Magazine article The CPA Journal

Pursuing a PhD in Accounting: What to Expect

Magazine article The CPA Journal

Pursuing a PhD in Accounting: What to Expect

Article excerpt

The recent shortage of accounting professors with a PhD has led to salary increases that outpace inflation. Increased demand has allowed new PhDs to be more selective in choosing the university where they want to begin their careers. Individuals who might be interested in a career in academia should weigh a number of factors when considering whether to pursue a PhD in accountancy.

PhD Shortage

The shortage of PhD-prepared professors in accounting has been exacerbated in recent years as older professors retire and fewer accounting professionals choose a career in academia. A 2005 study conducted by the American Accounting Association (AAA) and the Accounting Programs Leadership Group (APLG) estimated that, from 2005 to 2008, the overall supply of new accounting PhDs will meet only 49.9% of the demand. The study found that the supply of new PhDs specializing in audit and tax will meet only 22.8% and 27.1% needed in these disciplines, respectively.

The number of accounting doctorates granted nationwide has fallen over the last 15 years (Exhibit 1). In the late 1980s and early 1990s, approximately 200 PhDs were granted in accounting annually. Fewer than 100 PhDs were granted annually in the calendar years 2002 to 2004, with a low of 69 in 2003, according to the 2006-2007 Hasselback Accounting Faculty Directory. For the 2005-2006 academic year, the Association to Advance Collegiate Schools of Business (AACSB) International Salary Survey reported that only 53 new doctorates in accounting were hired. Another 14 professors who were "all but dissertation" (ABD) were also hired. Professors who are ABD have completed all coursework and required exams, but have not completed their dissertation. These professors are typically granted a one-or two-year grace period to complete their dissertation. The bottom line for potential PhD students is that, in the academic market, completing a PhD in accounting from an AACSB-accredited institution means that a job as an accounting professor is almost guaranteed.

Gaining Admission

One of the first things future academics learn when considering a doctorate is that not every school offers a PhD in accounting. According to the Hasselback Accounting Faculty Directory, only 73 universities in the United States have granted PhDs in accounting since 1999. Some schools that offer PhDs in other business disciplines, such as Duke and Georgia Tech, offer a PhD with an accounting concentration. Given that there are so few PhD programs in accounting and that acceptance into any program is not guaranteed, potential candidates may have to relocate to pursue their degree.

A question often asked by potential PhD students is, "What are the criteria to gain admission to a program?" While this varies from school to school, most PhD programs look at undergraduate and graduate transcripts, professional work experience, professional certifications (e.g., CPA, CMA, CFE, CIA), recommendation letters, and Graduate Management Admissions Test (GMAT) scores. The AAA/APLG study found that approximately 46% of current PhD students had between one and five years of work experience, while more than 38% had over five years of work experience. Surprisingly, the study found that only 56% of the current students held a professional certification.

Because grades are often difficult to compare between schools, the GMAT is often considered the gold standard when evaluating future PhD students. The authors conducted a survey of accounting PhD programs in 2005 and found that the median GMAT score for public universities was 685 (out of 800), whereas the median GMAT score for private universities was 730. Approximately 90% of the responding programs reported that the overall quality of their current PhD students was either the same or had improved over the last five years. Potential candidates should therefore prepare diligently for the GMAT.

While the number of new PhDs is down compared to the early 1990s, the authors found that over 80% of the respondents reported that their PhD enrollment over the last five years was either holding steady or increasing. …

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