In January, Finweek published an opinion piece written by Johan Fourie, an Economics lecturer at Stellenbosch University, titled ‘Why you should think twice before going for that accounting degree’ In summary, he stated the following.
Reasons why an accounting degree should not be the default option for South Africa’s brightest kids:
- Academic freedom in the accounting departments of South African universities has been butchered by being on the payroll largely of the Big Four auditing firms, coordinated by SAICA.
- The current accounting syllabus does not allow CA(SA) students to develop the problem-solving skills necessary for top-level managers.
- The SAICA-developed syllabus is fine for those for whom accounting is a passion and who enjoy technical challenges. But for those many bright and ambitious kids who study accounting simply to be successful in business and who see accounting as a stepping stone to high income, it may not give the right skills set.
- South African universities’ accounting departments are capable of educating students to ‘think outside the box’, but it is the accounting profession which strictly follows a narrow rules-based compliance philosophy in education.
- Effectively SAICA has the authority to run accredited universities’ accounting departments. They set the syllabus, determine the criteria and even pay salaries – to the extent that academics complain that 90 per cent of their focus is on the CA (SAICA) programme.
- If accounting departments veer from what SAICA wants, they lose their accreditation. The SAICA syllabus emphasises technical aspects, virtually ignoring any broader, research-led, fundamental, or conceptual accounting issues.
- Business decision-makers are demanding a greater range of skills and according to a recent opinion piece in the Economist, accounting degrees may be less sought after in the future: it suggests there may be a 94 per cent likelihood that some accounting jobs will be replaced by computers or robots. There is also a risk that accounting skills, like call centres, can be outsourced to low-income countries.
- The only way that accountants may remain competitive is to begin to add value in areas where computers are useless: strategic thinking, creativity – in short, thinking outside the box.
You can access the full article here: http://finweek.com/2014/01/20/opinion-think-twice-going-accounting-degree/
SAICA’s response to the opinion piece
I would like to respond to your opinion piece which appeared in Finweek (‘Why you should think twice before going for that accounting degree’) on 21 January 2014 as follows.
The model used for educating chartered accountants [CAs(SA)] in South Africa was developed over many years and the process was one in which the universities participated fully, and on a voluntary basis. The result of the changes – both large and small – to the process is that the academic programme, as well as the training programme, has remained dynamic and responsive to the needs of the economy.
CAs(SA) have enjoyed an enviable reputation throughout the world for many decades and count among its members world-class business leaders – some of whom head up international entities. That South Africa continues to have a very strong accounting and auditing profession (the World Economic Forum has rated South Africa no 1 for auditing and financial reporting in its world competitiveness report for the last four years) is evidenced by the still growing demand for CAs(SA).
We live in a dynamic economic environment which requires that education and training remain responsive to the needs of the economy. The South African Institute of Chartered Accountants (SAICA), together with the universities, makes every effort to ensure that the education, training and assessment processes remain relevant to the needs of South Africa.
It is our view that many of the above ‘allegations’ are unfounded, inaccurate and one-sided. While we welcome constructive criticism, it is important that prospective students not be misinformed. Allow me to elucidate.
“Accounting degrees should not be a default option for most of South Africa’s brightest kids”
South African learners are ‘new generation’ youngsters who are smart and generally aware of the plethora of career paths open to them. It would be a mistake to underestimate their intelligence, especially as far as career choice goes. SAICA, like most other organisations, uses a targeted marketing strategy to attract talented learners to the profession and is competing to secure a share of the limited pool of candidates who achieve over 60 per cent in the core mathematics in their National School Certificate (matric) exam. Only about 15,6 per cent of the 2013 matric learners who wrote the maths paper met this requirement, a standard requisite for entrance into many university programmes.
“Accounting departments in South Africa are perfectly positioned to help deliver students capable of thinking outside the box”
I could not agree more! But despite academics being passionate about their calling to academe, and their best intentions to deliver well-designed programmes and courses, they face many challenges in the present-day tertiary environment. They are torn between demands for meeting university requirements for research on the one hand and delivery of the best possible education to their students on the other. While SAICA agrees that appropriate research and scholarship are critical to all high-performing accounting departments, universities should balance this with the as important goal of delivering appropriate teaching and learning to their students. SAICA therefore continues to encourage universities to find ways to meet both objectives.
“The current accounting syllabus does not allow students to develop the skills necessary for top-level managers”
Certainly, qualifying as a CA(SA) requires more than just completing four years at university (a three-year undergraduate degree followed by one postgraduate year). That is why the four years of academic studies is followed by a three-year training programme; a period in which prospective CAs(SA) develop and garner experience, thus enhancing the building blocks laid down through their university education. Furthermore, as professionals CAs(SA) are required to develop and enhance their competence through continuing professional development relevant to the role they fill or career path they follow after qualification. The ability to be a life-long learner is entrenched by the initial seven-year qualification process.
Qualification as a CA(SA) is not solely related to competence. Rather, it is the culmination of education, training and assessment processes aimed at developing the combination of intellect, aptitude and ability to respond to demanding situations. The accounting profession is a dynamic one and once skills are entrenched in the persona of the CA(SA), they can achieve success in a wide variety of fields, as the many case studies of CAs(SA) who are successful leaders and who hold high positions show. It is these entrenched skills which enable CAs(SA) to be successful in a wide range of demanding work environments. It is rather enlightening to note that over 30 per cent of CEOs of listed companies are CAs(SA).
Some university programmes do find it challenging to teach students to be creative thinkers – the extent of the challenge differing from university to university. However, it is of critical importance that this is a feature of university programmes in general and not just of accounting programmes. SAICA recognised this problem many years ago and has been working with interested universities to find ways to address this, for example by the introduction of a competency framework and a new final assessment (the Assessment of Professional Competence which is being introduced in 2014).
Introduction of the competency framework
- The SAICA competency framework, which has been in place since 2009, sets out competencies (or, more broadly, outcomes such as knowledge, skills and attributes) required of CAs(SA) at entry level into the profession (the point at which they register to become CAs(SA)).
- The framework was developed after extensive research on international trends and local consultation and included significant input from the academic community.
- The competency framework places significantly more emphasis on pervasive skills (which overlap with the so-called ‘graduate attributes’) which are categorised into three broad areas: ethics and professionalism, personal attributes, and professional skills. It is the responsibility of universities to ensure that these skills and attributes are developed throughout the accounting programme.
- The competency framework has been of great benefit to the so-called previously disadvantaged universities where SAICA is successfully engaged with its university partners in assisting them with capacity-building projects for their programmes. (The University of Limpopo obtained SAICA accreditation in 2011, UniZulu and Walter Sisulu University are part of a capacity-building project, and UniVen will shortly join the capacity-building project.)
- However, the competency framework is a guideline. Universities remain in full control of their programmes and it is up to them to add interesting and relevant topics to their syllabi.
“The accounting profession follows a narrow rule-based compliance philosophy in education, whereas universities generally follow a broader principle-based approach”
Through regular, on-going interaction with accounting departments SAICA encourages them to ensure that their teaching and learning models reflect a more principle-based approach. The final say is in the hands of each university.
“To sum it up, SAICA runs accounting departments”
Universities have full control of their programmes and their structuring. SAICA’s approach to the accounting departments who offer programmes leading toward the CA(SA) qualification is simply this: SAICA’s role is to maintain the appropriate standards of the CA(SA) qualification route so as to ensure the delivery of competent CAs(SA) with relevant skills to the market place. This is done by:
- The development, with the input of academics in accounting departments as well as practising CAs(SA), of a guideline in the form of a competency framework.
- Implementing an accreditation and monitoring process in line with requirements set out by the Council on Higher Education. (It is absolutely voluntary for universities to seek SAICA accreditation.)
- Setting and administering the two standard-setting assessments which allow a broad range of candidates from multiple accredited programmes to be assessed against standards required of the profession. (We refer you to our website for details of our new Assessment of Professional Competence which is being rolled out for the first time in 2014.)
- Involving academics in a variety of aspects in a deep and meaningful way across the entire process: this includes development of policy and of the competency framework, peer reviews of programmes by means of the monitoring process, as well as involvement in the standard-setting examinations from the setting phase, through reviewing of questions to the marking phase.
“Why don’t scholars in accounting departments resist this influence? Because SAICA pays”
SAICA’s philosophy is simple – in order to run high-quality programmes and produce the most competent accounting graduates possible, universities require excellent people. Because CAs(SA) typically have the opportunity to earn higher salaries in commerce, SAICA uses a subvention fund to attempt to retain key staff on the CA(SA) programme. This is by no means a salary but an annual amount based on the particular university’s performance and contribution during the year under review. While the lump sum allocated to each department of accounting is determined by SAICA (based on the fund’s three key objectives of quality, quantity and transformation), individual amounts are determined by the head of each Department of Accounting and ratified by a local subvention committee.
To conclude, SAICA is convinced that it plays a critical role in the development of world-class accounting professionals who will continue to serve the South African and international economy in a variety of roles – as CEOs, CFOs, auditors, analysts, entrepreneurs, stock brokers, corporate financiers, tax advisors, forensic specialists, IT specialists, and academics, to name but a few roles where CAs(SA) are influencing and shaping the future of this country.
To blame SAICA for, among other things, generations of accountants being trained without a broader understanding of the complexity, problem-solving or trends in the global economy is myopic. Many of the challenges identified in your article are not unique to accounting degrees.
Yes, with the advent of computers there are many jobs that will need to evolve, and this undoubtedly includes the role of the accountant, but here I quote Sizwe Nxasana [CA(SA)]: “Accounting and auditing of the kind done by CAs(SA) require a lot of analysis and decision-making which computers will never do in a million years.” The profile of our SAICA members clearly shows that we are not simply bean counters, for we fill a wide variety of roles, in many cases in important leadership positions, both here in South Africa and abroad. It is noteworthy that over 21 per cent of CAs(SA) are economically active outside South Africa. The world-class quality of CAs(SA) remains a non-negotiable objective for SAICA.
Ask yourself again – what qualification provides the youth with the stepping stones to a brighter and exciting future … one which they will have the responsibility of driving once they have qualified as CAs(SA). The market place has decided and will continue to decide the standing of CAs(SA) in the South African economy.
It is in our opinion scandalous to encourage kids not to consider qualifying as CAs(SA) given the career choice and leadership opportunities the designation affords to the youth of South Africa. ❐
Mandi Olivier CA(SA) Senior Executive: Professional Development SAICA