The first major step in becoming a professor is going back to school to earn a PhD. This is an enormous decision, and many practitioners have a number of reservations. Like any business decision, however, it is important to have the most complete and accurate data possible. In the authors’ experience, when discussing academic careers with practitioners, there are often significant misunderstandings about what it takes to obtain a PhD and about what an accounting professor actually does—research and service, not just teaching. This article presents the top 10 reasons accounting practitioners identified for not pursuing a PhD, and then provides additional context for those considering taking the plunge and entering a doctoral program.
Shortage of Accounting PhD Faculty
The shortage of academically qualified accounting professors was first thoroughly investigated by a joint project of the American Accounting Association (AAA) and the Accounting Programs Leadership Group. In December 2005, the joint committee issued a report, “Supply and Demand for Accounting PhDs.” (For a summary, see “Assessing the shortage of accounting faculty” by Plumlee, Kachelmeier, Madeo, Pratt, and Krull, Issues in Accounting Education, vol. 21, no. 2, 2006.) The committee estimated for 2005–2008 that the supply of new PhDs would only meet 49.9% of the demand for new PhDs. This discrepancy was particularly great for tax and audit professors, where the supply of new PhDs would only meet 27.1% and 22.8% of the demand, respectively. Over the next few years, numerous other research studies came out confirming the significant shortage of new accounting PhDs relative to the demand. The shortage even garnered the attention of the Treasury Department in 2008 (https://home.treasury.gov/news/press-releases/hp1158). More recently, Plumlee and Reckers (“Lessons Not Learned: Why is there still a crisis-level shortage of accounting PhDs?,” Accounting Horizons, vol. 28, no. 2, 2014) found that more than 70% of accounting program administrators believe their accounting programs have been harmed by the accounting PhD shortage (e.g., increased class sizes, reduced number of elective courses). The shortage of accounting professors has continued over the years and into the present.
The AICPA’s “2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits” (https://bit.ly/3E5OE4s) notes that the number of undergraduate and master’s-level students has increased almost 14% over the past 10 years (241,141 in the 2017/18 academic year and 211,610 in 2007/08) and the hiring of new accounting graduates into U.S. CPA firms has increased over 21% (30,903 and 25,488 hired in 2018 and 2008, respectively). The report, however, shows that the number of enrolled accounting PhD students has decreased over 40% during the same time period (732 in 2017/18 and 1,224 in 2007/08). The combination of increased undergraduate and master’s-level enrollment of accounting students and low supply of new accounting PhD faculty, with the retirement of existing accounting PhD faculty, continues to make it more difficult for accounting programs to maintain adequate numbers of academically qualified accounting faculty.
The shortage of accounting PhD students is also exacerbated by the fact that not all enrolled PhD students complete the program requirements and earn the degree. Significant numbers of PhD students either drop out (or fail out), or complete all the program requirements except the dissertation–often referred to as All But the Dissertation (ABD). The National Research Councils’ 2011 “A Data-Based Assessment of Research-Doctorate Programs in the United States” (https://bit.ly/3BPipst) finds the average PhD completion rates range from 40% to 60% for PhD students in agricultural sciences, biological and health sciences, physical and mathematical sciences, social and behavioral sciences, and humanities—these exclude professional fields such as accounting and other business disciplines. The completion rate does appear to be greater for accounting PhD programs. Utilizing data reported by current PhD students, Brink, Glasscock, and Weir reported an average completion rate of 82.2% in their study entitled “The Current State of Accounting PhD Programs in the United States” (Issues in Accounting Education, vol. 27, no. 4, 2012).
The shortage of new accounting PhDs is also intensified by a substantial shortage of underrepresented minority students, such as Black/African American, American Indian/Alaska Native, and Hispanic/Latino students. The shortage of under-represented minorities is not unique to accounting. Okahana, Klein, Allum, and Sowell reported that underrepresented minority students earned 8.5% of the total doctoral degrees awarded in STEM (science, technology, engineering, and mathematics) doctoral programs in 2011/12, whereas underrepresented minority students earned 21% of the bachelor degrees granted in the United States (STEM Doctoral Completion of Underrepresented Minority Students: Challenges and opportunities for improving participation in the doctoral workforce, Innovative Higher Education, vol. 43, 2018).
Lastly, enrollment into an accounting PhD program for a practitioner approaching retirement age may not make sense because of the time it takes to complete a PhD, plus the seven years it takes on average to ultimately earn tenure. Instead, many universities look to retiring practitioners to fill professionally oriented, non–tenure-track positions rather than tenure-track roles that require terminal degrees.
Over the past several years, the accounting profession has created a number of initiatives to help address the shortage of accounting PhDs. Most of these programs center around recruiting new PhD candidates by utilizing scholarships and stipends (e.g., the Deloitte Foundation Fellowships, the Accounting Doctoral Scholars program, the AICPA Fellowship for Minority Doctoral Students). Sources for these programs will be discussed below. Overall, the programs have certainly helped recruit new accounting PhD students; however, these programs alone are not nearly enough to shrink the gap. Currently, the shortage of new accounting PhDs is being partially filled through the use of adjunct faculty (part-time faculty that are typically local accounting practitioners), lectures (full-time faculty that are typically local accounting practitioners), clinical faculty (full-time faculty that are typically very experienced accounting practitioners), and accountants with Doctor of Business Administration (DBA) degrees. (These degrees will be discussed in more detail below.) These will continue to be valuable resources and alternatives to PhD faculty as long as accounting programs continue to monitor and adhere to accreditation standards for the percentage of academically qualified faculty.
The above discussion indicates the importance of addressing the shortage of the supply of new accounting PhD faculty candidates. The discussion below explores the top 10 reasons the accounting practitioners surveyed identified as reasons not to pursue an accounting PhD and become an accounting professor. Our goal is to provide relevant and accurate information for each item that a practitioner may consider when evaluating whether to pursue a PhD. Hopefully this also clears up any misunderstandings regarding the PhD process and faculty responsibilities, as well as provide readers with additional context. Good decisions are made with good data.
To investigate the decision not to pursue a PhD, a survey was developed and administered through SurveyMonkey. It asked respondents to answer questions about obtaining a PhD and becoming an accounting professor. Surveys were sent to accounting practitioners identified via alumni and employer contacts from a large southeastern university. In all, 220 responses were received from practicing accountants; respondents included a mix of current profession, experience level, gender, and family structure (Exhibit 1). The authors acknowledge the findings may be limited by the relatively small sample size, but we are optimistic that the variety of professionals we were able to reach provides us different viewpoints, experiences, and opinions.
Results—Top 10 Reasons Not to Pursue a PhD in Accounting
Respondents were asked to provide their main reasons for not pursuing a PhD in accounting. There was no minimum nor maximum on how many reasons they could enter. From this, the authors compiled the top 10 reasons given not to pursue a PhD shown in Exhibit 2. The following is a brief discussion of each of these concerns.
Top 10 Reasons Not to Pursue a PhD in Accounting and Become an Accounting Professor
1. Cost to obtain a PhD.
The cost to obtain an accounting PhD was cited by 48.6% of respondents. The cost issue includes both the expenses incurred to pay tuition to attend a PhD program and the opportunity cost of salary forfeited during the four to six years the individual is enrolled in a full-time doctoral program. Although the costs of college programs are significant, most accounting doctoral programs offer scholarships and admissions packages (e.g., full tuition remission) that cover the full cost of tuition and student fees. To help recruit new accounting doctoral students, the profession has initiated several additional scholarship and funding opportunities (e.g., the Accounting Doctoral Scholars program; https://www.adsphd.org; the AICPA Fellowship for Minority Doctoral Students, https://bit.ly/3S0Jsqm; the Deloitte Foundation Doctoral Fellowships in Accounting, https://bit.ly/3qPYfby).
Temporarily forfeiting an annual salary is certainly a significant financial challenge for most candidates, and most accounting PhD programs do require full-time attendance. The authors are aware of several current and former PhD students (including themselves) who utilized savings to offset the reduced income or had working spouses who helped cover costs. In addition, stipends are typically provided for doctoral students and require students to serve as research or teaching assistants in the accounting department. According to the Brink, Glasscock, and Weir (2012) study discussed previously, for the 39% of accounting PhD programs that provided specific stipend amounts on their web-sites, the stipends ranged from $12,000 to $65,000 per year (mean, $23,400). Considering that data from that study was gathered approximately 10 years ago, it is likely those amounts are greater today. In addition, universities may allow doctoral students to teach summer classes for additional compensation.
It is also important to keep in mind that the expenses for PhD students are usually significantly lower than for professional CPAs. For example, PhD students can generally take advantage of graduate student apartments, university meal plans, and reduced incidentals such as gas or dry cleaning. Students can spend most of their days in jeans or khakis! It is also important to note that this reduced income is only temporary. The shortage of academically qualified accounting faculty has resulted in increasing salary levels for professors over the past several years; therefore, a temporary (four- to six-year) sacrifice in income could result in an overall increase in pay once you return to full-time employment. Reason #10, below, discusses professor salaries further.
There are also 28 AACSB-accredited nontraditional doctoral programs in the United States that allow business professionals to maintain their employment while completing the doctoral program, often through DBA degrees. The sidebar, U.S.-Based, AACSB-accredited DBA Programs, lists these schools, but please note that because some schools may not offer specific concentrations in accounting, it is always best to contact the programs directly. According to the Pathways Commission’s 2014 report, “Non-Traditional Doctoral Education,” these programs are typically completed in three to three-anda-half years (https://bit.ly/3S0bDWm). These nontraditional programs, however, are expensive—according to the report, they range in cost from $35,000 to $150,000, although more recent estimates put the range from $70,000 to $150,000—and typically do not provide the tuition remission and stipends offered by traditional doctoral programs. Graduates from these programs are more likely to be employed at universities that emphasize teaching rather than research (and therefore are likely to earn lower average salaries), but these schools still require faculty with terminal degrees (PhD or DBA) for tenure-track positions in order to meet AACSB or other accreditation standards.
2. Time to complete a PhD.
Time to complete a PhD program was mentioned by 44.1% of respondents. Choosing to obtain a doctoral degree is a major, full-time commitment. Utilizing data from PhD students, the Brink, Glasscock, and Weir (2012) study discussed above found that the average expected completion time for a PhD is 4.7 years (range, 3.5 to 6). If the length of a program is a major consideration, the authors encourage candidates to e-mail PhD students and ask how long it has taken recent PhD graduates to finish the program. PhD program websites often provide general timeline for completing the program as well as some general expectations of the stages required to complete a PhD (e.g., classes, comprehensive exams, dissertation). One can also ask program administrators for advice on how to finish the program in a timely manner. Another alternative is the nontraditional programs mentioned above: they can generally be completed in three to three-anda-half years.
Having to relocate to attend a doctoral program was cited by 12.3% of respondents. Because traditional accounting doctoral programs are very costly to operate, they are only available at 89 AACSB-accredited U.S. colleges and universities; therefore, many individuals will need to relocate in order to attend one of these programs. The sidebar, U.S.-Based, AACSB-accredited Accounting PhD Programs, lists schools offering a PhD in accounting. Locations range from small college towns to large cities, so a desirable (and perhaps not-too-distant) location can likely be identified.
Newly minted doctoral graduates are not hired as new faculty members at the university where they completed their degree, meaning that relocation to another college or university will be necessary after completing a doctoral program. Assuming one meets the overall expectations set forth by the college or university that hires the doctoral graduate, one can expect to remain at this school for at least five to six years. If one meets the requirements to earn tenure status, tenured faculty can generally remain until they choose to leave. The first (and possibly only) stop of one’s academic career will depend upon which colleges and universities are in the market to hire a new accounting faculty member. The American Accounting Association (AAA) provides significant assistance in this process. The AAA hosts the Annual Meeting Career Fair where schools with job openings interview eligible PhD students, generally before starting their final year in the PhD program. The AAA also hosts an annual Rookie Recruiting and Research Camp where faculty and recruiters can meet with PhD students on the job market. Current accounting faculty job openings can be browsed in the American Accounting Association’s Career Center (https://careercenter.aaahq.org/).
4. Research aspect.
One of an accounting professor’s main responsibilities is to perform academic research; this was included by 11.4% of respondents as one of the main reasons they did not want to pursue an accounting PhD. Academic accounting research is probably the least understood aspect of a professor’s job even though, at most universities, publishing research is the most important part of getting a job and keeping it (i.e., promotion, tenure). The goal of accounting research is to add to the academy and, hopefully, make contributions that impact practice.
The primary purpose of a PhD program is to train PhD students in the skills necessary to perform accounting research. Courses will include complex statistics, econometrics, accounting research seminars, and other relevant theory-based courses that accounting academics utilize in accounting research (e.g., finance, economics, psychology). There are different types of accounting research (e.g., analytical, archival markets, experimental) and different topical areas (e.g., audit, tax, financial accounting, managerial accounting, accounting information systems). For the authors, the joy of accounting research is to identify an important question or problem and then investigate the issues or alternative solutions to the question or problem.
A general overview of academic research in accounting can be found on the “What is Accounting Research?” section of the Brigham Young University (BYU) PhD prep webpage (https://bit.ly/3Sh1zrV). More about the research and publication process can be found in “What it Means to be an Accounting Professor: A Concise Career Guide for Doctoral Students in Accounting” by Beyer, Herrmann, Meek, and Rapley (Issues in Accounting Education, vol. 25, no. 2, 2010).
5. Family considerations.
Of the survey respondents, 57.3% were married or have a life partner and 33.6% have dependent children. Choosing to leave one’s job and attend a doctoral program is a major decision, but even more so when others are involved. Family considerations were indicated by 9.1% of respondents as a main reason not to pursue a PhD. These considerations included concerns about work/life balance while in a doctoral program, impact on children due to relocation and other required life changes, and potentially needing to put family goals on hold. Practitioners, however, should consider that relocation is not unique to PhD students. CPAs in both public and private sectors may have to consider relocating in order to change jobs, earn a promotion, or make partner. Family always comes first, and those with spouses, significant others, and/or children will definitely need to consider the impact on their loved ones. The authors urge candidates to consider viewing relocation as a potentially positive step, allowing one to temporarily live in and explore a new area without the pressure of making it a permanent home. It is highly likely that other PhD students in the program will be married and have children, leading to opportunities to meet others in a common situation who may become lifelong friends!
6. Happy in current job.
Being happy in their current job was cited by 9.1% of respondents as a main reason for not pursuing a PhD. Although the authors believe that being an accounting professor is the best job in the world, if you have found a job and career you enjoy, then we recommend you stick with it and know you can always pursue a doctorate later in your career. We also note that the largest age group represented in our survey (42.7%) was 25–30, so the average respondent may not be far enough along in their careers to have reached a traditional milestone for leaving or maximizing their potential at their current employers. One of the authors of this article worked in public accounting for 13 years before leaving to pursue a PhD, including turning down offers for partner and corporate accounting positions. Although leaving a high-paying job she enjoyed to pursue the PhD was difficult, she will tell anyone that her experience is a tremendous complement to her role as professor and that the reduced stress level in her new profession has immensely improved her overall quality of life!
7. PhD program requirements.
The rigor of completing PhD program requirements (e.g., dissertation, effort to complete program) was cited by 8.6% of respondents. It is true that accounting doctoral programs are very rigorous and challenging, but they are designed to help doctoral candidates succeed. One way that PhD programs address this issue is through somewhat demanding acceptance requirements, in order to ensure that students who are accepted are up to the challenge of completing the program. PhD program candidates must meet certain criteria, based on in-person interviews, work experience, and GPA and GMAT scores, which are much higher than the requirements for master’s degree programs. Anyone considering a PhD who has not taken the GMAT in the past five years, or did not score highly on the test, will need to spend time studying to ensure they meet the minimum requirements for their preferred schools.
For students who have cleared the initial acceptance hurdle, most programs consist of two major components: First, candidates complete two to three years of coursework that focuses on research skills (e.g., research methods, statistics, econometrics, psychology) and accounting-specific research seminars (e.g., archival/markets research, behavioral accounting research). After coursework, candidates focus one to two years on completing a dissertation. This requires candidates to develop a research question, collect and analyze data, and then write (and rewrite, and rewrite) the dissertation. This process is the most challenging aspect of the PhD journey, although a dissertation advisor will help candidates through the process. Developing the dissertation idea often takes several months and numerous rounds of discussion and debate with that advisor; this includes several hours examining prior research to determine one’s research question and how it might contribute to academic research and practice. Nevertheless, there is a lot of opportunity for new research ideas, and for many PhD students, past work experience and knowledge can help cultivate interesting topics to research. For more information about doctoral programs and program requirements, see the “Life as a Doctoral Student” section of BYU’s PhD prep webpage (https://bit.ly/3Si6N6L)
8. Teaching aspect.
The teaching aspect of obtaining a PhD and becoming a professor was cited by 7.7% of respondents. This included respondents that indicated they were not interested in teaching, but also respondents that indicated they were not sure if they would like, or be good at, teaching. For anyone who is not interested in teaching or does not enjoy it, then clearly becoming a professor may not be the best fit. For anyone unsure whether you would enjoy or be good at teaching, we encourage you to give it a try. Candidates could offer to lead training courses at their firm or inquire about adjunct teaching opportunities at local colleges. These teaching assignments are typically for introductory classes in financial or managerial accounting, and it generally only takes one class to know if teaching is right for you.
9. No interest in PhD in accounting.
Simply having no interest in obtaining a PhD was cited by 7.7% of respondents. No career path is right for everyone, and there will certainly be those that just know obtaining a PhD and being a professor is not right for them. Because the data was collected anonymously, no follow-up questions were possible, but it is likely some of these respondents, if interviewed, would have explained not having an interest in a PhD with some of the reasons discussed earlier.
10. Professor salary.
The salaries for professors were a main reason that 4.5% of respondents did not want to obtain a PhD and become a professor. Specifically, these respondents indicated professor salaries were too low. Discussing the attractiveness of salaries is always going to depend on one’s reference point. For example, the same salary might be considered attractive to a staff or senior level auditor but unattractive to an audit partner. That being said, the authors do find that practicing accountants generally underestimate the salary of accounting professors. The AACSB’s “2019/2020 Staff Compensation & Demographics Survey Executive Summary” reports that the mean nine-month salary for an accounting assistant professor was $147,440, and $156,290 for tax professors (https://bit.ly/3DO65dg). Because of the shortage of new accounting doctorates, accounting assistant professor salaries are typically inverted, whereby newly hired assistant professors fresh out of PhD programs have a higher salary than assistant professors that have been at the same university for a few years.
Before writing off the idea of becoming a professional because of the pay, especially for accounting professionals with significant work experience, the authors suggest a few considerations. First, we believe a professor’s lifestyle moves at a much easier pace, with less stress than most accounting positions; there is no “busy season” in academia! Second, the salary is for a nine-month position. Professors are paid well and are able to enjoy long breaks during the summer (and winter), which can allow for family time, travel, and recreation. If one chooses to work during the summer months, many colleges and universities offer additional funding for summer research or teaching. This additional funding can be significant, increasing a professor’s total compensation by as much as 20%. It is important to also note that professor salaries will vary by type of university, with salaries often being significantly higher at universities that emphasize research and lower at universities that emphasize teaching (professor responsibilities, such as number of courses taught, number and quality of research publications, will also vary). Finally, while one may be able to earn more money by staying in public accounting or finding a high-paying position in corporate accounting, the number of opportunities available is limited due to the requirements to make partner or become CFO. On the other hand, there is currently a shortage of accounting faculty. With multiple positions available for accounting faculty with a PhD, the opportunity to earn a good salary is much easier to come by than in public or corporate accounting!
There is a significant shortage of accounting PhD graduates each year, and this causes universities to really focus on ensuring they have enough academically qualified accounting professors in order to maintain important accreditations. This is particularly challenging for small and medium-sized universities that may not have the budget to attract PhD students. Part of the problem is that going back to school to obtain a PhD is a major commitment—a decision that may be filled with many uncertainties and perhaps misinformation. The 10 reasons identified and discussed above should provide interested practitioners with valuable information and resources that will clarify, and perhaps correct, assumptions about earning a PhD and starting the path towards academia.
Although the above discussion focused on perceived barriers to pursuing a PhD and become an accounting professor, the authors have tried to dispel some common misconceptions. Although every individual will have different priorities and weights to their priorities, the following are the authors’ Top 10 reasons why one should consider pursuing an accounting PhD:
1. Work-life balance.
Professors work hard and occasionally clock many hours (perhaps not as many as during the notorious public accounting busy season); however, there is tremendous flexibility as to when academics work. Professors also have significant time off during holidays, winter, and summer that allow the ability to spend quality time with family and friends.
Working with students requires professors to maintain their intellectual curiosity and stay young at heart. Students’ excitement and motivation are contagious!
Life in academia is not without stress (especially prior to tenure). However, in the authors’ views, it is nothing compared to that of public and corporate accounting.
4. Financial security.
While it is unlikely that an academic will become exceedingly wealthy, accounting professor salaries allow for an incredibly comfortable lifestyle.
5. Job satisfaction.
The authors believe there is no greater satisfaction than helping a student maximize their potential and begin a meaningful career.
6. Making a difference.
Professors make a difference in the lives of their students, in furthering the knowledge base of the profession through research, and in contributing to their local communities. This work is important and meaningful and touches many individuals.
7. Community engagement.
Working at a university provides many opportunities to engage with and feel connected to the local community.
8. Flexibility of teaching topics.
Although the authors tend to focus our teaching preferences around certain topics (e.g., auditing, financial accounting, corporate tax), there are ample opportunities to teach in alternative areas of accounting for which one either has a passion or simply wants to learn.
9. Flexibility of research topics.
Like teaching, although professors tend to focus their research on certain topics (e.g., auditor judgment and decisions, impact of accounting information on stock prices, tax judgment and decisions) there are opportunities to branch out into other research areas and other methodologies.
All of the above contribute to the authors’ general life happiness!