What the 2018 Accounting Standards Mean for Your Business School
Posted May 03, 2018 by Stephanie Bryant
- Executive Vice President and Chief Accreditation Officer - AACSB International
If you haven’t heard by now, the members of the AACSB Accounting Accreditation Council—schools currently holding AACSB accounting accreditation—voted overwhelmingly at the 2018 International Conference and Annual Meeting (ICAM) in Honolulu to accept the proposed accounting standards. We believe these standards are a great step forward in quality and will be well received by the membership when they are in place.
The new standards were formulated by an Accounting Accreditation Task Force comprising highly respected accounting academics as well as members of the accounting practitioner community, including representatives from public accounting firms, members from the 2013 Blue Ribbon Committee, the National Association of State Boards of Accountancy (NASBA), the American Institute of CPAs (AICPA), and the Institute of Management Accountants (IMA), who worked diligently for 18 months to tackle some of the inefficiencies and gaps that existed in the standards, and to consider ways to bring the practice and academic sides of accounting ever closer together. You can view the task force report for more details.
Here are some of the most common questions we receive about the new standards.
Q: The new standards require a three-person accounting team, with the third team member being an accounting practitioner. How will these practitioners be chosen, and what will their role be?
A: The addition of one accounting practitioner to every accounting peer review team is probably the single biggest change in the new accounting standards. The practitioners who will join peer review teams are individuals who have been closely involved in higher education in a variety of ways, such as active involvement in university advisory boards, committees, or other university service. Their role will be one of helping to review the accounting curriculum and use of technology within it for currency, relevancy, and timeliness; evaluating student and faculty engagement with the profession; and contributing to the peer review team’s evaluation of overall impact, engagement, and innovation exhibited by the school. AACSB is partnering with the AICPA and the IMA on connecting qualified practitioners with peer review teams. Practitioners apply for participation in a peer review team visit by completing an application on the AICPA website.
Q: We’ve always used the phrase “separate” accounting accreditation. Now we hear the phrase “supplemental” accounting accreditation. Why the change in the terminology?
A: The 2018 accounting standards reinforce the fact that accounting accreditation is built on the foundation of first having business accreditation. To reinforce that point, this version of the standards eliminates virtually all redundancy from the business standards. Accounting statistics such as faculty qualifications percentages and counts of intellectual contributions are reported in the business standards along with all other units of the organization. The school’s accounting report, then, is designed to provide information supplemental to that found in the business report. For this reason, the word “supplemental” is more appropriate than “separate.”
Q: When will the new standards be in place?
A: A small group of volunteer schools scheduled for spring 2019 visits will be reviewed under the new standards. Taking suggestions from those schools and volunteers, we will expand the group of schools scheduled for visits in 2019–20 to any schools opting to early-adopt the new accounting standards. All schools with visits scheduled for 2020–21 will be reviewed under the new standards.
We hope you are as excited as we are about the new standards! For more information, see the accounting accreditation section of our website.