The shortage of accounting faculty is a hot topic in academia and professional circles. Some call it a crisis.
INSIGHT – The Magazine of the Illinois CPA Society – January/February 2007
By Sheryl Nance-Nash
Over the next three years, US and Canadian universities will need to hire 942 new PhDs, but will have only 621 graduates to choose from. Which brings to light a simple truth: The number of graduating PhDs are insufficient to replace the number of professors who are due to retire over the next decade, according to research conducted by the American Accounting Association.
“This is terribly serious,” says Paul Sharman, president and CEO of the Institute o Management Accountants, (IMA) based in Montvale, New Jersey. “There are 50 percent fewer PhDs in academia than there were 10 years ago; and given the number of PhD students now, that number will likely be halved in another decade,” he contends. “The problem is growing increasingly acute.”
The root causes are pretty well understood, but making them relics of a bygone era presents challenges.
The numbers don’t add up
When you look closely at the shortage, one factor crops up again and again: Money.
“It takes five or six years to get a PhD, and the most students typically get paid is $15,000-$20,000, just barely enough to survive if you don’t have to support a family,” points out Shyam Sunder, the James L. Frank Professor of Accounting, Economics and Finance at Yale School of Management and president of the American Accounting Association. “Yet, a top undergrad can come out of school and make $50,000-$70,000. Where’s the incentive? How good a deal does this sound to our brilliant students, who we would like to attract to a life of teaching and scholarship? ”
“Someone will have to decide that funding PhD education is important. Society decides what matters. You can’t expect the best and the brightest to survive on poverty wages for five years, especially the older candidates with families,” says Sunder. “Money is certainly a large part of the solution.”
Furthermore, “The skilled labor shortage has pulled some accounting faculty back into full-time practice,” says Joyce Gioia, president of the Herman Group, a consulting firm based in Greensboro, North Carolina. Then, too, PhD programs typically require full-time enrollment.
“A part-time program might be easier for someone to enter. That way, the financial burden might not be as great,” suggests Charles Davis, chair of the Accounting & Business Law Department at Baylor University’s Hankamer School of Business in Waco, Texas. “And, if they find out that they don’t really want to pursue the PhD, they have an escape route back into practice. Increasing stipends and adding benefits would be good. I don’t believe many programs include health insurance benefits for students as part of the stipend.”
It also wouldn’t hurt, Davis believes, to look at reducing the length of time it takes to complete a graduate program.
“I think we had only two or three viable candidates for our tax position last year. We made one offer that was turned down, and now we are recruiting for that position again this year,” he continues. “I think the shortage will be particularly difficult for smaller schools and those in non-metropolitan areas.”
Debunk the myths
Another issue is social image and prestige. “Academia just doesn’t sound exciting to some people. While it does have many interesting aspects, I think professionals recall boring accounting classes in college and they don’t want to be a part of that,” says Tracy Coenen, who teaches part-time in the MBA program at Concordia University, Wisconsin as well as working as a forensic accountant.
“When most people choose their careers and consider what their friends think is cool, being a university professor doesn’t rate high,” says Sunder. “In popular culture and in the media, college professors are viewed as nerds – not an ideal image to attrach talent.”
The trouble is, the image of accountants isn’t accurate even at the undergraduate level, says Sharman. “What’s misunderstood is just how critical accounting is. It’s how business gets done, while also being mindful of compliance.”
“You have to change people’s minds about accounting,” says Susan Crosson, accounting coordinator and professor of accounting at Santa Fe Community College in Gainesville, Fl. “People think of it as a math class, but accounting is the language of business. How well you understand the rules determines how successful you’ll be in business.”
Gioia sees the image problem in a different light. “With Enron and other accounting scandals still singed into our memories, young people are not going into accounting in the numbers we used to see. There are several reasons for this, including the fact that many just don’t want to work that hard; they want to have personal lives. With fewer people going into the profession, there are fewer to choose academia as a career route.”
The search for answers
“PhD education is a public good, like clean air and national defense. As with other public goods, universities educate PhDs at high cost to themselves, do not get compensated, and others can free-ride on the benefits of such education,” says Sunder.
“We have to keep this issue in the spotlight,” adds Sharman.
According to Sandy Richtermeyer, the IMA professor-in-residence at Xavier University in Cincinnati, you also have to consider the environment at colleges and universities. “The environment can be intimidating. People can be reluctant to make the leap, especially if they don’t have a mentor.” The change from the corporate world to academia can be tough. “More needs to be done to smooth the transition.”
“There needs to be a commitment to raising money for scholarships,” says Crosson. “If people only understood the benefits and pleasures of teaching, there wouldn’t be a shortage. Community colleges don’t pay well, so it’s easier for us to find part-timers rather than someone committed to working full-time to improve accounting education.”
Universities would do well to establish strong alliances with professionals who are interested in part-time teaching. “These people could become valuable, long-term faculty members on a part-time basis,” says Coenen. “Some schools use their part-time faculty as back-ups or fillers for classes that don’t have full-time faculty.” She calls that shortsighted.
“It’s more beneficial to treat those part-time faculty members as valued employees,” Coenen continues. “The schools should go out of their way to make the teaching experience one that professionals want to continue for a long time.”