Where have all the accounting students gone?

California CPA, June, 2001 by DEANNA McCRARY

Over the last 10 years, California's colleges and universities have experienced a 30-50 percent decline in the number of students majoring in accounting. Traditional accounting programs no longer attract the best and brightest, nor are they keeping up with marketplace realities. In short, they are in real danger of becoming extinct.

"Were waiting to see what happens with the 150-hour requirement in California," says Joseph Mori, accounting department chair at San Jose State University. "If it doesn't happen at all, we'll probably get out of the traditional accounting business."

"The students who stay here in the accounting program do stay focused and go on to get their CPA. But the numbers aren't as high as they have been," says Maureen Beck, director of career development services at Loyola Marymount University. Beck notes that Loyola Marymount's intermediate accounting class this year is down to 27 students, compared to 70 in the fall of 1996.

FACTORS INFLUENCING THE DECLINE

Educators and college recruiters point to a number of factors to explain the decline. They claim that students seek exciting work with lots of autonomy right out of college as well as substantial compensation packages.

"Students used to be willing to come in, do their time, work in the trenches and all that, without having special, exciting projects to work on," says Beck. "What we're seeing with new hires today is that if those needs aren't met and the satisfaction doesn't come quickly enough, they may leave the firm."

Additionally, educators claim that the majority of young people don't understand what accountants do, or the myriad directions an accounting career can take. The image of spending one's life stuck behind a computer tapping out numbers on a calculator and talking to no one, is certainly not as sexy to a high school student or college sophomore as a cell-phone toting, SUV-driving IT professional. Although in reality, the latter might end up spending more time in front of a computer than any accountant ever would-at least he's "shown the money" from the get-go. (See entry-level salary comparisons, this page.)

Scott McConnell, an accounting major in his junior year at Loyola Marymount, a small, private, liberal arts school in Los Angeles that is often courted by the Big Five, says that when he tells freshmen or sophomores that he is an accounting major, they say, "Eeww--why?"

"Students don't realize that with accounting there is a lot of interaction with people, as opposed to sitting behind a desk or computer all day typing numbers into a calculator. I think that is still a common perception," McConnell says.

McConnell's sister is an accountant with KPMG, so he had an insider's track into the realities of what it's really like to be an accountant today. He noticed that she has a lot of interaction with many different people, which influenced his decision to major in accounting. But McConnell also is taking a track many students today choose-a double major in accounting and information systems.

Says Mon, "People perceive accountants as no longer relevant. Certainly kids are somewhat impressionable and if they get the feeling that [accounting] is dry, not dynamic, not mainline, nor compensated well, they're not going to give you the time of day."

SHOW ME THE MONEY

"Our pay rates for graduates haven't kept up with other majors," says Bill Holder, accounting professor at the University of Southern California. "There was a time when accounting majors clearly received the highest pay of any beginning, entry-level graduates with business degrees, but that is no longer the case. It suggests to me that for whatever reason, the work [accountants] do isn't valued as highly by the market."

Beck attributes much of the recent decline to students being wooed by the glamour and trendiness of the dot-coin explosion, as well as the financial opportunities that the booming economy offered. "Those [accounting] students who also had technology skills were gobbled up," she says.

"They were in demand by [dot-com] companies because of their strategic, quantitative, critical thinking and analytical skills. [Our students] brought a lot-they can do the business, they can compile information and give it to the management team."

Beck adds that students who interviewed with Big Five firms last fall were holding out--looking for any sort of creative offer the firms would give. "But the Big Five recruiters weren't offering perks such as company cars to an entry-level, $40,000 to $45,000a-year position," she says. "At higher levels, people were getting some really lucrative, tantalizing perks to go along with their job, but we weren't seeing that at the [accounting] entry-level."

INFORMATION SYSTEMS TAKE OVER

"We've seen an exodus of students going to information systems." notes John Lacey, accounting professor at the University of California, Long Beach. He adds that the decline in the school's accounting majors has been matched with an increase in students majoring in information systems.