Accounting Trouble a Boon for Schools
By CHRIS CZIBORR
The bad news for Arthur Andersen and dot-commers has been good news for the area’s accounting schools.
Interest in accounting classes has surged at Southland schools, despite the demise of Arthur Andersen, once one of the “Big Five” accounting firms, and the technology downturn that started a few years back.
Accounting traditionally has been seen as a trusty major for business students, especially during economic downturns. And now it’s even a little sexy.
“People thought accounting might be a little boring,” said Sally Anderson, managing partner at the Irvine office of Ernst & Young LLP. “But now with so much going on, people are more interested in the profession.”
Anderson said prospective recruits realize it’s not the whole industry that’s at fault for accounting scandals that have rocked Corporate America.
“They know that it’s just a few people who were involved,” she said.
Arthur Andersen was convicted of obstructing justice in its role as Houston-based Enron Corp.’s accountant. Enron had been forced to restate its earnings after using dubious accounting methods to boost profits. Enron operates today as a shell of its former self; Andersen has ceased to exist.
Betty Chavis, chair of the California State University, Fullerton, department of accounting, said she’s seeing a surge in accounting enrollment nationally.
“And that’s certainly true here at Cal State Fullerton,” Chavis said. “We closed enrollments early because accounting classes filled up so quickly.”
Chavis said she believed the tech slowdown has helped bolster accounting enrollment.
“When the dot-coms fell, the students came back to us for a second undergrad or a grad degree,” she said.
And she said that Andersen’s collapse has boosted interest in the school’s classes, particularly for those in business.
“Now people realize they have to know what accountants are doing,” Chavis said. “Andersen made the whole country realize how important financial statements are.”
Cal State Fullerton’s fall accounting major declarations has jumped 9% to 872 vs. last year, according to undergraduate data provided by the school. Its spring numbers had jumped nearly 5% from the prior year.
Interest in accounting began to grow a couple of years ago, according to Joanne Starr, assistant dean of the master’s of business administration program at University of California, Irvine’s Graduate School of Management.
“As the dot-coms waned, our students began looking more at additional coursework, beyond the core curriculum fundamental business courses,” Starr said.
Enrollment in accounting electives by UCI’s business students rose by one-third from fall 1998 to fall 1999. They then rose by 75% the following year.
Starr expects enrollment to be flat this year.
“Our financial reporting standards and financial statement analysis courses have been quite well subscribed,” she said. “And it looks this fall like they will be again.”
About 70% of 130 MBA students took financial statement analysis classes last year.
“And our new elective teaching the Enron case is full and has a waiting list,” she said.
UCI’s well-publicized Enron class will feature a lecture and class discussion by Sherron Watkins, the Enron executive who last summer blew the whistle on the company’s financial and accounting dealings.
Meanwhile, the University of Southern California’s Leventhal School of Accounting has seen a big jump in enrollees in the past few years. Its undergraduate enrollment this fall is up 50% to 160 vs. two years ago and 18.5% vs. last year.
“One soon-to-be USC grad said there’s a lot more interest in accounting now,” E & Y;’s Anderson said. “Students we’ve talked to said accounting still looks pretty strong compared to some other industries.”
Officials at Orange-based Chapman University said their accounting programs have been gaining popularity in recent years.
“Since the dot-com bust there are more students studying business fundamentals,” said Doug Tuggle, dean of the George L. Argyros School of Business and Economics at Chapman.
Glenn Pfeiffer, Chapman associate professor of accounting, said enrollment fell during tech’s peak boom years in the late 1990s.
“We saw a 20% decline in accounting enrollment during that period,” he said. “Students saw a lot of opportunities in technology and dot-coms when it was hot.”
He said that enrollment has stabilized in the past few years.
Chapman dean Tuggle said he expects demand for accountants to spike in the next several years as regulatory bodies pay closer scrutiny and police tighter regulations on corporations.
“I sit on the audit committee of a public firm and I already have seen our workload double in recent months,” he said. “Audit fees are also going to double.
“That’s going to trickle down to student enrollment.”
