Abstract
Forty-one states require educational requirements for CPA licensure to include 30 credit hours beyond the baccalaureate degree. This study, using state-level panel data of CPA examination pass rates, examines two hypothesized effects of this requirement: one, it improves the quality of new CPAs, and two, it restricts entry into the profession reducing the supply of potential CPAs. Empirical findings reveal that raising minimum educational requirements increases the success rate of first-time CPA exam takers, leading to improved entrant quality. However, increased success rates are associated with significant declines in the number of exam takers and, hence, reduced supply.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
American Institute of Certified Public Accountants. Digest of State Accountancy Laws and State Board Regulations. Englewood Cliffs, NJ: Prentice Hall 1983, 1985, 1987/1988.
American Institute of Certified Public Accountants and National Association of State Boards of Accountancy. A1CPA/NASBA Guide for Implementation of the 150-Hour Education Requirement. New York: AICPA/NASBA, April 1991.
Becker, Gary S. Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education. New York: National Bureau of Economic Research, 1964.
Boone, Jeff P. and Teddy L. Coe. “The 150-hour Requirement and Changes in the Supply of Accounting Graduates: Evidence from a Quasi-Experiment.” Issues in Accounting Education 17 (August 2002): 253–68.
Dunn, W. Marcus and Thomas W. Hall. “An Empirical Analysis of the Relationships between CPA Examination Candidates Attributes and Candidate Performance.” Accounting Review 59 (October 1984): 674–89.
Flesher, Dale L., Paul J. Miranti, and Gary John Previts. “The First Century of the CPA.” Journal of Accountancy 182 (April 1996): 51–56.
Friedman, Milton. Capitalism and Freedom. Chicago: University of Chicago Press, 1962.
Gellhorn, Walter. Individual Freedom and Government Restraints. Baton Rouge: Louisiana State University Press, 1956. Reprint, New York: Greenwood Press, 1968.
Kleiner, Morris M. “Occupational Licensing.” Journal of Economic Perspectives 14 (Fall 2000): 189–202.
Leathers, Park E. and James A. Sullivan. Uniform Statistical Information Questionnaire, 1975: A Supplementary Report. New York: American Institute of Certified Public Accountants, 1978.
Maddala, G. S. Limited-Dependent and Qualitative Variables in Econometrics. New York: Cambridge University Press, 1983.
Muzondo, Timothy R. and Bohumir Pazderka. “Occupational Licensing and Professional Incomes in Canada.” Canadian Journal of Economics 13 (November 1980): 659–67.
National Association of State Boards of Accountancy. CPA Candidate Performance on the Uniform CPA Examination. New York: NASBA, 1986–1996, Nashville, 1997-1999.
Reilly, Frank K. and Howard F. Stettler. “Factors Influencing Success on the CPA Exam.” Journal of Accounting Research 10 (autumn 1972): 308–21.
Sanders, Howard P. “Factors in Achieving Success on the CPA Examination.” Journal of Accountancy 134 (December 1972): 85–88.
Spence, Michael. “Job Market Signaling.” Quarterly Journal of Economics 87 (August 1973): 355–74.
Titard, Pierre L. and Keith A. Russell. “Factors Affecting CPA Examination Success.” Accounting Horizons 3 (September 1989): 53–59.
U.S. Census Bureau. Statistical Abstract of the United States: 2002 (122nd edition), 2000 (120th edition), and 1994 (114th edition), Washington DC, 2002, 2000, and 1994.
Author information
Authors and Affiliations
Additional information
This research is based on a chapter in the author’s dissertation. I thank Bernt Bratsberg for his guidence in conducing this research. Additionally, I thank Don Ballante and Antoinette James Criss for helpful comments on drafts of this paper. Any errors are mine.
Rights and permissions
About this article
Cite this article
Jackson, R.E. Post-graduate educational requirements and entry into the CPA profession. J Labor Res 27, 101–114 (2006). https://doi.org/10.1007/s12122-006-1012-1
Issue Date:
DOI: https://doi.org/10.1007/s12122-006-1012-1