Could a Professional Doctorate in Accounting Help Solve the Accounting Faculty Shortage?

If not remedied, the current shortage of academically qualified accounting faculty stands to affect student learning and the fulfillment of universities’ missions. This article examines the present environment and prior attempts to address the issue. The authors conclude with a proposal for a professional doctorate that could both alleviate the shortage and provide other benefits to accounting education.

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Accounting higher education is experiencing a shortage of doctorally qualified accounting faculty that shows no signs of abating. If not resolved, this shortage is likely to adversely affect the teaching, research, and service missions of the colleges and universities with accounting programs and limit the access of students and others to highly trained faculty. There are numerous explanations for this shortage, including the aging of the current professoriate, rising accreditation standards, and the attractiveness of non-academic career paths. Various solutions have been proposed, one of which is the creation of a professional doctorate in accounting as an alternative to the traditional research PhD.

This article examines the current shortage of accounting faculty, previous attempts to address this shortage, the characteristics of a professional doctorate as opposed to the traditional research PhD, and what the authors believe is the potential for a professional doctorate to reduce the shortage of qualified accounting faculty and also to achieve various other benefits within accounting higher education.

The Accounting Faculty Crisis

The shortage of individuals qualified to teach accounting has been identified and lamented by various professional organizations and committees for years, most significantly by the Pathways Commission established by the American Accounting Association (AAA) and the AICPA (The Pathways Commission: Charting a National Strategy for the Next Generation of Accountants and Implementing the Recommendations of the Pathways Commission: Year Three, AAA/AICPA, https://aaahq.org/Pathways-Commission). Recent studies have confirmed that this crisis is becoming ever more acute as doctorally qualified professors continue to retire. Many professors currently teaching accounting are in their sixties, and a large percentage of doctoral program graduates are foreign nationals who may not remain in the United States. In its most recent report of doctoral student enrollment, the AICPA stated that there were 732 students enrolled in accounting PhD programs in 2017/2018, representing the second lowest amount in 15 years and a decline of over 40% from a peak of 1,224 students in 2007/2008 (AICPA, Trends in the Supply of Accounting Graduates, 2019, https://egrove.olemiss.edu/aicpa_guides/1783). Furthermore, not everyone who enrolls in a PhD program eventually completes it and earns a degree, and some graduates pursue accounting careers outside of academia. Taking all of these factors into consideration, the current shortage of faculty with PhDs is likely to become even more severe in the coming years.

Why are graduate schools not generating sufficient numbers of PhD accountants to solve this problem? As noted above, one likely explanation is the aging accounting professoriate. As the current supply of senior faculty declines, there are fewer mentors to serve those pursuing a PhD. Moreover, those professors who do mentor candidates are also under pressure to devote their time to activities which generate greater revenue (such as MBA programs) and enhance school rankings (such as scholarly publications). This may limit the ability of doctoral programs to admit new students.

One study found that 42% of doctoral programs reported an increase in applications, but only 17% reported an increase in enrollments (R. D. Plumlee and P. M. Reckers, “Lessons Not Learned: Why Is There Still a Crisis-Level Shortage of Accounting PhDs?” Accounting Horizons, vol.28, no. 2, 2014, pp. 313–330). The most recent edition of a widely used directory reported that from 2004–2022 there were anywhere from 12 to as many as 30 schools in the country accredited by the Association to Advance Collegiate Schools of Business (AACSB) with doctorate programs that did not graduate any students in a given year, adding to the shortage (J.R. Hasselback, “Updated Chart of Accounting Doctoral Graduates by School and Year,” 2023, http://www.jrhasselback.com/FacDir/DocChart.pdf).

Other authors have mentioned the relative lack of appeal of an accounting PhD due to the attractiveness of other career paths, as well as the barriers to entry perceived by some potential PhD candidates—primarily the lack of financial reward when switching from a professional accounting career to an academic one. With a bachelor’s degree and a CPA license, or a master’s degree, an accounting graduate has an earnings potential that will match or even exceed that of a tenured professor along a variety of career paths. When combined with the substantial time, monetary, and opportunity costs to earn a doctorate degree, it is not surprising that accountants who lack a strong commitment to academia tend to choose an alternative career path (W. A. Kerler, C. D. Allport, D. M. Brandon, and J. A. Parlier, “From Practitioner to Professor: Why Aren’t More Accountants Getting PhDs?” The CPA Journal, September/October 2022, https://www.cpajournal.com/2022/12/07/from-practitioner-to-professor-2).

Many practicing accountants may question why the PhD, with its emphasis on abstract theoretical and quantitative research, has become a primary requirement to teach accounting. The answer lies in several major developments that occurred over many years within higher education and the accounting profession. In the 1950s, reports funded by the Carnegie Foundation and Ford Foundation had a profound impact on raising the academic qualifications for business education. The Ford Foundation report, for example, concluded that business faculty lacked the research skills and “academic esteem” of their counterparts in the sciences. Reinforcing this trend, in 1963 the American Accounting Association (AAA) supported a doctoral qualification and research productivity for tenure and promotion decisions (G. Van Wyhe, “A History of US Higher Education In Accounting, Part I: Situating Accounting Within The Academy,” Issues in Accounting Education, vol. 22, no. 2, 2007, pp. 165–181). In 1967, the Association to Advance Collegiate Schools of Business (AACSB) declared the research doctorate to be the primary terminal degree for accounting faculty, and that faculty engage in research as a primary part of their job responsibilities. As a result of these developments and others, the ratio of accounting professors possessing a doctorate rose from one out of three to one out of two over the following decade.

In the late 1970s, the AAA began considering the possibility that accounting education was not meeting all of the profession’s needs. While an influential report produced by the AAA in 1986 (the Bedford Report) generally reinforced research as the necessary element of accounting faculty activities, this was followed by the formation of the Accounting Education Change Commission in 1989 which issued statements suggesting that metrics other than research contributions could also be used to evaluate accounting faculty performance.

The AACSB also addressed the need for non-research-oriented faculty, and it developed standards for what was initially called “professionally qualified” and “academically qualified” faculty. The AACSB also acknowledged the value added by practitioner faculty by making clear that an “optimum mix” of faculty included professors from both categories (Deploying Professionally Qualified Faculty: An Interpretation of AACSB Standards, AACSB International Accreditation Quality Committee, AACSB International, 2006). In 2020, the AACSB refined this classification scheme, but possession of a doctorate degree was still required for a significant portion of business school faculty, and for a majority of the faculty in research-oriented universities. While the AACSB has publicly recognized and has attempted to address the accounting faculty shortage, there is no indication that it will reverse its emphasis on the doctorate degree as an academic qualification.

Previous Attempts to Address the Crisis

There have been multiple proposals and attempts to address the shortage of doctorally qualified faculty. In 2005 the AAA and the Accounting Programs Leadership Group (APLG) formed an ad hoc committee which recommended shortening the time to degree for an accounting doctorate, and additional funding for PhD programs. Under this approach, the AAA and APLG believed that doctoral education did not require substantial changes, only greater financial support (Report of the American Accounting Association/Accounting Programs Leadership Group Ad Hoc Committee to Assess the Supply and Demand for Accounting PhDs, University of Texas at Austin, 2005).

In 2006, the AACSB created a Bridge Program to train business executives with significant experience to enter colleges and universities as business professors. The AACSB also developed a Post-Doctoral Bridge to Business Program to prepare individuals with related non-business doctorates to teach in business programs. By 2023, the AACSB reported that more than 500 executives had successfully completed the Bridge Program, many of whom were serving in faculty roles (AACSB Bridge Programs, AACSB International, 2023, https://tinyurl.com/mrx56twa).

The efforts of the various committees and commissions of the AACSB and AAA were also reflected in the AICPA’s Accounting Doctoral Scholars (ADS) and the Fellowship for Minority Doctoral Students (FMDS) programs. The ADS program was launched in 2008 and was designed to fund four years of doctoral study for CPAs at 47 select institutions. Funding was obtained from large public accounting firms and other organizations. By 2021, the AICPA had recruited and funded 161 students into these programs. The FMDS program was launched in 1969, and during the 2021/22 academic year it awarded scholarships totaling $300,000 for 25 doctoral students. Another program, entitled “The PhD Project,” was launched in 1993 by the KPMG Foundation and several other organizations to support individuals from underrepresented groups who were interested in and are pursuing doctorate degrees in accounting. This successful program, which is still in operation, continues to receive generous support from KPMG.

Around the same time that the ADS Program’s first graduates were earning their degrees a major joint effort by the AAA and AICPA known as the Pathways Commission (cited above) was developing a plan for a sustainable solution to the doctoral shortage. While acknowledging the above and other initiatives, the Pathways Commission concluded that these were temporary solutions and stated that “only by allowing flexible content for doctoral programs can academia better address this shortage.” The Commission’s 2012 report contained various action items, one of which was to “permit development of what might be termed ‘professional’ or ‘executive’ doctoral programs.” It was formalized in Objective 2.2, which was to “develop multiple pathways to terminal degrees in accounting.” This was in line with earlier recommendations from the AACSB Doctoral Faculty Commission, which called for an alternative to the research doctorate (Sustaining Scholarship in Business Schools, AACSB Doctoral Faculty Commission, AACSB International, 2003, https://tinyurl.com/yu5cwk2b), and the Advisory Committee on the Auditing Profession, which recommended an investigation into a professional terminal degree for accounting as well as a “professional school model” for postgraduate education (Final Report of the Advisory Committee on the Auditing Profession to the US Department of The Treasury, Washington, DC, 2008, https://tinyurl.com/2jm64jwk). The Pathways Commission also commended Doctor of Business Administration (DBA) programs, which meet AACSB standards but place a greater emphasis on practice-oriented research.

Other organizations have taken a similar position on the value of a professional doctorate. One of the most significant statements was the following from the Higher Learning Commission:

Characteristics Of Professional Doctorates

A professional doctorate can be defined as “a terminal degree that is either intended to qualify an individual for a particular profession or to enhance the skills of an individual” (T. Gill and U. Hoppe, “The Business Professional Doctorate as an Informing Channel: A Survey and Analysis,” International Journal of Doctoral Studies, vol. 4, 2009, p. 40). In law and medicine, possession of a JD or MD degree is required to be licensed to practice within the profession. In accounting, all 50 states moved to require a bachelor’s degree with at least 150 credit hours to be licensed as a CPA, but without a requirement for a doctorate degree (though a number of states have recently enacted alternative pathways for candidates to become licensed with only 120 credit hours). This is in part because degree programs in accounting did not develop along the same paths as law and medicine.

In the early part of the 20th century, it was not believed that accounting had a broad enough body of knowledge and standards to justify a professional doctorate. In the legal profession, however, a broad set of case law led to the development of law schools which teach a process that can be employed to find the relevant facts and opinions when needed. Law schools “focus on teaching students how to think like a lawyer … the case-dialogue method constitutes the legal academy’s standardized form of the cognitive apprenticeship” (W. M. Sullivan, A. Colby, J. W. Wegner, L. Bond, and L. S. Shulman, Educating Lawyers: Preparation for the Profession of Law, Jossey-Bass, 2007, p. 50). This provides law students with a framework that can be applied in a variety of situations.

The acquisition of practical experience in a clinical setting is a feature that makes the MD program of a medical school distinctly different from that of a law school. By working with actual patients under the supervision of licensed physicians in various areas of specialization, medical students develop professional skills in a manner that cannot be conveyed in a classroom setting. In addition to formal instruction and clinical training, many medical schools have also adopted practices from other educational traditions, such as the case study method.

There are other differences between professional doctorates in law and medicine and accounting doctoral programs. Both law schools and medical schools admit students with bachelor’s degrees in a range of majors, whereas accounting doctoral programs restrict entry to students with an undergraduate or master’s degree in accounting or the equivalent. A large percentage of the faculty in law schools and medical schools have professional doctorates, whereas the AACSB requires virtually all faculty in accounting doctoral programs to have a PhD in accounting or a closely related field. Perhaps most significantly, because JD and MD programs are not research doctorates they do not require a dissertation, which is a major barrier to completion for many PhD students. In contrast to the ambiguity and relative isolation of the dissertation process, JD and MD programs are more structured and finite. This may contribute to attrition rates that are close to 10% in law and medicine as opposed to approximately 50% for accounting doctoral programs (B. E. Lovitts, and C. Nelson, “The Hidden Crisis in Graduate Education: Attrition from PhD Programs,” Academe, vol. 86, no. 6, 2000, pp. 44–50).

The Importance of Professional Experience

Another concern of many practitioners is that PhD faculty who lack professional experience may be limited in their ability to provide the most career-relevant instruction. To address this, non-doctoral faculty have become an important part of many accounting programs. The AACSB currently allows accredited institutions with an applied or pedagogical mission to have as much as 60% of their faculty comprised of professors without a research doctorate (“Guiding Standards and Principles for AACSB Business Accreditation,” AACSB International, 2020, https://tinyurl.com/3v86tycf).

Professionally qualified faculty are also valued by students and other constituencies. For example, one study involving students revealed that “professors possessing relevant practical experience are perceived to be of significantly higher quality than professors lacking relevant practical experience” (P. H. Mounce, D. S. Mauldin, and R. L. Braun, “The Importance of Relevant Practical Experience Among Accounting Faculty: An Empirical Analysis of Students’ Perceptions,” Issues in Accounting Education, vol. 19, no. 4, 2004, pp. 399–411). Another study found that accounting professors believed that either practical experience or certification for practice were at least as beneficial for teaching effectiveness as a PhD degree (P. D. Marshall, K. J. Smith, R. F. Dombrowski, and R. M. Garner, “Accounting Faculty Perceptions of the Influence of Educational and Work Experiences on Their Performance as Educators,” Accounting Educators’ Journal, vol. XXII, 2012, pp. 73–91). Comparable sentiments were found in a survey of accounting practitioners (D. M. Boyle, D. R. Hermanson, and M. O. Mensah, “Addressing the Accounting and Auditing Faculty Shortage: Practitioners’ Perceptions of Academia,” Current Issues in Auditing, vol. 5, no.1, 2011, A70–A85), and similar conclusions have been reached in numerous other studies and reports.

A related issue found by Doyle, et al. is when experienced accountants choose to pursue a doctorate degree, they can be disillusioned by the discrepancies between accounting in practice and the subject matter emphasized in PhD accounting programs. The relevance of academic accounting research has been discussed for many years. The AACSB has repeatedly commented on the lack of practical use for research by accounting academics, and various studies have found that practitioners do not believe that accounting research adds value to their professional activities. Related to this, two prominent academics asked, “Why have business schools embraced the scientific model of physicists and economists rather than the professional model of doctors and lawyers?” (W. G. Bennis and J. O’Toole, “How Business Schools Lost Their Way,” Harvard Business Review, vol. 83, no. 5, 2005, pp. 96–104). Other studies have noted that PhD programs are much more narrowly focused than JD programs, the substantial disparity between the content of master’s programs and PhD programs in accounting, and the desirability of more applied research that addresses the issues and challenges of professional practice. This has led a number of these authors to conclude that professionally qualified faculty play an important role in keeping the rest of the professoriate up to date regarding the accounting profession they are training their students to join.

A Professional Doctorate in Accounting

To summarize, there is a shortage of doctorally qualified accounting faculty, and previous attempts to reduce this shortage have not been fully successful. Many practicing accountants who might be interested in an academic career cannot justify the costs in terms of time, effort, and lost income to obtain a PhD. Many are also disillusioned by the disparity between their professional knowledge and expertise and the subject matter of PhD accounting programs. There has also been an interest among various regulatory and professional organizations in a professional doctorate for several decades. What might be the potential benefits of such a program?

To begin with, a professional doctorate in accounting could be an attractive alternative to a research doctorate for accounting professionals who wish to enter higher education. Such a degree would offer accountants another path to join the academic community, similar to the more structured paths already available in medicine and law. This would increase the supply of full-time faculty with terminal degrees, helping to overcome the shortage of accounting faculty. Assuming a professional doctorate in accounting is recognized by the AACSB (and, as noted above, there is some evidence that it would be), there would also be a greater supply of faculty to meet AACSB standards for academic qualifications.

Second, faculty with a professional doctorate degree would most likely teach various courses in undergraduate, master’s level, and professional doctorate programs. PhD programs would continue to be taught by faculty with research doctorates. Because undergraduate and master’s level programs train students for professional practice (along with some doctoral students), this could improve the alignment between the training of faculty and the objectives of the programs in which they teach.

Another benefit is, while PhD programs train students to conduct theoretical and quantitative research, faculty with professional doctorate degrees would more likely be interested in professional issues and accounting practice. In order to meet the requirements of their colleges and accrediting organizations for intellectual contributions, these professors might be expected to generate articles largely of an applied and pedagogical nature, such as the interpretation and application of existing standards and real-world case studies. The benefit to students could be substantial, as observed by the Advisory Committee on the Auditing Profession cited above, and others. In addition to graduating students with training that more closely matches the needs of the profession, there would also be an increased opportunity for collaboration with PhD faculty on projects that link theory and practice.

A professional doctorate in accounting could strengthen the relationship between accounting educators and accounting practitioners. Faculty who completed professional doctorate programs involving case studies and clinical training would have a more thorough understanding of the needs and priorities of the profession, which they could employ to update the accounting curriculum and keep it relevant. A professional doctorate in accounting would also provide its recipients with expertise that could be of value to the professional community and government agencies, leading to consulting engagements and high-level career opportunities even for those who do not enter higher education.

It should be kept in mind, however, that there are additional questions that will need to be answered prior to the development and implementation of professional doctorate programs in accounting. Among the most important are:

• ▪ Is there a demand for this type of program?
• ▪ Will they be accepted and supported within the higher education establishment?
• ▪ Will there be sufficient faculty to teach in these programs?
• ▪ Will the graduates of professional doctorate programs be successful in finding employment?

Fortunately, various studies have concluded that the answers to these questions are likely to be favorable, with the majority of program graduates finding employment at regional colleges and universities which tend to be more impacted by the shortage of accounting faculty (D. M. Boyle, D. R. Hermanson, and G.W. Krull, “How Research-Focused Doctoral Programs Can Enhance Business Education,” AACSB Insights, 2020, https://tinyurl.com/425kpkcr; T. Gill and U. Hoppe, “The Business Professional Doctorate as an Informing Channel: A Survey and Analysis,” International Journal of Doctoral Studies, vol. 4, pp. 27-57, 2009, https://tinyurl.com/ad7ty6ef).

The key attributes of a professional doctorate program in accounting would naturally vary by institution, as acknowledged by the AACSB (“Eligibility Procedures and Accreditation Standards for Accounting Accreditation,” AACSB International, 2016) and others. A logical starting point would be to consider incorporating the best practices of other professional doctorate programs, including the case-dialogue method of legal education and the clinical experience gained in medical education. The latter, in particular, would expose students to a variety of real-world situations which they would later be able to share as instructors. Regardless of its final form, however, the potential of a professional doctorate to help alleviate the current accounting faculty shortage, with the other potential benefits outlined above, makes it worthy of further consideration.

Proposal for a Professional Doctorate in Accounting

What might a professional doctorate in accounting program look like? As noted by the AICPA, the AACSB, and other professional organizations, there are many potential alternatives for such a program that would depend upon the institution and accreditation requirements. Because there are few, if any, stand-alone professional doctorate in accounting programs in existence, the following proposal has been prepared primarily to stimulate a discussion, with the understanding that the final designs might differ significantly based upon the mission of each individual institution.

One possible title for the degree to be awarded might be a Doctorate in Accounting, and admission might be restricted to those with an MBA, an MS in Accounting, or similar degree. A CPA, CA, or equivalent professional certification could also be required. As with various other professional doctorate programs, it would likely consist of a minimum of 60 credit hours beyond the master’s degree. The delivery format could be in-person, online, or hybrid.

The first phase of the program might consist of required seminars covering current issues affecting the profession in financial accounting, managerial accounting and control, international accounting, auditing, governmental and nonprofit accounting, taxation, and so forth. Additional required courses could consist of data analytics and AI in accounting, methodologies for applied research, and others providing a foundation for more specialized study.

The second phase of the program might consist of elective courses that would be chosen by the student based upon their specific interests and professional goals. These courses could cover a variety of accounting and relevant non-accounting topics, such as forensic accounting, SEC issues, sustainability accounting, cases in litigation support, information technology, strategy and management of an accounting practice, marketing techniques for professional organizations, or teaching methodologies and supervised instruction.

The final phase of the program might also be based upon the student’s interests and professional goals. Experienced practitioners who did not want to enter higher education might complete an applied research project on a topic relevant to their professional activities. Students without significant professional experience might be required to complete one or more clinical assignments in public accounting firms or even government agencies. This could be mandatory for those seeking to become educators. A combination of applied research and clinical assignments might be an option as well.

Whatever final form a program were to take, its overriding objective would be to produce graduates with state-of-the-art expertise in the profession of accounting to help solve the accounting faculty shortage and realize the other potential benefits identified in this article.