Does Graduate Education Contribute to Professional Accounting Success?

Abstract

We investigate the value of graduate business education in learning tacit knowledge and achieving professional accounting success. Archival (n = 5,932) and survey (n = 2,941) data from managerial accountants employed at 2,525 North American companies in three industries (publishing, paper, and chemical) indicate that job performance evaluations (JPEs) of those who hold either a Masters of Accountancy (MAcc) or MBA degree are generally higher than non-master's (NM) degree accountants. We find some evidence that professionals with master's degrees, as compared to NM professionals, have higher levels of two forms of tacit managerial knowledge (TMK): self and others. The results also suggest that MAcc and MBA degrees contribute to success differentially throughout the professionals' careers. Specifically, a MAcc degree provides greater benefit than a MBA degree in the early and middle career years, while an MBA degree provides greater benefit than a MAcc degree in later career years. The results indicate that MAcc and MBA degrees contribute to success by increasing specific types of knowledge and enhancing ones' ability to learn.

Keywords: Tacit knowledge, education, professional success, job performance

JEL Classification: M40, M46