours or 225 quarter hours, a college degree, and the

equivalent number of credit hours needed for an accounting major to sit for

the CPA exam. This requirement will begin in Ohio with the May, 2000

examination. Any candidate who began the CPA exam process on or before

November 1999 will be covered under the old exam requirements. However, in

order for candidates to be successful in the accounting field, further

education will be needed to adapt to changing business standards and to

compete with accountants who passed the exam under the new requirements.

There are many reasons for the implementation of the 225-hour requirement.

Donald Tidrick, Senior Lecturer University of Texas says, "In 1989 a

publication was issued from the Big Eight Accounting Firms to Higher

Education. The point of the publication was to inform higher education

personnel that students were not learning the right methods and skills needed

in the accounting field.2" Since then changes have been made in the business

track curriculum. Team projects and presentations in class develop written,

verbal, problem solving and interpersonal skills. There is a need for

accountants to relate to more broadly educated executives and operate in a

more complex environment. Accounting firms have a desire to sell more

value-added services to their clients in order to remain competitive. The

AICPA web page states, "With increased demands on CPAs to offer diversity in

the business world for clients, the 225-Hour Requirement is necessary to be a

broadly prepared Certified Public Accountant.3" CPAs of the twenty-first

century must be well educated, possess superior accounting skills, and strive

for excellent quality work in order to remain competitive in the accounting

field.

The requirement increase of 225-quarter hours can be acquired in three

different processes: The hours can be accumulated by obtaining a master's

degree, pursuing a second undergraduate major or minor in any field relevant

to the student's career goals, or taking extra courses in areas of interest

to the student. The method in which the candidate earns the extra hours to

sit for the CPA exam is up to his or her discretion; however, the hours must

be earned in order to qualify.

Undergraduate students have multiple pathways to choose from in order to

fulfill the 225-quarter hour requirement. Students may decide on a five-year

accounting program that is offered at many universities in the United States.

William Bentz said, "Ohio State should have their five year accounting

program activated by September 2000.4" Students may also pursue an

undergraduate accounting degree, and then proceed to a masters program. A

final option for the undergraduate student is to achieve the accounting

degree, and then decide on another major, minor, or elective courses to

fulfill the requirement. Finance and Management Information Systems are two

majors that compliment an accounting degree. Which pathways the

undergraduate student chooses is not of great importance; the key point is

that the student must be well-educated and well-diversified in order to

succeed in the accounting profession.

Graduate students enrolled in a masters program have many options and may

gain valuable benefits. A masters degree in accounting will develop enhanced

technical expertise. A masters degree in business administration will

provide a tremendous amount of business knowledge useful in all areas of

accounting. Other masters degrees will provide the student with a

well-diversified education. Many benefits may result from the completion of

a masters degree. The AICPA web page states, "A graduate education provides

higher rates of success on the CPA exam, starting salaries normally ten to

twenty percent higher, and promotions are increasingly being awarded.5"

Although graduate education requires time and money, the benefits that follow

far outweigh the costs.

Professionals in the accounting field who have not taken the CPA exam but

have the desire to, will need to take the exam by November, 1999, or take

classes to fulfill the requirement. Robert Goldie, Tax Partner

Pricewaterhouse Coopers said, "Many firms like Pricewaterhouse Coopers have

programs that fund further education for employees and potential employees.6"

Higher education is needed throughout ones career in order to stay current

with changing educational curriculums, skills, and standards.

With the business environment becoming increasingly complicated, certified

public accountants must meet new challenges when making critical business

decisions. Prospective CPAs need to have a broad educational base that

includes accounting and business knowledge and develops the skills needed for

the continued growth in a fast and changing global economy.