A STUDY ON GAP BETWEEN SKILLS ACQUIRED DURING ACCOUNTING EDUCATION & SKILLS NEEDED BY THE ACCOUNTING PROFESSION

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1 A STUDY ON GAP BETWEEN SKILLS ACQUIRED DURING ACCOUNTING EDUCATION & SKILLS NEEDED BY THE ACCOUNTING PROFESSION K.S. Upendra Wagle * and Dr. Umesh Maiya ** * Chartered Accountant and Research Scholar of Bharathiar University, Amba Prasad, Siribail, Post Kadthala, Karkala Taluk, Udupi Dist , Karnataka state. ** Assistant Professor and Head, Department of Commerce and Management, Govt. First Grade College, Byndoor, Karnataka State ** Corresponding Author ABSTRACT This paper investigates suitability of accounting skills acquired during university education to the accounting profession by tracing out the gap between accounting skills acquired during university education and accounting skills needed for the accountant. The paper also identifies the necessary actions to improve the accounting education programs. The study is of asking opinions of accountants to find out how much present accounting education contributes towards accounting skills needed by the accounting profession. Observation has shown that despite of efforts from the university in updating academic curriculum to suit the job requirements, there is huge gap between the accounting job skills and skills acquired in accounting education. The study shows lacking in field work and practical training which is necessary for accounting profession among the youth. They should undergo different type s external training before they go for interview. Universities should inculcate these skills by adding different training programs in the curriculum and hosting seminars on accounting developments. Keywords: Accounting education, GAP, Accounting skills, Accounting Knowledge, IFRS. Introduction: India has been ranked 105th country out of 130 countries on 2016 Global Human Capital as per World Economic Forum (WEF). This clearly shows Indian educations system is out of tune with the job market. The government and educational institutions must change its education policy to fill the gap by utilization of digital revolution. Growth prospects of country largely depend on its ability to create, develop and deploy the human capital. But the bad news is that despite of several improvements in the educational system over the years, still we need to travel long in terms of utilization of human capital. The identification of the existence of a gap may assist the universities in determining the nature of that gap and how to close it by redesigning syllabus and training. This paper aims are twofold: firstly, to identify if a gap exists between university accounting 55

2 education and job requirements skills by evaluating the perceptions of accountants and secondly, to canvass the skills that universities must consider while designing accounting curriculum. Objectives of the Study: The present research work was undertaken keeping in view the following objectives: To develop an insight into skills and knowledge needed by the accountants. To understand the gap between skills and knowledge acquired by university students and needed by the accountants. To find out options to acquire skills and knowledge needed by the accountants. Literature Review: Manpower Group s 10 th annual talent shortage survey has revealed that 58% of the Indian employers report difficulties filing job vacancies due to talent shortages and globally 38% of employers find talent shortage as Published by The Hindu, Business line, May 2015 According to Albrecht and Sack Traditional accounting educational programs remain very deficient of the ideals of education developing the person as a whole and seldom preparing the accountants for a full and meaningful participation of socioeconomic life. While calls for a reform in accounting education to deal with the challenges of business ethics continues, research shows that similar calls in the past have not been embraced practically. Professor Phil Hancock says that according to the stakeholders interviewed the required technical skills, in order of the most frequently cited were: basic practical accounting skills, IT, accounting software skills, and industry-specific skills and awareness. Beneath these general areas were specific skills, such as taxation, debits and credits, and audit in the basic accounting skills and Excel in the IT skills, with MYOB straddling both accounting and IT. According to Susan Lightweis, he evidence recommends accounting educators to use simulations as a supplemental learning tool in preparing accounting students for the profession. This study allows colleges, universities, and state accounting associations and societies to explore and conduct future research in using learning tools to enhance professional skills to bridge the gap between accounting students and the profession. An accountant advise and consult (Jones and Abraham, 2007) and even become a business partner or chief financial officer rather than just do the compliance work as it happened in the past. A survey of employers expectations of accounting graduates derived from classified job advertisements in the US in 1993 (Johnson and Johnson, 1995) identified that after professional accounting qualifications (57%), accounting positions called for communication skills (15%), organisation skills (7%) and interpersonal skills (5%). Method of Study: The study was conducted by collecting opinion of accounting professional working in companies by using questionnaire survey method. Three types of questions were asked to the accountant and professionals. First set of questions were asked to understand gap in technical skills needed by the accountants and skills acquired during university education. Second set of questions were asked to understand the gap in the knowledge requirements needed by the accountants and knowledge acquired during university education. Third set of questions were to understand how the gap in technical skills and knowledge can be filled. The survey was done mostly on the accountants and professionals working in different types of entities such as companies, proprietorship entities and partnership firms. The selection of population for study was done randomly. All the questions were utilizing on a Likert scale ranging from 1= strongly agree to 5 =strongly disagree. The responses were converted to percentages for presentation and analysis. Findings: Table showing the response received Qualification Contacted Responded % of Response B.Com % M.Com % C.A % Others % Total % Source Note: Field survey data 56

3 GAP in skills acquired in Accounting Education and Skills needed by accountants: A question was asked to find out what percentage of population agrees to the perception that there is a gap in skills acquired during university education and skills and knowledge actually needed in accounting job. 100% of population contacted has the view that there is huge gap in skills and knowledge acquired during accounting education and skills and knowledge needed by the accountants. The result has been show in pie chart. 94% 6% Nuetral 0% 0% 0% GAP in the technical and soft skills acquired during university education and skills needed by the accountants: The perceptions of accountants were asked on computer skills, soft skills and leadership skills relevant to accounting profession. The result has been shown in percentages as under: Skills a) Computer (Spread Sheet) Skills 0% 72% 14% 14% 0% b) Soft skills such as communication, problem solving, planning and analytical skills 30% 60% 0% 10% 0% c) Leadership skills 8% 60% 32% 0% 0% 57

4 72% of population agree that university education does not provide necessary computer skills needed in accounting job. 90% of population agree university students are lacking in soft skills needed by accountants. 68% of population agree that leadership skills are needed for accountants and 32% are neutral on the question. GAP in the knowledge acquired during university education and knowledge needed by the accountants: Knowledge Area a) Accounting Standards (IFRS) 29% 43% 0% 28% 0% b) Accounting Software 35% 65% 0% 0% 0% c) Accounting procedure 14% 72% 0% 14% 0% d) Practical knowledge of taxation 43% 45% 12% 0% 0% e) Budgeting 57% 43% 0% 0% 0% f) Order to Cash 27% 73% 0% 0% 0% g) Procurement to Cash 43% 45% 12% 0% 0% h) Practical knowledge on audit 62% 38% 0% 0% 0% i) MIS reports 27% 26% 15% 33% 0% On an average 80 to 90 percentage of population has opinion that above mentioned skills are lacking in university education. Methods to acquire the skills and knowledge needed for the accounting jobs: Methods a) Consider Academic Subject 30% 70% 0% 0% 0% b) Internship 85% 15% 0% 0% 0% c) External Training 57% 33% 0% 0% 0% 100% of population strongly agree and agree that these skills can be acquired by including opportunities in the academic curriculum or by internship training or by undergoing external training. Conclusion: The global accounting is changing. Business relies more and more on technology and technology keep on growing. The study found that university should restructure accounting education to equip graduates with the tools and skills they need in today s world. The entrepreneurs and corporate people find challenges in recruiting right candidate for the job due to lack of skills. Many of the European universities have taken steps to develop these skills among the students either by adding as academic subject or by internship training. The Indian universities should redesign their education program to develop these skills among the students. 58

5 References: 1. Albrecht, W. S., & Sack, R. J. (2000). Accounting education: Charting the course through a perilous future. American Accounting Association. Accounting Education Series, 16, Johnson, L.M., and V.E. Johnson (1995). Help wanted accountant: What the classifieds say about employers expectations, Journal of Education for Business 70(3), Jones, G. and Abrahams, A., 2007, Education implications of the changing role of accountants: perceptions of practitioners, academics and students, The Quantitative Analysis of Teaching and Learning in Business, Economics and Commerce, Forum Proceedings, The University of Melbourne, Melbourne, pp Manpower Group s Annual Talent Shortage Survey, The Hindu Time, Business Lines, May Phil Hancock (Project Leader), The University of Western Australia accounting for the future: more than numbers 2009, volume 1 6. Susan Lightweis (2014). Strayer University, USA, Bridging the Gap between Accounting Students and the Profession: A Case Study, Higher Education Studies, Vol.4, No 5 59