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Assessing the Impact of the AICPA Model Tax Curriculum on the First Tax Course Taught at AACSB-Accredited Institutions
Editor:
Jane T. Rubin, CPA
Director of Accounting Accreditation
American Assembly of Collegiate
Schools of Business
St. Louis, MO
Editor's note: Ms. Rubin chairs the AICPA Tax Division's Tax Education Committee. Ms. O'Neil and Messrs. Weber and Harris are members of the committee. If you would like additional information about this article or a copy of the complete survey results, contact Cherie O'Neil at coneil@lamar.colostate.edu.The Tax Education Committee is planning a follow-up study in Fall 1999. This study will solicit tax practitioner views on tax education.
Almost a decade ago, the Tax Education Committee considered the content of undergraduate tax education and found it in need of improvement. The concern then was the topical coverage, especially in the first tax course. In the Committee's view, first tax classes emphasized individual taxation, with far too little focus on business transactions. Such concerns are consistent with the recently publicized AICPA vision, which emphasizes broadening the CPA practitioner's scope.
At the time of these initial discussions, the perceived coverage problem in the first course was mitigated by the second tax course that most programs offered on a required or elective basis; this course generally focused on business transactions and corporate and partnership entities. However, in the late 1980s and early 1990s, as the large accounting firms pushed for students to acquire more nontechnical skills, the second tax course was dropped by a number of schools. This once again raised concerns about first course content. In response, the AICPA formed a task force whose charge was to develop a Model Tax Curriculum at both the undergraduate and graduate levels. They were specifically charged with developing content recommendations for a single, stand-alone undergraduate tax course. The content recommendations were published in 1996 as part of the AICPA's Model Tax Curriculum.
The task force and the Tax Education Committee undertook to communicate their recommendations to tax educators. The goal of this communication was twofold:
Two task force members, Jack Oppenheimer (Geller, Ragans, James, Oppenheimer & Creel) and Caroline Strobel (University of South Carolina) devoted significant effort to communicate the Model Tax Curriculum to the academic community. Both attended numerous academic meetings and presented and lobbied for the task force recommendations both before and after curriculum publication.
This effort has clearly had some effect. Textbooks have been changed to allow the teaching of the recommended course content, and some tax educators have changed not only what they teach, but how they teach the first tax course. The question of how much has changed in the courses themselves is, in part, the subject of the survey discussed in this column.
Survey
This survey was designed to determine the impact of the AICPA's Model Tax Curriculum on the first tax course offered by colleges and universities. A questionnaire was mailed to 307 American Assembly of Collegiate Schools of Business (AACSB)-accredited colleges and universities that had at least one faculty member with a teaching or research interest in taxation, or both (as listed in the On-line Prentice Hall Accounting Faculty Directory compiled by James R. Hasselback). Those surveyed returned 110 questionnaires, a 36% response rate. The responses were from 41 states and appear to be a reasonable national sample.
Results and Analysis
Over 50% of students take the first tax class in their Junior Year (see Exhibit 1). Approximately 80% of the schools surveyed offer only one or two sections of the first tax class each semester and have fewer than 90 students enrolled in all sections (see Exhibit 2). Approximately 70% of the schools use tenured or tenure-track faculty to teach the first tax course; the remaining 30% use adjuncts. (Only one school indicated that the first tax course was staffed with doctoral students.) Thus, the first tax class is taught primarily by tenured/tenure-track faculty, with few schools using only adjunct instructors.
Over 80% of the schools require only one tax course in their accounting major, but approximately 75% offer more than one undergraduate tax course (see Exhibit 3). In addition, over 70% of accounting majors take more than one undergraduate tax class (see Exhibit 4). At only 8% of the schools surveyed is the first tax course required for other business/nonbusiness majors and only 15% offer a separate course for nonaccounting majors. This suggests that, at institutions in which low enrollment in tax classes is an issue, offering classes that are attractive to nonaccounting majors should be considered.
While the focus of the first tax course remains predominantly on individual taxation (as discussed below), some changes have occurred. In the first tax course, over 80% of the schools surveyed cover individual tax topics and over 70% cover tax concepts, while in the second tax course, only 11% cover individual tax topics and 30% cover tax concepts (see Exhibit 5). Interestingly, 37% of the schools surveyed also cover the taxation of business entities in the first tax course, which may be due to the Model Tax Curriculum's impact. Tax compliance dominates course content, with 90% coverage in the first tax course and 46% coverage in the second tax course. Almost all respondents (97%) devote some class coverage to technical material in the first tax course. In the second tax class, 72% of the respondents devote some class time to technical information. When other topics (such as tax procedure, tax research and the impact of taxes on business decision making) are covered, less than 20% of class time is devoted to them. Thus, the content of the first tax course remains dominated by technical information focused on tax compliance topics relevant to individual taxpayers.
To measure the impact of the AICPA's Model Tax Curriculum on the first tax course, questions regarding curriculum revision were asked. Almost two-thirds (63%) of the schools responding to the survey indicated that the content of the first tax course was revised within the last three years (see Exhibit 6). When the curriculum had been revised within the last two years (i.e., after publication of the AICPA Model Tax Curriculum), 18% of the respondents indicated that the revision was influenced by the Model Tax Curriculum (see Exhibit 7). However, other sources (such as the AACSB, students, recruiters and other faculty) were mentioned more often (26%) and the instructor's influence was mentioned most often (56%). Nonetheless, even though other factors were mentioned more often, respondents indicated that, on average, such factors had less influence on their decision to revise the course than did the Model Tax Curriculum. Additionally, the influence of the Model Tax Curriculum may be understated in these statistics, because it was given considerable publicity over an extended period prior to its publication, and may be reflected in other categories, particularly "instructor's influence."
Another way to measure the impact of the AICPA's Model Tax Curriculum is to examine how schools' coverage of specific subject areas has actually changed. The responses were subjected to multivariate analysis to determine whether schools revising their first tax course were moving in directions consistent with the Model Tax Curriculum's suggestions, and to what extent the Model Tax Curriculum may have influenced those revisions. Two major differences between the Model Tax Curriculum and the "traditional" first tax course are the Model Tax Curriculum's greater emphasis on business entities and its reduced focus on individual taxation. After controlling for a number of other possible differences in respondents' schools (such as number of students and tax courses offered, and the percentage of tenured faculty), the results indicate that schools are revising their curriculums and placing greater emphasis on business entities and less on individuals. Further, the more importance the respondents placed on the Model Tax Curriculum in motivating such revisions, the greater their change in this direction. Other possible influences on changes to the first tax course were also identified; almost 50% of the respondents indicated that technology has motivated change (see Exhibit 8), while 36% indicated that changes in tax texts was a factor (see Exhibit 9).
The method of content delivery in the first tax class is still primarily lecture, with only 3% of the respondents not using this format. Less than 26% of those who indicated that they use the lecture format limit class time spent on lectures to less than 35%; 74% spend more than 40% of class time lecturing. Problem solving is also a popular method of delivery. While only 23% of the respondents spend more than 40% of class time working problems, the remaining 77% spend between 20%35% of class time working problems. More than half of the respondents indicated that they spend no class time on group work. When time is devoted to group work, it never exceeds 35% of class time. More than two-thirds of the respondents indicated that they spend class time on hands-on computer work, but no instructor spends more than 35% of class time with students at the computer. Fewer than 20% of respondents use student presentations, guest lectures, videos or movies. When these alternate methods of classroom instruction are used, their use never exceeds 35% of class time. Thus, the instructional pedagogy used in the first tax class is primarily the traditional lecture supplemented by problem solving. Active learning techniques (such as group work, hands-on computer work or student presentations) and alternative methods of delivery (such as guest lectures and multimedia presentations) appear to be used less frequently.
Tax practitioners rely heavily on electronic tax research databases for doing tax research. Indeed, many CPAs boast that they no longer maintain "paper" tax libraries. A majority (55%) of respondents indicated that they use tax research databases in the first tax course; conversely, 45% do not use such databases (see Exhibit 10). The most popular database is CCH Access, followed by RIA's OnPoint/CheckPoint databases, Lexis-Nexis and finally, the BNA portfolios; approximately one-fourth of the schools surveyed use some other electronic database. (The reasons for this usage pattern and whether it is representative of practice needs would seem to merit future investigation.)
The final survey question asked if tax educators promoted taxation as a career choice; a large majority of respondents (67%) indicated that they did. There did not seem to be any one particular way of encouraging students to consider a career in taxation; most respondents indicated that they did so by telling "war stories" (relating their own experiences). This also seems like an opportunity for the AICPA to develop instructional/promotional materials to encourage more students to consider a career in taxation. Multimedia presentations, such as the AICPA's RoomZoom, focusing on tax careers, could be developed and distributed free of charge to tax educators.
Conclusion
For tax education to be relevant to the practice of accounting, the content of tax classes must be relevant to accounting practice. The tax curriculum needs to be continuously updated and revised to meet the changing needs of the accounting profession. As more and more CPA firms redirect their tax compliance efforts to tax consulting, the content of the undergraduate tax courses needs to be focused more on the "big picture" and less on technical tax compliance. As the sophistication of computerized tax preparation programs increases to handle the more technical aspects of compliance, the tax practitioner can focus more on tax planning to minimize the client's tax liability. Certainly, the complexity of the tax laws will increase as Congress enacts more tax incentives, and the role of the tax practitioner will continue to shift from compliance to consulting. The mission of tax educators is to ensure that students receive the training they need to act as trusted advisers to their clients. In this respect, the Model Tax Curriculum appears to be having a significant, positive impact on tax education.
From Cherie J. O'Neil, Ph.D., CPA, Colorado State University, Fort Collins, CO, Richard Weber, Ph.D., CPA, Michigan State University, East Lansing, MI, and David Harris, Ph.D., CPA, Syracuse University, Syracuse, NY
