Event 1

Research Spotlight: Stemming the faculty shortage with flexible doctoral programs

Three researchers survey viewpoints about programs that allow practitioners to earn degrees
while keeping their jobs.
by Courtney L. Vien
Published September 08, 2015

The accounting profession still suffers from a serious faculty shortage. As the average age of
tenured accounting professors is 58, the faculty drought is likely to worsen in the near future.

Are flexible doctoral programs for practitioners one answer to the shortage? Douglas Boyle,
CPA, DBA, and Brian Carpenter, Ph.D., both of the University of Scranton, and Dana Hermanson,
Ph.D., of Kennesaw State University, believe so.

“There’s an enormous pool of practitioners, some of whom want to go into academia,” said
Boyle, a graduate of Kennesaw State’s flexible doctoral program.

But many of these practitioners can’t afford to leave their jobs for the years it takes to earn an
advanced degree. As Carpenter pointed out, “It’s just not viable to leave the workplace and go
for a doctorate full time. In most cases people have families. They can’t forgo the income level
they’re used to.”

That’s why the professors find flexible doctoral programs so promising, and why they
performed a survey of more than 800 accounting faculty and administrators to gauge
perceptions of the quality of such programs.

We spoke to Boyle, Carpenter, and Hermanson about their findings, published in the article
“The Accounting Faculty Shortage: Causes and Contemporary Solutions” in Accounting Horizons
earlier this year.

Extra Credit: Can you tell us more about flexible doctoral programs and how they work?

HERMANSON: The one at Kennesaw State lasts about three years. In the first two years you
have nine or 10 on-campus residences a year, lasting three to four days each. In the third year,
you complete and defend a dissertation. It’s research-focused, dissertation-focused. Students
have published in some very strong journals.

In your survey, you asked respondents to rate how important they thought it was to attract
practitioners to flexible programs on a scale of 1 to 100 (with 100 = high value). The average
score was 69.77. When you asked them to rate their level of support for flexible doctoral
programs on a scale of 1 to 100 (with 100 = high support), the average rating was 56.18. How
do you interpret these results?

CARPENTER: I was encouraged. These programs are so new that I was glad to see there was
some receptiveness to a different model. There’s a recognition that the four- to five-year model
doesn’t work for everyone. The time was right for people to become more open.

Why do you think some faculty are resistant to flexible programs?

HERMANSON: One factor is tradition. Some people think, “I dropped four years to get my
doctorate, and that’s what it takes to be successful.” The other thing to note is that people are
naturally skeptical of a new model.

CARPENTER: Many people assume these programs are online-only or that they’re going to be
watered down. When people learn about them, they find they really are rigorous. They’re not
online. Students are on campus every month. The classroom time is extensive. The more they
learn about these programs, the more comfortable they get.

In your study, you asked respondents how serious the faculty shortage was at their institutions.
The mean rating was a 53 on a scale of 1 to 100 (with 100 = critical problem)—suggesting that
respondents only saw it as a moderate problem. Were you surprised by these results?

BOYLE: When you drill down into our data, you find that certain institutions feel the shortage
more than others. Smaller institutions are competing with larger ones that can offer more
compensation. It made sense.

HERMANSON: Another consideration is that a number of schools have responded to the

shortage by bringing in more nontraditional faculty—adjuncts and lecturers. The problem is not
so severe that they’re not getting their classes covered.

Something else to consider is that, at the time we did the survey, we were coming out of the
financial crisis. A lot of people who planned to retire at that time decided to hold off. It pushed
the crisis off for a few years. But look at the average age of faculty. It’s an older group. There
will be a lot of retirements soon.

What would be your recommendations to help lessen the faculty shortage?

BOYLE: Another paper we worked on showed that interest in teaching is high among
practitioners, but that they don’t understand what the job is like. We need to work on
educating practitioners on how great a career in academia is—what the life looks like, what the
requirements are.

HERMANSON: I introduce master’s-level students to what a doctoral career in academia is like.

There are a lot of stereotypes out there. They don’t realize professors can do other things than
teach classes. Have the students read research papers. It will get them interested. I tell students
I have the best job in America; there’s great freedom and flexibility. I can work at midnight or 2
a.m. I can go to my kids’ events.

CARPENTER: I’d advocate a greater use of professional faculty who are not doctorally qualified.
Accreditation standards allow for a greater number of them than people realize.

What are some things you’re doing at your school to attract new faculty members?

BOYLE: At Scranton we proactively identify potential professors and help them make the
transition to academia. For example, one process that our department has recently
implemented is to review a list of our accounting alumni who had been out in the field four to
five years and identify those who we feel may make strong academics. We reach out to these
alumni to see if they are interested in teaching and, if so, provide our support and insight. If we
hadn’t been proactive like that we wouldn’t have gotten our last few hires.

In addition, we formed a council comprised of our most distinguished accounting alumni. This
council meets on a quarterly basis to provide support on our various initiatives, including
identifying potential future faculty members.

CARPENTER: Frequently, students at the undergrad level say they would ultimately like to
teach. We seek out people who did the best in their classes and expressed an interest in
teaching. The person we hope to hire soon was the top student in her academic year.

Interested in learning more about pathways to academia? Visit the Pathways Commission’s
website or view a video webcast on transitioning from practitioner to faculty member.

Administrators: Read about the American Accounting Association’s best practices for
integrating professionally oriented faculty.

Do you know of great research that deserves to be in the spotlight? Tell us about it at
academicnews@aicpa.org.

Event 3

How should materiality be applied? FASB

weighs in
By Ken Tysiac
September 24, 2015
See more at: http://www.journalofaccountancy.com/news/2015/
FASB issued two exposure drafts Thursday that address the use of materiality—an
attempt to help organizations eliminate unnecessary disclosures in financial
statements.
Feedback received by FASB indicated that the current discussion of materiality in the
board’s conceptual framework is inconsistent with the legal concept of materiality
established by the U.S. Supreme Court, FASB Chairman Russell Golden said in a
news release.
That created uncertainty about organizations’ abilities to interpret which disclosures
are material, as well as FASB’s ability to identify and evaluate disclosure
requirements in accounting standards, according to Golden.
“These proposals are intended to clarify materiality—which will help organizations
improve the effectiveness of their disclosures by omitting immaterial information, and
focus communication with users on the material, relevant items,” Golden said.
The proposals are part of the disclosure framework project FASB is undertaking to
improve the effectiveness of disclosures in notes to financial statements. The
proposals address the use of materiality in two ways:
 Helping organizations use discretion when determining which disclosures in notes to
financial statements should be considered “material,” and
 Helping FASB understand the reporting environment in which it sets accounting and
reporting standards.

One of the exposure drafts issued Thursday proposes amendments to Chapter 3 of

FASB Concepts Statement No. 8,Conceptual Framework for Financial Reporting,
and is intended to clarify the concept of materiality.
The other exposure draft, Proposed Accounting Standards Update, Notes to Financial
Statements (Topic 235): Assessing Whether Disclosures Are Material, aims to
promote the appropriate use of discretion when organizations decide which
disclosures they should consider material. The amendments to ASC Topic 235 would
apply to all types of organizations—public and private companies, not-for-profits, and
employee benefit plans.
In a 2012 comment letter replying to a FASB discussion paper, James G. Campbell,
Intel’s vice president for finance and corporate controller, wrote that disclosure
effectiveness requires application of materiality. The letter said the appropriate
threshold for materiality is consistent with the Supreme Court’s interpretation of
materiality, and that FASB Concepts Statement No. 8’s discussion of materiality can
lead organizations to a threshold that is too low and exacerbates disclosure overload.
“Materiality assessments for disclosures are not occurring as often as they should,”
the letter said.
A 2012 comment letter from the American Gas Association encouraged FASB to
clearly define materiality and relevance with a focus on limiting disclosures in
financial statement notes.
“Unless the Board enhances the materiality and relevance guidance, reporting entities
may choose to avoid being challenged by independent auditors, legal advisers, and
regulators by not making any changes to their notes or even including immaterial
disclosures,” wrote Stephen P. Feltz, chairman of the American Gas Association
Accounting Advisory Council.
FASB’s proposals would:
 Make it clear that FASB does not define materiality.
 Delete the existing discussion of materiality in Chapter 3 of FASB Concepts Statement
No. 8 and replace it with a broad observance of the Supreme Court’s definition of
materiality.
 State that materiality is applied to quantitative and qualitative disclosures individually
and in the aggregate in the context of the financial statements taken as a whole.
Therefore, some, all, or none of the requirements in a disclosure may be material.
 Refer to materiality as a legal concept.
 State that an omission of immaterial information is not an accounting error.

- See more at: http://www.journalofaccountancy.com/news/2015/sep/fasb-proposal-

what-materiality-means-201513079.html#sthash.4cmGQT5C.dpuf

event 4

Back

Should students learn IFRS?

Faculty recommend best practices for teaching the standards.
by Cheryl Meyer
Published September 08, 2015
Companies in about 120 countries worldwide use and support International Financial Reporting
Standards (IFRS). But whether the SEC will require or permit U.S. public companies to use IFRS
remains in question. That has left some American accounting departments in a bit of a
quandary: Do they teach their students about IFRS?

The answer for many professors is “yes.”

“IFRS is being adopted by some of the largest countries in the world,” said Rama Ramamurthy,
CPA, a teaching professor at Georgetown University and an IFRS specialist. “If you want to have
relevance across international borders, you should have knowledge of IFRS. Business does not
begin and end in your country.”

In addition, a U.S. accounting firm may do business with multinational clients. As Mark
Holtzblatt, CPA, Ph.D., an associate professor of accounting at Cleveland State University, said,
“There are so many U.S. companies that have subsidiaries overseas, and there are foreign-
based companies that have U.S. subsidiaries.”

Mark Fitzpatrick, CPA, a partner at Moss Adams LLP in Seattle and a former instructor of IFRS
for his firm, believes teaching IFRS is not as important as it was a few years ago, and said that
students may or may not end up using IFRS in their careers. But if students “want to pass the
CPA exam, they at least need some fundamental knowledge of what it is,” he said.

Professors who teach IFRS say that while accounting students may be intimidated by the
prospect of learning a whole new set of standards, they realize quickly IFRS is not as daunting as
they expected.

Teaching IFRS, faculty say, can also help students develop vital critical-thinking skills.
“Professional services firms more and more demand new hires to think more and do it earlier in
their career cycle,” said Terry Campbell, CPA/CITP, CGMA, Ph.D., a clinical professor at Indiana
University. “The academic community must also embrace this need to think as universities
refocus on their mission: critical thinking and communications in regards to the topic at hand.”
Faculty should allow and encourage students to “embrace the inherent uncertainty and
ambiguous challenges in financial reports,” he said.

But still, teaching this more-specialized subject is not easy. That’s why Holtzblatt and
Norbert Tschakert, CPA/CFF/CITP, Ph.D., an associate professor of accounting at
Salem State University in Salem, Mass., who also teaches a global accounting course,
created TeachingIFRS.com, a website that offerglobal accounting course,
createdTeachingIFRS.com, a website that offers free resources on teaching IFRS in
the classroom. They launched the site a couple years ago after they realized how few
materials were available on the topic.

Holtzblatt, Tschakert, and other faculty members offer the following tips for
professors interested in teaching IFRS:
Make sure students know U.S. GAAP well before teaching them about
IFRS. Beginning accounting students are in no way ready to learn about IFRS,
Fitzpatrick said: The topic is best-suited “for someone who is further along in their
academic career.” Once students have knowledge of U.S. GAAP, however, they will
realize that IFRS and U.S. GAAP have many similarities and will likely be less
anxious about studying IFRS.

Prioritize your teaching curriculum. Professors cannot possibly teach everything

about IFRS in a 14-week course, so they should prioritize which topics they want to
cover. Given the tight time frame, teachers should focus mostly on the differences
between U.S. GAAP and IFRS, Ramamurthy suggested.

Use creative and attention-grabbing tactics. Bring in guest speakers, watch videos,
and have students work on mini-cases that involve IFRS and U.S. GAAP—and then
compare and contrast the two sets of standards. Classes in IFRS at Indiana University,
for instance, use real standards and financial statements and usually include discussion
of “a deal gone sour or a fraud where the possibility of accounting differences is
involved,” Campbell said. One case Campbell uses to illustrate the application of
standards is the HP/Autonomy deal, which, he said, is “infamous for the alleged
differences in IFRS and U.S. GAAP which contributed to the difficulties
encountered.”

Take advantage of online materials. Many sources providing valuable information

on IFRS are now available online. A $20 membership in the International Association
for Accounting Education & Research gets students full online access to IFRS
standards. Deloitte offers IFRS e-learning modules free to anyone who registers with
its site. The AICPA operates IFRS.com, which includes many videos about the topic.

YouTube is also a great resource, offering many up-to-date videos. “If instructors are
simply using a textbook, they are probably two years behind the times, because by the
time a typical textbook gets into a student’s hands, it may be a couple years out of
date,” Holtzblatt said.

Have patience. Students may believe IFRS is not worth their time, particularly since
IFRS has the reputation of being more ambiguous and less rules-based than U.S.
GAAP. “It is difficult for them to understand because they come with a preconceived
notion that accounting is black and white,” Campbell said. “In essence, accounting is
very gray and has no precise answers. It requires critical thinking and analysis.”

Cheryl Meyer is a California-based freelance writer.

To read more Extra Credit articles, click here.

s free resources on teaching IFRS in

event 5
1. News

2. PROFESSIONAL ISSUES

Rise in US accounting salaries accelerates

By Ken Tysiac

September 3, 2015

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TOPICS

 Career Management

 Firm Practice Management

o Human Capital

Accounting professionals in the United States continue to be in high demand, and the starting salaries
they can command are rising at an accelerating rate, according to new data.

Average starting salaries for U.S. accounting professionals will increase in the coming year between 4.0%
and 5.3% over the previous year, depending on the job position, according the 2016 Salary
Guide released this week by staffing services provider Robert Half.
These figures represent a significant jump from the increase in starting salary ranges for U.S.
accountants predicted by Robert Half for recent years:

 A range of 2.9% to 4.4% for 2015.

 A range of 2.9% to 4.5% for 2014.

 A range of 2.7% to 4.5% for 2013.

For 2016, starting salaries in public accounting are expected to rise slightly more than those in corporate
accounting. Twenty-six of the 46 public accounting positions listed in the guide had predicted increases
of 5.0% or more. The overwhelming majority of the corporate accounting positions listed in the guide
had predicted increases between 4.0% and 4.9%.

Businesses’ bounce back from the recent global recession has led to significant hiring and high demand
for skilled talent in accounting and finance, said Dan DeNisco, vice president of Robert Half Management
Resources.

“They’re hiring at rates we hadn’t seen since pre-2008,” DeNisco said. “The whole supply and demand
scale has been tipped now in the other direction, and you tie that in with some specific industry
demands such as those in financial institutions with the compliance [requirements] that are hitting
them, it’s just created a huge shortage of good, solid talent.”

Increases in average starting salary for Canadian accounting professionals are expected to accelerate
slightly, with a rise of 3.3% to 4.7% for 2016 over the previous year. The range for Canadian public
accountants for 2015 was 2.3% to 4.6%.

Difficulty in finding and retaining good talent has caused many employers to embrace flexibility for
accounting professionals, DeNisco said. He said allowing remote access for employees and flexible hours
may be necessary for firms and companies to attract and retain talent. Employers also are bringing back
alumni from their companies and firms to work on a part-time or interim basis, DeNisco said.

“Those are things that wouldn’t have even been considered a few years ago, but that flexibility and
accommodating that workforce is really important,” DeNisco said. “And it’s all about that culture of
valuing the employee.”

Investing in employees’ career and professional development also is a key part of employers’ retention
strategies, DeNisco said.

Despite the favorable environment for employees and job seekers, accounting professionals need to
continue enhancing their skills to remain in high demand, DeNisco said.

“Things have changed so dramatically, especially in the accounting and finance world,” DeNisco said. “…
The accounting professional that’s adding value today is a business partner with all the other
stakeholders in that company. So I may be the best compliance auditor in the world, but if I don’t have
the technology skills to go along with that, I’m not going to be as valuable.”

According to DeNisco, high-demand skill areas for accountants include:

 A combination of audit/compliance and IT skills.

 Senior accountant skills, such as the ability to do reconciliations and monthly closes.
  Financial analysis skills, such as budgeting and variance analysis.

—Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

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event 6

ASB addresses audits of ICFR integrated with financial statement audits

See more at: http://www.journalofaccountancy.com/

The AICPA Auditing Standards Board (ASB) issued a new standard Tuesday to
establish requirements and provide guidance that apply only when an auditor is
engaged to perform an audit of internal control over financial reporting (ICFR) that is
integrated with an audit of financial statements.
Statement on Auditing Standards No. 130, An Audit of Internal Control Over Financial
Reporting That Is Integrated With an Audit of Financial Statements, takes effect for
integrated audits for periods ending on or after Dec. 15, 2016.
The new standard states that although the objectives of an audit of ICFR and an audit
of financial statements are not the same, the auditor should plan and perform the
integrated audit to achieve the respective objectives simultaneously. Under the
guidance, the auditor should design tests of controls:
 To obtain sufficient appropriate audit evidence to support the auditor’s
opinion on ICFR as of the date specified in management’s assessment of
ICFR, and
 To obtain sufficient appropriate audit evidence to support the auditor’s
control risk assessments for purposes of the audit of financial statements.
 When the new standard takes effect, the ASB will withdraw Statement on
Standards for Attestation Engagements No. 15, An Examination of an Entity’s
Internal Control Over Financial Reporting That Is Integrated With an Audit
of Its Financial Statements. Also withdrawn will be a related attestation
interpretation, “Reporting Under Section 112 of the Federal Deposit
Insurance Corporation Improvement Act.”
 At the same time, amendments to various sections in SAS No.
122, Statements on Auditing Standards:Clarification and Recodification, will
take effect.
 At a later date, the ASB will consider developing an attestation standard
addressing examinations of internal control other than ICFR that is integrated
with an audit of financial statements.