Characterizing Accounting Research - Oler D K

Accounting Horizons Vol. 24, No. 4 2010 pp. 635–670

American Accounting Association DOI: 10.2308/acch.2010.24.4.635

Characterizing Accounting Research Derek K. Oler, Mitchell J. Oler, and Christopher J. Skousen SYNOPSIS: In response to concerns over the viability of the academic discipline of accounting, we investigate trends in accounting research by examining papers published in six top accounting journals from 1960 to 2007. We use citations made by accounting papers as a proxy for their antecedent ideas and examine trends in citations, topics, and methodologies, in aggregate and by journal. Our results suggest that the growing body of accounting research draws increasingly from both finance and economics. Financial accounting topics and archival methodologies are becoming more dominant over time relative to other topics and methodologies, although these trends vary by journal. Though most concerns we discuss are recent, we find that the situation today is the result of trends set in motion decades ago with an explicit decision by influential researchers to move the discipline from a normative perspective to a positive perspective. Given its current state, accounting research may be broadly characterized as research into the effect of economic events on the process of summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of reported information on economic events.

INTRODUCTION ccounting research has emerged as a literature that draws from and adds to a larger body of work dealing primarily with businesses and their interactions with society at large, often through capital markets. Several researchers have identified threats to accounting as an academic discipline, and some question its future viability. Others have noted the gap that often exists between academics and practitioners in accounting. We offer an alternative approach to examining these threats and concerns, and an approach to characterizing accounting research, by 共1兲 examining its antecedent seminal ideas, proxied by the papers cited by research published in six top accounting journals; 共2兲 examining the general topics covered; and 共3兲 examining the general methodologies used. We summarize trends in citations, topics, and methodologies from 1960 to 2007, both in aggregate and by journal. We conclude by proposing a characterization of accounting research based on our observations.

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Derek K. Oler is an Associate Professor at Texas Tech University, Mitchell J. Oler is an Assistant Professor at Virginia Polytechnic Institute and State University, and Christopher J. Skousen is an Assistant Professor at Utah State University. The authors thank Tom Dyckman, Michael Gibbins, Bill Kinney, Kenny Reynolds, Stephen Zeff, Anthony Hopwood, Dana Hermanson, two anonymous reviewers, and participants at the 2007 BYU Accounting Research Symposium and the 2009 American Accounting Association Annual Meeting for helpful comments on prior versions of this paper. All remaining errors are our own. We also thank Laura Oler for her programming assistance. We are grateful to Kevin Federico, Robert Brandt, Kara Brandt, Monte Searle, and Brian Watson for their research assistance.

Submitted: March 2010 Accepted: April 2010 Published Online: December 2010 Corresponding author: Derek K. Oler Email: [email protected]

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Researchers have raised significant concerns about the viability of accounting research as an academic discipline. Fogarty and Markarian 共2007兲 argue that the academic accounting profession is in decline because there are shrinking numbers of accounting researchers at the assistant and associate professor levels. Their results are consistent with Plumlee et al. 共2005兲 and Leslie 共2008兲. One implication of these studies is that, ceteris paribus, fewer accounting research papers will be published over time as the number of researchers declines. Another concern, raised by Hopwood 共2007兲, is that accounting research is becoming more insular and self-referential 共also see, Biehl et al. 2006兲. This concern suggests that the proportion of citations from other fields will decrease over time because more recent accounting research ignores new ideas from other literatures. We examine trends in the relative proportion of ideas in accounting research being drawn from other disciplines to determine the extent to which accounting seems to be becoming more insular. Rayburn 共2005, 2006兲 expresses concern over the increasing dominance of financial accounting research topics in academic journals, and Tuttle and Dillard 共2007兲 find a strong trend in publications in The Accounting Review toward more financial accounting papers and fewer papers on other topics. We investigate whether this trend extends to other journals. Specifically, we examine Accounting, Organizations and Society 共AOS兲, Contemporary Accounting Research 共CAR兲, Journal of Accounting and Economics 共JAE兲, Journal of Accounting Research 共JAR兲, Review of Accounting Studies 共RAST兲, and The Accounting Review 共TAR兲. These journals are currently and commonly viewed as top-tier publications at researchintensive U.S. schools. Two of these journals, AOS and CAR, are not based in the United States and publish a greater proportion of papers by non-U.S. academics. To enhance comparisons between our journals, we exclude papers without at least one U.S. author. Accounting research intersects with a number of neighboring disciplines, primarily finance, economics, psychology, and management. Building on Zeff 共1996兲, we classify citation sources into eight categories: accounting, finance, economics, psychology, management, statistics, other academic journals, and other citations 共i.e., books, professional journals, working papers, popular media, legal cases, etc.兲. We classify the topics covered by accounting papers into six categories: financial accounting, managerial accounting, auditing, tax, governance, and other topics.1 We classify the research methodologies used into seven categories: archival, experimental, field study, review, survey, theoretical 共often referred to as analytical兲, and normative.2 These are broad categories, but we believe they are adequately descriptive while remaining reasonably digestible.3 In cases where a paper addresses multiple topics, or uses multiple methodologies, we select the primary topic and primary methodology for our classifications. We provide an expanded description of our categories in the Appendix. Our results indicate that the nature of accounting research has changed significantly over the past 48 years. The most radical shift has been from the dominance of normative research in the

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Prior research in auditing and management accounting may also be considered governance research; however, we define governance research here as research relating to the overall corporate management, as opposed to a firm’s system of internal controls. While some governance papers occurred prior to the Gompers et al. 共2003兲 paper, we note that most governance research builds on their work. Our selection of governance is also an example of a newer “hot” topic that is essentially borrowed from economics. We note that our terms for methodology are not parallel: archival, experimental, and field study methodologies are examples of positive research 共the study of what is兲, and theoretical work is similar 共the study of what is, from the perspective of mathematical logic, although one could also consider theoretical work to be normative as well兲. Normative research deals with what ought to be 共see Keynes, 1891, 34兲. “Review” is not really a methodology, but rather a summation and synthesis of prior work. Our selection of topics and methodologies, while consistent with prior work, is open to criticism. For example, Abbott 共2004兲 provides a taxonomy of 36 different methodologies, compared to our seven. However, increasing our categories has the adverse effect of increasing the complexity and size of the paper, making it more difficult to group the thousands of papers we examine into tractable categories.

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1960s to positive research from the mid-1970s onward. This shift seems to continue to guide the trajectory of accounting research today. The total number of papers published by the top accounting journals has increased dramatically from 1960 to 2007, mostly because of new journals being inaugurated and later commonly accepted as “A” journals. We also break out paper counts by individual journal, and find that research production overall has not decreased. Accounting papers currently draw just under 50 percent of their antecedent ideas from other prior accounting work 共Table 1兲, and this ratio has remained consistent since the mid-1990s. Borrowing from finance and economics has been slowly but steadily increasing. Financial accounting research has remained the dominant topic of research, and is becoming increasingly so. Tuttle and Dillard 共2007兲 find that this trend occurs in TAR; we show that the trend extends to other top journals except for AOS and CAR. Papers in our six accounting journals indicate a different mix of citations, topics, and methodologies. For example, RAST papers cite other accounting papers 50 percent of the time on average from its 1996 inception to 2007, and cite psychology papers only 0.2 percent of the time, compared with AOS papers, which cite accounting papers 30 percent of the time and psychology papers only 9.4 percent of the time. Differences in citations reflect significant differences in topic and methodology: from inception to 2007, 22 percent of CAR’s papers focus on audit issues, compared to 3.8 percent of RAST’s. Papers dealing with financial accounting make up an increasing proportion of the total papers published in almost all journals from their inception through today except for AOS and CAR. In terms of methodology, archival research is becoming more dominant in all journals. Our results have several implications. First, although the number of accounting “A” journals and the number of total accounting publications have increased significantly over time, when our results are considered in conjunction with Plumlee et al. 共2005兲 and Leslie 共2008兲, warning signs emerge. The increase in output does not appear to be attributable to a general increase in researchers, but rather to 共1兲 a slight increase in researchers at doctoral-granting schools, and 共2兲 a significant increase in the amount of time spent on research 共Leslie 2008兲. But faculty cannot indefinitely increase their time devoted to research. The large unmet demand for auditing and taxation Ph.D.s noted by Plumlee et al. 共2005兲 corroborates our finding that the proportion of auditing and taxation papers has decreased in the 2000s relative to prior decades. This decrease in the number of publications and researchers in audit and tax is especially disconcerting to auditing firms, who look to academics to supply new generations of CPAs 共Solomon 2008兲. The Final Report of the Treasury’s Advisory Committee on the Auditing Profession also reflects concern about the adequacy of both the near- and long-term supply of doctoral faculty given the anticipated pace of faculty retirements 共Levitt and Nicolaisen 2008兲, especially for audit and tax. The recent AICPA Accounting Doctoral Scholars Program 共announced in July 2008兲 should help to counteract this trend by encouraging and funding CPAs who wish to obtain Ph.D.s and pursue auditing or tax. Over time, citations from finance and economics have increased, suggesting that accounting research is drawing closer to these related disciplines and moving away from audit and tax. This is consistent with the shift in accounting research from primarily normative research in the 1960s to positive research that uses methods from finance, economics, and other established academic disciplines 共Granof and Zeff 2008兲. Citations from psychology, statistics, and management are relatively low in the 2000s when compared to prior years. The increasing dominance of financial accounting research is also consistent with the observations of Tuttle and Dillard 共2007兲 and Plumlee et al. 共2005兲. It is important to note that the selection of papers published in any journal is jointly determined by the authors 共who determine the topic, methodology, and where to submit

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TABLE 1 Proportion of Citations Made by Papers Published in Top Accounting Journalsa

Year

Acctg.

Fin.

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

29.7% 31.2% 24.2% 27.5% 27.7% 29.7% 28.1% 33.0% 42.7% 41.1% 40.0% 25.4% 30.1% 36.7% 34.2% 37.6% 31.7% 34.7% 35.3% 31.6% 35.1% 25.6% 37.6% 34.0% 36.3% 35.9% 44.0% 39.2% 44.3% 43.3% 39.8% 39.8% 42.2% 37.9% 42.2% 38.9% 45.7% 47.9% 44.7% 49.1% 45.5% 48.1% 48.4% 49.9% 48.9%

1.9% 2.5% 0.8% 1.5% 3.8% 0.7% 2.1% 4.7% 4.3% 2.5% 5.9% 6.4% 6.2% 6.4% 5.7% 6.7% 7.6% 5.6% 11.7% 8.2% 8.2% 10.0% 7.8% 8.8% 10.4% 8.6% 8.4% 8.7% 6.9% 9.0% 9.7% 9.3% 8.4% 10.7% 8.7% 6.6% 8.0% 7.9% 7.6% 9.5% 10.0% 8.2% 11.2% 13.2% 13.7%

Papers Total Other Acad. Other with No Number Econ. Psych. Stats. Mgnt. Jrnls. Citations Citations of Papers 1.3% 1.1% 2.1% 1.6% 2.6% 1.6% 2.5% 2.7% 1.5% 2.7% 3.3% 3.5% 3.8% 2.6% 6.5% 3.1% 4.8% 4.4% 5.0% 6.8% 7.7% 8.1% 5.2% 6.1% 5.6% 9.8% 6.2% 9.4% 7.9% 7.8% 10.4% 10.8% 7.7% 8.9% 8.2% 13.3% 7.7% 4.7% 8.3% 10.0% 8.4% 6.0% 8.0% 7.6% 8.3%

0.0% 0.0% 0.1% 0.2% 0.4% 0.0% 0.0% 0.3% 0.1% 2.0% 0.6% 1.5% 3.4% 2.5% 3.0% 3.6% 6.0% 6.3% 2.1% 3.8% 6.1% 6.7% 6.4% 6.3% 5.3% 3.7% 2.5% 2.5% 3.3% 3.9% 2.6% 2.1% 3.2% 2.9% 1.5% 2.3% 1.3% 2.4% 1.0% 1.6% 2.0% 2.2% 1.5% 1.2% 1.2%

0.0% 2.3% 0.0% 0.1% 1.0% 0.4% 1.4% 2.4% 0.7% 2.0% 1.5% 0.7% 3.1% 0.9% 1.8% 1.4% 0.6% 0.8% 1.3% 0.6% 0.2% 0.4% 1.2% 0.6% 1.0% 0.9% 1.0% 0.9% 0.5% 0.2% 0.6% 0.3% 1.3% 3.2% 2.8% 2.6% 1.8% 0.3% 0.2% 0.0% 0.2% 0.1% 0.1% 0.2% 0.0%

2.3% 1.7% 0.8% 2.5% 2.7% 2.6% 2.6% 4.9% 3.9% 5.3% 5.3% 4.5% 3.5% 3.7% 1.6% 5.2% 7.9% 9.8% 5.5% 4.9% 4.7% 5.8% 3.4% 7.4% 3.5% 3.2% 6.1% 2.1% 5.5% 1.7% 3.2% 1.9% 3.1% 2.1% 1.2% 3.6% 1.1% 1.6% 1.2% 1.9% 2.1% 1.8% 1.8% 1.1% 2.3%

4.6% 1.1% 0.8% 10.3% 10.9% 5.6% 8.0% 5.2% 3.0% 4.1% 2.7% 4.1% 2.8% 1.6% 2.8% 0.1% 0.7% 1.0% 0.2% 0.3% 0.4% 0.7% 0.4% 0.4% 0.4% 0.6% 1.6% 0.6% 0.9% 0.7% 0.8% 1.6% 1.0% 1.0% 1.7% 1.4% 1.0% 0.6% 2.4% 1.0% 0.5% 0.2% 0.3% 0.7% 0.8%

60.3% 60.1% 71.2% 56.4% 50.9% 59.4% 55.3% 46.7% 43.8% 40.3% 40.6% 54.0% 47.1% 45.7% 44.5% 42.3% 40.6% 37.3% 38.8% 43.7% 37.6% 42.6% 38.0% 36.3% 37.6% 37.4% 30.2% 36.7% 30.6% 33.5% 32.9% 34.2% 33.0% 33.2% 33.7% 31.2% 33.4% 34.5% 34.5% 26.8% 31.3% 33.3% 28.7% 26.1% 24.8%

15 16 20 14 17 10 16 18 12 8 4 6 5 1 5 1 4 3 2 2 1 2 1 1 0 4 0 0 0 1 3 5 2 0 3 0 1 7 2 2 0 1 0 1 1

57 60 70 88 93 72 87 80 90 95 83 87 86 73 68 62 87 96 79 89 90 97 113 86 107 121 99 101 108 116 152 115 120 122 121 119 131 127 119 152 118 125 171 173 157

(continued on next page)

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TABLE 1 (continued)

Year

Acctg.

Fin.

Papers Total Other Acad. Other with No Number Econ. Psych. Stats. Mgnt. Jrnls. Citations Citations of Papers

2005 46.9% 14.3% 7.2% 2006 48.3% 13.5% 8.5% 2007 47.2% 14.5% 8.5% Total Papers

2.5% 1.4% 2.5%

0.1% 0.1% 0.3%

1.8% 1.2% 2.8%

0.6% 1.3% 1.0%

26.5% 25.7% 23.0%

Wtd. Avg. 40.2%

2.5%

0.8%

3.1%

1.6%

36.4%

a

8.5% 6.8%

0 1 0 218

144 165 143 5,114

This table shows the proportionate number of citations made by top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 from 1960 to 2007 for papers with at least one U.S. author. Proportions are calculated based on the total citations listed per paper. “Other Academic Journals” represents an aggregate of remaining academic citations from law, sociology, education, health, and miscellaneous disciplines. “Other Citations” represents an aggregate of remaining citations 共including working papers, books, popular media, and professional journals兲. The weighted average is calculated based on the number of papers published in a given year.

their paper兲, reviewers, and editors 共who determine which papers to accept and publish based on the papers that are submitted兲. Thus, our research should not be interpreted as a criticism of the editorial choices of particular journals. Another important caveat is that we do not consider all accounting journals. Researchers specializing in tax or audit will likely place some of their work in topical journals such as the Journal of the American Tax Association or Auditing: A Journal of Practice & Theory. However, these are not generally accepted as “A” publications in top U.S. schools. Researching academics, especially those currently untenured, recognize that a publication in one of our selected journals is very helpful, and often essential, to attaining tenure. Our choice of six top accounting journals implicitly assumes that the choices made by submitting authors, reviewers, and editors of these journals reflect a representative sample of accounting research.4 Based on our observations, we construct a possible characterization of accounting research: Accounting research is research into the effect of economic events on the process of summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of reported information on economic events.

This characterization is necessarily broad, reflecting the diversity of papers published over the past 40 years. We also emphasize that this characterization is a reflection of what has been published as accounting research, and not necessarily what accounting research should be. Our results are useful to researchers in deciding where to submit their work. Students, administrators of Ph.D. programs in accounting, and accounting professionals may wish to use our results in making decisions on resource allocations, especially toward encouraging and expanding audit and tax research. Accounting Ph.D. students may benefit from our long-term overview of accounting research and how it has changed over time. Finally, our results are also useful for

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We also note that our selection of journals is “backfilled”—that is, we include all prior issues of newer journals, even before they came to be commonly accepted as “A” journals. Because the inclusion of a journal on an “A” list is determined by individual schools at different times, we cannot provide a definitive date as to when AOS, CAR, JAE, JAR, and RAST became “A” journals 共we assume that TAR has always been considered an “A” journal兲.

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accounting practitioners in understanding the pressure on the education of the next generation of auditors and tax professionals, especially since it seems more difficult for audit/tax professors to publish their research in the top accounting journals. Levitt and Nicolaisen 共2008兲 note that there is an underdeveloped bond between the accounting profession and accounting academia. Personal interactions between the authors and accounting firm employees 共including their former supervisors and co-workers in accounting firms兲 confirm that the typical CPA firm employee has a limited understanding of exactly what accounting academics do. Our overview of academic publications, and our proposed definition of accounting research, should help to alleviate this problem and to encourage additional discourse between accounting professionals and academics. In the next section we expand on our motivation and review the prior literature. In the third section we review our data and methodology. In the fourth section we present our results and propose a current characterization of accounting research, and in the fifth section we conclude. BACKGROUND AND MOTIVATION Some papers are intuitively accounting 共e.g., “Required Disclosures in Financial Reports,” 关Schipper 2007兴兲, but others less clearly so 共e.g., “Tax Benefits as a Source of Merger Premiums in Acquisitions of Private Corporations,” 关Erickson and Wang 2007兴; “Industry Product Market Competition and Managerial Incentives,” 关Karuna 2007兴; “Measuring Customer Relationship Value: The Role of Switching Cost,” 关Dikolli et al. 2007兴兲. One heuristic used by many researchers in deciding if their paper is “accounting,” and therefore where to submit their work, is to count citations: if the majority of citations are from accounting journals, then it is an accounting paper. This heuristic clearly works for the Schipper paper above 共42 out of 44 citations from academic journals are from other accounting journals兲, but less so for Erickson and Wang 共only 9 out of 21 citations are from accounting journals兲. Beaver’s 共1968兲 seminal work in 1968 cites only 3 accounting papers out of 17 total citations: according to the citations-count heuristic, “The Information Content of Earnings Announcements” is a finance paper. This ad hoc analysis suggests that the citations-count heuristic alone cannot adequately define accounting research. A simple approach to describing and conceptualizing accounting research is to look at papers published in top accounting journals. We look at six top journals 共AOS, CAR, JAE, JAR, RAST, and TAR兲 for U.S. schools because a publication in one of these journals represents a highly sought after achievement that is required for tenure at top institutions and can often guarantee tenure at lower-tier institutions.5 Accounting journals do not explicitly define the term “accounting research.” TAR’s editorial policy is to publish articles “reporting results of accounting research” from “any accountingrelated subject.” JAR’s first issue states that the journal “will be devoted to reporting the results of research activities in all areas of accounting” 共Shultz and Caine 1963兲. The inaugural issue of RAST describes its mission as to provide “an outlet for significant academic research in accounting” where research “must contribute to the discipline of accounting.” Similarly, the inaugural issue of AOS discusses the need for research into “understanding the way in which all forms of accounting information are actually used” 共Hopwood 1976, 2兲, suggesting that accounting research could consider individuals’ response to accounting information. The lack of an explicit definition of accounting research does not suggest sloppy thinking or laziness; rather, it suggests that accounting research is hard to define. Hopwood 共2007兲 argues that accounting research has 5

An elite university will often require six top-tier publications for someone to have a likely chance at tenure, and many other research-intensive schools will require two to four top-tier publications. Lower-tier schools have reduced tenure requirements, but typically pay less 共Carcello 2007兲.

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changed over time; for example, pre-JAR 共1963兲 and pre-Ball and Brown 共1968兲, accounting research was largely normative 共i.e., focusing on how economic events should be accounted for兲, but afterward positive research became more dominant and accounting research came to embrace the consequences of accounting in wider institutional settings 共focusing more on the effect of accounting information on economic events兲.6 Thus, looking at the effect of net income on stock prices seems to have become accounting research, where previously it was not. With Ball and Brown, the contemporaneous shift toward positive research 共discussed by Reiter and Williams 关2002兴兲, and the explosion of archival research 共see Kothari 2001兲 accounting researchers seem to have partially annexed a literature that was previously in the realm of finance.7 Our paper seeks to provide a context within which to evaluate threats to 共and concerns over兲 the profession, as well as an overview of accounting research, by examining prior work. We assume that papers published in top accounting journals are a faithful representation of the accounting literature, and that the prior work they cite is an effective proxy for their antecedents.8 That is, the papers cited by accounting research in top journals can give us insight into where seminal ideas in accounting are coming from and can help us characterize what accounting research is. Insights from investigating citations and trends in citations from published accounting research will also help us to evaluate threats to the profession identified by various researchers. Threats to the Academic Accounting Profession Fogarty and Markarian 共2007兲 recount changes in accounting faculty numbers from 1982 to 2002 and conclude that a decline in the number of assistant and associate accounting professors over that period indicates that the future of the academic discipline is in doubt. Leslie 共2008兲 finds a similar decline. Buchheit et al. 共2002兲, Swanson 共2004兲, and Swanson et al. 共2007兲 report that accounting has the lowest proportion of faculty who publish in a top journal.9 These results seem consistent with Plumlee et al. 共2005兲, Fogarty and Markarian 共2007兲, and Leslie 共2008兲, because if it is more difficult for accounting researchers to obtain publications needed for tenure, then fewer potential accounting Ph.D. students may consider the field as a viable career. Plumlee et al. 共2005兲 report expected shortages of accounting researchers for 2005–2008, especially in audit and tax 共and report no indication that this trend will reverse in the near future—see also Levitt and Nicolaisen 关2008兴兲. If the number of active researchers decreases and acceptance rates at journals remain the same, then we should expect to see a corresponding drop in accounting papers published 共especially in audit and tax兲. This expectation is corroborated by Carcello 共2007兲, who notes that many accounting Ph.D. programs today welcome students with strong backgrounds in economics and finance as opposed to students with a professional background as a CPA. Such students are more likely to pursue a Ph.D. in financial accounting 共as it is closer to their educational foundations兲 and less likely pursue a Ph.D. in auditing or tax. Additionally, accounting Ph.D.s granted to individuals with no practical experience in accounting can only widen the gulf between academics and professional accountants. Another concern, perhaps best articulated by Hopwood 共2007兲, is that accounting research has grown more insular and less innovative over time. Williams 共1985兲 raises similar concerns. If correct, this concern should manifest itself in a reduction of citations from other literatures over time in accounting research.

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Interestingly, Ball and Brown 共1968兲 was rejected by TAR as a non-accounting paper 共Dyckman and Zeff 1984兲. This is a “two-way street” in that papers potentially considered accounting have also appeared in finance journals. Of course, citations do not have a one-to-one correspondence with ideas. Swanson et al.’s 共2007兲 set of accounting journals consists of CAR, JAE, JAR, and TAR. Buchheit et al. 共2002兲 consider JAE, JAR, and TAR from accounting as well as top-tier journals from other business disciplines.

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Diversity within accounting research is also a concern 共e.g., Rayburn 2005, 2006; Tuttle and Dillard 2007; Granof and Zeff 2008兲. If one topic or methodology becomes overly dominant to the detriment of other topics or methodologies, then the entire profession may suffer, as researchers focus on a shrinking set of “acceptable” papers. Granof and Zeff 共2008兲 note that developments in the 1960s, including a desire by accounting researchers to obtain more academic respectability from peers in other fields, have led to the unintended consequence of interesting accounting questions now being ignored because they cannot be addressed through currently accepted quantitative and theoretical analysis. Their work is consistent with Tuttle and Dillard 共2007兲, who find that the field of academic accounting research is becoming more homogenized as it matures. Specifically, they find that the proportion of nonfinancial accounting papers published in TAR has decreased significantly from 1976 to 2006, and they find corroborating trends in papers winning the American Accounting Association Competitive Manuscript Award, downloads of working papers from the Social Sciences Research Network 共SSRN兲 website, and accounting dissertations awarded. We investigate whether their findings extend to five other top accounting journals. Related Prior Research Similar to our paper, McRae 共1974兲 uses citations as a proxy for information transfers between disciplines. He examines the proportion of citations in both academic and professional accounting journals from 1968 and 1969, and finds that accounting journals draw mostly from other business fields and also from economics and law.10 Hofstedt 共1976兲 uses citations to compare and contrast behavioral accounting research with capital markets research. Dyckman and Zeff 共1984兲 examine citations as part of their review on the impact of JAR on academic accounting research. They also note that the pace of interdisciplinary borrowing by accounting research increased in the 1960s and 1970s. Brown and Gardner 共1985兲 use citations to assess the impact of TAR, JAR, JAE, and AOS on CAR from 1976 to 1982. Carnaghan et al. 共1994兲 profile CAR over its first 10 years. Similar to our approach, they provide a breakdown of papers by topic and methodology.11 We extend their work by time frame and also by journal. Similarly, Stone 共2002兲 provides a breakdown of accounting publications by method and topic from 1989 to 1998 for AOS, CAR, JAE, JAR, and TAR, and finds that the dominant topic and methodology over that period was financial accounting and archival, respectively.12 We extend Stone in both years and journals covered. Buchheit et al. 共2002兲 compare the proportionate publication rates for accounting, finance, management, and marketing, and find that the proportionate number of accounting faculty publishing in top accounting journals is significantly lower than the corresponding rates for other disciplines.13 More recently, Wakefield 共2008兲 uses citations to estimate the relative influence of 22 accounting research journals from 2000 to 2006. She finds the most influential journals are JAR, TAR, JAE, AOS, and CAR, respectively, with RAST as the 9th most influential journal 共see also Lowe and Locke 2005; Bonner et al. 2006兲. We extend a number of prior studies by examining a much longer time series of data and by expanding the set of accounting journals investigated. However, we do much more than merely extend prior work: We provide insight into long-term trends in top accounting journals, and ultimately help to inform the debate on the trajectory of accounting research and the status of the profession.

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Within the general heading of “business” his largest grouping is “other,” which unfortunately is not broken down further. His next largest business subcategory is finance. Their specific classifications for topic and methodology are also similar to our own. As with Carnaghan et al. 共1994兲, Stone’s categories of topic and methodology are similar to ours. Their results are corroborated by Swanson 共2004兲 and Swanson et al. 共2007兲.

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DATA AND METHODOLOGY We review and collect data on all articles published in six top accounting journals: AOS, CAR, JAR, JAE, RAST, and TAR.14 We exclude letters, committee reports, book reviews, notes, and other articles not related to research.15 We collect data as far back as 1960 for TAR 共i.e., back to volume 35兲, and to the journal inauguration date for the other five 共JAR, 1963; AOS, 1976; JAE, 1979; CAR, 1984; RAST, 1996兲.16 Although we include non-U.S. journals 共AOS and CAR兲, our primary focus is on the state of accounting research in the United States. Therefore, we restrict our analysis to papers with at least one U.S. author 共except for our analysis on total papers published over time, where we plot total papers versus papers with at least one U.S. author兲. We classify citations into eight major categories: accounting, finance, economics, psychology, management, statistics, other academic journals, and other citations 共i.e., books, professional journals, working papers, popular media, legal cases, etc.兲.17 An alternative approach would be to exclude nonacademic journal citations, but this would preclude our comparison of citations going back to 1960, since many early articles did not cite other academic journals 共few academic journals existed at the time兲. We include a large number of items in “other citations,” because books and working papers are more difficult to classify 共e.g., should a book on business valuation be classified as “accounting” or “finance”?兲, and because of the diversity of other items cited 共e.g., professional journals, court cases, websites, etc.兲. A few papers, mostly in the 1960s and 1970s, make no citations at all, and we exclude these papers from our citations analysis but not from our analysis of topic and methodology.18 We classify papers by topic using six categories: financial accounting, managerial accounting, auditing, tax, governance, and other topics 共which captures a variety of topics, including education, research methodology issues, and history兲. Finally, we also classify papers by methodology: archival, experimental, field study, review, survey, theoretical, and normative 共i.e., research arguing over what should be—and often advocating a particular accounting treatment—as opposed to positive research兲. See the Appendix for further description. Because we examine a 48–year time trend of changes in citations, topics, and methodologies, we add information on significant historical events affecting accounting. Our timeline is admittedly ad hoc, necessarily brief, and considers the creation of new academic journals, the introduction of accounting and financial databases, changes in major accounting institutions, and publications of seminal research.19 RESULTS Table 1 presents our results for proportionate citations by literature from 1960 to 2007. The period from 1960 to 1966 is characterized by relatively low proportionate citations from accounting or other academic fields and very high proportionate citations from books, legal cases, court

14

15 16

17

18 19

We include RAST in our set of journals because its rapid rise of influence makes it representative of newer trends in accounting research. Our informal polling among academics suggests that some schools view CAR as superior to RAST, and others consider RAST to be superior to CAR. For example, TAR featured articles sectioned under “Teacher’s Clinic” and “Education Research” headings until 1985, and we exclude these articles. We also include discussion papers, and classify them in the same topic and methodology as the paper they discuss unless clearly warranted otherwise 共for example, a discussion paper on theoretical work that uses archival data to test the work’s implications兲. For simplicity, we refer to these areas as “categories;” however, we recognize that this is a coarse categorization. Economics, psychology, and mathematics may be more accurately described as disciplines; accounting, finance, statistics, and management may be more accurately described as applied fields. The listing of journal classifications is available from the authors. For selecting seminal accounting papers, we use the top four accounting papers as of 1992 listed by Brown 共1996兲, plus Feltham and Ohlson 共1995兲 and Sloan 共1996兲.

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cases, and other sources, reflecting the practitioner-oriented early years of the discipline. However, starting with 1967, the proportionate citations in accounting papers from accounting journals begins to increase significantly.20 At the same time, citations from finance, economics, and management also begin to increase. For the most part these trends continue, but one exception is that citations from the management literature reached a high point of 9.8 percent in 1977 and have reverted back to early 1960s levels in subsequent years. Figure 1 plots the same results in graphical form alongside our historical timeline.21 To avoid clutter, we show only the top three categories 共accounting, finance, and economics兲. The increase in accounting citations appears to have been precipitated by the launch of JAR in 1963 and the origination of CRSP and Compustat in 1964. Accounting citations accounted for between 30 and 40 percent of citations between 1972 and 1985 共other than one exception in 1981兲, increased from 1986 to 2003, and have tapered off slightly since then. Citations from finance and economics have increased steadily from 1960 to 2007, with a few spikes 共e.g., 1978 for finance, contemporaneous with the publication of Watts and Zimmerman 关1978兴, and a spike in economics citations in 1995 contemporaneous with the publication of Feltham and Ohlson 关1995兴兲.22 Citations from finance research reach their highest point in 2007, at 14.5 percent. Overall, these results suggest that 共1兲 current accounting research has a considerable foundation from which to draw, and if accounting has been growing more insular over time, the level of insularity appears to have peaked in 2003; 共2兲 accounting research in general appears to be drawing closer to finance and economics, but even by 2007, combined citations from finance and economics represent just under 25 percent of total citations. These trends are consistent with the rise of positive research, which has its roots in economics and finance. Figure 2 plots the aggregate number of papers published by year in our accounting journals, with the same timeline as in Figure 1. These results indicate that the number of accounting papers published has increased significantly since 1982 even though Fogarty and Markarian 共2007兲 and Leslie 共2008兲 report a drop in accounting researchers. The increase is not monotonic 共for example, there was a decrease from 1968 to 1975兲, but the upward trend from 1975 to 2007 is clear and appears to be associated with the introduction of new major journals. This apparent disconnect between our results on publications and prior work on the number of researchers can be explained by two factors: First, Leslie 共2008兲 reports a slight increase in accounting researchers at doctoralgranting schools 共although they also report a significant drop in researchers at four-year nondoctoral schools兲. As faculty at doctoral-granting schools are more likely to be research active 共because of higher research budgets and because of reduced teaching loads兲, the decrease in the number of researchers may not translate directly into a decrease in the number of publications. Second, Leslie 共2008兲 also finds that the number of hours spent on research reported by accounting faculty has increased by 52 percent from 1993 to 2004, suggesting that an increase in output-perfaculty is compensating for a decrease in the number of faculty. A breakout 共not provided兲 by individual journal reveals inconsistent trends in the number of papers published by year across the journals, with TAR, JAR, and AOS declining over time while CAR and RAST are increasing. Table 2, Panel A, examines citations sorted by research topic. The vast majority of papers fall into financial accounting 共2,577, over three times the number published in managerial accounting, the next closest topic兲. Different topics draw from somewhat different categories. Auditing and

20 21

22

We also note that, with the inauguration of JAR, proportionate citations to “Other Citations” 共mainly books and court cases兲 begin to decrease in 1963. We use several acronyms to conserve space. “EMH” stands for the efficient market hypothesis, “WRDS” stands for Wharton Research Data Services offered by the University of Pennsylvania, and “SOX” stands for the Sarbanes-Oxley Act of 2002. However, given the ad hoc nature of our timeline, we do not provide evidence on causality.

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FIGURE 1 Proportion of Citations Made by Top Accounting Journals 60.0%

Proportion off Citations

50.0%

40.0%

A Accounting ti 30.0%

Finance Economics

20.0%

10.0%

0.0% 1960

1963 JAR Launched

1965

1970

1968 Ball & Brown

1975

1980

1985

1990

1995

2000

2005

1973 FASB replaces APB

1979 JAE 1985 1995 Feltham 1998 WRDS Launched Healy & Ohlson Launched 1978 Watts & 1987 19 0 EMH 1970 1960 CRSP 1964 Compustat Zimmerman Hopwood 1996 Sloan; 2002 SOX 1984 CAR Articulated by Launched Launched RAST Passed Launched Eugene Fama 1976 AOS Launched Launched

This figure shows the proportionate number of citations made by top accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR) from 1960 to 2007 for papers with at least one U.S. author. Proportions are calculated based on the total citations listed in the paper. For brevity, only citations from accounting, finance, and economics are shown. CRSP refers to the Chicago Center for Research into Stock Price, EMH refers to the Efficient Market Hypothesis, FASB refers to the Financial Accounting Standards Board, APB refers to the Accounting Principles Board, WRDS refers to Wharton Research Data Services, and SOX refers to the Sarbanes-Oxley Act of 2002.

financial accounting draw proportionately more from prior accounting research than from other categories, at 44 percent for auditing and 43 percent for financial accounting; however, auditing draws the most from psychology at 5.1 percent. The newest topic, corporate governance and control, draws the least from accounting and the most from economics 共consistent with the seminal paper in that field, Gompers et al. 关2003兴, published in The Quarterly Journal of Economics兲, as well as substantially from finance. Managerial accounting draws significantly from economics, but relatively little from finance. When broken out by topic and decade, Panels B to G, the results suggest a strong trend toward more accounting citations as accounting researchers take ownership of research streams and build on prior accounting papers in the area. Financial accounting, auditing, tax, governance, and other topics all show increased borrowing from finance, while managerial accounting has decreased its borrowing from finance. Borrowing from economics also increased from decade to decade across

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FIGURE 2 Number of Papers by Year 180

160

140

120

100

80

60

40 1960

1963 JAR Launched

1965

1968 Ball & Brown

1970

1975

1980

1985

1990

1995

2000

2005

1973 FASB replaces APB

1979 JAE 1985 1995 Feltham 1998 WRDS Launched Healy & Ohlson Launched 1987 1978 Watts & 19 0 EMH 1970 1960 CRSP 1964 Compustat Hopwood Zimmerman 1996 Sloan; 2002 SOX Articulated by 1984 CAR Launched Launched RAST Passed Eugene Fama 1976 AOS Launched Launched Launched

This figure shows the aggregate number of papers with at least one U. S. author published in six top accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR) from 1960 to 2007. CRSP refers to the Chicago Center for Research into Stock Price, EMH refers to the Efficient Market Hypothesis, FASB refers to the Financial Accounting Standards Board, APB refers to the Accounting Principles Board, WRDS refers to Wharton, Research Data Services, and SOX refers to the Sarbanes-Oxley Act of 2002.

most topics from the 1960s through to the 1990s, but tapered off for many topics from 2000 to 2007. Borrowing from statistics is small across all fields, and management research also plays a limited role for most topics except for management accounting 共where it is declining兲.23 Table 2, Panel B, shows that the number of financial accounting papers has increased significantly from the 1960s to the 2000s. Panels C to G show that managerial accounting, auditing, and tax have all decreased from the 1990s to the 2000s; governance has increased significantly in the 23

Our finding on statistics is indicative of accounting research using primarily “tried and true” statistical methods. In many cases papers that show improved methodologies are published in finance journals 共e.g., Petersen 关2009兴, published in the Review of Financial Studies兲.

Accounting Horizons American Accounting Association

December 2010

Panel A: Citations by Topic Topic Financial Accounting Managerial Accounting Auditing Tax Control/Governance Other Topics

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

2577 741 684 237 34 623

43.1% 34.5% 44.0% 36.3% 27.6% 32.9%

12.2% 4.1% 1.8% 9.1% 18.2% 5.6%

6.5% 10.6% 3.7% 8.6% 13.8% 5.6%

1.2% 4.3% 5.1% 1.5% 1.4% 3.5%

0.8% 1.0% 1.0% 0.6% 0.1% 0.9%

Management

Other Academic Journals

Other Citations

1.3% 9.2% 1.8% 0.9% 3.0% 5.6%

1.2% 1.9% 1.1% 1.3% 1.3% 4.0%

33.8% 34.4% 41.5% 41.7% 34.6% 42.0%

Characterizing Accounting Research

Accounting Horizons

TABLE 2 Proportion of Citations Made by Papers Published in Top Accounting Journals by Research Topica

Panel B: Financial Accounting by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

334 408 497 610 728

34.7% 33.8% 41.1% 46.9% 50.3%

3.0% 10.2% 13.8% 13.0% 15.6%

2.3% 4.6% 7.5% 8.5% 7.0%

0.2% 1.8% 2.3% 1.0% 0.6%

0.7% 1.3% 0.7% 1.4% 0.1%

Other Citations

1.8% 3.1% 1.2% 0.9% 0.6%

3.9% 1.4% 0.5% 0.8% 0.6%

53.3% 43.8% 32.9% 27.5% 25.1%

Other Citations 39.7% 38.0% 31.9% 35.1% 28.4%

Panel C: Managerial Accounting by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

113 139 164 182 143

38.1% 32.5% 33.4% 31.6% 38.7%

4.7% 4.9% 4.0% 3.3% 3.8%

3.6% 5.3% 8.8% 17.5% 14.6%

0.3% 6.0% 7.4% 2.7% 4.5%

1.9% 1.6% 0.4% 1.0% 0.1%

6.1% 10.7% 13.1% 7.1% 8.6%

5.7% 1.0% 1.0% 1.6% 1.2%

(continued on next page)

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Management

Other Academic Journals

648

Accounting Horizons American Accounting Association

Panel D: Auditing by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

33 91 186 223 151

25.0% 40.5% 38.0% 45.9% 54.7%

0.0% 0.7% 1.6% 1.9% 3.2%

0.0% 1.7% 3.5% 5.1% 4.1%

0.9% 3.7% 7.3% 5.0% 4.3%

1.7% 1.1% 1.1% 1.2% 0.2%

Management

Other Academic Journals

Other Citations

3.8% 3.1% 2.1% 1.3% 1.0%

3.7% 1.3% 0.4% 1.5% 0.5%

65.0% 47.8% 46.0% 38.0% 32.0%

Other Citations

Panel E: Tax by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

26 14 42 85 70

23.7% 35.8% 31.4% 38.7% 41.2%

2.5% 3.9% 6.3% 9.6% 13.7%

0.9% 4.4% 10.7% 10.9% 8.1%

0.0% 1.1% 1.4% 1.5% 2.1%

0.0% 1.1% 0.7% 1.1% 0.1%

1.7% 2.6% 0.9% 0.3% 0.9%

5.3% 0.8% 0.7% 0.7% 1.1%

66.0% 50.3% 47.8% 37.2% 32.7%

Other Citations NA 80.0% 44.9% 42.8% 30.0%

Panel F: Control/Governance by Decade Decade

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

0 1 2 6 25

NA 8.0% 6.7% 26.0% 30.5%

NA 4.0% 7.9% 18.0% 19.6%

NA 0.0% 39.3% 9.0% 13.4%

NA 8.0% 0.0% 0.0% 1.5%

NA 0.0% 0.0% 0.0% 0.1%

NA 0.0% 1.1% 4.2% 3.0%

NA 0.0% 0.0% 0.0% 1.8%

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(continued on next page)

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1960s 1970s 1980s 1990s 2000s

Number of Papers

Decade 1960s 1970s 1980s 1990s 2000s a

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

140 124 137 147 75

24.5% 28.7% 33.0% 39.4% 42.3%

0.5% 4.2% 6.0% 6.8% 13.7%

0.9% 4.7% 9.3% 5.6% 9.1%

0.8% 5.4% 7.0% 1.8% 2.2%

1.2% 0.9% 0.4% 1.4% 0.1%

Management

Other Academic Journals

Other Citations

3.9% 9.0% 8.5% 3.3% 2.3%

10.7% 3.5% 1.1% 2.4% 0.9%

57.5% 43.6% 34.7% 39.3% 29.3%

This table shows the proportionate number of citations made by top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 from 1960 to 2007 for papers with at least one U.S. author, broken out by research topic 共Panel A兲 then by decade for each topic 共Panels B to G兲. Proportions are calculated based on the total citations. “Other Academic Journals” represents an aggregate of remaining academic citations from law, sociology, education, health, and miscellaneous disciplines, and “Other Citations” represents an aggregate of all other citations 共accounting regulations, books, working papers, etc.兲.

Characterizing Accounting Research

Accounting Horizons

Panel G: Other Topics by Decade

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2000s but still remains a relatively small topic.24 Figure 3 plots the relative proportion of papers by topic graphically, and emphasizes the increase in financial accounting papers, from about 42 percent in 1960 to about 65 percent in 2007. However, the most dramatic increase in financial accounting occurred around 1995, coinciding with the publication of Feltham and Ohlson 共1995兲, Sloan 共1996兲, and the founding of RAST in 1996. The portion of other topics has generally decreased in a similar manner: relative stability until around 1995, tapering off slightly thereafter. Table 3 breaks out papers by research methodology instead of topic. Because most financial accounting research is archival, our results show a similar dominance by archival research 共the number of archival papers is over twice the next highest methodology, theoretical modeling兲. Archival research draws heavily from finance 共at almost 15 percent, and Panel B shows that the trend is increasing over time兲. Theoretical research draws more from economics than other meth-

FIGURE 3 Proportion of Papers by Topic 80% 70%

P Proportion

60% FA

50%

MA Audit

40%

Tax Other

30% 20% 10% 0% 1960

1963 JAR Launched

1965

1968 Ball & Brown

1970

1975

1973 FASB replaces APB

1980

1985

1990

1995

2000

2005

1979 JAE 1985 1995 Feltham 1998 WRDS Launched Healy & Ohlson Launched 1978 Watts & 1987 1970 19 0 EMH 1960 CRSP 1964 Compustat Hopwood Zimmerman 1996 Sloan; 2002 SOX Articulated by 1984 CAR Launched Launched RAST Passed Eugene Fama 1976 AOS Launched Launched Launched

This figure shows the proportionate number of papers published by topic in the top six accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR) from 1960 to 2007 for papers with at least one U.S. author. If a paper covered more than one topic, then we selected the primary topic for purposes of categorization. Because governance topics make up a relatively low proportion of topics, for brevity governance is excluded from this figure. CRSP refers to the Chicago Center for Research into Stock Price, EMH refers to the Efficient Market Hypothesis, FASB refers to the Financial Accounting Standards Board, APB refers to the Accounting Principles Board, WRDS refers to Wharton Research Data Services, and SOX refers to the Sarbanes-Oxley Act of 2002.

24

Comparing absolute numbers can be misleading because we have only eight years of data from 2000 to 2007, versus ten years for the 1990s.

Accounting Horizons American Accounting Association

December 2010

Panel A: Citations by Methodology Topic

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

2134 745 66 124 156 844 827

45.3% 36.7% 27.6% 41.8% 30.3% 40.0% 32.8%

14.4% 3.1% 3.2% 7.0% 3.1% 5.9% 2.6%

6.2% 5.0% 5.0% 5.9% 2.8% 14.6% 2.9%

0.4% 9.5% 7.3% 5.0% 8.0% 0.8% 1.7%

0.7% 1.0% 0.1% 0.9% 0.7% 1.2% 0.7%

Archival Experimental Field Study Review Survey Theoretical Normative

Management

Other Academic Journals

Other Citations

1.2% 3.0% 17.6% 4.0% 13.0% 3.3% 4.9%

0.9% 1.3% 1.8% 1.1% 3.4% 1.1% 4.3%

30.9% 40.5% 37.4% 34.4% 38.8% 33.0% 50.1%

Other Citations

Characterizing Accounting Research

Accounting Horizons

TABLE 3 Proportion of Citations Made by Papers Published in Top Accounting Journals by Research Methodologya

Panel B: Archival by Decade Decade 1960s 1970s 1980s 1990s 2000s

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

59 219 433 651 772

26.2% 33.9% 43.1% 47.6% 49.3%

8.3% 12.5% 14.5% 13.4% 16.4%

5.0% 5.2% 5.9% 6.5% 6.4%

0.0% 0.7% 0.9% 0.2% 0.2%

0.6% 1.7% 0.6% 1.2% 0.2%

2.7% 2.1% 1.3% 1.1% 0.8%

4.0% 1.5% 0.5% 0.8% 0.7%

53.2% 42.3% 33.2% 29.2% 26.1%

Other Citations 53.0% 47.3% 43.6% 37.5% 30.9%

Panel C: Experimental by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

36 140 214 200 155

29.6% 29.3% 35.0% 38.0% 45.7%

3.2% 4.4% 2.4% 2.6% 3.5%

1.7% 2.0% 3.9% 7.9% 6.2%

4.2% 8.9% 10.4% 9.1% 10.3%

2.5% 1.2% 0.6% 1.7% 0.1%

2.8% 4.9% 3.4% 1.8% 2.4%

3.1% 2.1% 0.7% 1.4% 0.9%

(continued on next page)

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Number of Papers

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Accounting Horizons American Accounting Association

Panel D: Field Study by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

0 6 23 19 18

NA 23.3% 29.5% 27.5% 26.9%

NA 11.3% 2.3% 1.4% 3.5%

NA 9.4% 5.4% 1.7% 6.4%

NA 16.4% 10.0% 4.3% 3.9%

NA 0.0% 0.1% 0.1% 0.2%

Management

Other Academic Journals

Other Citations

NA 27.9% 20.9% 11.9% 16.2%

NA 0.6% 2.1% 2.4% 1.0%

NA 11.0% 29.9% 50.7% 42.0%

Other Citations

Panel E: Review by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

5 22 46 23 28

27.1% 30.6% 42.7% 38.2% 54.6%

1.5% 5.3% 4.9% 9.2% 10.8%

2.4% 3.4% 6.8% 4.9% 8.1%

1.1% 7.9% 7.2% 2.8% 1.6%

0.0% 1.6% 0.2% 3.0% 0.0%

1.6% 5.2% 4.9% 3.4% 2.3%

3.0% 0.3% 1.0% 2.7% 0.1%

63.4% 45.6% 32.4% 35.9% 22.5%

Other Citations 58.2% 43.3% 32.9% 43.6% 32.4%

Panel F: Survey by Decade Decade

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

10 35 48 30 33

6.1% 25.6% 29.2% 34.6% 40.7%

0.0% 4.8% 3.1% 1.4% 3.5%

3.3% 2.7% 3.3% 1.7% 2.8%

0.0% 7.1% 14.2% 4.8% 5.5%

1.4% 0.7% 0.3% 1.5% 0.2%

9.8% 13.5% 15.5% 8.6% 13.5%

21.2% 2.3% 1.5% 3.8% 1.3%

December 2010

(continued on next page)

Oler, Oler, and Skousen

1960s 1970s 1980s 1990s 2000s

Number of Papers

Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

48 206 172 255 163

34.9% 39.2% 33.9% 40.7% 48.0%

7.2% 6.1% 6.6% 4.5% 6.8%

6.0% 6.3% 16.4% 19.6% 18.0%

0.0% 1.3% 1.3% 0.6% 0.3%

0.7% 1.6% 1.5% 1.4% 0.0%

Management

Other Academic Journals

Other Citations

6.5% 5.3% 2.8% 2.7% 1.3%

4.6% 1.3% 0.3% 1.1% 0.7%

40.1% 38.9% 37.2% 29.3% 25.0%

Other Citations 54.0% 48.5% 33.8% 50.4% 42.8%

Panel H: Normative by Decade Decade 1960s 1970s 1980s 1990s 2000s a

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

488 149 92 75 23

33.3% 31.9% 30.2% 32.0% 40.3%

1.5% 3.6% 6.0% 3.2% 5.6%

1.3% 3.1% 9.3% 4.3% 4.6%

0.2% 2.7% 7.2% 3.0% 0.6%

1.1% 0.3% 0.3% 0.1% 0.1%

2.8% 7.9% 11.9% 4.5% 5.2%

5.9% 2.0% 1.3% 2.6% 0.8%

Characterizing Accounting Research

Accounting Horizons

Panel G: Theoretical by Decade

This table shows the proportionate number of citations made by top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 from 1960 to 2007 for papers with at least one U.S. author, broken out by research methodology 共Panel A兲 then by decade for each method 共Panels B to H兲. Proportions are calculated based on the total citations. “Other Academic Journals” represents an aggregate of remaining academic citations from law, sociology, education, health, and miscellaneous disciplines, and “Other Citations” represents an aggregate of all other citations 共accounting regulations, books, working papers, etc.兲.

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odologies 共also at almost 15 percent兲 and experimental research draws significantly from psychology 共almost 10 percent兲. Field studies draw the least from prior accounting and are much more dependent on management. We find a similar result for survey papers. Figure 4 illustrates the time trend in the relative proportion of methodologies, and indicates the precipitous drop in normative research, from a high in 1963 to almost negligible by the mid-1980s, consistent with observations from Bricker and Previts 共1990兲, Reiter and Williams 共2002兲, Williams 共2003兲, and Granof and Zeff 共2008兲. The period from 1968 to 1979 is characterized by roughly equal representation among all methodologies except normative, which declined.25 However, roughly corresponding with the publication of Watts and Zimmerman 共1978兲 and the inauguration of the JAE in 1979, we see a growing dominance of archival research over

FIGURE 4 Proportion of Papers by Methodology 100% 90% 80%

P Proportion

70%

A hi l Archival Experimental

60%

Theoretical Normative

50% 40% 30% 20% 10% 0% 1960

1963 JAR Launched

1965

1970

1968 Ball & Brown

1975

1973 FASB replaces APB

1980

1985

1990

1995

2000

2005

1979 JAE 1985 1995 Feltham 1998 WRDS Launched Healy & Ohlson Launched 1978 Watts & 1987 19700 EMH 19 1960 CRSP 1964 Compustat Hopwood Zimmerman 1996 Sloan; 2002 SOX Articulated by 1984 CAR Launched Launched RAST Passed Eugene Fama 1976 AOS Launched Launched Launched

This figure shows the proportionate number of papers published by methodology in the top six accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR) from 1960 to 2007 for papers with at least one U.S. author. If a paper used more than one methodology, then we categorized the paper by its primary methodology. Because field studies, reviews, and surveys make up a relatively low proportion of methodologies, for brevity they are excluded from this figure. CRSP refers to the Chicago Center for Research into Stock Price, EMH refers to the Efficient Market Hypothesis, FASB refers to the Financial Accounting Standards Board, APB refers to the Accounting Principles Board, WRDS refers to Wharton Research Data Services, and SOX refers to the Sarbanes-Oxley Act of 2002.

25

We are ignoring reviews here, which may be viewed as a “pseudo-methodology” because they are concerned with summarizing and synthesizing prior research rather than discovering new knowledge.

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655

other methodologies. This significant increase is preceded by the availability of significant data sets such as CRSP and Compustat, which allowed archival researchers to investigate questions that were previously only answerable using experimental or field study approaches. Over 1970 to 2007 we also see a slight decrease in theoretical research, and a more pronounced decrease for experimental research.26 Tables 4–6 break out citations, topics, and methodologies by journal, and help to characterize the “flavor” of each journal. Panel A in Table 4 gives an overview of citation sources by journal. Consistent with its name, JAE papers draw from economics 共11 percent兲, but even more heavily from finance 共18 percent兲. AOS draws the least from prior accounting work 共30 percent versus 39 percent for TAR, the next lowest兲 and draws the most from psychology and management. Panels B to F detail the trend in citations for each journal by decade. Each journal shows a strong trend toward citing prior accounting work 共except JAR which remains stable in accounting citations from the 1990s to 2000s, at 45 percent, coupled with a large increase in citations from finance兲. Table 5 examines paper topics by decade and journal. The increasing dominance of financial accounting is evident in Panel A, along with the relative decline of managerial accounting, audit, and tax. Panel B breaks out topics by journal and indicates some stark differences. RAST publishes predominantly financial accounting papers 共with some managerial, but relatively few audit, tax, and governance papers兲. In contrast, AOS publishes proportionately more managerial accounting papers than other journals 共34 percent to 16 percent, the next highest from TAR兲, and CAR publishes proportionately the most audit research. Tax research makes up a relatively small portion of total research, with JAE publishing proportionately more tax research than the other journals. The drop in published research in audit and tax is consistent with the unmet demand for audit and tax researchers noted by Plumlee et al. 共2005兲. Breaking out trends by individual journal, CAR is the only journal to move contrary to the trend toward increasing financial accounting research 共64 percent of papers in the 1990s to 50 percent in the 2000s兲; all other journals have increased the proportion of financial accounting papers published. CAR also increased its proportion of managerial, audit, and tax papers, while these topics have declined 共or remained the same兲 for JAR, RAST, and TAR. AOS shows a small increase in financial papers published 共15 percent to 17 percent兲 but also shows a large jump in managerial research, from 27 percent to 41 percent. The aggregate number of governance papers published is small 共34 papers, from Table 2兲, and are published mostly by AOS and JAE. Table 6 examines methodologies by decade and journal. Consistent with the increase in financial accounting research noted in the prior tables, there is a strong trend toward proportionately more archival research, shown in Panel A. Normative research drops from being the dominant methodology in the 1960s to being almost nonexistent. Experimental work declined from a zenith in the 1980s, and theoretical work seems to have wide swings over time. Panel B reveals considerable variation by journal: JAE and RAST publish primarily archival papers; JAR, AOS, and CAR publish relatively more experimental papers; RAST and CAR publish relatively more theoretical papers. Panels C to G present the time trend for each journal. We find an increase in the relative proportion of archival research from the 1990s to the 2000s for almost all journals 共the only exception being JAE, which devoted its entire September 2001 issue to reviews兲. We also find a precipitous decline in experimental research in JAR, going from 25 percent in the 1970s down to 8 percent in the 2000s, but an increase in experimental research published in both CAR and AOS.

26

This is consistent with two of the three new journals 共JAE and RAST兲 launched from 1979 to 1996 being strongly oriented toward archival research. Only CAR has published a significant number of experimental papers. JAE and RAST have published almost no experimental papers.

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TABLE 4 Proportion of Citations Made by Papers Published in Top Accounting Journals, by Journala Panel A: Summary of Top Six Accounting Journals Journal AOS CAR JAE JAR RAST TAR

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

520 527 536 1469 208 1636

30.2% 48.0% 43.8% 39.5% 49.8% 39.0%

4.3% 8.6% 18.1% 9.0% 11.5% 6.0%

4.2% 8.8% 10.8% 7.2% 9.6% 4.8%

9.4% 2.3% 0.1% 2.2% 0.2% 1.8%

0.2% 2.9% 0.2% 0.8% 0.2% 0.8%

Management

Other Academic Journals

Other Citations

13.5% 1.6% 0.8% 1.7% 0.8% 2.7%

1.9% 1.3% 0.8% 1.0% 1.8% 2.5%

36.2% 26.5% 25.4% 38.7% 26.0% 42.5%

Other Citations

Panel B: Accounting, Organizations and Society, by Decade Decade 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

59 193 169 99

27.9% 30.4% 28.6% 34.1%

7.5% 4.7% 2.7% 4.2%

5.4% 4.8% 2.5% 5.5%

12.8% 13.7% 5.0% 6.2%

0.1% 0.3% 0.0% 0.1%

28.6% 15.9% 6.7% 11.5%

2.0% 1.7% 2.6% 1.2%

15.5% 28.4% 51.8% 37.2%

Other Citations 33.2% 21.4% 29.4%

Panel C: Contemporary Accounting Research, by Decade Decade

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

101 237 189

41.2% 47.8% 52.0%

7.3% 9.6% 8.1%

9.7% 10.0% 6.6%

2.6% 2.1% 2.4%

1.2% 5.8% 0.1%

3.1% 1.4% 1.1%

1.8% 1.9% 0.4%

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(continued on next page)

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1980s 1990s 2000s

Number of Papers

Decade 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

8 102 228 198

17.8% 37.1% 45.7% 46.2%

20.6% 17.6% 16.4% 20.3%

19.7% 11.3% 10.3% 10.7%

0.0% 0.0% 0.1% 0.2%

0.3% 0.2% 0.2% 0.2%

Management

Other Academic Journals

Other Citations

0.0% 1.0% 0.9% 0.5%

0.0% 0.1% 0.4% 1.7%

41.6% 32.6% 26.0% 20.2%

Other Citations

Panel E: Journal of Accounting Research, by Decade Decade 1960s 1970s 1980s 1990s 2000s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

147 331 433 294 264

29.1% 33.2% 40.7% 45.4% 44.8%

4.5% 7.4% 9.1% 7.2% 15.5%

4.1% 4.7% 7.8% 9.3% 8.6%

1.2% 2.7% 2.6% 2.4% 1.0%

1.4% 1.5% 0.8% 0.2% 0.1%

2.7% 2.5% 1.1% 1.9% 0.6%

3.9% 1.5% 0.2% 0.6% 0.3%

53.0% 46.5% 37.6% 33.0% 29.1%

Other Citations

Characterizing Accounting Research

Accounting Horizons

Panel D: Journal of Accounting and Economics, by Decade

Panel F: Review of Accounting Studies, by Decade Decade

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

59 149

43.6% 52.2%

6.3% 13.6%

12.9% 8.3%

0.1% 0.3%

0.3% 0.1%

1.2% 0.7%

4.6% 0.7%

31.0% 24.0%

Other Citations 52.9% 45.0% 42.8%

Panel G: The Accounting Review, by Decade Decade 1960s 1970s 1980s

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

Management

Other Academic Journals

499 379 199

33.0% 35.0% 37.1%

2.0% 6.4% 7.7%

1.4% 3.7% 6.0%

0.1% 2.5% 3.5%

1.0% 1.3% 0.8%

3.2% 4.4% 1.7%

6.3% 1.7% 0.4%

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1990s 2000s

Number of Papers

Decade 1990s 2000s a

Number of Papers

Accounting

Finance

Economics

Psychology

Statistics

266 293

42.6% 52.1%

7.3% 9.6%

10.0% 6.6%

2.0% 2.4%

0.5% 0.2%

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Accounting Horizons American Accounting Association

Panel G: The Accounting Review, by Decade Management

Other Academic Journals

Other Citations

1.2% 1.6%

0.4% 0.5%

35.9% 27.0%

This table shows the proportionate number of citations made by top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 for papers with at least one U.S. author, broken out by journal. Panel A presents aggregate results from 1960 to 2007. Panels B to G show proportions for each journal separately, by decade. Proportions are calculated based on the total citations. “Other Academic Journals” represents an aggregate of remaining academic citations from law, sociology, education, health, and miscellaneous disciplines, and “Other Citations” represents an aggregate of all other citations 共accounting regulations, books, working papers, etc.兲.

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Panel A: Summary of Top Six Accounting Journals, by Decade Decade Number of Papers Financial 1960s 1970s 1980s 1990s 2000s

792 810 1038 1278 1196

48.6% 52.8% 48.3% 48.4% 61.2%

Panel B: Summary of Top Six Accounting Journals, by Journal Journal Number of Papers Financial AOS CAR JAE JAR RAST TAR

524 532 557 1529 210 1762

16.6% 58.1% 52.8% 59.0% 83.8% 50.9%

Panel C: Accounting, Organizations and Society, by Decade Decade Number of Papers Financial 60 196 169 99

20.0% 16.3% 15.4% 17.2%

Panel D: Contemporary Accounting Research, by Decade Decade Number of Papers Financial 1980s 1990s 2000s

101 242 189

59.4% 63.6% 50.3%

Audit

Tax

Governance

Other

16.7% 17.4% 15.9% 14.6% 12.0%

4.8% 11.9% 17.9% 17.9% 12.6%

3.9% 2.1% 4.0% 6.7% 5.9%

0.0% 0.1% 0.2% 0.5% 2.1%

26.0% 15.7% 13.7% 11.7% 6.3%

Managerial

Audit

Tax

Governance

Other

33.8% 10.3% 9.5% 12.0% 10.5% 15.8%

15.8% 22.2% 4.3% 15.4% 3.8% 13.1%

1.7% 5.6% 6.5% 4.8% 1.0% 5.4%

1.1% 0.0% 2.7% 0.5% 0.5% 0.3%

30.9% 3.8% 24.2% 8.4% 0.5% 14.4%

Managerial

Audit

Tax

Governance

Other

26.7% 38.3% 26.6% 41.4%

11.7% 15.3% 19.5% 13.1%

0.0% 1.5% 0.6% 5.1%

0.0% 0.0% 0.6% 5.1%

41.7% 28.6% 37.3% 18.2%

Managerial

Audit

Tax

Governance

Other

14.9% 7.0% 12.2%

20.8% 19.8% 25.9%

1.0% 5.0% 9.0%

0.0% 0.0% 0.0%

4.0% 4.5% 2.6%

(continued on next page)

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1970s 1980s 1990s 2000s

Managerial

Characterizing Accounting Research

Accounting Horizons

TABLE 5 Research Topic by Decade and Journala

1970s 1980s 1990s 2000s

8 108 242 199

50.0% 58.3% 45.0% 59.3%

Panel F: Journal of Accounting Research, by Decade Decade Number of Papers Financial 1960s 1970s 1980s 1990s 2000s

178 353 434 300 264

52.8% 58.4% 56.9% 53.3% 73.9%

Panel G: Review of Accounting Studies, by Decade Decade Number of Papers Financial 1990s 2000s

59 151

Panel H: The Accounting Review, by Decade Decade Number of Papers

a

614 389 199 266 294

Audit

Tax

Governance

Other

12.5% 1.9% 14.9% 7.0%

0.0% 5.6% 4.5% 3.5%

0.0% 4.6% 6.2% 8.0%

0.0% 0.9% 2.5% 4.0%

37.5% 28.7% 26.9% 18.1%

Managerial

Audit

Tax

Governance

Other

19.7% 13.9% 11.3% 10.0% 7.6%

3.9% 14.7% 18.4% 23.7% 9.8%

6.2% 0.6% 3.7% 11.3% 3.8%

0.0% 0.3% 0.0% 0.0% 2.3%

17.4% 12.2% 9.7% 1.7% 2.7%

Managerial

Audit

Tax

Governance

Other

74.6% 87.4%

18.6% 7.3%

5.1% 3.3%

0.0% 1.3%

0.0% 0.7%

1.7% 0.0%

Financial

Managerial

Audit

Tax

Governance

Other

47.4% 53.0% 49.7% 47.4% 59.5%

15.8% 19.3% 12.1% 18.0% 11.6%

5.0% 9.5% 24.6% 23.7% 17.3%

3.3% 3.9% 8.5% 9.0% 6.8%

0.0% 0.0% 0.5% 0.0% 1.7%

28.5% 14.4% 4.5% 1.9% 3.1%

December 2010

This table shows the proportion of papers published by topic in top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 for papers with at least one U.S. author, from 1960 to 2007. Panel A presents aggregate results by decade. Panel B presents aggregate results by journal. Panels C to H show results for each journal separately, by decade.

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1960s 1970s 1980s 1990s 2000s

Managerial

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Panel E: Journal of Accounting and Economics, by Decade Decade Number of Papers Financial

Panel A: Summary of Top Six Accounting Journals, by Decade Number of Decade Papers Archival Experimental 1960s 1970s 1980s 1990s 2000s

792 810 1038 1278 1196

9.6% 28.3% 42.1% 52.1% 64.7%

4.9% 17.9% 20.6% 15.8% 13.0%

Panel B: Summary of Top Six Accounting Journals, by Journal Number of Journal Papers Archival Experimental AOS CAR JAE JAR RAST TAR

524 532 557 1529 210 1762

10.7% 48.9% 81.9% 47.8% 63.3% 31.0%

19.8% 18.8% 0.7% 20.1% 2.4% 13.3%

1970s 1980s 1990s 2000s

60 196 169 99

8.3% 9.2% 10.7% 15.2%

11.7% 23.5% 16.6% 23.2%

Review

Survey

Theoretical

Normative

0.0% 0.9% 2.2% 1.5% 1.5%

0.8% 2.8% 4.6% 1.9% 2.3%

1.6% 4.3% 4.6% 2.3% 2.8%

6.4% 25.8% 16.6% 20.5% 13.7%

76.6% 20.0% 9.2% 5.9% 2.0%

Field Study

Review

Survey

Theoretical

Normative

12.0% 0.8% 0.0% 0.0% 0.0% 0.0%

6.5% 2.1% 5.9% 1.8% 0.0% 1.3%

14.3% 2.4% 0.0% 0.3% 0.0% 3.7%

4.6% 25.2% 11.1% 20.3% 34.3% 14.5%

32.1% 1.9% 0.4% 9.5% 0.0% 36.2%

Field Study

Review

Survey

Theoretical

Normative

11.7% 11.7% 11.2% 14.1%

5.0% 7.7% 4.7% 8.1%

16.7% 13.3% 9.5% 23.2%

5.0% 1.5% 10.1% 1.0%

41.7% 33.2% 37.3% 15.2%

(continued on next page)

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Panel C: Accounting, Organizations and Society, by Decade Number of Decade Papers Archival Experimental

Field Study

Characterizing Accounting Research

Accounting Horizons

TABLE 6 Research Method by Decade and Journala

1980s 1990s 2000s

101 242 189

36.6% 50.4% 53.4%

8.9% 18.6% 24.3%

Panel E: Journal of Accounting and Economics, by Decade Number of Decade Papers Archival Experimental 1970s 8 62.5% 0.0% 1980s 108 79.6% 0.0% 1990s 242 83.5% 0.8% 2000s 199 81.9% 1.0% Panel F: Journal of Accounting Research, by Decade Number of Decade Papers Archival Experimental 1960s 1970s 1980s 1990s 2000s

178 353 434 300 264

24.7% 36.0% 45.4% 55.0% 75.0%

17.4% 25.2% 24.9% 19.7% 8.0%

Panel G: Review of Accounting Studies, by Decade Number of Decade Papers Archival Experimental 59 151

42.4% 71.5%

3.4% 2.0%

Field Study

Review

Survey

Theoretical

Normative

0.0% 0.0% 2.1%

3.0% 2.5% 1.1%

5.9% 1.7% 1.6%

39.6% 26.0% 16.4%

5.9% 0.8% 1.1%

Field Study

Review

Survey

Theoretical

Normative

0.0% 0.0% 0.0% 0.0%

0.0% 7.4% 2.9% 9.0%

0.0% 0.0% 0.0% 0.0%

37.5% 11.1% 12.8% 8.0%

0.0% 1.9% 0.0% 0.0%

Field Study

Review

Survey

Theoretical

Normative

0.0% 0.0% 0.0% 0.0% 0.0%

2.2% 2.3% 3.5% 0.3% 0.0%

0.0% 0.0% 0.0% 1.3% 0.4%

13.5% 21.5% 22.4% 23.7% 16.3%

42.1% 15.0% 3.9% 0.0% 0.4%

Field Study

Review

Survey

Theoretical

Normative

0.0% 0.0%

0.0% 0.0%

0.0% 0.0%

54.2% 26.5%

0.0% 0.0%

December 2010

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Panel D: Contemporary Accounting Research, by Decade Number of Decade Papers Archival Experimental

1960s 1970s 1980s 1990s 2000s a

614 389 199 266 294

5.2% 23.7% 49.7% 50.4% 64.3%

Experimental

Field Study

Review

Survey

Theoretical

Normative

1.3% 12.6% 25.6% 24.8% 20.4%

0.0% 0.0% 0.0% 0.0% 0.0%

0.3% 3.1% 3.5% 0.8% 0.0%

2.1% 6.4% 8.0% 2.3% 2.0%

4.4% 32.6% 10.1% 18.0% 11.2%

86.6% 21.6% 3.0% 3.8% 2.0%

This table shows the proportion of papers published by research method in top accounting journals 共Accounting, Organizations and Society, Contemporary Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, Review of Accounting Studies, and The Accounting Review兲 for papers with at least one U.S. author, from 1960 to 2007. Panel A presents aggregate results by decade. Panel B presents aggregate results by journal. Panels C to H show proportions for each journal separately, by decade.

Characterizing Accounting Research

Accounting Horizons

Panel H: The Accounting Review, by Decade Number of Decade Papers Archival

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Theoretical research is also declining in all journals, most significantly in CAR and RAST. Overall, these results present a mixed picture on the health of accounting as an academic discipline. Accounting research appears to have constructed a strong foundation from which to build: about half the citations in recently published accounting papers refer to prior accounting work. However, topics and methodologies appear to be narrowing to financial and archival; other topics and methodologies are, on average, in decline. Characterizing Accounting Research Building on our overview of citations, topics, and methodologies used by papers published in top accounting journals, we respond to the question: What is accounting research? Accounting research necessarily covers a wide swath of related areas, and we use a diagram of financial reporting, modified from Nikolai et al. 共2007兲 to help us classify these areas.27 This is necessarily a simplification, but we believe it captures the essential focus of the various streams of accounting research. As shown in Figure 5, financial accounting research focuses on the effect of accounting information on the investment decisions of external users in capital markets. Audit research focuses on the audit function, which sits between the accounting information produced by the firm and capital markets. Managerial accounting focuses on the link between accounting information and internal users, while tax focuses on the link between accounting information and taxation authorities, as well as the capital markets. Governance research focuses on corporate economic activities, which in turn drives accounting information. One area of contention centers on the response of capital markets to accounting information. In a recent example, Hand 共2002兲 argues that Skinner and Sloan’s 共2002兲 “earnings torpedo” paper is not accounting research because it does not focus on any of the key characteristics of accounting.28 More generally, the effect of economic events on the generation of accounting information appears to be commonly accepted as accounting research, but the effect of accounting information on economic events appears to be less so. We show this link with a question mark in Figure 5. The results indicate that accounting research refers to a broad spectrum of research that is informed primarily by finance and economics. Any proposed characterization based on prior accounting publications must be broad enough to include financial and managerial accounting 共obviously兲, auditing, tax, and possibly governance. Kinney 共2001, 278兲 defines the domain of accounting scholarship as “the knowledge of the individual and aggregate effects of alternative standardized business measurement and reporting structures.” His approach stems from an institutional viewpoint and is perhaps more normative in nature; our focus is on what accounting authors and editors have concluded on which papers are within the bounds of accounting research. In addition, Kinney is describing an area where accounting researchers have a relative advantage, not necessarily providing an all-inclusive characterization of accounting research. In spite of the above differences, our proposed characterization builds on Kinney’s description of the domain of accounting: Accounting research is research into the effect of economic events on the process of summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of reported information on economic events.

27

28

We place our proposed characterization after our discussion of trends in accounting research to emphasize that it is based on the data we observe. It is not a hypothesis that we attempt to support with data; it is a description that we derive from the data. He enumerates a nonexclusive list of these key characteristics: accruals, recognition bias, measurement, matching, and accounting rules versus discretion.

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FIGURE 5 Mapping Accounting Research into Financial Reporting

This figure maps different topics of accounting research into financial reporting, based on a diagram of financial reporting provided in Nikolai et al. (2007). Ovals denote various areas of accounting research focus. Rectangles denote the various institutional and economic factors. The thick solid line represents information flow, and the dashed line represents the effect of external investors’ and internal managers’ decisions on the activities of the firm.

The term “financial information” is purposefully very broad, and is meant to include tax information, analyst forecasts, and even relatively simple information such as cash level and inventory.29 For most accounting research, financial information relates to businesses, but accounting research can also extend to other entities such as governments and nonprofit organizations. “Standardized” information is information that is generated and presented in compliance with a measurement structure: GAAP for financial accounting, and internal reporting guidelines for management accounting information to be used inside the firm. “Effect” is also a very broad term, and encompasses “used,” “misused,” “misunderstood,” or even “ignored”—for example, Sloan 共1996兲 and Picconi 共2006兲. “Economic events” is equally broad; most accounting research will fall within a pecuniary definition of the change in a firm’s reported income or stock price, but the term can also extend to all human events dealing with the allocation of scarce resources 共e.g., hiring or firing of a CEO兲. 29

However, simple information can have significant and complex implications, as Bernard and Thomas 共1989兲 show with the relationship between earnings and post-earnings announcement drift, and as Oler 共2008兲 shows with the relationship between acquirer cash level and post-acquisition returns.

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SUMMARY AND CONCLUSION This paper examines trends in accounting research in citations 共as a proxy for the literatures from which seminal accounting research ideas are drawn兲, topics, and methodologies. Our intent is to assess the current condition of academic accounting research as a discipline by examining antecedent ideas and to propose a characterization of accounting research that is consistent with papers published in the top six accounting journals. Our results on the proportion of citations being drawn from accounting research, and on the number of papers being published by top accounting journals, suggest that there are significant problems ahead. The increase in output seems more attributable to faculty working increased hours than to an overall increase in faculty. Trends from Ph.D. programs suggest that there will continue to be unmet demand, especially in auditing and taxation, and we find that the proportion of research from these fields published in our six journals is already dropping. The Accounting Doctoral Scholar’s program announced by the AICPA in 2008 should help to attract more auditing and tax researchers to the profession, but no similar program exists to attract managerial or theoretical researchers. The relative proportion of citations drawn from prior accounting papers appears to have plateaued at just under 50 percent, and borrowing from economics and finance has increased, which suggests that accounting is not becoming more insular. However, concerns about decreasing diversity in accounting research are supported: We show that financial accounting is becoming increasingly dominant 共except for CAR and AOS兲 and other topics are declining. Archival methodologies are also becoming more dominant. With respect to the trend toward more financial accounting/archival research, this trend is consistent with a significant number of events. These include the creation of massive databases of stock returns and financial statement information, advances in computing technology to use these databases, the founding of JAR in 1963, and the publication of seminal papers such as Ball and Brown in 1968. All accounting Ph.D. programs of which we are aware can accommodate financial accounting/archival research interests, but fewer can accommodate other topics or methodologies 共especially tax and theoretical research兲. Our results augment the observation of Levitt and Nicolaisen 共2008, VI:19兲 that “the bond between the profession and academia is underdeveloped” by indicating that the bond is not underdeveloped so much as steadily atrophied. Most papers in the 60s were normative, often cited work from areas other than finance and economics, and often dealt directly with issues facing a professional accountant or auditor.30 Similarly, Carcello 共2007兲 observes that students entering an accounting Ph.D. program today are more likely to come from a quantitative background 共e.g., finance or economics兲, while the typical Ph.D. student 20–30 years ago was more likely to come from a professional background. Granof and Zeff 共2008兲 note that accounting researchers in the 60s began borrowing methodologies from other disciplines as an effort to improve academic respectability relative to their peers in other fields. Our results suggest that 共1兲 this effort has had a profound effect on accounting research in general, but 共2兲 one of the costs of this change is a widening gulf between accounting academics and accounting professionals. Levitt and Nicolaisen 共2008兲 make several proposals to help close this gap, including cross-sabbaticals 共where accounting academics temporarily move to professional positions within an accounting firm or government entity such as the FASB, SEC, and PCAOB, and also where accounting professionals

30

A quick perusal of early issues of The Accounting Review will illustrate how much academic accounting research has shifted over time. The October 1960 issue includes articles titled “Decreasing Charge Depreciation—A Search for Logic,” “Influence of Salvage Value upon Choice of Tax Depreciation Methods,” “Measuring Financial Liquidity,” “Price Level Accounting,” “Statistical Sampling in the Audit of the Air Force Motor Vehicle Inventory,” and “Separation of Fixed and Variable Costs.”

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temporarily move to academic positions at universities兲. They also encourage the provision of data 共such as audit information兲 to academics to facilitate additional research. Researchers can also take steps to close the gap between academia and the profession. We suggest that accounting research should focus on asking and answering questions that are 共1兲 useful to both academics and nonacademics, and 共2兲 are within the varied expertise of accounting researchers. The particular methodologies used should be the best ones suited for the question, not necessarily the ones in vogue at the time. When we limit ourselves to only questions that can be answered by the dominant methodology, existing homogenized databases, or worse, to only questions within the dominant topic of the day, we do the professional accounting community and ourselves a disservice. Our study is meant to initiate and continue discussion and debate, not conclude it. Our proposed current characterization of accounting research is a starting point, to be followed by further reasoning and discussion. As mentioned previously, we also do not intend for our results to be interpreted as criticism of editors and reviewers. Authors are the first-movers in the publications game: Editors cannot accept papers that are never written or never submitted. Accounting researchers desiring tenure at top schools are strongly encouraged to work on projects that appear to “fit” at top journals 共Demski 2007; Moizer 2009兲, and to send those papers to journals that have published similar papers. This creates a self-fulfilling prophecy; for example, JAE has published little experimental research, so would an experimental researcher risk sending her work there for review? We make several contributions to the literature, primarily by facilitating informed discussion on the health of the profession, and on facilitating informed discussion on the question: What is accounting research? Several researchers have raised concerns about the profession 共e.g., Swanson 2004; Plumlee et al. 2005; Rayburn 2005; Fogarty and Markarian 2007; Hopwood 2007; Demski 2007; Fellingham 2007; Leslie 2008; Granof and Zeff 2008兲. As Demski notes, many of the challenges we face today are not new 共for example, see Williams 1985; Mautz 1965兲. But this does not mean they should be ignored. We believe that this paper will also be a useful tool for introductory Ph.D. research seminars that wish to provide a general overview on trends in accounting research. Ph.D. students and new faculty may be interested in our findings when considering possible homes for their research. Administrators of Ph.D. programs may be interested in our results as they make decisions on where to allocate scarce resources and on their admissions decisions. Professional accountants can use this paper to help explain the gap between academic and professional accountants. We also hope this paper will emphasize calls for greater diversity within the umbrella of accounting research 共e.g., Rayburn 2006; Granof and Zeff 2008兲.

APPENDIX CLASSIFICATION EXPLANATIONS FOR TOPIC AND METHODOLOGY Topic Definitions Financial Accounting: Papers dealing with external financial reporting 共including analysts and analyst forecasts兲. Managerial Accounting: Papers dealing with internal reporting and evaluation, internal budgeting, and transfer pricing. Auditing: Papers dealing with auditing and auditors 共including internal controls over reporting兲. Tax: Papers dealing with federal and state income tax issues, tax planning, tax strategies, and the impact of taxes on capital markets.

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Governance: Papers dealing with overall corporate governance and control 共e.g., structure of the board, shareholder rights兲. Other Topics: All other topics that do not appear to fit into the above categories 共e.g., education, history, the CPA exam, etc.兲. Methodology Descriptions Archival: Papers using data from historical market information 共typically stock prices, but could include bond or commodity prices兲. Also known as capital markets research 共e.g., Kothari 2001兲. Experimental: Papers using data from human subjects that are assigned to multiple treatment groups 共to distinguish from survey research, where data is collected from all subjects with no pretreatment assignment兲. Field Study: Papers using data from direct observation 共i.e., company visits, interviews兲, characterized by a small sample size 共often one firm兲 but rich, descriptive data. Review: A “pseudo-methodology” because a review does not provide new data. Summarizes and synthesizes prior research. Survey: Papers using data gathered by soliciting information from human subjects without assignment to a treatment group. Theoretical: Papers constructing and/or using analytical 共i.e., mathematical兲 models, characterized by proofs, lemmas, etc. Normative: Papers that do not include data or analytical models 共and that do not review prior work兲. This is a “catch-all” category for work that does not fit into the above methodologies. Normative papers typically argue for a particular accounting treatment or course of action 共i.e., what should be兲.

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