Shyam Sunder
Yale University
Accounting Doctoral Students Association
Annual Conference
Chicago, August 3-5, 2007

Two roads diverged in a wood, and I —
I took the one less traveled by,
And that has made all the difference.
Robert Frost,
The Road Not Taken

• State of doctoral education in accounting: a survey
• What I got from the doctoral education
• What do we do?
• Posing a research question
• AAA, Imagination and Chicago meetings

• Not many young people find a life of scholarship to be an exciting prospect
• I think it is because they do not know and have never been exposed to its rewards
• The average age of AAA membership is
54.3 years
• Most other countries of the world have the same problem

• What factor influenced you the most to pursue a PhD in Accounting? (126 Responses)
– PhD Project (11.1%)
– Family influence (6.3%)
– Lifestyle (31.7%)
– Professor influence (32.5%)
– Other: (please specify) (18.3%) Interest in research; intellectual satisfaction; long-term career aspirations; always wanted to be an accountant; PT program (eve); interested in teaching; desire to contribute to field.

• How long did you consider entering a
PhD program before applying? (110
Responses)
– Under 1 year (25.5%)
– 1-2 years (29.1%)
– 3-4 years (26.4%)
– 5-6 years (10%)
– 7+ years (9.1%)

• What were the factors that contributed to your selection of a particular university? (149 Responses)
–
Significant number of active research faculty to work with and be committee members and/or chair?
(37.6%)
– Access to databases (3.4%)
– Stipend package (13.4%)
– Ranking (19.5%)
– Other (26.2%) Although most respondents did provided details here, of the 14 that did – 11 indicated location/proximity was key. The other responses were reputation/quality of school, PT program.

• What was the expectation of the number of years it would take to complete the PhD program at the time you entered the program? (110 Responses)
– 3-4 years
– 4-5 years
– 5-6 years
– 6 + (.9 %)
(12.7%)
(81.8%)
(4.5%)
• What is the actual number of years it will take you to complete the program? (102 Responses)
– 3-4 years (2%)
– 4-5 years (35.3%)
– 5-6 years (57.8%)
– 7+ years (4.9%)

• If you receive an annual stipend to teach during your studies, how much do you receive? (108 Responses)
– Under $10,000 (7.4%)
– $10,000 - $15,000 (20.4%)
– $15,001 - $20,000 (39.8%)
– $20,001 - $25,000
– $25,001 - $30,000
– $30,001 - $35,000
– $35,001 - $40,000
– $40,001 - $45,000
(15.7%)
(7.4%)
(1.9%)
(0%)
(0%)
– $45,001 - $50,000
– Over $50,000 (.9%)
(0%)
– Did not receive a stipend (Skip to Question #20) (6.5%)

• Do you anticipate that your starting salary as a professor will equal your expectations of that salary when you started your PhD program? (108 Responses)
– Yes – Same (56.5%) b. No – Higher (38.9%)
– Lower (4.6%) c. No
• Today, what base salary range do you expect to earn when you graduate? (113 Responses)
– Under $50,000
– $50,000 - $75,000
(.9%)
(2.7%)
– $76,000 - $100,000 (7.1%)
– $101,000 - $125,000 (31.9%)
– $126,000 - $150,000 (37.2%)
– $151, 000 - $175,000 (14.2%)
– Over $175,000 (6.2%)

• Please rank (1 being the highest) the following categories (not allinclusive), which are possible areas of focus to help address the
PhD shortage issue:
• #5 Improved access to research data
• #2 Building pipeline (to attract more students to PhD programs)
• #3 Creating additional slots in accounting PhD programs for new students
• #1 Financial scholarships/support for PhD students
• #6 Length of PhD programs
• #4 More focus by Deans/school leadership on issue.
• #7 Public accounting internships for professors.
•
• #8 Accreditation policies.
Other :

• Advertising the lifestyle more:
• Don't think many accountants know about the opportunities
(lifestyle, salary, etc). I don't think it ever really crosses their mind.
• More advertisement.
• Most PhD students choose this because of lifestyle (family).
Maybe this should be more advertised.
• Some people I worked with in public accounting expressed interest in the idea, but I think needed more info. Building a good network between auditors & faculty/PhD students will help the shortage as more info is exchanged.
• More than any of the above, I think it is a mindset. Check out
BYU's pipeline…

• Research:
• Reduce # of schools seeking to be research schools.
• Focus on industry & interdisciplinary research motivates young academia.
• Lack of student exposure to accounting research.
• People outside PhD programs don't understand what accounting research is.
Making accounting research more relevant to the accounting profession. It is my fear that much of the research currently being conducted is too math intensive and often loses sight of the accounting question at hand. Moreover, it is my observation that professionally trained accountants are shying away from the academic profession as it is being over-run by those who have undergraduate degrees in math who then apply those skills to an issue that has little relevance or application to the classroom of business for that matter

• Pre-Requisite Coursework:
• Reduce pre-requisite coursework. (i.e., even though I have a
MAcc, I had to retake 5 foundation courses in Accounting,
Marketing, Information Systems and Economics, which adds at least 1+ semester to program.)
• Salary:
• Improve prospects for tenured accountants to make good $$.
Hard to leave (career) to make less, especially with family to support.
• Outside options to strong candidates make $$ of a
PhD/academic career very significant.
• Recognize that obtaining a PhD is a VERY tough decision for many qualified candidates to make. Giving up an excellent job/salary to live as a poor student.

• There are interesting questions I had never thought about
• There are ways of looking at the same phenomena that never occurred to me
• There are ways of finding answers to questions I did not even know about
• Research is not a production process (and the labor theory of value does not apply)
• Each of us is both an essential as well as the weakest link in our research

• To explore ideas new to you
• To develop explanations that may not have occurred to you
• Find ways of sorting ideas and explanations:
– By logical consistency
– By empirical validity
– By boundaries of generalizability
• Cooperate with your colleagues and the faculty
• Establish intellectual links with your cohort
• Keep and open mind but listen critically
• Don’t be afraid to challenge or disagree but not just for the sake of disagreeing

• It is critical for welfare of our society that at least 5-10 percent of the best minds of each generation devote their lives to scholarship —thinking and innovation
• This result is not easy to achieve by bureaucracy in government
• No matter how deeply you study candles, you will not come up with electricity
• No matter how deeply you study horses and horse carts, you will not come up with cars
• No matter how deeply you study typewriters, you will not come up with laser printers and computers
• Whose imagination will invent the “electricity, cars and computers” of future?

• What do you do for a living?
• Teaching would satisfy her, but would not be entirely true
• Fortunately, she never asked.
• But two colleagues did, a sociologist and a physicist
• What do you do in accounting research?
• I could not give them the answer for Mom; they know better
• I managed to answer their questions to their apparent satisfaction (assuming they were not just being polite)

Perspective Organization form
Accounting form
Classical
Stewardship
Entrepreneurial without hierarchy
Entrepreneurial with hierarchy
Bookkeeping
Managerial
Capital markets Publicly traded Financial

Bookkeeping
Managerial
Financial

Shareholder s
Creditor s
Employees
Customers
Governmen t
Auditors
Vendors

• The measurement angle
• Walked him through the problem of measurement of his personal wealth
• After counting the contents of his wallet, he was not sure how to proceed to the next step
• Then scaled the problem up to an organization of many people and activities
• He could see the difficulty, or at least did not pursue the matter further

• History
• Measurement
• Technology of accounting
• Aggregation
• Governance
• Contracts and organizational engineering
• Wealth creation
• Social organization (national budget, bank supervision)
• Standards and competition
• Could we invite our colleagues into the accounting house of research and show them interesting stuff we do?
• The Doctoral Program is an opportunity to look at our collective whole, and be inspired to extend the boundaries of our thought

• What is the question you would like to have answered after the experiment? (A question is a single sentence with a question mark at the end.)
• What do you know already about the possible answers to the above question ?
• What are the various possible ways of finding an answer to the above question?
• What are the advantages and disadvantages of each method?
• How important is this question to YOU? What are the chances that the answer you get from the research will surprise you or others? What are the chances that it will change someone’s mind?

• How would you conduct your research? (write down a design and plan)
• Is your design the simplest possible design to help answer the above question?
• What are the possible outcomes of research?
Do the possible outcomes include at least one outcome that will answer the question you stated above? What is the chance that you will observe this outcome?
• Iterate as necessary

– Intellectual Property Task Force
– Global Accounting Digital Archive
– New Electronic Journal: Current Issues in
Auditing
– AAACommons
– Imagined World of Accounting: Program for
Chicago Annual Meetings

• Development of new information and communications technologies (ICT) has shifted the economics of intellectual property. As with other academic associations, production of intellectual property has been a major activity of AAA. The Intellectual Property Task Force will examine the technological, economic, financial, organizational, competitive, and intellectual consequences of the changes in ICT for AAA, and recommend any changes to the Executive Committee, the Council and the membership of the AAA with respect to its financial structure, publications, organization, and other relevant actions.

• Data availability, structure, depth, accessibility and cost are critical to accounting research to support basic, applied and practice research. Given new data technologies, there is an opportunity to develop a decentralized, global, cooperative, organized effort to make accounting literature and archives (noncopyrighted or copyright expired or released) readily, instantly and globally available to researchers to stimulate and support accounting as well as business research. Leading professional and academic accounting associations, forming a sponsoring coalition to create this public good, will serve as the catalysts to establish a unique resource on Internet which is unlikely to come into existence otherwise.

• Use of web technology for new means of communication, sharing, publication of ideas, research, curriculum, teaching materials, etc.

Some Highlights of the Chicago
AAA Program
August 6-8, 2007

• The Origin of Accounting
– Denise Schmandt-Besserat, Professor Emerita of Art and Middle
Eastern Studies, University of Texas at Austin (Archeology)
• Culture and the Nature of Human Sociality
– Joseph Henrich, Professor of Culture, Cognition and Evolution,
University of British Columbia (Anthropology)
• Accounting, Law and Social Norms.
– Michael Hechter, Professor of Global Studies, Arizona State
University (Sociology)
– Eric Posner, Professor Law, University of Chicago
• Data and Economic Growth
– Robert E. Lucas, Jr., University of Chicago, Nobel Laureate
• Hayek and Experiment
– Vernon L. Smith, George Mason University, Nobel Laureate

• Tuesday Lunch: John Dickhaut, University of Minnesota, AAA Presidential Scholar,
2007
• Wednesday Lunch: Gary J. Previts, incoming President of the American
Accounting Association

• Accounting, Anthropology and Archeology
– Basu, Goetzmann, and Waymire
• Accounting and Social Norms
– Paul Fischer and Mark Penno
• Accounting and the Macroeconomy
– Kanodia and Dye
• Hayek, Accounting and Experiment
– Bloomfield

• Europe Meets America: Diverse Research
Perspectives
– Biondi (France), Suzuki (UK), Lukka (Finland)
• History of Accounting Scholarship
– Pierre Liang, George Sorter
• A Proposed Accounting Curriculum
– Demski and Fellingham
• Big Unanswered Questions in Accounting
– Ball, Fukui, Huddart, Nagar

• Financial Literacy: Programs and
Response
– Previts
• Point-Counterpoint 1
– Benston, Linsmeier on fair value accounting
• Point-Counterpoint 2
– Lynn Turner and Larry Ribstein on SOX
• Data Mining and Accounting
– Srivastava

• Building Accounting Archives
– Tonya Flesher
• SEC Regulation Update
– Glover, Jorgensen, Taub
• Global Accounting Digital Archives Project
– Vasarhelyi
• FASB Research Initiative
– Bloomfield, Linsmeier

• Accounting and Neuroscience
– John Dickhaut
• Alternative formats for Accounting Journals
– Tony Tinker
• World Market for Accounting PhDs
– Christensen, Banerjee, Wong, and Lukka
• Academic and Professional Qualifications
– Jack Wilkerson
• Fiscal Wake Up Call for US
– David Walker, Controller General of the US

• Exciting sessions for Wednesday afternoon
• Attendance in each session on
Wednesday afternoon (after lunch) earns you a raffle ticket
• At the end of the last session on
Wednesday, we draw the winner of the raffle (must be present to win)
• Prize?

• In PhD programs, faculty ask you to read the stuff they wrote, and test you
• Awareness of the advantage grey hairs have over the youth are drilled in —we know, you don’t .
• What is kept hidden from you is your advantage over the older folks
• Your advantage: we know, you don’t
• You have a clean slate to generate new ideas, perspectives, problems, methods, and solutions

• Long history of extraordinary creative achievements of the young
• Do not underestimate your own ability to transform our discipline —any discipline?
• Cooper’s dissertation was rejected
• Ball and Brown was pre-dissertation research
• Look at music: Presley, Hendrix, The Beatles,
Led Zeppelin, Jay Z and many others
• How old were these folks at the peak of creativity?

• People are skeptical of new ideas because most of them turn out to be wrong
• When they are right, they create problems for the establishment
• If you have a good new idea, expect resistance (faculty, editors, referees)
• Should you yield to their demands or fight?
• How you decide to answer that question will determine whether research is fun or a chore
• Remember the risk return trade off
• Don’t forget the contribution of modern management
(and accounting and control) to jet aircraft, computers and our prosperity

• Let the authorities in each jurisdiction choose two or more SETS of standards that companies are allowed to use in preparing their reports. Reporting companies pay a royalty to standard setting organization they choose, and these royalties are the sole source of revenue of the standard setting organizations (i.e., no SOX fees for FASB)

• Problem too complicated for a Cartesian solution; criterion for choosing standards unclear
• GAAP started as common law, bottom up evolution of practice, not GIAS
• Experimentation with alternatives will allow research data, comparison, discovery of better methods and learning
• Competition places bounds on complexity
• Introducing economic tension to help standard setter decisions

• Language works through variation of meaning
(Esperanto failed)
• Examples: bond rating, auditing standards, university accreditation, appliances, state charter of corporations, stock exchanges, US and PA Deptts of
Agriculture with no evidence of race-to-the-bottom
• One size does not fit all in a country or the world: clientele
• Relief from undue pressure from interest groups on standard setters

• Choice of standards set as an additional information signal
• Protection from special interest capture of regulatory body
• Uniform standards insufficient for uniform reports without uniform economies
• Competition blocks endless progression towards detail in a fractal world (infinite detail)
• Judgment as essence of a profession
• Cancerous impact of standards on accounting education and quality of people

And do not forget to become a member of AAA
Why?

Shyam.sunder@yale.edu