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in November 2018 l The Management Accountant 1

COVER STORY
SKILL GAP IN ACCOUNTING
EDUCATION FOR
PROSPECTIVE MANAGERS

CMA (Dr.) Niranjan Mahendranath Shastri

Associate Professor
NMIMS, Indore Campus
Indore

Rachit Wadhwa Yashna Rampal

Scholar – PGDM Scholar – PGDM
NMIMS, Indore Campus NMIMS, Indore Campus
Indore Indore

66 The Management Accountant l November 2018 www.icmai.in

What is a Skill Gap? Figure 1 Indicating Technical Skill GapsSource: (Institute
“Employers expect graduates to be more prepared of Management Accountants, 2014)
than they actually are, resulting in an expectation-
performance gap. This gap refers to the difference between
the competencies desired by employers and the actual
competencies demonstrated by graduates.” (Brui, 2010)

“A skill gap is a gap between what employers want or need

their employees to be able to do, and what those employees
can actually do when they walk into work.”(Ryan, 2016)

“Skill Gap is the difference in the skills required on the job

and the actual skills possessed by the employees. Skill gap
presents an opportunity for the company and the employee
to identify the missing skills and try to gain them.”(Human
Resources Terms, n.d.) Figure 2 Indicating Non-Technical Skill GapsSource:
(Institute of Management Accountants, 2014)
For example, if an employee is recruited for the position
of management accountant and is expected to do financial
modelling using advanced excel functions, however he is
just able to use basic excel only, then there exists a skill gap.

Is there Skill Gap in Accounting Education?

“Over the past few decades, there has been an increasing
gap between accounting education and accounting
practice”(Siegel, 2010).It is vital for people who graduate
with accounting specialization to possess vivid technical
and non-technical skills so as to achieve success in career
(Klibi & Oussii, 2013), (Gabric, 2001), (Albrecht & Sack,
2000). The recent studies discussed here confirm the
criticism done by (Hawkes, Fowler, & Tan, 2003)that the Why there exists a skill gap?
various methods and techniques written in textbooks or According to(Jha, Chetna, Ponnam, & Ganguli,
taught to students have a limited use while practicing in 2013)“Various factors influence the students’ decisions in
real life. Thus there exists a wide skill gap in accounting exercising their option for the subject area of specialization
education which in turn leading to the presence of skill gap in the Post Graduate Business Management (PGBM)
in accounting professional which is likely to pull back their programs”. Due to such adding factor a void and a gap has
managerial prospects. been created between the skills acquired by an individual
and the skills needed by a recruiter. (Nasrollah & Martin,
(Institute of Management Accountants, 2014) found 2015).
that around the world, the problem of skill gap is being
widely faced by many enterprises, specially in the area of (Hakim, 2016) stated that manyrecruiters do not find
accounting and finance regardless of location, organization such accounting university programs which can provide
workforce size or job role. The gap between competencies graduates with required skill sets and such university
possessed by the accounting and finance professionals and graduates are not able to achieve expected standards
those needed by the enterprises is large. According to this of practitioners in thetechnological areas, interpersonal
study, the gap not only exists in technical but also in non- abilities, critical thinking, team building, communication
technical skills. Following two figures clearly indicate the skills, leadership, emotionalintelligence and ethics.
same: It appears that university accounting programs are
generallyframed togive a heavytheoretical accounting input
rather than focus on employability.

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 COVER STORY

How Skill Gap Harms & Why Bridging Gap is Needed?

(Vroom, 1964) stated that if an employee thinks that, he
does not possess requisite skills to perform a job, it will
adversely affect his belief about his ability to perform the
job and in turn, he will not be motivated to do that job.

(Holland, 1997) described “the mismatch between the job

A skill gap is a gap between requirement and the employee abilities lead to discontent,
poor performance, low achievement, and job turnover”.
what employers need their
Inferior HR and Ethical practices may even lead to
employees to be able to do, corporate frauds (Mittal & Shastri, 2018).
and what those employees (Edwards, 1996) found that a deviation in the demands
can actually do. In this of the job and the competence of the employee to leads to
strain and tension. On the contrarydemands of the job and
study an attempt is made the competence of the employeeleads to job satisfaction.
to discuss the concept of “From the employer standpoint, job satisfaction is
skill gap and its existence important because it increases employee’s motivation and
productivity. If the employee is satisfied he/she will be more
in accounting education motivated to effectively complete a job. When individuals
with respect to prospective are satisfied with their jobs they will be motivated to
work harder and less likely to leave their jobs. Therefore,
mangers. This paper also job satisfaction contributes to motivation as well as the
employee’s future at the organization” (Brooks, 2007).
discusses whether any such
Such positive state of mind of the employee in which
gap actually lies between he goes the extra mile while discharging his ordinary
accounting professionals duties is called employee engagement which play a
vital role in enhancing firm value. (Shastri & Rajpurohit,
and employers and if so 2017).An engaged employee’s work-related state of mind
is characterised by dedication and vigour (Shastri &
what are the reasons behind Rajpurohit, Engaging the Millennials: Need of the Hour for
the same. The consequences Indian PSBS, 2018).

of skill gap for employers It is extremely important to bring coordination in HR

issues even for better synergy in Mergers &Acquisitions
and employee are also (Shastri & Shastri, 2014).
discussed in this paper Thus in brief it can be said that skill gap is not only
and a few suggestions are harmful for career prospects of the employee but also
create hindrances for firm performance, value and growth.
offered to bridge this gap. Hence there exists a clear cut need for bridging the skill gap.

How to Bridge the Skill Gap?

According to (Kalpan, 1984) the accounting education
for management students should be based on the basis of
interaction with real organizations and not on the basis of
models. He contributed to this field by innovating Activity
Based Accounting, Balanced Score Card and Economic

68 The Management Accountant l November 2018 www.icmai.in

Value Added which is now being widely studied and used can be done. In a group people of different nature, work
in the world of management accounting. capacities and intellects sit together to attain a common
goal of completing the task provided to them, thus
According to(Lange, Jackling, & Gut, 2006)the contents introducing them to a skill of team work and patience.
which are being taught to students in their under-graduate or
graduate courses need to be modified. The material cannot Software Based Learning: (Wood & Bailey, 1985) talks
be content based or bounded to theoretical techniques or about the real time experience which an individual gain
skills. To excel in this changeable environment, they need through simulation. According to (Foster, Gregor, Heaney,
to develop few extra generic skills and must showcase O’Neill, Richardson, & Wood, 2011) to understand the
certain technical skills. Generic skills in this reference is concept of electronic trading system, practical work is
to imbibe transferable characteristics to suit the business required. As it is difficult to do it in real time, thus simulation
in which these freshmen work, however they are not was used as a technique to achieve the experience and
constrained to communication, leadership, critical thinking execute it. Thus as he says, with advancing technology,
or interpersonal skills. Therefore it has been recommended one cannot stick to books and understand the Á concept.
that the accounting education needs to mirror a more Along with the traditional methods of journals and
prominent spotlight on the improvement of generic skills registers, the same should be taught on various softwares,
so that accounting profession can have more capable and computation and understanding for the same should take
proficient professionals (Albrecht & Sack, 2000). place in college so that the students are familiar with basic
working of accounting softwares and will make them more
With the quick and speedy change in business efficient during their work span in industries
environments and with steady and slow change in the
syllabus and regulation in colleges/ universities, there is a Exposure to Industries: (Sen, 2015) stated that more
formation of gap between the skills imbibed in you by the and more involvement of students with the industry makes
education system and the skills which are required by the a proper hit to reduce the gap. During their graduation or
industry recruiters. post graduation courses, students should be given exposure
to industries and companies, various visits and guest
In the field of accounting, new professions are coming lecture with industry professionals should be arranged,
up like consultancies which not only require the technical so that they know that what is expected out of them and
skills or the accounting skills gained by a student but also they can develop themselves on those lines and in that
other aspects or interpersonal skills are catered to. Thus direction. Students should be exposed to various corporate
to bridge this gap, education system needs to develop projects during their managerial course, which gives them
corresponding skills in students along with their general the feel of working as a professional and could figure out
technical knowledge imparted by them. The curriculum their problems and fill the voids by developing their skills
or methods used to impart these skills doesn’t have to be accordingly.
stagnant and can be counted under the practical aspects
which an individual will need in their professional life ahead. References
1. Aiken, M., Martin, J., & Paolillo, J. (1994). Requisite Skills of Business
The few styles and methods which can be considered by School Graduates: Perceptions of Senior Corporate Executives. Journal of
universities/ college can be: Education for Business , 69 (3), 159-162.
2. Albrecht, W. S., & Sack, R. J. (2000). Accounting Education:
Group Projects and Case study Approaches: According Charting the Course through a Perilous Future. American Accounting
to (Hamilton & Klebba, 2008) case study approach should Association, American Institute of Certified Public Accountants, Institute
be incorporated in the study of management education. of Management Accountants, Arthur Andersen, Deloitte & Touche, Ernst
This gives them a real time experience and a new learning. & Young, KPMG, PricewaterhouseCoopers.
He calls case analysis to be a perfect mixture of learning 3. Boatright, J. R. (1998). Teaching Finance Ethics. Teaching Business
in classrooms and real time experience. Case study also Ethics , 2 (1), 1-15.
develops the skill of critical thinking as an individual will 4. Brui, B. &. (2010). Expectation-Performance Gap in Accounting
use each and every learning to crack the case. To promote Education: An Exploratory Study. Accounting Education: An International
team work, case studies can also be done in groups. To Journal , 19 (1), 23-50.
cover various skill deficiencies like team work, good orator, 5. Edwards, J. (1996). An Examination of Competing Versions of The
negotiation and other interpersonal skills these activities Person-Environment Fit Approach to Stress. Academy of Management

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