Academic journal article Academy of Accounting and Financial Studies Journal

Factors Influencing the Likelihood of Developing a Master's Degree in Accounting at U. S. Aacsb Business Schools

Academic journal article Academy of Accounting and Financial Studies Journal

Factors Influencing the Likelihood of Developing a Master's Degree in Accounting at U. S. Aacsb Business Schools

Article excerpt


A recurring theme in accounting education has been the call for a master's degree to help prepare individuals entering the practice of public accounting (Whye, 2007). However, prescriptive graduate-level education has been subdued by stakeholders' lack of agreement on a clear educational structure in addition to uncertainty as to who should be included in the professional accounting group. In 1988, the 150-hour requirement was advanced by 83% of American Institute of Certified Public Accountants (AICPA) voting membership but the initiative did not prescribe graduate education. Since that time, legislative changes have implemented some form of 150 h requirement in all states.

While major stakeholders have supported a post-graduate degree for entry into practice, detractors succeeded in rejecting this model, which resulted in a 150 h proposal that could be met at either the undergraduate or graduate level. Table 1 presents many of the notable groups and individuals who made recommendations for graduate study over a 50 year period prior to the AICPA mandate of 150 h for membership (American Accounting Association, 1986; American Institute of Certified Public Accountants, 1959; American Institute of Certified Public Accountants, 1978; Carey, 1937; Commission on Professional Accounting Education, 1983; Commission on Standards, 1956; Gordon & Howell, 1959; Langenderfer, 1987; Miller & Davidson, 1978; Model Public Accountancy Bill, 1984; Moonitz, 1973; Paton, 1971; Pierson, 1959; Roy & MacNeill, 1967; Van Wyhe, 1994).

Although no mandate exists for graduate level education, certain factors, including the 150-hour requirement appear to have prompted many academic programs to implement master's degrees in accounting. Donelan & Reed (2000) reported that while the total number of accounting degree programs changed little from 1988 to 1998, there was a significant increase in graduate accounting programs. The authors predicted that 80% of universities would ultimately offer master's degrees in accounting to meet the legislative mandate and that schools not offering a graduate degree will face significant competitive challenges from those that do. A study by Donelan and Philipich (2001) surveyed 500 CPA exam candidates in five states with a 150 h requirement and found that 35% had fulfilled the requirement with a Master of Accountancy degree, 22% with the Master of Business Administration (MBA) or other graduate degree, and 43% with additional undergraduate credits. Additionally, candidates who were employed in public accounting were more satisfied if they had enrolled in Masters of Accountancy programs as opposed to other graduate programs.

The 2013 edition of Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits (American Institute of Certified Public Accountants, 2013) reported that accounting enrollments, graduates receiving degrees in accounting, and demand for these new graduates were at a high point in 2012. Even more revealing are trends that show a steady ten-year change in enrollment mix with increases of 136% for Masters of Accountancy students, 51% for Bachelor's enrollees, and only 5% for the Masters of Tax and MBA in accounting. During that same 10 year time frame, new accounting graduates increased 115% at the master's degree level and 75% at the bachelor's degree level. More recently, the 2015 report (American Institute of Certified Public Accountants, 2015) corroborated the previous findings noting that an all-time high enrollment in accounting included a 19% increase in master's degrees and a 3% increase in undergraduate degrees. Additionally, the report observed master's degrees at 33% of all accounting degrees awarded in 2014.

Not surprisingly, CPA firm hiring has mirrored the supply shift by moving from 79% bachelor and 21% master's degrees in 2002, to 59% bachelor and 41% master's degrees in 2012. Additionally, of the 16,557 master's graduates hired by CPA firms in 2012, 86% held a master's degree in accounting rather than some other graduate degree (American Institute of Certified Public Accountants, 2013). …

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