Declining Doctoral Output in Accounting

By Charles G. Carpenter and Gary S. Robson

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Doctoral program output in accounting grew to approximately 200 per year in the late-1980s and remained so through the mid-1990s, but since has declined to less than 90. Exhibit 1 graphs the data that show the growth and then the decline in doctoral program output from the late-1970s to the present time.

The number of resumes posted at the placement service of the American Accounting Association’s (AAA) annual meetings has also declined; 180 resumes were posted in 1992, and just 64 in 2002. The authors speculate that, with 140 schools posting openings for single or multiple faculty positions, some candidates would elect not to post their resume but would contact only those institutions in which they had an interest. Exhibit 2 shows data from the AAA Placement Center for the last 11 years. The decrease in resume postings is unrelated to the number of position announcements posted; 110 position announcements were posted in 1992, while 140 were posted in 2002.

The authors sent a questionnaire to the doctoral program directors of the 92 programs listed in the Hasselback 2002–2003 Accounting Faculty Directory. Responses were anonymous, and the response rate was 42.4%. Respondents were asked to indicate if the size of their program had changed and, if so, whether the change was intentional. A decline in program size was reported by 84.3% of the respondents, and 71.1% reported an unintended decline.

The causes for the decline, where it existed, are listed in Exhibit 3. Program directors cited a lack of interest in academia as the dominant reason for low enrollments. Respondents also indicated that applicants have higher opportunity costs today, and that there may be an upswing of interest under way.

The questionnaire inquired if admissions standards had changed in the last five years. The responses (Exhibit 4) suggest that the standards have not changed in most doctoral programs, although a small number did indicate an increase in standards.

Additionally, the questionnaire asked whether the percentage of students completing the program in the past five years differed from earlier periods, as well as whether the proportion of students leaving without completing their dissertation (ABD) had changed. The responses are presented in Exhibit 5. In both instances, the majority perceived no changes in graduation or ABD rates. Of those students leaving the programs, the percentage of students leaving to teach ABD was unchanged from the past.

Declining Output

This survey indicated that the decline in doctoral program output first evident in 1995 has become a trend. In addition, the changes in undergraduate and master’s level enrollments in accounting influence both the supply of candidates for doctoral programs and the demand for accounting faculty.

A 2001 AICPA study (The Supply of Accounting Graduates and the Demand for Accounting Recruits, by B. Sanders, S. Goldfarb, and L.B. Romeo) for the academic year 1999/2000 showed a 30.4% decline in the number of bachelor’s degrees conferred but a 58.3% increase in the number of master’s degrees:

Bachelor’s Master’s

The undergraduate decline may be partly attributable to competition from other undergraduate majors—finance and information systems, in particular. Recent accounting scandals like Enron and WorldCom surely will influence enrollment; whether negatively or positively remains to be seen. The almost universal applicability of the 150-hour requirement may have contributed to reduced enrollment at the undergraduate level, and may also have been a source of demand for master’s degrees.

Another consideration in the demand for doctorates has been the increasing number of business programs seeking accreditation from the Association to Advance Collegiate Schools of Business (AACSB). With this effort has come the related need for a substantially doctoral-qualified faculty. In addition, the prevailing trend toward lower teaching loads has increased demand for accounting faculty (at least to the extent that the reduction is not offset by larger class size).

Moreover, the retirement of current faculty will contribute to demand. In “Retirement Demand and the Market for Accounting Doctorates,” R.L. Campbell, J.R. Hasselback, R.H. Hermanson, and D.H. Turner (Issues in Accounting Education, Fall 1990) constructed a model, using the Hasselback faculty database, in which they forecast faculty retirement demand. Although elements of the model were open to argument (e.g., when someone might retire), the anecdotal impressions are that the findings were accurate.

Recently, AACSB has identified faculty supply and demand within business disciplines to be a source of concern for its schools in their management of faculty resources; its annual reporting of average salaries of responding member schools shows considerable volatility from year to year. The obvious consequences of a supply-and-demand imbalance are heightened initial salaries, salary compression or inversion of salaries among continuing faculty, and an increase in nonsalary supplemental inducements.