Tax Practitioners’ Response to Education Survey

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. Koplin and Mssrs. Porter, Sheriff and Totten are all members of the committee.

In 1996, the task force that developed the AICPA's Model Tax Curriculum made recommendations to tax educators for changing tax course content. These recommendations were published as part of the Model Tax Curriculum. In 1999, the AICPA Tax Education Committee designed a survey to determine the recommendations' impact on the first tax course offered by colleges and universities.

The article, "Assessing the Impact of the AICPA Model Tax Curriculum on the First Tax Course Taught at AACSB-Accredited Institutions" (see TTA, August 1999, p. 596), presented the results of the survey and discussed several conclusions about the impact of the recommendations since their publication in 1996.

This article presents an interpretation of the same survey results by several tax practitioners who were interviewed for this article or who serve on the AICPA Tax Education Committee or both. It also offers some insight into, and reactions to, the August article and makes recommendations from a practitioner's viewpoint.

Background

During the 1970s, the AICPA (and tax practitioners in particular) addressed the impact of the world's changing business needs on the tax profession. They looked beyond the profession's traditional attest function and focused on providing "business advisory" services. As a result, the accounting profession has evolved its scope to include consulting, in order to meet the needs of today's fast-paced, global business environment. This shift required the development of strong technical skills, a broad knowledge of business and industry functions, strong interpersonal skills and technology proficiency. The Model Tax Curriculum and, more recently, the new AICPA Vision, directly support this global business consultant model.

Practitioners' Responses

The practitioners addressed the following key issues that were discussed in the August article:

• Timing of a student's first tax course to be during junior year;
• Importance of a mix of technical and nontechnical skills;
• Impact of the first tax course on nonaccounting majors;
• Promotion of tax careers by tax educators; and
• Use of electronic tax research.

Timing of first tax course. Practitioners agreed that the best time for undergraduates to take their first tax course is during the junior year. "There are specific benefits to this timing for all students–whether they are accounting majors pursuing a career in taxation, accounting majors not interested in a career in taxation, or majors not even related to accounting," explains Dana R. Ellis, Firmwide Director of Recruiting at Arthur Andersen LLP. According to Ellis, these benefits include:

• A fundamental understanding of how income tax influences business decisions (which is critical for all students, regardless of their chosen career).
• An opportunity to create an interest in pursuing additional tax courses for students uncertain of their career paths.
• An opportunity for students interested in the tax profession to take additional tax courses during their senior year and enhance their technical skills.

To realize these opportunities, the practitioners encouraged educators to advise more students (across majors) to take the first tax course during their junior year.

Importance of mixing technical and nontechnical skills. The practitioners strongly agreed that general business skills are critical, regardless of which discipline a student pursues. To that end, the intention of the Model Tax Curriculum was to encourage an increase in the focus on nontechnical skill development. However, it did not recommend a decrease in the focus on technical skills to meet that need; both should be equally weighted. In addition, the technical focus should continue to include both individual and corporate taxation. According to Nancy L. Ngou, National Tax Compliance, Corporate Product Leader at Ernst & Young LLP, "regardless of whether someone wants to be a Controller, CFO, CEO, director of tax and/or a CPA, they really should understand the basics of individual and corporate taxation. An understanding of individual tax alone leaves a gap in the required skill set. Educators' commitment to their students would be significantly enhanced by the inclusion of corporate tax principles in any curriculum." Richard G. Klingshirn, Account Team Leader for Assurance & Advisory Business Services at Ernst & Young LLP added, "an accounting curriculum should include two tax classes or more, now that we are well into the 150-hour requirement in most states."

Or, at the very least, "if only one tax course is required or offered in a school's business curriculum, the first tax course should include the basics of corporate taxation," Ngou states.

Impact of the first tax course on nonaccounting majors. Although the Big 5 look to accounting programs as primary recruiting sources, they will continue to increase their efforts to hire more nonaccounting majors, especially for their expanded nonattest functions. Whether or not these nonaccounting majors pursue a career in public accounting, a basic tax course covering business topics and tax concepts and consequences is critical for these students.

Promotion of tax careers by tax educators. The practitioners are alarmed by the survey statistics on the promotion of tax careers by tax educators. Only 67% of tax educators said they promote taxation as a career. According to Andrew Kane, Managing Partner–Tax Human Resources and Training at Arthur Andersen LLP, "we are in an age when the profession is experiencing a significant drop in the number of students expressing interest in an accounting career [not to mention tax in particular]. Tax educators, public accounting and industry practitioners need to make a concerted, joint effort to attract top-notch students into the profession." This effort will require positive, consistent message delivery through a variety of media. Practitioners recommended tax educators, practitioners and professional societies dedicate more resources to programs and career paths designed to attract students to tax careers and to the accounting profession in general.

Use of electronic tax research. The fact that survey results indicated that several programs are incorporating electronic research into their course content encouraged practitioners. George E. Peterson, National Director of Tax Human Resources at Ernst & Young LLP, commented that "it is a pleasant surprise that the majority of the survey respondents use tax research databases in the first tax course. In a world of increasing electronic knowledge management, professionals will be handicapped if they only know how to research with paper-based services." The tax practitioners recommend that universities continue to incorporate electronic research tools into tax courses and encourage students to gain experience with such services.

Practitioners' Recommendations

In summary, the practitioners recommend the following to universities to maximize the impact and effectiveness of the first tax course:

• Encourage students (even those in nonaccounting majors) to take the first tax course during their junior year.
• Continue to focus on all technical skills (including compliance) for individuals and business entities.
• Encourage students to take a second tax course.
• Include a second tax course, if it is not part of the required curriculum. In the absence of such a course, be sure to include business and entity taxation and concepts in the first course.
• Participate in efforts to promote the accounting and tax professions to students.
• Continue to incorporate the use of electronic research.

Conclusion

Tax practitioners should be encouraged by the results of the AICPA survey. They demonstrate the Model Tax Curriculum's positive impact on undergraduate tax education. The timing, content and delivery methods of the first tax course are moving in the right direction to better meet the knowledge and skill needs of students interested in tax and accounting careers. Although progress is being made, practitioners and educators need to continue strengthening their partnership in ongoing education efforts. Together, they need to ensure that tax and accounting students are fully prepared for successful careers in today's global business environment. The ever-changing marketplace continually places greater demands on new practitioners; professionals from both the education and practice arenas need to stay apprised of those changes and ensure that course content continues to meet those demands.

From Suzanne M. Kopplin, CPA, Ernst & Young LLP, Vienna, VA, Jeffrey A. Porter, CPA, Porter & Associates, Huntington, WV, Dennis Sheriff, PricewaterhouseCoopers LLP, Parsippany, NJ, and Jeffrey C. Totten, CPA, Arthur Andersen LLP, St. Charles, IL