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A STUDY ON THE NEEDS OF PRACTICAL TRAINING FOR ACCOUNTING STUDENTS; STUDENTS' PERCEPTIONS

YUSLIENA BINTI YUSOFF 99343505

MASTER OF ACCOUNTING

A dissertation submitted in partial fulfillment of the requirements of the Universiti Teknologi MARA for the degree of Master of Accountancy

MARCH 2001

ACKNOWLEDGEMENT

like to extend this appreciation to those who have directly and indirectly contributed invaluable assistance, co-operation and support in completion of this study. Special thank goes to Prof. Dr. Juhari Samidi, the former Dean of Faculty of Accountancy for selecting me to join the Master of Accountancy program and providing me with valuable advice during the program. My thanks is also extended to Dr. Nafsiah Binti Mohamed, the

Coordinator of Master of Accountancy program and also my supervisor, Dr Zubaidah Binti Zainal Abidin, for sharing her precious time in contributing her comments, guidance and general supervision to this dissertation. I would also like to extend my thanks to The Training Department of the Registrar Office of the MARA University of Technology in giving me the opportunity to further my studies. My special thanks also goes to my husband, Muhammad Fadzil Bin Ibrahim, my sweet little lady, Nur Alya Zulaikha, my family and my inlaws for being there when I needed them, for being strong and patient and for giving support and confidence in me in completing my study.

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ABSTRACT

The main objective of this study is to identify the accounting students'

perceptions towards the importance and the needs of a practical training

program. Various job attributes previously used by Reed and Kratchman (1989) were adopted in order to meet the objectives of this study. Extensive

literature on the potential benefits that can be gained from practical training

had been reviewed.

The other objectives of the study is to examine the perceptions of the male and female students and to determine the perceptions of BACC (Bachelor of
Accountancy) students from Part 1 to Part 4 on the importance of various job attributes. The study was conducted specifically in UiTM Seksyen 17, Shah Alam by

distributing questionnaires to BACC students during their class session.

It was found that the students perceived very important that practical training

help them build up their confidence. Other findings show that there is no
significant different in perceptions between gender and among students in

different parts on the importance of the various job attributes.

From this study, it indicates that practical training gives may benefits to students and the students themselves perceived that the practical training is necessary and important to them. Therefore the need to include the practical attachment in the curriculum of accounting, need to be considered.

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LIST OF TABLES
Page Table 4.1: Summary of Demographic Profile of Students on Gender and Part Summary of Demographic Profile of Students on Gender and Age The Means of the Students' Perception On the Importance of Various Job Attributes Comparison of Means of Students According To Gender and the Independent t-test on Differences between Gender's Perceptions Comparison of Means of Students According To Parts and the one-way ANOVA on the Means Summary Type of Organization Preferred Area of Knowledge Preferred Period of Practical Training Preferred
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Table 4.2: Table 4.3: Table 4.4:

25
27

31 35 40 41 41

Table 4.5: Table 4.6: Table 4.7: Table 4.8:

HI

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TABLE OF CONTENTS
Title
Acknowledgement Abstract List of Table Table of Contents

Page
i ii iii iv

Chapter 1
1.1 1.2 1.3 1.4 1.5

: Introduction
Introduction Statement of the Problem Objectives of the Study Significance of the Study Organization of the Study 1 4 4 5 6

Chapter 2
2.1 2.2 2.3 2.4

: Literature Review
Introduction The Potential Benefits and Importance Of Practical Training Benefits and Importance of Practical Training: Empirical Evidence Few Detriments of Practical Training 7

10 15 17

2.5
Chapter 3
3.1 3.2 3.3 3.4 3.5 3.6 3.7

Summary
: Research Methodology
Introduction Research Design Research Hypothesis Research Questionnaires Selections Subjects Statistical Analysis Limitations

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19 19 19 20 21 22 23

IV

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Chapter 4
4.1 4.2

: Data Analysis and Findings

Introduction Summary of Demographic Profile of Student Statistical Analysis 4.3.1 Comparison of Means of Students' Perception on the Importance of Certain Job Attributes 4.3.2 The Independent t-test 4.3.3 Analysis of Variance (ANOVA) Discussion of the Findings in Section B of Questionnaires Summary 24 24 26

4.3

26 30 34
40 43

4.4 4.5

Chapter 5

: Conclusions and Recommendations

5.1
5.2 5.3 Bibliography Appendix

Summary of Findings
Limitations Recommendations for Future Research

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46 46

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Chapter 1: Introduction

CHAPTER 1 INTRODUCTION

1.1

Introduction

Working experience has become a vital component of any education and profession. The role of practical training has become increasingly important in the career development of students in any field. Nevertheless, a practical training program can be an important part of an accounting
education. For students, it provides important insights into the "real world" of accounting. It can also open the doors to permanent employment opportunities. While for employers, practical training can provide skilled

and dedicated temporary employees at a minimal cost for businesses and nonprofit organizations. Most practical training programs offer full-time
employment for a period between three to six months.

A practical training program for accounting students has been implemented for several years ago in most universities in Malaysia. Previously, Mara University of Technology (UiTM) has implemented the practical training program in its accounting degree curriculum as a compulsory course. However, currently students are given option either to do their practical training or to finish their course earlier without the practical training. Other universities like Universiti Putra Malaysia are
currently implementing the practical training program as

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Chapter 1: Introduction

compulsory to their students, while Universiti Utara Malaysia gives option

to their students. According to Henderson (1996), the accounting profession sees

universities and higher learning institutions as job training center, which provide students with skills for careers in accounting. They expect that the

university courses will focus on to train young accountants both in

theoretical and practical skills.

Conversely, the university may view their role as research and in

educating their students, rather than training. From the university point of view, students who are able to analyze arguments, logically and critically;

and independent and adaptable as an ideal graduate. Although university

try to provide both theoretical and practical knowledge to their students,

but the profession regards new graduates as inadequately prepared: full of theory, unaware of the most basic aspects of the "real" world, and virtually
useless for as long as a year. (Henderson, 1996).

Most companies and firms

are currently looking forward

for

knowledgeable employees that can do their job without full and close

supervision. They would favor those candidate that have analytical skills, communication skills, independent and competence. Thus, working experience is fundamental to students entering the job market, as practical training or in other words, the internship program, would provide them with the essential practical knowledge required by the profession of
accounting.

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Chapter 1: Introduction

Therefore practical training or internship program should be beneficial especially to fresh graduates, as they will gain useful practical knowledge apart from the theoretical knowledge obtained in the classrooms. Practical

training can be particularly useful recruitment tools in the accounting industry, where there is strong competition for top talent. Such programs allow students to explore their interests and better develop their
accounting skills, while enabling employers to evaluate prospective new hires.

Previous studies have looked into the potential benefits of practical training to students, faculty members and employers providing the practical training programs. The present study aims to replicate part of a research previously done by McCombs and VanSyckle (1994) who examine the students1, employers and school administrators concerning their perception towards the accounting internship programs. Their findirig
suggests that overall 100% of the students and employers surveyed were

in favor of internship programs, as were 95% of school administrators.

The current study aims to investigate the perceptions of students towards

the importance of certain job attributes, which they can either do in a job
or receive from a job during their practical training program. This study

will look in a Malaysian context, particularly in UiTM.

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Chapter J: Introduction

1.2

Statement of the Problem

Previous studies have been carried out concerning the potential benefits of practical training to groups such as employers, school administrators and students groups. Most literature stated that the potential benefits to students include skills enhancement, gaining maturity, able to gain better understanding of classroom lesson and many more. Conversely, employer firms are said to gain benefits, which enhanced and facilitated their recruiting efforts at a lower cost. Since there are lack of empirical support to validate those propositions, this study attempts to investigate the importance of those potential benefits gained from the practical training in the perspective of accounting students. Therefore it is hoped that this study will be able to bring some ideas on the need of the practical training for accounting students. It is also hoped that the finding of this study may be used in considering the practical training program to be included in the curriculum as a compulsory course.

1.3

Objectives of the Study

In order to obtain the information concerning the students' perceptions toward the importance of the practical training program, some potential

benefits that can be obtained from a job are listed in the questionnaires.
Parts of the items were adopted from the questionnaires used by Reed and Kratchman (1989) who examined the students' perceptions of the importance of job attributes.

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Chapter I: Introduction

This study will use these job attributes in order to achieve the following

specific objectives:
1.3.1 To ascertain the accounting students' perception towards the importance of practical training (job attributes). 1.3.2 To determine possible factors that could significantly influence the students' perceptions of the importance of certain job attributes as follows: 1.3.2.1 To determine whether gender has a significant influence on the perception of students. 1.3.2.2 To determine whether the perception of students in part 1, 2, 3 and 4 differ. 1.3.3 To obtain additional information on the students' preference on the practical training program.

1.4

Significance of the study

It is hoped that the results of this study would assist us in evaluating the necessity of the practical training program in UiTM, which currently are made optional to students and no longer compulsory as before. The results of this study would represent an empirical evidence of the proposition that practical training program would be beneficial in aiding students to gain knowledge, skills and experience in the profession of accounting.

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Chapter 1: Introduction

1.5

Organization of the study

The next chapter will discuss the relevant literature review. Research
Methodology will be discussed in Chapter 3, data analysis and discussion of results will be performed in Chapter 4 and finally, conclusion will be

made in Chapter 5.

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Chapter 2: Literature Review

CHAPTER 2
LITERATURE REVIEW

2.1

Introduction

Work experience has becoming a vital ingredient when one is looking for

a job. Apart from the education and qualification of the candidates, most of the employers that are seeking for employees will consider those with
working experience. For fresh graduate without the working experience, practical training may help them to enhance their resume. According to Buck (1992), the classroom setting does not provide the practical experience students need upon leaving college. Some students

may not fully understand the concepts that the instructor is trying to
illustrate through textbook exercises. Internship programs represent one

way for students to apply knowledge gained in the classroom in a practical and beneficial manner. Students who are given the opportunity to walk a factory floor or work firsthand on an integrated accounting system will have a better understanding of classroom material and will be better able
to apply this knowledge in future employment.

The purpose of a practical training is to ensure that before students enter

the job markets or admission to membership of the association, the newly qualified have gained adequate experiences and training in accounting and

related areas. A practical training program can benefit both students

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Chapter 2: Literature Review

participating in the program and employers offering to provide the training.

William J. Lyons, assistant professor of business administration at Bluffton Colleges noted that the internship is a period of transition during
which we see our young people grow...stepping out of the protected confines of the classroom and into the real world of business. They are

being asked to apply what we as academicians have imparted to them. The

textbooks now become their trusted ally and resource. (Buck, 1992)
As a general guide, Hwa (1997) stated that work experience of CPA

students should encompass elements, which meet the following purposes:

Reinforce technical education by providing the opportunity to apply the theory previously learnt.

Develop technical working skills which can be applied to a variety

of future situations and which include the competence to make use
of relevant information technology.

Exercise and develop the personal skills and attributes of

judgement, initiative, objectivity, commercial sense, administrative

ability, the motivation and supervision of others and the all important skill of communications; in sum the ability to operate

effectively in a business environment. Full experience in these

areas is dependent on depth of experience.

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Chapter 2: Literature Review

According to Faculty of Economics and Business, University of Maribor, during the practical training the students must get to know practical solutions in the organization of a company and of its accounting, that is, organizational environment of accounting and organization of accounting (organizational components, organizational regulations and other rules, computer support to accounting). They should participate in the: 1) Implementation of bookkeeping or account processing, recording of business events into books of accounts, elaboration of detailed and fundamental financial statements, product and services costing reports, segmented reports and consolidated financial statements; 2) Accounting and analyzing of assets, liabilities and capital, costs, products and services, financial results, funds and cash flows as well as financial statements; 3) Budgeting or the formation of budgets of assets and liabilities, costs, products and services, financial results, funds and cash flows and budgeted financial statements; 4) Accounting supervising: within indirect control of accounting processes in auditing and in the construction of the internal control system in accounting. 5) Creation of the catalogue (file) of regular and irregular accounting information for business decision-making.

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Chapter 2: Literature Review

2.2

The Potential Benefits and Importance of Practical Training

Practical training programs have gained an increasing importance in the process of providing students with a more meaningful education. Apart from benefits gained by students and employers, college and universities will be able to promote the practical training program as an important feature included in their curriculum, while students can make use of their practical training experience in order to enhance their resume during job seeking process. The use of college and university students as interns is a process, which an increasing number of accounting firms and businesses have become accustomed to, in recent years. Use of such interns works to the advantage

of both students, who gain some real-world experience, and employers

who obtain low cost help during busy seasons without the long term commitment of a permanent employee. (Games and Gierlansinski, 1999). Accounting internships represent a win win situation for the student and the corporate employer. The students gains valuable experience in a realworld environment while the business acquires badly needed extra help, especially during year-end closings. Particularly attractive is the fact that these temporary workers can be obtained at little or no cost to the corporation. In addition, the university receives recognition as a valuable link between theory and practice, between academics and the workplace. (Buck, 1992)

In 1952, the American Accounting Association (AAA, 1952) noted the

benefits of internship programs to accounting students. Those benefits

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Chapter 2: Literature Review

include: broader exposure to accounting techniques and problems not

encountered in the classroom, improved understanding of the business

world, and improved ability to evaluate and assimilate classroom experiences. Lowe (1965) found that former interns felt their internships help clarified certain points of accounting theory previously studied in the
classroom.

According to Ferguson, Richardson and Wines (2000), accounting students begin to develop an appreciation for the role and function of
auditing in the course of prior accounting studies. However, the emphasis in such studies tends to be on basic principles and reporting standards. The

students* appreciation of the auditing function is likely to be incomplete

and possibly biased toward an idealized and naive view. An academic

audit course and work internship experience with an audit emphasis can
extend students* view to include more practical considerations. English and Koeppen (1993) stated that students should benefit from an

internship by acquiring first-hand experience in applying accounting and

auditing knowledge to solve real-world problems. Such experience was identified as an important quality of the accounting graduate. Other study

by King (1996) confirmed that new hires with internship backgrounds are
better prepared for the workplace.

Other abilities and knowledge desirable for the accounting graduate are also an inherent part of an internship experience: working with others,
organizing and delegating, withstanding and resolving conflict,

transferring and receiving information, understanding the internal working

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Chapter 2: Literature Review

of an organization and gaining an understanding of interpersonal and

group dynamics in business.

They further stated that students' motivation and ability to learn should be

positively affected by the internship experience. A positive experience

would be one in which the student gained an appreciation for skills needed on the job, learned what employers expect from employees, and acquired good work habits. These positive internship experiences will result in improved grade performance for interns upon returning to coursework.

McCombs and VanSyckle (1994) in their study conduct an opinion survey

to gather information from employers, school administrators and students concerning their perceptions toward accounting internship programs.

They found that accounting students are gaming maturity through

exposure to the business world and learning valuable lessons during the

internship. Such areas are like estimation and judgement, topics not fully
presented in most textbooks.

Human relation in a work environment is another non-textbook area where

students1 skills are normally improved. By helping to sharpen these skills

during the internship "trial" period, an employer can contribute
meaningfully to a student's development and ability to better clarity career

goals. Such assistance should also benefit the employer, as it helps to

assure that the subsequent full-time employment decision is based upon realistic assumptions and thus improves the retention rate.

Practical training program also benefits the employers providing the

practical training to the students. McCombs and VanSyckle (1994) further

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Chapter 2: Literature Review

stated that the principal advantage to an employer of having an internship program in place was that it enhanced and facilitated their recruiting efforts. Recruiting is improved primarily because the employer is provided with a no-obligation look at a prospective employee. This enables employers to experiment with new positions and personnel without making a long-term commitment. Internships also make oncampus recruiting easier because of the increased exposure for the firm through student word-of-mouth. The other advantages employers can gam from internships including extra

help to fill employment needs, improved public relations, lower cost than regular employees and the ability to train before hiring. Thus, employers use interns to meet seasonal workload demands, including peak times or vacation fill-ins.
Furthermore, vacation and insurance benefits, along with unemployment

compensation, are not necessary; thus, real employment costs are somewhat minimized. There is also generally no employee turning over
during the internship program and internship also offer the company an

opportunity to assess its internal training and supervisory functions. Brooklyn College Career Services in its manual, "Guideline for Employers" stated that the benefits to the employer in the internship program are obvious. Savings in recruitment and training costs are two
significant and primary advantages where the internship serves as trial

employment. Other benefits reduced labor costs, increased productivity,

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Chapter 2: Literature Review

improved ties to the college, and enhanced company or organization

visibility and reputation on campus.

According to Lynch (Rowan University, www.charolette.rowan.edu). by providing training to students, the employers are allowed an opportunity to assess a student's skill and competence levels in many areas with no commitment to permanent employment. English and Koeppen (1993) also stated an obvious benefit to the employer firm is the opportunity to obtain qualified students to serve as employees during heavy workload periods. The firm also has the chance to evaluate its training and supervisory programs, and may develop a lasting relationship with the school and the students of the sponsoring school. Potentially, an internship can be a probationary period for a student to prove himself as a valuable employee who should be considered for longterm employment.

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Chapter 2: Literature Review

2.3

Benefits and Importance of Practical Training: Empirical Evidence

A study of one advertisement agency by Scott and Frontczak (1996)

revealed that an internship was judged to be very important in the hiring decision by over 54% of the respondents. Less than 25% thought that the Dean's list, scholarship or college GPA were very important. This implies that, good qualification only does not necessarily means that a particular student is competent in performing job, but practical knowledge is vital. Practical experience can also bring advantage to students in terms of their expectation towards the career in accounting profession. This is because students without practical training may find that their perception of accounting job differ after they actually entered the profession. When they find that their expectation differ, this can lead to dissatisfaction and frustration which can results in intention to leave. Thus, high turnover of employees will be costly to accounting firms. Elliot and Jacobson (1992) stated that the common disappointment associated with early employment is unmet expectations. Reports of job dissatisfaction and high turnover rates for competent entrylevel accountants are problems that are faced annually by the public accounting profession (DeZoort, Lord and Cargile, 1997).

Practical training therefore benefits to students as it can help reduce the expectation gap the students face when they actually entered the job in
accounting profession. Students can gain practical experiences that are meaningful to them so that they can feel the actual situation during the

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Chapter 2: Literature Review

practical training before they actually engaged with a permanent

employment. As a result, job dissatisfaction can be avoided and therefore turnover rate can be reduced. Reed and Kratchman (1989) in their cross sectional and longitudinal study
found that accounting students and accounting practitioners (with working experience of up to 15 years) have significantly different perceptions of the accounting work environment. They found that students do not hold the same perceptions of the relative importance of various job attributes

when they work. The study indicated that accounting graduates alter many of their beliefs previously held as students.
Several researchers such as Koehler, (1974); Knechel and Snowball, (1987); Kwong and Gladie, (1991); and English and Koeppen, (1993)

have examined the relationship between accounting internship and subsequent academic performance. All of the above mentioned researchers
found that there is a positive relationship between internship and

subsequent academic performance except for the research results by Knechel and Snowball, (1987) which are contrary. Research result by English and Koeppen (1993) suggest that internship assignments, when made available to students earlier in their academic careers, can significantly and positively affect grade performance. Such enhanced grade performance suggests that a student's knowledge base in
accounting and business should have increased, and a student's motivation

to learn should be enhanced when a positive internship experience has

occurred.

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Chapter 2: Literature Review

This research by English and Koeppen (1993) is contrary to the findings of

Knochel and Snowball (1987) which found that the average performance

across all courses did not differ significantly between intern (students with
practical training) and non-intern (students without practical training) groups.

2.4

Few Detriments of Practical Training

Although internship program may be beneficial, there are few detriments

to the program. McCombs and VanSyckle (1994) in their study identified
few disadvantages, but the reported disadvantages are not significant to

any of the participants of such program.

The disadvantages, primarily affecting students and school administrators,

which include scheduling and timing problems; program administrative time and cost; and monitoring of job placement quality. The only reported

disadvantage that relates to employers was the potential for developing poor relations with the college/university if the internship arrangement

was unsatisfactory.

However, this concern did not appear to be too serious as it was mentioned
by only 8% of the employers surveyed in the study. Overall, 100%

respondents surveyed in this study were in favor of internship program.

Lynch (Rowan University, www.'charolette.rowan.edu') stated that school

encounters many problems in administering the internship program. One

of the problems is that, for the program to be effective, the internship must
be supervised by a faculty member meeting regularly with a number of

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Chapter 2: Literature Review

students. It is therefore often necessary to hire a full time administrator to ,

locate positions, arrange interviews, negotiate salaries and place students in suitable positions. The other problem may be faced by employer in terms of their responsibility to provide close supervision and challenging learning experiences to the student. The employer is also asked to evaluate the student's performance, a responsibility often disliked by the employer,
especially if it affects the student's grade.

2.5

Summary

Based on the advantages of internship identified by those researchers, an internship program should be made available to all universities and
colleges that provide accounting courses. Students should gain as much information and skills as possible during the practical training, to provide

themselves for practical real-world business and auditing problem. Schools that do not presently have an internship program should consider
modifying their curriculum to allow accounting students an internship experience in their academic program.

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