br Introduction br Literature review and hypothesis developm
Literature review and TBCA mg development CPA exam performance-related research has been of interest to academics for the past few decades. These studies have ranged from investigating the impact of the 150-hour requirement on pass rates (Allen & Woodland, 2006) to examining whether the order in which the exam sections were attempted affects the timeliness of passing the exam (Bline, Perreault & Zheng 2016a). One variable of interest, the impact of graduate study on CPA exam performance, has been examined by a number of researchers with mixed results. Titard and Russell (1989) found that the completion of a graduate degree was positively related to the performance on each of the parts of the exam. Although Donelan and Philipich (2002) did not specifically examine exam performance differences between candidates with and without a graduate degree, they found that students who satisfied the 150-hour requirement through the completion of a graduate degree were more satisfied with their level of preparation for the exam than those who utilized extra undergraduate courses. Howell and Heshizer (2008) found that having completed a graduate degree was a significant predictor of passing the exam on the first or second attempt. Dunn and Hooks (2009) compared the cost of obtaining a graduate degree with CPA exam pass rates and observed a positive relationship between the pass rate and the completion of a graduate degree. However, they also found that there were only limited differences in the performance based on the cost of education. Alternatively, Haen, Vandenberg, Janes and Conlon (2013) found that the composition of the additional hours (either graduate work or undergraduate courses) did not contribute to a significant difference in CPA exam performance. Bline, Perreault and Zheng (2016b) examined individual CPA exam data from 2005 to 2013 and found that candidates enrolled in a graduate program had significantly higher exam scores than those who were not. The current study extends these results by focusing on school-level data. This is important because many universities and colleges use school-wide pass rates to provide evidence of the quality of their accounting programs (Bline et al., 2016b). The current study also differs from Bline et al. in distinguishing graduate candidates from undergraduate ones. They classified candidates as graduate if they were enrolled in a graduate program, whereas the current study classifies candidates as graduate if they completed a graduate degree at the time of registering for the exam. Menk, Nagle and Rau (2017) also examined school-wide CPA exam data from 2013 and 2014 for institutions for which both bachelor’s degree and graduate degree data were reported. They examined all testing events (first-time and repeat test-takers) and found that both the average exam score and the pass rate to be significantly higher for the candidates who held a graduate degree. In the current study, the analysis is limited to first-time test takers. This provides the clearest measure of each school’s impact on CPA exam preparation as it eliminates the possibility of enhanced performance on the exam resulting from prior attempts. In addition, Menk et al. excluded schools that did not report results for both bachelor’s and graduate degrees. These schools are included in the current study to provide a more complete analysis of exam performance. Students who meet the 150-hour credit requirement through a process of completing a graduate degree are expected to have a more in-depth exposure to relevant material over a longer period of time (four years of undergraduate study plus an additional year to complete the graduate program). Thus, CPA exam performance should be greater for graduate degree observations. Therefore, the following hypothesis is proposed: A generally acknowledged indicator of a quality institution is based on an external review of the school of business and/or accounting program by an accrediting body. The Association to Advance Collegiate Schools of Business (AACSB) is the accrediting body that relates directly to the quality of education in business schools. On its website, the AACSB claims that its accreditation process includes a rigorous external review of a school’s ability to provide the highest quality programs, and that member schools are reported to have better faculty, students, and overall programs when compared to non-member (non-accredited) schools (AACSB, n.d.). Given these assertions, it is reasonable to expect that graduates from schools with AACSB accreditation should outperform graduates from non-AACSB accredited schools on the CPA exam.