Faculty Internships: Connecting Tax Practice and Academia

Editor: Annette Nellen, J.D., CPA

Every year, thousands of eager graduates leave college campuses to join the accounting profession. These new professionals seek opportunities to apply the theory and skills learned in the classroom to real-world client situations. Yet, many of the accounting and tax professors training these future leaders of the profession lack a clear understanding of the realities of today’s accounting and tax practice.

Although many accounting academics have practice experience, decades may have passed since their transition from the “real world” back to the ivory tower. Faculty internships, in which academics reenter practice for a period of time, are valuable to professors and the sponsoring organizations. This column describes the benefits of faculty internships and issues faculty and firms interested in pursuing such arrangements should consider. While this discussion focuses on tax professors and practice, similar opportunities exist in other areas of accounting.

Both authors of this column completed faculty internships in the tax division of a large office of a Big Four public accounting firm. During internship periods of approximately four months, they worked on a variety of client service projects. The experiences were diverse, encompassing tax return preparation, technical research, memo writing, accounting methods projects, tax provision review, and participating in national and local office training. Although these internships provided somewhat similar experiences, other quite different faculty internship opportunities also exist.

Across the country, tax faculty have completed internships with the federal government at the IRS, the Joint Committee on Taxation, and the Senate Finance Committee. Within public tax practice, faculty have interned at Big Four, national, and local firms. Although these public accounting and government experiences are different, discussions with any one of these faculty interns would probably have a common theme: It was a valuable, worthwhile experience. Opportunities exist or can be created for those faculty and sponsors willing to pursue them.

Benefits of Faculty Internships

The benefits of faculty internships are mutual from the perspective of the academic and the professional. The most tangible benefit for all is curriculum improvement. During the internship, faculty members learn what the most important technical topics currently are as well as the emerging issues of a changing business environment. This learning may be on-the-job during a client engagement or during formal training the faculty member attended or completed on the web.

Faculty interns also become acquainted (or reacquainted) with the knowledge and skills that new staff need to successfully start their careers and remain successful long term. As a result, faculty returning to campus can adjust the tax curriculum to ensure that graduating students are prepared for work on day one. The obvious benefit for the firms is that students will be better prepared to join the workforce as the curriculum responds to the firms’ needs. In turn, students graduating from those programs will be sought after by the firms because of their increased preparedness.

Beyond technical knowledge of tax, the curriculum may be improved in two additional areas. The first is ethics and independence. As a new employee at a public accounting firm, the faculty intern must complete the requisite independence and ethics training. Although faculty are familiar with the Sarbanes-Oxley Act (SOX), P.L. 107-204, the stark reality is that regulations in public accounting have changed dramatically since the faculty were in practice (which was likely before SOX was enacted). Training in ethics and regulatory developments can serve to remind faculty interns of how intense the regulatory environment can be. This new practice perspective will certainly enhance classroom discussions of the practice implications of ethical decisions.

The second area is technology. The amount of technology used in tax departments across the country has significantly increased, even within the past few years. Working with the clients and their specialized software for compliance and provision engagements is a lot for new hires to absorb in addition to the other new challenges they face. When speaking with staff and asking what they wish they had learned in school to help with their jobs, the most common answer, by far, was technology. Any opportunities to bring technology into the classroom would be a welcome improvement.

Faculty internships can also enhance relationships between the firm and the university. Spending three or four months at a firm is an intimate experience. Everyone involved will have a much better understanding of the challenges and issues facing academia and the tax profession today. In addition, faculty will develop one-on-one relationships with professionals who are generally more than happy to be a go-to person for technical questions, guest lecture invitations, or case study assignment ideas. From the employer’s perspective, the firm will have a faculty member with a vested interest in the profession who can provide an academic viewpoint or student perspective. The faculty member can also introduce students and professionals for recruiting purposes.

A faculty member’s role as a student adviser is also improved by the internship experience. Students often seek faculty advice when choosing a major, choosing between tax and audit, and choosing a firm for an internship or full-time position. As part of these conversations, students often seek to understand the day-to-day nature of the job. A faculty intern can offer much more credible and specific insights in response to these questions.

Internships with the federal government will also improve the curriculum and be beneficial when mentoring students. However, the technical knowledge acquired may be very specialized, depending on where the internship is done. A faculty member may spend a significant amount of time studying and researching one particular law or technical area. Alternatively, the experience may be in developing legislation, which will provide an understanding of the legal process of enacting statutes or of procedural issues of administration. This knowledge will be useful in enhancing the classroom experience in these specialized areas.

There are many long-lasting benefits of a faculty internship. It is important, however, for faculty to understand that one of the direct benefits of the internship is not research related. Faculty should not enter into an internship at a public accounting firm with the expectation of acquiring research subjects, running experiments, gathering data, or performing a field study. The internship should be focused solely on professional practice. An indirect byproduct, of course, may be research ideas or future contacts, but those benefits should not be the primary goal of the internship. The faculty member applying for an internship should focus on acquiring in-depth knowledge of the tax practice. Some federal government internships do involve research more directly, so faculty should consider the type of internship that best fits their goals.

Interested? Things to Consider

Faculty interested in pursuing an internship should carefully consider logistical issues before proceeding. In many cases, a sabbatical leave from the university will be necessary to devote the requisite time to an internship. Short-term experiences of a few weeks are likely not an option for public accounting firms due to regulatory requirements. Within the accounting profession, access to confidential client information is restricted to employees who are subject to the firm’s employment policies and procedures. To achieve a hands-on experience, an academic must be hired by the firm, albeit on a limited basis. Hiring any employee is costly for a firm and not worthwhile for short-term experiences. Faculty should be willing to devote at least a semester to the internship so the benefits exceed the related costs. Summer internships during faculty nonteaching time may not be an option with some firms because this is a slow period in many practices.

Faculty must also consider their preferences for location in pursuing an internship. The authors chose to intern away from their home cities because this allowed a full immersion in the experience and limited distractions from the home university. However, family considerations may favor a local experience for many faculty. In pursuing federal government opportunities, relocation to Washington, D.C., may be necessary. As part of the decision process, faculty must consider both the costs of housing and the challenges of either moving their family or commuting home periodically.

Accounting department chairs and business school deans may not immediately recognize the benefits of faculty internship experiences. Faculty members must be prepared to sell their colleagues on the broader benefits of this temporary absence from the university. However, based on the discussion above regarding the benefits for the academic and university, hopefully this will be an easy sell. Sabbatical policies may require faculty members to submit a written report on the experience after returning to campus.

Faculty should contemplate and be prepared to describe their goals in pursuing the internship. For example, the authors’ goals were primarily to gain a current perspective on the realities of tax practice, the use of technology in facilitating client service, and the effects on the profession of recent regulatory changes. While these goals were fairly broad, others may have very specific goals, such as working on tax provision assignments or in a specific practice area, such as mergers and acquisitions.

Faculty must recognize the need to balance their specific goals with the needs and goals of the sponsoring organization. Flexibility is the key to structuring a successful internship experience. Practice personnel in the area targeted for the internship will likely expect to interview the faculty member before a final decision is made on extending an internship offer. This process offers faculty an excellent opportunity to practice the advice they give to students about interview skills.

For faculty wishing to intern in a Big Four tax practice, some formal programs exist. They should raise the issue with their local recruiting professionals and/or national recruiting contacts. If a formal program does not exist, they need to work with local recruiters and practice professionals to see whether their local office would be willing to sponsor them as faculty interns. This requires persistence—it may take several conversations with different contacts to generate interest. These conversations should stress the benefits discussed above and might include sharing a copy of this column with their firm contacts.

Firms that seek to offer faculty internship opportunities must similarly plan for a successful experience. Often firms tend to consider faculty as ideal candidates for special projects, but most project work has a short planning horizon, which may not be feasible for the faculty member. All firms are encouraged to adopt a broader perspective on the usefulness of faculty interns. The process of applying for and scheduling a sabbatical at a university often requires planning up to a year in advance. Most faculty simply cannot be available for a special project commencing in a matter of weeks. The authors’ internships were not targeted at any particular client project. Instead, they became part of the tax staff group available for ongoing client work as it arose. This approach offered the opportunity for diverse experiences and interactions between the authors and a larger group of practice personnel.

Practice leaders and recruiters may need to convince client service personnel of the benefits of a faculty intern. Many working tax professionals are understandably concerned that a faculty member hired for a short-term internship will not have sufficient work experience to function effectively on the job. However, many tax academics have prior practice experience and valuable skills that are transferable. For example, tax academics are skilled at researching technical tax issues, writing memos, and working with young people. Tax academics can also help train and coach new staff.

Practice leaders might consider setting the faculty intern’s billing rate relatively low as an incentive for practice personnel to use the faculty on their projects. Since many professionals may seem wary of working with academics, planning some lunches, coffees, or get-togethers between the faculty member and some managers and partners is key to smoothing the way to scheduling a faculty member for client work. These meetings and discussions of expectations could even be done before the start of the internship so the faculty intern can begin client work immediately upon starting the internship.

If a faculty intern is expected to work on tax compliance projects, the firm should consider sending the faculty member through the training program used to acquaint new tax staff with compliance tools and technology. Benefits of this approach can be twofold: The faculty intern will be better prepared to complete compliance projects and also could be available to assist with training in the future. Both of the authors (and many other former faculty interns) currently train new tax staff at the firm at which they interned.

Conclusion

A faculty internship can be a fun, rewarding, and unique experience for academics and firms. Allowing academics to understand the current tax practice environment will directly result in an improved curriculum that benefits students and firms. Furthermore, fostering a relationship between a firm and a university is a tangible and important benefit. An indirect result of the internship may be a research idea that has a practical application for years to come. Although this column focused on tax practices, it is important not to forget colleagues in audit. Internships for faculty who teach auditing provide many of the same benefits.