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ABSTRACT
Non-technical skills are essential for today’s professional accountant who operates in a dynamic socio-technical environment. Accounting degrees have continued to be criticised for failing to develop these skills to the required level. In the Scottish location of this study, employers have responded by seeking out graduates from non-accounting degrees who they perceive have better developed these skills. The research aims to further the debate on non-technical skill development of accounting graduates, interpreted through a lens of institutional theory. Data was collected via a questionnaire to Big 4 ICAS trainees and subsequent interviews with Scottish academics. Pressure, driven normatively by accreditation, for high-levels of technical content was found to result in accountancy degree providers requiring to make prioritisation decisions regarding the development of non-technical skills. Accountancy degree providers appeared to prioritise interpersonal and communication skills at the detriment of intellectual skills. Un-actioned, this could threaten the institutional legitimacy of accountancy degrees.
Acknowledgements
Funding for this project from the British Accounting and Finance Association’s Committee for Departments of Accounting and Finance is gratefully acknowledged. The authors would also wish to thank the academics and ICAS trainees who participated in this research and the firms (Deloitte, Ernst and Young, KPMG and PWC) who facilitated data collection.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Although none of the UK professional accountancy bodies require student entrants to have a degree, non- graduate student entrants represent only a minority for the professional bodies whose members qualify as Chartered Accountants. Only members of the Institute of Chartered Accountants of Scotland (ICAS), Institute of Chartered Accountants in England and Wales (ICAEW) and Chartered Accountants Ireland (CAI) qualify as Chartered Accountants in the UK. The percentages of graduate entrants (in 2017) of each of these professional bodies who do not hold a degree are as follows: ICAEW: 26%; CAI: 8% and ICAS: 00% (FRC, Citation2018).
2 The number of graduate entrants to training in 2017 who hold a relevant degree (being a degree that qualifies the trainee for exemptions from certain examination stages) are as follows: ICAEW: 24%; CAI: 74%; ICAS:39%; The Association of International Accountants (AIA): 24%; Association of Chartered Certified Accountants (ACCA): 23%; Chartered Institute of Management Accountants (CIMA):36% and Chartered Institute of Public Finance and Accountancy (CIPFA): 18% (FRC, Citation2018)
3 Big Four firms comprise Ernst and Young, PriceWaterhouseCoopers (PWC), KPMG and Deloitte.
4 Despite this focus on professional curriculum, graduates with an accounting degree do not outperform graduates with a non-accounting degree in professional accountancy examinations (Douglas, Citation2017).
5 A variety of terms have been used to describe the development of non-technical skills including ‘soft’, ‘generic’ and ‘vocational’ (Arquero Montano et al., Citation2001; Crawford et al., Citation2011; Jackling & De Lange, Citation2009; QAA, Citation2007). International Education Standard 3 identifies five ‘skill’ categories that are required to be developed prior to qualifying as a professional accountant: intellectual; personal; interpersonal and communication; organisational and business management; technical and functional (IFAC, Citation2010). This research identifies four of the five skill categories, with the exclusion of ‘technical and functional’ skills, as being relevant to this study as non-technical skills and this is the phrase used thereafter in this paper to encompass all these skills. Technical and functional skills are excluded due accounting specific skills being included in this category which are not relevant to non-accounting graduates.
6 Graduates seeking an ICAS chartered accountancy qualification must complete a three year training contract comprising three stages of ICAS examinations (accountancy related graduates are usually exempt from the majority (5/6 examinations) of the first stage) and relevant work experience with an approved employer.
7 Those who do not have an accredited accounting degree have three options for entry. Firstly, to complete an conversion course at an accredited tertiary. Secondly, a CA foundation pathway where online learning units, for identified knowledge gaps, are completed and examined with this being delivered by an external university. Thirdly, for those significant workplace experience can, with written support of their employer, enrol in the exam only without having to undertake the online tuition (CA ANZ, Citation2019)
8 IES 3 was revised in 2015 post data collection. The skills in the revised standard are broadly the same as the standard used at the time of data collection.
9 IES 3 in one of eight education standards issued by IFAC. Professional bodies are obligated to comply with all of these standards.
10 The Common Content (Citation2015) Skills Framework identifies the skills required by entry level professional accountants and has been developed through a collaboration of 9 European accountancy bodies (including ICAS, ICAEW and CAI).
11 The UCAS Tariff is the system in the UK for allocating points to qualifications and is used for entry to higher education (UCAS, Citation2013). For example, 320 UCAS points could be achieved by obtaining one ‘A’ grade and two ‘B’ grades in A-Level examinations in England. Students usually require 3 A-Levels to gain access to university education.
12 This represents the award made at undergraduate level. Depending on performance in a student’s honours years, different grades will be awarded to passing students: First Class (representing the highest grade); Second Class (Upper Division); Second Class (Lower Division) and Third Class.
13 FRC (Citation2011) states that 808 students registered with ICAS in 2010. Big 4 firms confirmed a total of 574 (71%) commenced a training contract with them in 2010.
14 In England and Wales, three years is the standard completion time for an honours degree. In Scotland, undergraduates have the option of exiting after three years with an ordinary degree or after four years with an honours degree. The majority (70%) of Scottish graduates hold a four years honours degree (HESA, Citation2016).
15 The fee charged per student for undergraduate degree courses in Scotland is dependent on home location. Scottish residents and other non-UK EU residents (known as ‘home’ students) are subject to pay university fees at a level set by the Scottish Government (£1,820 in 2019 for accountancy degrees (SAAS, Citation2019)) and this is paid for by the Student Awards Agency for Scotland (SAAS) assuming eligibility criteria are met by the applicant. Due to devolved governments, students from the rest of the UK can be charged fees, set by the individual Scottish university, of up to £9,250. This contrasts to universities operating in England, where fees of up to £9,250 can be charged directly to all UK and EU students, Wales where fees of up to £9,000 can be charged to home students and £3,925 for EU students and in Northern Ireland, where fees of up to £3,750 can be charged directly to all UK and EU students. For Scotland, England, Wales and Northern Ireland there is no restriction on the fee that can be charged to international students and overall, it is estimated undergraduate students from outside the EU are, on average, are paying £4,503 more than students from the UK and EU (Times Higher Education, Citation2017).
16 In 1992 a number of educational institutions, commonly known as Polytechnics, were able to apply to award their own degrees and receive ‘university’ status. These are commonly referred to as ‘new’ universities in the UK with remaining universities known as ‘traditional’ universities.
17 This relatively low response rate may reflect the way in which the questionnaire was disseminated. As contact could not be made directly with the students, covering emails from the firm and follow up emails were limited to what each firm was willing to do.
18 Based on FRC (Citation2010) Education statistics for full ICAS trainee population. Statistic were similar for 2009 and 2011 (FRC, Citation2010, Citation2011, Citation2012).
19 Average age based on FRC (Citation2011) Education statistics as 2011 is the mid-way point of a three year training contract. Weaker p value is expected due to a number of students taking more than 3 years to complete their training contract.
20 Based on FRC (Citation2010) Education statistics for full ICAS trainee population. Statistic were similar for 2009 and 2011 (FRC, Citation2010, Citation2011, Citation2012).
21 Consideration was also given to accreditation but this was not deemed an appropriate split due to the high number of students with partly accredited degrees. In addition, it was noted that some students with potentially accredited degrees did not apply for exemptions due to their firms requiring them to sit the Test of Competence examinations, from which exemptions are gained, regardless of the accreditation status of their degree.
22 The questionnaires were entered into SPSS for statistical analysis. For likert scales, the ordinal data required non-parametric tests to be undertaken. To test the difference between accounting and non-accounting students for likert ratings the Mann-Whitney test was used (Field, Citation2009).
23 The QAA in an independent body in the UK that promotes quality in higher education. It protects public interest by reviewing how higher education establishments maintain their academic standards and quality. It is a key advisor to the UK Government regarding whether an institution can be called a university and award degrees (QAA, Citation2013).
24 The comparison initially excluded skills required to be developed by accounting degrees but not all degrees. This allowed for a fair comparison as non-accounting degrees were not being compared on skills that only accounting degree providers are required to develop.
25 Team working may be required by other degrees but as it is not required by all degrees team working is not included in the QAA generic guidance for all degrees.
26 This included exemptions for ICAS, ICAEW, ACCA, CIMA, Chartered Accountants Ireland, Association of International Accounts and the Chartered Institute of Public Finance and Accountancy. All programmes have at least two of these, several with all or almost all of these.