What they don’t teach you at accounting school

The gap between the theory that students learn at university or TAFE and its practical application is increasingly coming into focus.

Ian Casey, an accountant at Attwell Partners in Perth, says a lot of graduates lack basic problem-solving skills. “Juniors, too, often hit a roadblock with a given task and just stop dead,” he says. “They need to have the ability to think of a plan B and C or at least have some sense of the places they could look for guidance or answers.

“I see juniors lacking the imagination to so much as consult the help in the software, look up a business on ABR/ASIC or google wthe ATO website, let alone read an Act directly. A million small problems can be solved this way before one so much as asks a senior colleague.”

The lack of such skills is a productivity issue. A certain amount of hand-holding can be expected for any accounting professional in their first job. But spending too much time guiding a newcomer through the basics not only means the newcomer is less productive, it also reduces the amount of time the more experienced staff member spends on their own job.

Cathy Demenna, principal at CLD Consulting Services in Melbourne, says that many graduates’ expectations often don’t match the reality of what they’ll be doing in their first job. Some expect to be assigned high-level work, such as negotiating with the tax office, whereas in reality, they’ll be filling in tax returns, doing journal entries and applying for ABNs. “They’ve learned tax theory, but they’ve never seen a tax return, they’ve never seen a form to apply for an ABN,” says Demenna. “I don’t think uni prepares them very well for the real world.”

While she doesn’t think universities should teach students how to fill out individual forms, she believes that, for example, students should at least be given the basics of how to prepare a set of financial statements.

Mind the gaps

Samantha Sin, senior lecturer in the Department of Accounting and Corporate Governance at Macquarie University, says the accountancy profession has now spent two decades grappling with the gap between what accountants learn at university or TAFE and what they need to know to do their job in the workplace.

According to surveys of accounting firms, the most common skills gaps centre around communication abilities, teamwork and critical thinking.

Various universities have started to teach these skills, especially by trying to introduce more practical experience into their courses, but Sin says it’s hard to assess their success. “The message from employers is that graduates still aren’t ready,” she says. “There is some kind of gap or misalignment between what we do in the institutions and what is required outside.”

Sin says Macquarie University has started to send its accountancy students out into the workplace to get on-the-job experience as part of their course. But she isn’t sure how much of this practical training can be taught at university itself. “While we can prepare them with the generic skills, the employers also have some responsibility for training,” she points out.

The International Accounting Education Standards Board (IAESB) also recognises the limitations of academic study alone and says accountants need practical experience as part of their training, although it leaves decisions on what that practical experience should comprise to the individual national accounting bodies.

“By itself, study does not necessarily demonstrate achievement of the professional competence to perform a role of a professional accountant,” notes the IAESB. “Experience gained at work equips aspiring professional accountants with many of the skills needed to become competent professional accountants.”

Emotional intelligence

In a paper last year, one group of Australian academics argued that accountants need to be equipped with emotional intelligence, as well as technical skills.

“Accountants need to understand emotions as they are constantly working with and interacting with a diverse range of people,” wrote the authors, Lyn Daff of Avondale College of Higher Education, Paul de Lange of RMIT and Beverley Jackling of Victoria University.

They say emotional intelligence encapsulates the ability to organise, recognise, use and manage emotions and people.

“It comprises a set of skills that enable accountants to perform better in a variety of functions, including leadership, business growth, team building and client relations,” the academics write in their paper, Generic Skills And Emotional Intelligence In Accounting Education: A Proposed Conceptual Schema Of Commonalities And Differences.

“Although academic programs have traditionally focused on core competences, there is a growing demand for students to have a rounded education that enables them to be effective leaders, team members, clear communicators, personable, flexible and emotionally aware,” states the paper.

Daniel Harrison concurs. A senior accountant at Prowealth Accounting, on the NSW Central Coast, he believes a lot of accountants lack the basic people skills needed to talk to clients. “They lack soft skills, such as the general interaction with the client – being able to bring things back down to the client’s level and assess the various clients they deal with,” says Harrison.

“Some clients have no understanding of anything to do with accounting, and you have other clients who have an amazing understanding. A lot of the younger ones coming through don’t have the ability to gauge where the clients are on that scale.”

Harrison and others say that graduates of TAFE often have more practical knowledge. “They don’t need as much hand-holding to start off with for the basic things like tax returns, preparing accounts and simple transaction processing,” says Harrison.

From his own experience, Harrison found he gained more practical skills when he studied at TAFE than he did when he studied at university. On the other hand, he notes that TAFE students don’t get a “deep understanding” of tax legislation and how it would apply to various business scenarios.