Public Sector Accounting Education in Australian Universities- Obstacles and Opportunities

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Asian Review of AccountingPublic sector accounting education in Australian universities: Obstacles and

opportunitiesNick Sciulli Robert Sims

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To cite this document:Nick Sciulli Robert Sims, (2008),"Public sector accounting education in Australian universities", AsianReview of Accounting, Vol. 16 Iss 3 pp. 246 - 262Permanent link to this document:http://dx.doi.org/10.1108/13217340810906690

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Public sector accountingeducation in Australian

universitiesObstacles and opportunities

Nick Sciulli and Robert SimsCentre for International Corporate Governance Research (CICGR),

Faculty of Business and Law,Victoria University, Melbourne, Australia

Abstract

Purpose In Australia, the public sector represents a significant component of the Australianeconomy and is a major employer across all states and territories. A constant stream of public sectormanagement reforms has occurred over the last decade. These reforms include accrual accounting andbudgeting, whole of government reporting, privatisation and contracting out to name a few. This wouldsuggest that accounting graduates applying for positions at government agencies would benefit fromsome knowledge of these significant reforms. This paper aims to examine the perceptions of accountingacademics as to barriers to public sector accounting (PSA) education in Australia and identify strategiesfor making the accounting curriculum more public sector inclusive.

Design/methodology/approach Two data collection methods were employed in order to attaina comprehensive picture of the state of PSA education in Australia. Telephone interviews wereundertakenwith accounting academics across a carefully selected range of universities. This selection ensuredrepresentation across thecoreaccountingunits to gain an indication of theextent of public sector coveragein the core accounting subjects. In-depth face-to-face interviews were then conducted at five universitiesacross five states of Australia to probe further issues that emanated from the telephone interviews.

Findings The findings suggest that in general, there is very limited teaching of PSA in Australianuniversities accounting degree programs. Of the universities studied where issues regarding thepublic sector are emphasised, this is mainly due to a few academics who have a research interest in thepublic sector and so extend this interest into their teaching and the curriculum.

Research limitations/implications There are a number of strategies identified to achievegreater coverage of PSA in the curriculum. However, the findings suggest that unless the professionalaccounting bodies require PSA to be included in courses as part of the accreditation process, then itwill be difficult to achieve significant improvement in the nature and extent of public sector exposure.Most interviewees argued that a key factor in increasing public sector coverage would be ensuring thatthe textbook writers for the core accounting units included more PSA examples.

Originality/value The public sector in general, and PSA education is a neglected area of research.This study is significant as it highlights that although major public sector reforms have occurred inAustralia and worldwide, this has had little impact on the accounting curriculum taught to students.

KeywordsPublic sector organizations, Accounting education, Australia, Universities

Paper type Research paper

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1321-7348.htm

The authors gratefully acknowledge the financial support provided by CPA Australia BoardPublic Sector Committee to undertake this project, and secretarial support provided by the PublicSector Research Unit Victoria University. The authors wish to thank their research assistantJosephine Simone for her valuable contribution.

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q Emerald Group Publishing Limited

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IntroductionThe purpose of this study is to identify the major barriers inhibiting the teaching of publicsector accounting (PSA) in Australian universities. A secondary purpose was to identifystrategies that could be implemented to help overcome these barriers. To achieve these

aims, a range of universities was contacted to complete a telephone questionnaire.In addition, a number of site visits were conducted in order to completein-depth interviews(IDIs) with key participants.

The motivations for this project are numerous. In an era within the public sector thathas included such reforms as value-for-money, accrual-based budgeting, activity-basedcosting, outsourcing and contracting out of services, corporatisation and/orprivatisation and public private partnerships to name a few, the increasingimportance of accounting and accountability information to the organisation andmanagement of public sector organisations is critical (Dewing and Russell, 1998).

Further, contact with CPA Australia has confirmed that 11,125 CPAs are currentlyemployed in the public sector, from its total membership of 118,000. This represents9.4 per cent of the total membership. In addition, few research studies have beenundertaken measuring the extent of PSA education in Australian universities, with theexception of the study conducted by Sims et al. (1997). In that report respondentsfelt that there were still significant differences in accounting practices betweenprivate and public sectors. However, the study concluded that apart from pockets ofactivity in a few universities, most accounting graduates in Australia received verylimited exposure to PSA. It is timely to re-visit this issue given the number andimpact of public sector management reforms which have been implementedin Australia and internationally, most notably in the UK, the USA andNew Zealand (NZ).

The public sector can be broadly defined as including local, state and federalgovernment departments and agencies. Its size and importance can be measured in

various ways. The 2005-2006 annual budget (Australian Government, 2005) confirmedthat the total public sector constitutes a significant portion of the Australian economy(over 20 per cent of domestic final demand). In terms of employees, as at May 2005, therewere a total of 1,599,000 public sector employees across the three tiers of governmentaccounting for approximately 16 per cent of all wage and salary earners in Australia(Australian Government, 2005).

Accounting education and public sector reformsThe public sector has undergone and continues to undergo significant reforms. Many ofthese reforms affect the type and quality of information required by managers andexternal users.

Over the last two decades there has been widespread interest in the management of

the public sector both in Australia and overseas (Davis et al., 1988; Zifcak, 1994;Homeshaw, 1995; OFaircheallaigh et al., 1999; Steane and Walker, 2000; Klumpes, 2001;McDonald et al., 2005). Faced with a number of issues including changing communityperceptions, the need to limit budget spending, and globalisation, the public sector inAustralia has undergone a period of intense change. Public sector managers have comeunder pressure to increase efficiency, effectiveness and provide value for money inpublic sector activities. In response, public sector organisations have adopted privatesector management techniques (Funnell and Cooper, 1998; Potter, 2002).

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These developments in the public sector have been referred to as the new public sectoror the new public management (Hood, 1991, 1995; Mathews, 1997; Mok, 1999; Schedlerand Mastronardi, 2005).

Accountants in their primary role of providing predominantly financial information to

decision makers are now required to work in an environment of constant change. At thesame time, the past studies referred to above confirm that few accounting graduatesreceivedmore than scant coverage of PSAissues in theirformal university education.Thisagain raises the question of whether universities are producing appropriately educatedaccounting graduates able to serve the public sector.

The changing nature of the commercial environment has subjected accountingeducation in general, to much scrutiny in terms of its practicality in adequately preparingstudents for todays business world. Accounting educators must be aware of whatindustries and sectors their graduates will ultimately service in the future and the skillsrequired by graduates (Mohamed and Lashine, 2003; Gammie et al., 2002).

Richardson (1999) highlighted the fact that universities are under pressure from

constrained levels of funding as well as being under pressure to meet employer needs.Though courses and subjects had been developed which are more specialised, it isimperative that they meet the requirements of the targeted industry. After examining theperceptions of senior accountants in the Australian industry, Richardson (1999) concludedthat university graduates were under-prepared in a number of important managementaccounting roles, based on the perceived requirements of management and publicaccounting positions.

Arguing further the case for accounting programs to remain relevant, Rebele (2002)suggested that accounting courses need to monitor and respond to changes in their

environment just as businesses do. This process allows universities to respond to newopportunities and maintain competitive advantages. However, this notion does notseem to have been applied to general accounting education let alone PSA education.Parker (2005) noted that accounting and auditing teaching in Australian and NZuniversities is largely textbook driven, with a predominantly quantitative, calculative,and professional accounting association accreditation orientation.

At the same time, the nature and volume of public sector reforms, appears to havehad little effect on an accounting curriculum with a predominantly corporate businessfocus. In fact, a study by Mathews (2004) that undertook a web site analysis of the 39academic institutions in Australia, found much uniformity in programs, but no PSAsubject in the composition of accounting majors. Mathews (2004) also raises thequestion of accounting education uniformity and commonality as a result of theinfluence of the accreditation process.

Developing an awareness of public sector issues may need to be initiated by academic

research. Macve (1992) raises the point that there have been major restructurings ofpublic sector organisations such as schools, hospitals and universities under theauspices of improved financial management and accountability. Yet, there does notappear to have been a commensurate increase in the level of academic research toinvestigate whether and to what extent these government objectives have been met.Moreover, an interdisciplinary approach may need to be examined to establish whether

development of public sector curriculum is best served by including academics fromother disciplines in addition to accounting academics.

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There are varying views on the objective of accounting education, but the businessworld has changed dramatically and there is concern that the accounting curriculum isnot keeping pace with that change. Courtis and Zaid (2002), for example, identified anexpectation gap between the employer and the graduate accountant as a consequence

of employers perceptions of a lack of practical ability among graduates.In an Australian context, Mathews (2001) argued that accounting education ought

to move towards a graduate entry course similar to what are often known asconversion courses in many universities. He argued that this would ensure

accounting graduates developed a more broadly based education, before commencingspecialised accounting studies. This, in turn, was thought to improve the graduatesability to think strategically and better deal with the business complexities of theworkplace. This proposed development may help to serve the interests of public sectororganisations which, unlike their private sector counterparts, have to operate in acomplex tapestry of sometimes conflicting social, political and economic demands frommanagers, bureaucrats, officials and the electorate.

In NZ, Dixon (1989a) surveyed members of the NZ Society of Accountants employedin the NZ public sector and found that the lack of knowledge of government structure,process and accounting in the public sector was the most frequently perceivedweakness of graduate trainees. Dixon (1989b) followed up with a survey of NZuniversities and polytechnics to examine recent trends in PSA education. The findingsof this study mirrored closely those found in the later study conducted by Sims et al.(1997). Both studies identified a number of barriers to PSA education including low

numbers of academic staff involved in PSA, a lack of student interest and a lack ofqualified and or interested staff. These two studies confirm that formal PSA educationin Australian universities has been stagnating for a very long time despite majorpublic sector reforms being actively adopted by successive governments.

In commenting on the state of professional accounting education in the UK, Sikka

et al. (2007, p. 15) make the notable comment that:

Perhaps, under the control of professional accountancy bodies, accounting education is

destined to remain a decontextualized technical process.

While this comment was aimed at issues around corporate governance and ethicsrather than the public sector per se, it provides some support for the importance ofcontext in the teaching of accounting. The public sector context has importantstructural and organisational differences, including the constraints imposed byoperating in an environment restricted by constitutional and legislative budgetary andaccountability frameworks, still very different from corporate structures. The questionthen is to what extent should accounting graduates who may be entering the public

sector need to be more exposed to the public sector context while studying accountingat university.

Previous research provides many insights into the deficiencies of accountingeducation as well as various suggestions on how accounting education can beimproved within university curriculum. However, as suggested earlier, there has beena dearth of research focussing on PSA education. This project seeks to address this

deficiency. It was commissioned by CPA Australia Board Public Sector Committee,to examine the extent to which PSA is taught within universities, to identify barriers to


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PSA education and to suggest courses of actions to improve the coverage of publicsector education.

MethodData collection and recordingTwo data collection methods were employed in order to attain a comprehensive pictureof the state of PSA education in Australia:

(1) Telephone interviews were undertaken with accounting academics acrossa carefully selected range of universities. This selection ensured representationacross the core accounting units to gain an indication of the extent of publicsector coverage in the core accounting subjects.

(2) In-depth face-to-face interviews were then conducted at five universities acrossfive states of Australia to probe further issues that emanated from the telephoneinterviews.

Telephone interviewsThe main aim of the telephone interviews was to obtain the perceptions of accountingacademics in relation to PSA education in the core subjects for which they wereresponsible at their university. Telephone interviewees were chosen to ensurea sufficiently high-response rate which was cost-effective and data were collected ina relatively short time. A smaller number of in-depth face-to-face interviews were thenused to gain a deeper understanding of the relevant issues. The telephone interviewprotocol was drafted with a mixture of fixed and open-ended response questions[1].These questions sought to determine the following:

. Whether core accounting subjects incorporated PSA and if so, how and to whatextent?

.

The perceived barriers to including more PSA content in core accountingsubjects.

. Whether there is a need for PSA education, and if so, what could be done toencourage universities to include public sector content in the accountingcurriculum?

The following universities were chosen on the basis of obtaining a suitable geographicalspread across Australia as well as a distribution across universities that have had a longresearch history and those newer universities which formerly were teaching intensiverather than research-oriented. The universities which participated in the telephoneinterviews were as follows:

(1) University of Melbourne.(2) The University of Tasmania.

(3) Curtin University.

(4) University of the Sunshine Coast.

(5) Deakin University.

(6) University of Sydney.

(7) The University of Adelaide.

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(8) The University of Queensland.

(9) The University of Western Sydney.

(10) University of South Australia.

(11) Australia National University.(12) University of Western Australia.

For each of the 12 universities, the subject coordinators for the following coreaccounting subjects were contacted to carry out a telephone interview:

. introductory accounting;

. management accounting (introductory level);

. financial accounting (introductory level);

. auditing; and

. accounting theory or advanced financial accounting or equivalent.

The above subjects consist of a mix of first, second and third year core accountingsubjects to ensure coverage across the core accounting discipline areas most likely tocontain some reference to PSA. The interview protocol also included a question aboutwhether the interviewee was aware of any other subject where a lecturer may beincorporating any material or examples relating to the public sector. No examples wereidentified, and to the extent that staff could be relied upon to be aware of what subjectmatter is taught by their fellow colleagues, then, this confirms the appropriateness ofthe subjects chosen to investigate.

Contact details about each subject coordinator were obtained from each universitysweb site or where necessary by direct contact with the university. Out of an interviewsample of 60 (12 universities by five core accounting subjects), 42 interviews were

carried out, resulting in a response rate of 70 per cent.

In-depth face-to-face interviewsThe face-to-face interviews were conducted to probe further the issues raised withinthe telephone interviews. The interviews were also undertaken to test for anyinconsistency with the perceptions obtained from the telephone interviews. Thein-depth face-to-face interviews consisted of structured and unstructured (open-ended)questions, to allow respondents to describe the underlying foundation in theirdiscipline of accounting, as well as providing a broader insight into the philosophy ofaccounting education at their respective university. The open-ended questions allowedthe respondent to expand upon what they considered were the important issues in PSAeducation and problems still to be resolved, rather than be constrained by

pre-determined questions. The respondent in this way is analogous to an informant[2].Five universities were selected to carry out the IDIs. They were:

(1) Griffith University.

(2) Curtin University.

(3) The University of South Australia.

(4) The University of Western Sydney.

(5) The Australian National University.


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These universities were selected on the following basis:

. Three universities were chosen because they currently offered a specialist(usually an elective) PSA subject. The subject coordinator for the subject wasinterviewed in this instance to gain the perceptions of someone who could bereasonably presumed to have at least some background or interest in the publicsector.

. Two universities were chosen which do not offer a specialist PSA subject whereit was less likely that the interviewees would have a public sector background orinterest. A head of school and a senior lecturer were interviewed in this instancein each case, who could reasonably be regarded as expert witnesses to what washappening in each respective accounting school.

Four of the five interviewees agreed to have the interview tape-recorded. In addition,notes were taken directly on to a lap top computer at all five interviews. The interviewsranged in duration from one-and-a-half to two-and-a-half hours.

Data analysisA combination of quantitative and qualitative data analysis techniques were used for thisproject. The telephone interviews provided quantitative data about perceived barriers toincluding PSA, how PSA ought to be taught and what could be done to encourage morePSA in the curriculum. The face-to-face interviews produced only qualitative data.

Quantitative data were analysed using basic descriptive statistics as displayed inTable I and Figures 1 and 2 which are discussed in the results section of this paper. Itwas not necessary to go beyond simple analysis of frequencies to gain anunderstanding of the extent of public sector education and identify barriers and actionsto improve PSA coverage.

The processes for analysing qualitative data were necessarily more complicated.

Qualitative data were extracted from the transcripts of the face-to-face IDIs andgrouped and analysed using a combination of data organisation and themedevelopment. The first step was to make interim summaries of each interview and dosome preliminary coding to identify common themes. First level coding was used toattach labels to words or groups of words, and second level coding, also known as

Response Number Per cent

1.1 Full curriculum/timing issue 15 221.2 Lecturers interest in, experience and perceived

relevance of the public sector 12 181.3 Belief that accounting concepts can be applied across

the board 11 161.4 Lack of suitable public sector resources 9 131.5 Teaching focus is on the private sector and or

publicly listed companies 8 121.6 Curriculum driven by the accounting

standards/professional accreditation 5 71.7 Student interest 4 61.8 None/no views 4 6

Total 68 100

Table I.(TI) Barriers toincorporating PSA

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pattern coding, was used to group the initial codes into a smaller number of themes orpatterns. This form of coding is analogous to factor or cluster analysis of quantitativedata. To validate the coding rules, a research assistant was asked to fill in a number ofthe coding sheets after reviewing an IDI transcript. It was found that there were nosignificant problems in understanding and filling in the coding sheets and thatidentical PSA issues were noted by the assistant.

The themes derived from this process were used to design matrices to assist in

further analysis of the data, as suggested by Miles and Huberman (1994, p. 240):[. . .] matrix construction is a creative yet systematic task that furthers your understanding ofthe substance and meaning of your database, even before you begin entering information.Thus, the issue is not whether you are building a correct matrix, but whether it is a helpfulone that will give you reasonable answers to the questions you are asking.

Thus, various themes emerging from the data were listed across the top of the matrixand the names of the interviewees were then listed vertically along the left hand side ofthe matrix and the interviewee responses coded into the body of the matrix.

Figure 1.

Figure 2.


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Since the central research question was on the barriers to teaching PSA, much of theanalysis is based on developing themes and categorising barriers as they emergedfrom the data, rather than applying pre-determined themes. That is, ananalyst-constructed typology was developed whereby patterns, categories and

themes were created from the data.The initial data collection matrices prepared had to still allow for some flexibility to

enable the inclusion of new and interesting data which may not have been predictedfrom the first cut using the interview summaries. This flexibility had to be allowed toensure new themes and barriers could be meaningfully added as they emerged.

FindingsBarriers to teaching public sector accounting. Based on the telephone interviews, themain barriers to incorporating PSA in the curriculum are shown in Table I (TI).

Full curriculum/timing issue. The largest barrier (22 per cent) to incorporating PSA inthe curriculum was the perception that there is already too much material that needs to becovered during the semester. This finding was consistent with the Sims et al. (1997) studywhich identified the volume of content specified by the professional bodies to be thegreatest barrier to PSA education. These views indicate that incorporating therequirement to teach further content such as PSA within the standard curriculum willlikely be at the expense of teaching other material. A professor of accounting emphasised:

We cannot cover everything in three years.

There is no room in the current curriculum. More content will not necessarily improveoutcomes (IDI).

This was the predominant theme emerging from the interviews with academics. It wasalso suggested that the newer universities had reduced their weekly instruction from fourhours perweek to three hours and, moreover, the teaching semester has reduced from 16 to

12 weeks. This transition occurred during the Dawkins era of higher education reforms.This has had an enormous impact on the quantity and depth of instruction of accountingtheory and practice. One respondent stated that there is the additional expectation of whatemployers want from graduates in terms of technical and soft skills and this raises theneed to balance the professions expectations with employers expectations.

The availability of double majors has proved popular amongst students and in thiscourse structure there is rarely scope for students to choose electives, one of whichcould conceivably be PSA.

A related issue is work load pressure. Comments from academic staff centred around thefact that there was little incentive in developing a PSA elective, as few staff had the time todevelop such a subject. It required more effort to update the subject, produce materials andkeep abreast of changes compared to the core accounting subjects, where there was a much

larger range of contemporary textbooks and resources.Lecturers interest in, experience and perceived relevance of the public sector. In total,

18 per cent of respondents suggested that the lecturers teaching and/or workexperience or specific research interest had some influence on the teaching of PSAcontent. Only one respondent used the example of how she developed case studies forher teaching that were based on her previous experience of working in the bankingsector. No other examples were provided from the sample surveyed. This suggests thatthe current pool of Australian accounting academics is drawn substantially from the

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private sector or directly from their undergraduate/post-graduate studies. For example,honours students taking up tutoring positions. According to one senior lecturer:

The main barrier is the academic mindset because they have never encountered anything ofthe public sector and do not see it as necessary. It remains a poor third cousin and stilla stigma associated with public sector accounting and the public sector generally.

Students feel there is a stigma attached to the public service [. . .] especially if they did not geta job with the Big Four or in the commercial sector (IDI).

Across the Australian university sector, there appears to be small pockets of academicswith a strong interest in teaching and researching issues regarding the public sector,but this represents a very small minority. As one professor lamented:

There is a complete lack of academics who can teach in the area (IDI).

A head of school from a different university corroborated this comment:

There is a lack of expertise and/or interest in public sector accounting among academics

generally. Very few lecturers with the expertise in this school around 20% only. (I have a)belief in academic freedom and am not prepared to force all individual staff to include publicsector content in their subjects (IDI).

Belief that accounting concepts can be applied across the board. With the volume ofcontent that needs to be covered during the semester, the teaching focus appears to beon core accounting principles and common elements that would apply across the publicand private sectors. About 16 per cent of respondents suggested that the concepts thatwere taught would apply to both the private and public sectors. As stated succinctly byan accounting subject coordinator:

The principles (regarding the private and public sectors) are the same (IDI).

However, this remains a contentious issue mong accounting academics. A number ofcomments reflected that the important differences in context needed to be understood,with one accounting professor suggesting that:

The AASB (Australian Accounting Standards Board) is dominated by corporates; they do notunderstand how the government differs from the private sector (IDI).

This is consistent with the current accounting regulatory framework which has nowdiscarded the concept of having two regimes of accounting standards, one issued forthe private sector and PSA standards which were issued by the Public SectorAccounting Standards Board.

It was also noted by a senior lecturer who had an interest in the public sector thateven though the internationalisation of accounting standards had narrowed the

differences between the two sectors, there was still a need to point out some continuingmajor differences such as:

Public sector auditing the public sector audit process and compliance role of the AustralianNational Audit Office and State audit offices. There are also implications forpurchaser/provider delivery methods and other business arrangements which providechallenges for auditing and auditors (IDI).

Lack of suitable public sector resources. The interviewees repeatedly raised theavailability of PSA resources as an important issue. Many respondents saw the lack of


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PSA content within the mainstream accounting textbooks as a significant problem.Eight of the nine respondents to this issue (89 per cent) believed that the mainstreamaccounting textbooks needed to be improved in relation to PSA content. As manyaccounting academics often follow the textbooks closely throughout the semester, this

was viewed as a significant issue in the teaching of PSA. To improve the textbooks,one respondent recommended that PSA content be integrated into the existingtextbooks and not tagged on by merely adding another chapter.

Teaching focus is on the private sector. In teaching these core principles andcommon elements, 12 per cent of respondents suggested that the accountingcurriculum focused on the private sector rather than the public sector. One professor ofaccounting stated that:

When I taught I mentioned the public sector, but it was difficult to bring up examples becausethe students had no background knowledge, and;

All subjects are bombarded with the private sector, for example, law, management andaccounting, so students do not know anything about the public sector (IDI).

This is linked to the perception from many academics that most accounting concepts canbe applied across the board. The logic for this is based on the view that generalaccounting knowledge is the same for the public and private sector. Academics then aimto cover the key accounting standards whilst ignoring public sector specific accountingstandards such as AAS 27 Financial Reporting by LocalGovernments, AAS 29 FinancialReporting by Government Departments and AAS 31 Financial Reporting byGovernments. This may also be partially a reflection of the relatively small numbersof academics with experience or interest in PSA, and therefore, arguably less awarenessof differences and their importance.

Moreover, accrual accounting has been the dominant basis for accounting practice inthe private sector, and, although government agencies now have to prepare reports onaccrual accounting principles, it is a relatively new concept that may again partlyexplain why teaching PSA is overlooked.

Curriculum is driven by the accounting standards/professional accreditation.Professional accreditation is a major driver of the accounting curriculum. Thestandard offering of core accounting subjects is a prime example of this. As one subjectcoordinator stated:

The profession dictates the content of core subjects and there is not much flexibility in thecontent of core subjects.

Students are not aware of the organisational, reporting and accountability structures of thepublic sector (IDI).

Several interviewees pointed out that PSA content is not required for professionalaccreditation from either of the two professional bodies, and suggested that if theprofession wanted to ensure a minimum level of coverage, it would need to be includedin accreditation requirements.

Students interest. Students interest in PSA was raised as a potential issue.One respondent suggested that without concerted marketing by individual lecturers,demand for a PSA elective, would be low or non-existent. Students generally have lowawareness of employment opportunities in the public sector, unless perhaps if their

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friends or relatives worked for a public sector organisation. According to a professor ofinformation systems:

It should be demonstrated to students (via marketing) that they can get good jobs in thepublic sector (IDI).

The lack of awareness by students is understandable given their minimal workexperiences and uncertainty regarding their future career choices. As one subjectcoordinator stated:

Undergraduates do not know what they want or need to know and therefore they are notinterested in public sector accounting (IDI).

At three of the universities visited, there was some student interest in the public sectorwhich was directly influenced by an accounting academic who also had an interest inthe public sector. One head of school reflected on this:

Two students are doing their PhDs on the public sector one on performance measures and oneon outsourcing of computer services. If we had not been here it would not have happened (IDI).

Two issues were raised in relation to international students. First, as public sectorcontent is often specific to Australia, it may not be seen as relevant to students whowill return to their home country once they have completed their degree. Second,legalistic content coupled within the Australian context would presumably bechallenging (and less interesting) for most international students. International studentdemand to learn PSA may also be influenced by the fact that the Australian publicsector only employs Australian citizens. Conversely, some international students maybe studying in Australia to obtain points to gain residency and therefore, PSA contentin that case would be relevant.

Strategies for increasing the level of PSA content

Where in the accounting degree program should PSA be taught?Respondents were asked where in the accounting degree program should PSA betaught. The responses are shown in Figure 1 (TI).

Figure 1 shows that respondents felt that the most appropriate way of incorporatingPSA content was via existing core accounting subjects. As a comparison, this findingis similar to the study by Sims et al.(1997) where the majority of respondents regardedintegrating PSA in mainstream accounting subjects as the most desirable practice. Inthis investigation one head of school stated that:

It would be good to incorporate some comparative public sector and private sector examplesin the mainstream curriculum (IDI).

This is consistent with the view that the accounting curriculum as it stands, has muchcontent to cover and therefore, some material could be changed by merely substitutingsome PSA examples, thereby not increasing the overall volume of material to be presentedto students. Another academic suggested that annual reports of government agenciesshould be used for comparison purposes with what is produced for the private sector.

In addition, a subject coordinator stated that the auditing area needs some publicsector material. In fact, information in the media about state and federalauditor-generals reports would be a valuable resource that academics could tap intofor their teaching and research purposes.


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It is important to note that 29 per cent of respondents believed that PSA ought to betaught in both the core accounting subjects and as a separate stand-alone subject. Thissuggests that the volume of PSA material is too great to be covered adequately in the coreaccounting units. There is arguably a basic level of public sector knowledge that perhaps

all students need to be exposed to. However, there is scope for more specialised publicsector content that may be appropriate for students seeking employment in the area offinancial management/ PSA which may need a level of specialised content that could onlybe provided in an elective. Regardless of how the content is taught, one respondentcommented that all three levels of government ought to be addressed in the curriculum.

Strategies to encourage greater PSA coverageIn terms of what could be done to encourage the incorporation of public sector content incore accounting subjects, there was a range of responses as shown in Figure 2 (TI). Notethat the responses are from those who currently do not incorporate any PSA content intheir subject, that is 33 interviewees.

The findings reveal that 29 per cent of respondents are not sure of what could be

done to encourage a greater level of PSA content.However, of those that did have an opinion, the most popular suggestion (26 per cent)

was to include public sector coverage in textbooks for core subjects. The adequacy ofrelevant public sector resources was also an issue raised by the interviewees during theIDIs. There was agreement that there was a general lack of up-to-date Australian-basedresources that academics could access. Some pertinent comments from accountingsubject co-ordinators were:

If useful examples were provided, I would use them;

It (the public sector) needs to be in the textbooks and;

Case studies need to be small, easy to understand and incorporate key issues, rather than too

large and complicated and putting people off (IDI).

The use of case studies for accounting students was investigated by Weilet al. (2001)who found that students believed that case studies enhanced their learning byexposing students to real-world complexities. A professor of accounting suggested thata small, low-cost booklet needed to be produced which would outline the differencesbetween local, state and federal government, with some case studies which could beused when teaching management accounting.

One subject coordinator suggested that to encourage the teaching of PSA, it wouldbe desirable to appoint a lecturer at each university who has a PSA interest to provideleadership in this area. This may lead to the natural development of courses/subjects/research, marketing and promotion in the area.

All academics interviewed face-to-face suggested that the accreditation by theprofessional bodies was a means of increasing the level of PSA. A head of schoolcommented:

I am critical of how the program can be accredited without knowledge of the public andnot-for-profit sectors, and,

CPA Australia and the ICAA through their accreditation process should raise the publicsector issue with universities, just as they mention internationalisation and informationtechnology but not the public sector (IDI).

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Beyond the university system, it was suggested by several academics that a specialist PSAelective module be developed as part of the CPA program, specifically catering for peoplealready working in the public sector or those seeking employment in the public sector.

Conclusions and further researchThe findings of this research report reflect an important dilemma for the teaching ofPSA and the accounting profession generally. At the crux of the dilemma is whetherthere is still a need to differentiate the public and private sectors, and therefore,demonstrate these differences through lecture illustrations or seminar discussion.At the other end of the spectrum is the belief that accounting concepts can be appliedacross both sectors negating any need to incorporate public sector examples into thecurriculum. Even if, there was general agreement that some PSA teaching wasdesirable, the current level and quantity of material to be covered suggests that itwould be very difficult to replace some current accounting material with PSA material.

It could be argued that private sector management practices are not alwaysapplicable to the public sector given that their objectives may be different. Outcomessuch as the quality of education received from government schools, the outcomes frompublic hospital admissions and legal representation for disadvantaged groups are justsome of the myriad of issues that may not be the prime focus of the private sector.However, these are significant reporting issues that confront the public sector andprivate sector practices may not provide guidance as to best practice.

Students studying accounting need to be aware of the arguments for and againstadopting certain public sector management reforms so that they are in a position toprovide advice and make informed judgments as to their efficacy. Ultimately,well-designed accounting information systems can make public sector managersaccountable for their decisions on the use of limited resources.

Therefore, three critical issues evolve from this study that identifies the mainproblems regarding the teaching of PSA within Australian Universities. They are:

(1) Minimal recognition of this sector from the professional accounting bodiesthrough the accounting accreditation process.

(2) An accounting curriculum which is currently overloaded with material tomeet the requirements of the individual university in-house requisites, theprofession, prospective employers and other interested groups.

(3) A very small dedicated cohort of academic staff with experience in/and interestwho can carry the charge for the teaching of PSA.

In this context, it appears that the coverage of PSA in Australian university courses islacking and thus, little has been done to overcome this deficiency as outlined in theprevious papers by Dixon (1989a, b) and Sims et al. (1997).

It is clear that a number of strategies need to be implemented in order to minimisethe barriers to PSA education identified in this paper. The action that was thoughtmost likely to cause significant change in universities would be to ensure that PSAbecomes a requirement of the accreditation process of the Australian professionalaccounting bodies, CPA Australia and the Institute of Chartered Accountants inAustralia. Given that approximately, 10 per cent of CPA Australia members work inthe public sector, this could justify a re-evaluation of the need for some public sectormaterial to be included in the curriculum.


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Just as the professional bodies ensure that accounting courses include an appropriatelevel of information technology and have an international flavour, so too could theprofessional bodies insist that some acknowledgment be given to the theory and practice ofaccounting in the public sector. Most interviewees argued that a key factor in increasing

public sector coverage would be ensuring that the textbook writers for the core accountingunits included more PSA examples. There was universal agreement that this is unlikely tohappen unless the profession requires it as part of the accreditation process.

Further research could examine the needs of potential public sector employers.A longitudinal study could explore how well the students undergraduate degree hasprepared them for employment in the public sector. This proposed study could beundertaken at the start of their employment and one, two and three years hence.Further research could investigate what students think about the PSA component ofthe curriculum, and whether it would encourage them to choose a career in the publicsector. It would be useful to survey the students at various stages of their degree inorder to examine if and how their attitudes to PSA change over time.

From an accounting academic perspective, an investigation of the number ofpublished papers on PSA in highly ranked accounting journals may provide furtherinsights as to whether the editors view PSA research as a hot topic. Closely related tothis would be the question of whether investing the time and energy in this field wouldimprove career prospects and development.

Notes

1. The findings from the telephone interviews are identified as (TI).

2. Quotations used from the in-depth face-to-face interviews are characterised by IDI at the endof the quote.

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Further reading

Steadman, M. and Green, R. (1995), Implementing accounting education change: bringingaccounting graduates into the management mainstream, Managerial Auditing Journal,Vol. 10 No. 3, pp. 3-7.

Taylor, V.A. and Rudnick, W.P. (2005), Accounting education: designing a curriculum for the21st century,The Journal of American Academy of Business, No. 2, pp. 321-3.

Corresponding authorNick Sciulli can be contacted at: [email protected]

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