Competence, not culture, determines confidence in the novice accountant

Discussion Opinion

An even greater focus on behavioral subjects, at the expense of technical competence in accounting education, is a mistake.

Tjibbe Bosman

The auditor is trusted by society because the auditor is particularly competent in reporting, internal control, auditing and related subjects. Accountants have completed some of the most rigorous vocational training in the country and are subject to strict ethical requirements and strict disciplinary rules. The accountant is like a financial practitioner in an organization. The auditor has knowledge of a wide range of subjects and access to a broad group of specialists where necessary.

The recent statements and proposals of the quartermasters about the accountant training make me seriously concerned whether future accountants will still meet this professional image. In a panel debate at the conference of the Foundation for Auditing Research, quartermaster Chris Fonteijn stated that it is desirable that auditor training be more behaviorally oriented and less technical. The quartermasters’ fourth progress report even talks about “…to make a thorough redesign of the education in the short term“.

Compared to other (accounting) courses, the Dutch education is already very focused on (ethical) dilemmas, behavior and oral exams, where the candidate’s professional views are critically tested. Teaching and studying ethical topics is useful and contributes to better ethical decisions (Kowaleski et al. 2020). Additionally, we know from FAR research by Jere Francis and Lena Pieper that conscientious and ‘uncomfortable‘ auditors perform better (Pieper and Francis 2022). Professionals with these personality traits also make better ethical decisions (Parks-Leduc et al. 2021). PhD candidate Sanne Janssen found in her thesis with FAR data that accountants with many ‘professional moral courage‘ perform better (Janssen 2020). These are elements that are largely already embedded in the learning outcomes of the training and personality characteristics that can be measured relatively easily and reliably.

However, I see an even greater focus on behavioral topics at the expense of technical competence in training as a mistake. Society has no use for (beginning) accountants who cannot make journal entries and do not understand a consolidation, but who can spend an entire afternoon talking about an ethical dilemma, diversity or philosophy. If an accountant is not able to recognize the (technical) issues, then focusing on culture and behaviour, sociology and the like will do nothing.

Take recognition of an (implicit) derivative and the question of whether and how it should be accounted for. Recognizing such problems requires great technical competence. Taking time away from training these technical skills will not improve the future accounting profession. If we look at the latest revision error and the relevant research reports, then there seems to be ‘performance issuesIn other words, lack of competence. If the Wirecard audit had been conducted according to German auditing standards, then the Wirecard reporting fraud would likely have come to light as early as 2014 (Rödl & Partner 2021). If the Vestia auditor knew how to account for and value interest rate derivatives, the derivatives drama at Vestia would probably have come to light sooner.

This does not change the fact that the addition of (social) psychologists, ethicists and philosophers at the corporate level undoubtedly has value. However, it is a mistake to exclude the scarce time in the accounting education from core technical subjects. Why should every member of an audit team be an auditor and every auditor be a behavioral expert?

Tjibbe Bosman is a chartered accountant and Wirtschaftsprüfer and affiliated with the Foundation for Auditing Research (FAR) and the University of Amsterdam. He writes personally.

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