INTRODUCTION

• Outline

Perceptions about the changing nature of work and changing skill requirements have convinced many employers, educators, and policymakers that the United States needs a better system of education and workforce preparation. Many feel that a system of standards can play a central role in such a system. National standards can work in tandem with broader education reform initiatives to improve the preparation of young people for work and life. A national system of standards will emphasize educational outcomes rather than educational processes, provide students and educators with a better understanding of what youth need to know and be able to do to embark on a career, and provide employers with better information about the skills and qualifications of prospective workers (Bailey & Merritt, 1995).

The U.S. is now attempting to develop such a national skill standards system under the leadership of the National Skill Standards Board (NSSB). The purpose of the NSSB, established under Title V: The National Skill Standards Act of 1994 in the Educate America: Goals 2000 Act of 1994, is to "serve as a catalyst in stimulating the development and adoption of a voluntary national system of skill standards" (Section 502). NSSB was not created to set skill standards but rather to "establish guidelines used to endorse standards created by groups called `voluntary partnerships'" that include employer, union, worker, community, and education and training representatives (NSSB, 1996). In addition, NSSB will have a role in the assessment and certification of skill standards. ^[1] The standards system that NSSB is working to develop will "serve as a cornerstone of the national strategy to enhance workforce skills that will result in increased productivity, economic growth, and American economic competitiveness" (Section 502, 1 and 2).

One unique aspect of the NSSB is their commitment to producing a more seamless system of preparation for students that connects workplace reform initiatives with reform efforts taking place in the education community. Lacking a formal educational counterpart, ^[2] NSSB is now working with the U.S. Department of Education's National School to Work Office and Office of Vocational and Adult Education to link state vocational and academic standards with industry standards. The three consortia of school-to-work implementation states that have been funded under this "Building Linkages" initiative (to be discussed in detail later in this report) will spend one year exploring effective models that incorporate academic and skill standards into school-to-work systems. In an attempt to promote the proliferation of high-performance workplaces, NSSB has developed a skill standards framework that requires workers to possess more than solid technical skills. In addition to occupational abilities, workers who obtain NSSB endorsed certification will need to demonstrate strong academic, basic, and crossfunctional (employability) skills (these will be discussed later in length).

Even though the NSSB is considered a pioneer in its attempt to establish a coordinated national (voluntary) system of industry skill standards, the U.S. has extensive experience with standard and certification systems. Indeed, examples of long-standing national systems (or guidelines) for training and certification can be found in a wide range of U.S. industries (see Wills 1993a, 1993b, 1993c for a detailed listing of standards and certification systems). Given this extensive experience with standards, it makes sense that those working under current initiatives should study past efforts and draw out lessons that will aid them in establishing a more coherent system.

This report is designed to be a source of such lessons by focusing on the system of skill standards developed for the accounting profession. The report will present the experiences and outcomes of accounting standards-setters who have, in many cases, been successful in establishing a national, uniform system of certification for public accountants. ^[3] Public accounting, as this report will discuss, has changed dramatically over the past century and provides excellent examples of the issues that arise when public and private sector organizations work together to regulate professional activities, protect public interests, and create a dynamic system of codified workplace responsibilities. By presenting accounting in this fashion, the report can be a learning tool for policymakers, educators, and industry representatives who are currently working to develop and firmly establish a system of standards.

A study of accounting is pertinent for several reasons. First, as we have argued elsewhere, changes in the nature of work have resulted in a "professionalization" of production workers (Bailey & Merritt, 1995, 1997). Jobs at many levels of the employment hierarchy are now assuming characteristics traditionally associated with professions such as medicine, law, accounting, or architecture. Workers in high-performance work organizations are being asked to function as more proactive workers who are capable of working both autonomously and cooperatively in teams. If the movement toward high-performance and professional workplaces is significant and sustainable ^[4], an investigation into how and why skill standards in a profession such as accounting were developed will provide important insights into the future of skill standards setting in a broad range of occupations.

Second, accounting has developed an extensive system of standards and, in the process, created a long and well-documented history. For decades, accounting standards have been discussed and scrutinized in public before state and national legislative bodies and in private among the various professional associations representing practitioners and educators. Efforts of organizations such as the American Institute of Certified Public Accountants (AICPA) to maintain industry control of standards and limit government intervention have many applications for trade associations and industry groups that are in the process of creating standards and accompanying certification systems. Studying the well-developed and often tumultuous relationships between accounting groups, business organizations, and government regulatory agencies offers many learning opportunities. This is especially pertinent given the leadership role that the NSSB, a quasi-governmental agency, will assume in endorsing standards and certification processes. Indeed, if the efforts of the NSSB are to be respected and sustained, it must become a coordinating body that assumes a certain amount of authority (albeit informal). It must direct the efforts of a wide variety of institutions and organizations, some with extensive success and experience in developing and implementing standards and certifying their employees. The future will surely present the NSSB with a variety of turf-battles, many of which the accounting standards-setting community has already dealt with and, in some cases, conquered.

Third, despite strong state control of accounting through its fifty-four State Boards of Accountancy, the profession has been successful in developing and implementing national certification of technical standards through a uniform Certified Public Accountants examination (CPA exam) that is now being used in every state. In varying degrees, practitioners, employers, and educators at state and national levels have been involved with development and revisions of the examination since its inception over 100 years ago. Accounting organizations have also worked to revise the exam as the nature of the accounting profession and the activities of accounting have changed. Aspects of the development and implementation of the CPA exam have particular value for those who are now working to translate industry-based skill standards into assessment and certification tools.

Thus, accounting seems to have attained many characteristics of the standards systems that current reformers are trying to develop. At the same time, however, there have been and continue to be many problems and tensions in the operation and evolution of the education and certification system in accounting. The CPA exam has often been criticized for failing to represent the needs of employers. Accounting's educational system is considered by some to be too focused on narrow, methodical aspects of accounting which, in turn, discourages many potential students from majoring in accounting. Despite over twenty years of experience in developing skill standards in accounting, the Financial Accounting Standards Board is continually criticized for the processes they use, the issues they choose to address, and the outcomes of their efforts. Contemporary standards-setters can learn equally valuable information from many of the controversies that still plague the accounting standards-setting process. As this report will discuss, standards-setters in accounting are continuing to confront many of the issues that are now bedeviling the NSSB and the agencies and organizations that are working towards a broader system of skill standards and the integration of classroom and workplace learning activities.

Outline

In order to provide the reader with some background on an industry that has such an extensive history in the United States, this report will begin with two sections that examine the evolution of accounting into a 20th century profession. Two key aspects of accounting will be highlighted in these first two sections: (1) the responsibilities intrinsic to the practice of accounting are ambiguous; they require a unique combination of technical, academic, and employability that allows accountants to objectively report facts with a certain amount of subjective wisdom and guidance; and (2) the new responsibilities placed upon accountants due to changing technology and workplace dynamics have put pressure on the profession to specialize its services and create the accompanying education and certification.

This preliminary discussion of accounting practice will be followed by a more detailed investigation of accounting skill standards and how those standards are developed, taught, and assessed. The report presents accounting standards in terms of their technical, academic, and real-world characteristics. In its discussion of technical standards, the report will focus on the standards-setting process, the CPA exam, ethical standards, and continuing education. A discussion of academic and real-world skills will highlight key issues surrounding accounting education and experience requirements.

^[1] The standards endorsed by the NSSB cover entry-level through first line supervisory positions.

^[2] Under the original Goals 2000: Educate America Act, the U.S. Department of Education was to establish a National Education Standards and Improvement Council to act in unison with the U.S. Department of Labor's National Skill Standards Board. This body, created to "certify and periodically review voluntary national content standards and voluntary national student performance standards that define what all students should know and be able to do" (Title II, Section B, Goals 2000: Educate America Act of 1994) was never formed.

^[3] Although many areas of accounting practice have established certification systems, this report will focus on the skill standards and certification efforts that were initially directed towards public accountants--those that report on the financial positions of publicly held companies.

^[4] Estimations on the number of American firms that employ high-performance strategies range from 5 to 30%. Although there is great hope for the potential of high-performance workplaces in transforming the American economy and the skills of the American workforce, data that pinpoints the extent of actual growth is inconclusive at this time.