If anyone can sell the lucrative but often misunderstood and seemingly unglamorous accounting specialties of tax and audit, it is executive recruiter Anthony Santiago.
The “tax profession is not what people expect. It’s very interesting and essential to a company’s profitability,” says Santiago, who founded TaxSearch Inc., a 30-year-old firm focused on recruiting tax professionals.
Despite an ailing national economy and high rates of unemployment, it is tough to fill vacancies in tax departments. Companies are searching for creative candidates who understand business, are comfortable with technology, can master constantly changing tax codes and are willing to travel the globe. Santiago has accounting jobs waiting for qualified people who can earn as much as six figures early in their careers.
The problem is that the profession is overwhelmingly White and approaching retirement age. And there is a shortage of accounting professors with Ph.D.s who can prepare the next generation. Now, says Santiago, “We have a knowledge drain going out the door, which is a big problem, and we’ve got to supplement it.”
To help reverse the faculty deficit, the American Institute of Certified Public Accountants (CPAs) has created the new Accounting Doctoral Scholars program by pooling more than $17 million and soliciting commitments from more than 70 of the nation’s largest accounting firms and several state CPA societies. Tax and audit are “the areas of greatest shortage,” said Dr. Doyle Z. Williams, the program’s executive director.
Williams, like many others in the profession, says a “significant decline” in the number of accounting doctorates has loomed for the past decade and is now acute. He points to aging faculty as a major factor.
Dr. Jerry E. Trapnell is executive vice president and chief accreditation officer at the Association to Advance Collegiate Schools of Business (AACSB). When he surveyed the landscape at this year’s gathering of accounting academics in San Francisco, he saw “a very gray-haired place.”
The average age of accounting professors is about 55. “This indicates that a real crisis is coming in the next decade,” Williams says. “By contrast, the demand for professionals with undergraduate and master’s accounting degrees is at an all-time high.”
Trapnell also attributes the Ph.D. shortage to the fact that few accountants want to pursue long and costly graduate study when it is not required to become a CPA or have a successful career. It is also difficult to conduct doctoral research because much of the data is confidential.
“Much of the valuable information needed to support dissertations in tax and audit is privileged by virtue of being tax returns or financial information on clients collected by firms and individuals who conduct audits,” Trapnell says.
The Accounting Doctoral Scholars program is turning to seasoned tax and audit professionals to boost the supply of faculty Ph.D.s. Filling the faculty gap isn’t just about the numbers or age, Williams points out. Organizers of the new Scholars program are looking for newcomers to the classroom who have real-world experience in audit and tax.
On the front end, firms sponsoring the Scholars program assist in identifying candidates and encourage them to become accounting professors in the audit and tax disciplines. Once selected, Scholars must be accepted and enroll in one of the program’s 40 participating universities offering programs in tax and audit. Its first class began in 2009, and its second gets under way this fall.
“These are candidates who are highly motivated and who believe that they can make a difference by teaching the next generation and through their research,” says Williams. The program will provide funding for up to 30 new candidates each year for four years for a total of 120 newly trained Ph.D.s in audit and tax.
Looking within the profession to bolster graduate accounting faculty in tax and audit isn’t a new concept, Trapnell says. The AACSB and other professional organizations have launched a variety of short- and long-term training, academic and orientation programs to prepare accounting practitioners and business professionals for work in academia.
“We are deeply concerned about the future and stemming the faculty shortage,” Trapnell says. “Part of it is understanding doctoral education and being an advocate for innovation in doctoral education,” efforts he says can also help increase the number of minority candidates and stimulate the overall faculty pipeline.
Williams says quite a few faculty positions are available for graduates of his program. He hopes The PhD Project, created by the KPMG Foundation, will address the diversity issue to increase the number of African-Americans, Latinos, and Native Americans teaching in business schools.
This year, Santiago released a new study titled “Minorities in Tax 2010.” The report examines the number of African-Americans within the tax profession and those employed by public accounting firms, the government and corporate in-house tax departments. Santiago found that African-Americans represented only 4 percent of the employees in public accounting firms. Whites represented 71 percent, Asians 18 percent, and Hispanics 5 percent.
“Without increasing diversity in the profession,” Santiago says, “we can’t expect to address the supply side of accounting.”