Has the Quality of Accounting Education Declined?
43 Pages Posted: 21 Jun 2013
Date Written: June 19, 2013
For decades, accounting practitioners, academics, and professional bodies have argued that the quality of accounting education is falling. There are two specific claims in the literature. First, that the knowledge acquired by students in accounting programs has become less valuable and second, that the best students self-select away from accounting degree programs. In this study, I use several large, publically available datasets to empirically test both claims. I measure the quality of accounting education using a model of the private economic returns to accounting education relative to the returns to education in non-accounting fields and find no evidence of a decline in the returns to accounting education from either 1950 to 2010 or 1970 to 2010 relative to all non-accounting workers or all non-accounting workers in business occupations. To assess the quality of students selecting into accounting degree programs, I model the quality of students expressing interest in various college degrees after controlling for a number of their demographic characteristics. I find that, relative to students pursuing all non-accounting majors, the quality of freshmen interested in accounting has by most measures been steady over 1971 to 1999. Relative to freshmen interested in non-accounting business majors, the quality of freshmen interested in accounting has significantly declined over the sample period. The results are broadly inconsistent with the hypothesis that the quality of accounting education has declined, but they do suggest that accounting programs have fared increasingly poorly in the competition for the best and brightest students in business schools, a fact that could have contributed to the perception that the quality of accounting students has declined.
Keywords: returns to accounting education, accounting major premium, accounting students, accounting student quality
JEL Classification: J24, J31, J44, M41, M53, N3, N81
Suggested Citation: Suggested Citation