When Accounting Met Analytics

KPMG partners with b-schools to create master’s programs that update a traditional field with the latest technology. 
When Accounting Met Analytics

THE FIELD OF ACCOUNTING has forever been changed by the power of data and analytics, and business education is just catching up to the realities of the workplace. To ensure that new hires have the technical expertise they will need, Big Four firm KPMG has teamed up with a select group of universities to develop master of accounting (MAcc) programs with an emphasis in data and analytics. The company also chooses students to attend the programs, pays their way, brings them in for one-semester internships, and then—assuming they have maintained good academic credentials—guarantees them jobs once they obtain their degrees.

This type of partnership, in which schools and companies work together closely to create practical programs, might be a new model of education for schools looking to maintain relevance and currency in a rapidly shifting world, but it comes with its own risks and challenges.

PUTTING TOGETHER THE PROGRAMS

The KPMG MAcc launched in the fall of 2017 with 25 students at Villanova School of Business at Villanova University in Pennsylvania and 26 students at the Fisher College of Business at Ohio State University in Columbus. But the company had been discussing the idea of creating such a university partnership for more than three years.

“Not only did we realize that we were going to need our people to understand the new technology, but we recognized there were benefits in allowing universities to see what we were doing,” says Roger O’Donnell, who leads KPMG’s global audit data and analytics initiative. “We felt it was partly our responsibility to help university faculty understand what the future might look like.”

As they considered potential academic partners, KPMG representatives assessed the programs and reputations at a number of schools, including the extent to which their curricula already incorporated data and analytics. Additionally, the firm looked for schools with which it already had strong relationships that could help smooth over any difficulties that might arise.

Once the first two universities were selected, KPMG met frequently with school representatives to discuss the firm’s learning goals, and it held training sessions to familiarize faculty with some of its proprietary tools. But the company left course design up to the schools.

"We were not looking to get into the university business,” says O’Donnell. “Our position going in was that the universities would be the ones to decide how to develop their curricula. But we gave them a framework of what we thought was important, and we provided some of our technology, datasets, and cases.”

Each school developed its own program and devised ways to bring more data and analytics into the curriculum. For instance, at Villanova, students will learn the “data” side of mining and managing information, and the “analytics” part of creating visualizations and interpreting information. At OSU, data and analytics information will be the focus of one of the four core courses, offered in several electives, and sprinkled throughout many of the other courses. In this way, students will constantly get some exposure to the topics.

But despite the increased emphasis on data and analytics, a large part of the curriculum at both schools remains devoted to more traditional skills. Says Michael Peters, chair and Alvin A. Clay Professor of Accounting at Villanova, “Students are still making audit decisions, still using financial statements, and still have to understand all the GAAP concepts. Those pieces did not go away. It’s just that the data they’re looking at is much different than in the past, and that requires them to have a different skill set.”

And while the technical training is specific to KPMG tools and software, students who go on to work at different firms will still have an edge, says Tzachi Zach, associate professor of accounting and faculty director of Fisher’s MAcc program. “Similar tools are used in other companies,” he says. “But the main idea is to allow the students to learn certain principles, using the tools as examples. The principles are far more important than specific software.”

BUILDING AND EXPANDING

At both schools, students begin their programs in the fall, spend the spring semester completing internships with KPMG, then return to school to finish the program in the summer. But one of the key differences is that Villanova delivers the program only to a cohort of students sponsored by KPMG, while at OSU the sponsored students are part of a group of about 90 who all take classes together in the fall. The sponsored students leave for their internships while the rest of the OSU students complete the program.

KPMG supported the two different models to see if there would be any advantages to having sponsored students study in a closed cohort—that is, if graduates would feel more loyalty to the company or develop better working relationships with classmates. But ultimately the company decided it would take too long to track the results of the experiment. So when the program expands to nine schools this fall, the new partners will be able to choose the approach that suits them best. Most are opting to open the program to other university students, as this more flexible approach makes it easier to line up faculty and deliver the courses.

The seven additional schools—Arizona State’s Carey School of Business, Baylor University’s Hankamer School of Business, the University of Georgia’s Terry College of Business, the University of Mississippi’s Patterson School of Accountancy, the University of Missouri’s Trulaske College of Business, the University of Southern California’s Leventhal School of Accounting, and Virginia Tech’s Pamplin College of Business—are all designing their own MAcc data and analytics programs. To help them get started, Villanova and OSU have shared syllabi, curricula, and other program notes.

Says O’Donnell, “There’s been a collegial atmosphere among the professors of all nine schools as they develop content, think through challenges, and help one another deliver the program to the classroom.” KPMG continues to host training programs for all nine schools.

KPMG is trying something new with the program that will be offered at Baylor. The firm is not sending sponsored students to Baylor. Instead, it has worked with the university to develop its curriculum and share KPMG resources so that the school still can expose students to the tools and data that KPMG uses. “We think that’s a unique model that bears watching,” says O’Donnell.

While KPMG is open to expanding the program beyond the current partners, O’Donnell says it’s too early in the process to determine if it will. “It will be almost two years before the new class of students will be joining us for a full audit cycle, so before we expand, we need time to evaluate if we’re seeing the difference we wanted and if these students are gaining the skill sets that will make them more valuable for us.”

LINING UP STUDENTS—AND FACULTY

Part of what makes the program so unusual is the fact that KPMG isn’t just helping universities develop their curricula, it is enabling students to participate by paying for the tuition, room, and board for the ones it sponsors. As O’Donnell points out, the rising cost of education puts certain goals out of reach for some students. To earn a CPA license, for example, students must complete 150 hours of education. While those final 30 hours don’t have to go toward obtaining a master’s, KPMG reps believe that students who opt for the higher degree should study something focused on accounting.

“We felt we were in a unique position to say, ‘Let’s create something that will be of more value to students in terms of the skills that we know will benefit them, whether they work with us or take other jobs within the profession,’” says O’Donnell.

As the program expands in the 2018–2019 school year, KPMG will sponsor 135 students at the participating schools. Interested students first apply to KPMG for sponsorship when they are juniors rising to their senior year. KPMG chooses candidates by considering aptitude, leadership capabilities, and interest in the field. The firm also looks for students with a mix of backgrounds, from sports to IT to entrepreneurship. Students selected by KPMG must apply to the partner schools they plan to attend and gain admittance like any other candidate before they are accepted into the program.

Finding the right students for the program is KPMG’s responsibility; finding the right people to teach it is the job of the partner schools. Both OSU and Villanova draw faculty from their finance and accounting departments, where skills in analytics are required to work large databases and financial statements. Villanova also encourages other faculty to learn about and incorporate analytics into their courses, even if in only small ways, says Peters.

But at Villanova, data-heavy classes—such as those that teach students how to organize data, use visualizations, and mine data—are taught by MIS and analytics faculty; others are team-taught by faculty with business and MIS expertise. To prepare for the first year of the program, some of Villanova’s nonbusiness faculty attended KPMG training and made a point of learning about auditing so they could be better prepared for their classes.

For schools, this opportunity for faculty to see firsthand how the profession is adopting data and analytics is one of the prime benefits of the partnership. “Through the training we had at KPMG, and through the exposure we had to the company’s professionals, we were able to see under the hood of the new auditing practices,” says Peters. “This has put us on the cutting edge of what’s happening in the field.”

That knowledge will inevitably change both teaching and research, says Anil Makhija, dean and John W. Berry Sr. Chair in Business at the Fisher College. “Allowing our faculty to introduce data and analytics into the curriculum caused us to rethink the way we teach both of those subjects, as well as accounting concepts. This ‘shock’ will surely find its way to continuous development in practice and research.”

ADVANTAGES AND RISKS

But the partnership program has benefits that extend far beyond faculty gains. Clearly, KPMG wins by having the opportunity to hire job-ready graduates with advanced skills tailored to the company’s specific needs. But the schools also reap rewards:

Enhanced diversity. For Ohio State, where sponsored students take classes alongside other OSU students, one of the biggest benefits is the diversification of the classroom. The sponsored students have come from states where OSU rarely draws applicants, such as Alaska and Mississippi, and from different types of undergraduate programs.

Improved programming. “The partnership pushed our faculty and department into revising our curriculum to include skills not traditionally required by auditors and accountants,” says Zach. “Universities do not usually move very fast, so the partnership hastened the process of urgency.”

Organizational change. “Designing this program was a great learning experience in how to corral people to work on a new initiative, and it made us a better organization,” says Peters. Villanova set up an internal reporting structure to manage the program, and within this structure it brought together KPMG representatives and faculty from participating disciplines to act as one cohesive team.

“With academia, the biggest challenge is silos. And we had to go across silos to make this program work,” says Peters. “We saw the analytics professor saying, ‘I want to learn more about this audit so I can add some applications to it.’ We heard the accounting people say, ‘I want to add data analytics.’ It started to catch fire. So the way we organized the program internally helped bring down some of the silos.”

Despite these tangible benefits, any close industry partnership involves some risks. In a situation like this, one of the greatest challenges comes from managing the tension between delivering short-term skills and long-term knowledge.

“Managing that tension is especially important in dynamic economies where tools are going to be obsolete quickly,” says Zach. “It’s hard to imagine that students who learn a particular piece of software are going to be using it in five years. That’s why we have to use that piece of software to teach them how to apply the principles that they will use in the future. We have to impart the principles and the preparation they will need for an entire career or a lifetime of learning.”

LOOKING TO THE FUTURE

When all partners are aware of the upsides and downsides, close collaborations between industry and academia can be vibrant successes. But schools and corporations approach potential partnerships from different perspectives and need to pose different questions, O’Donnell says.

For instance, he says, business schools must ask themselves about their strengths and weaknesses. What opportunities do they see in the market? What corporations could make the best partners? And can their faculty create the cross-disciplinary programs that so many industry partners are looking for? Corporations must ask themselves about the challenges they face. What skills do they need to address those challenges? And are they willing to provide experiential learning resources to the classroom?

Other members of the KPMG partnership offer five more suggestions for increasing the chances of success in collaborations between industry and academia:

Align culture and values between partners. “A commitment to reputational integrity—by a school and a potential partner—is the foundation of any successful partnership,” says OSU’s Makhija.

Create common goals. “You have to have a shared understanding and commitment on both sides,” says Peters of Villanova. This means that school officials must make sure they understand what the industry partner is looking for, and they must embed those learning objectives into the program.

Communicate constantly. “We kept presenting information to the people at KPMG, letting them know what we were doing and how we were accomplishing their learning goals, which gave them a sense of comfort and confidence,” says Peters.

Seek faculty buy-in. Make sure that faculty understand the benefits of the new program—and that it will be their responsibility to create it. Says OSU’s Zach, “Faculty are very passionate about the curriculum, and as a result, it’s not going to work for outside partners to try to impose their vision.”

Respect the process on both sides. On the one hand, academic institutions must learn to be agile and nimble “so that we move at a pace that makes the partnership feasible and fruitful,” says Makhija. “On the other hand, the industry partner will need to acknowledge and accept some academic truths, such as the fact that approvals of proposals and programs could take longer than they would in the private sector.”

Makhija believes that schools must build deep and multifaceted industry partnerships if they are to keep up with the pace of change in their markets. “Strong partnerships with leading companies deepen the relevant, hands-on experiences we provide our students while also creating a two-way conversation between these partners and our researchers and faculty,” he says. “Partnerships encourage us to push our curriculum forward and to continuously develop it to meet the needs of our constituents: students, faculty, employers, and the economy at large.”

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This article originally appeared in BizEd's May/June 2018 issue. Please send questions, comments, or letters to the editor to bized.editors@aacsb.edu.