Evaluating the Impact of the Accounting Doctoral Scholars Program on Academic Accounting in the U.S.

ABSTRACT The accounting establishment and AICPA Foundation responded to an inadequate supply of new accounting faculty by creating the Accounting Doctoral Scholars (ADS) program. Between 2009 and 2018, the $17 million program enabled 105 practitioners to become audit and tax faculty. Based on market data and an ADS participant survey, we find an increase in doctoral graduates at ADS and non-ADS schools relative to pre-ADS years, and unmet demand for audit has decreased after ADS, whereas tax remains in need. Compared to the market, ADS graduates experienced somewhat better placements by moving up to more prestigious strata and were more likely to place at schools with a doctoral program. Additionally, we present results for ADS students' motivations, degree completion time, and differences between audit and tax participants. Our findings have important implications for academic accounting, business schools, regulators, and policymakers. We provide important context for changes in market trends preceding COVID-19.</jats:p

PRACTITIONER SUMMARY When does utilizing valuation specialists reduce auditors' litigation risk?

This article summarizes "The effects of specialist type and estimate aggressiveness on juror judgments of auditor negligence" (Brown, Grenier, Pyzoha, and Reffett 2019), which examines two critical factors auditors consider when auditing complex estimates: the type of specialist to engage and the relative aggressiveness of the estimate. In an experiment involving an alleged audit failure, jurors were less likely to find auditors negligent when the auditors consulted with a valuation specialist, but only when managements' estimate was deemed to be more aggressive. The study does not find similar litigation benefits of using a specialist for a less aggressive estimate. A second experiment extended these results by demonstrating jurors were less likely to find auditors negligent when the auditors consulted with an external rather than an internal specialist, because jurors perceived external specialists as having greater independence from the client. Further, the litigation benefits of using an external specialist extended to circumstances when auditors who initially engaged an internal specialist also brought in an external specialist to review the internal specialist's work. The study concludes that utilizing external specialists, to either test management estimates or to review internal specialists' work, can limit auditors' litigation exposure, especially when auditing aggressive management estimates.</jats:p