the relationship of college preparation and · the relationship of college preparation and j;...
TRANSCRIPT
THE RELATIONSHIP OF COLLEGE PREPARATION AND J;
COLLEGE GRADES TO SUCCESS ON THE CPA E~1INATION
by
Robert Bruce Prouty I II
Thesis submitted to t:.he Graduate Faculty of the
Virginia Polytechnic Institute
in candidacy [or the degree o~
MASTER OF SCIENCE
in
Dusiness Education
APPROVED: APPROVED:
Ifireci:or of Graduate Studies
Dean of Di/ion Supervisor
August 25, 1958
Blacksburg, Virginia
2
TABLE OF CONTENTS
LIST OF TABLES •
LIST OF FIGURES
Chapter
. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
I.
- II.
III.
IV.
v.
THE STATEMENT OF THE PROBLEM • . . . . . . . . . . . . . . . . The Preview of the Prob le.n1 . . . . . . . . . . The Historical Setting of the Problem
The Problem . . . . . . . . . . . . The Objectives of the Problem . . . . . . . . . . . . . . The Assumptions
The Limitations
The Definitions
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . The Setting and Need . . . . . . . . . . . • • •
THE REVIEW OF LITERATURE • • . . • • • . . . . . . . THE PROCEDURES • . . . . . . . . . . . . . . . . . . . . . THE PRESENTATION OF THE DATA . . . . . . . . . . . . . . . . .
The Tables
The Graphs
. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . THE INTERPRETATION OF THE DATA . . . . . . . . . . . . . . . .
The Use of Tables of Comparison . . . . . . . . . . . . . The Interpretations of Data on Total Candidates
The Interpretations of Data on Serious Candidates
VI. '£HE SUMMARY AND THE CONCLUSIONS . . . . . . . . . . . . . . . The Sunuuary . . . . . . . . . . . . . . . . . . . . . . .
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TABLE OF CONTENTS
Chapter
The Conclusions • • • . . . The Reconunendations •
ACKNOWLEDGMENTS • •
SOURCES CONSULTED • • . . . . . . . . . . . . . . . VITA ••••
APPENDIX A: SAMPLES OF FORMS USED IN COLLECTION OF DATA
APPENDIX B:
APPENDL'{ C:
TABLES OF COMPARISONS OF TOTAL CANDIDATES IN SELECTED CLASSIFICATIONS • • • • . • •
TABLES OF CO~..PARISONS OF SERIOUS CAi.1DIDATES IN SELECTED ClASSIFICATIONS • • • • • • •
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LIST OF TABLES
Table
I. Number and Percent of Candidates Who Passed and Failed the CPA Examination Who Were College Graduates and Non-College Graduates • • • • • • • • • • • • • • •
11.
Ill.
Number and Percent of College Graduate Candidates Who Passed and Faile<l i.:he C?A Hxamination Who Were Accounting Majors and Non-Accounting Majors • • •
Number and Percent of College Graduate Candidates Who Passed and J:'ailed the CPA Examination Who Had an overall College Average of B or Higher, Below B or For Whom No Aver~ge Was Available • • • • • •
. . . .
IV. Number and Percent of College Graduate Candidates Who Passed and Failed the CPA Examination Who Attended Member Schools of AACSB and t•fho Attended Non-Member Schools of AACSB • • • • • • • • • • • . . . . . . .
v. Number and Percent of Non-College Graduate Candidates Who Passed and Faile<i the CPA E;xamination Who Attended Technical Schools and Who Were Admitted on the Basis
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of Experience Only or For Whom No Record Was Available 27
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LIST OF FIGURES
Figure
1. Number and Perc~nt of Candidat:e::i Wh<:> Passed and Failed the CPA Examination from November, 1945, Through
2.
3.
Hay, 1957 ••
Number and Percent of Candidates Who Passed and Failed the Cl?A Examination from November, 19l~5, Through May, 1957 Who Were College Graduates ••••••
Numbei· and Percent of Ca11didat1:!S Who Passed and Failed the Cl?A E:..:amination from November, 1945, Through May, 1957 Who Were Collage Graduates and Majored in Accountirig . . . . . . • . . . . . . • . . • • . . . .
4. Number and Percent of Candidates ftfuo Passed and Failed the CPA Examiaation :b:or.1 Novt-.. mbe:t, 1945) 'l'hrough May, 1957 '/no Were College Graduates and Did Not
5.
Maj or in Accounting • • • • • • • • • • • • •
Number and Percent of Cand:tdatcn Who Passed and Failed the CPA Examination from November) 19L~5, 'l'hrough May, 1957 Who Were College Graduates Who Hacl an overall College Average of :& or Higher • . . . . .
6. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 19l!-5, Through May, 1957 Who Were College Graduates Who Had an overall College Average of Below B • • • • • • • • •
7. Number and Percent of Candidates Who Passe.cl and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Attended Member Schools of Axi1erican Association of. Collegiate Schools of Business • • • • • • • • . • • • •
3.
. .
Number and Percent of Candidates ~rho Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Did Not Attend Member Schools of American Association of Collegiate Schools of Business • • • • • • • • • . . . .
9. Number and Percent of Candidates Who Passed and Failed the C:PA Examination from November, 1945, Through May, 1957 Who Were Not College Graduates ••••
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LIS'\' OF FIGURES
Figure
10. Number and Percent of Candidates Who Passed and F.::.iled the CP.A Examination from November, 1945» Through May, 1957 Who Were Not College Graduates and Who Received Their Accounting Training from Technical Schools • • • • • • . . . . . . . . . . . . . . . . .
11. Comparison of the Numbar and :t>ercent of All Candidates Who Passed. and Failed the CPA Examination from November, 1945, Through May, 1957, Who Were College Graduatei; With Those Who Were Not
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College Graduates • • • • • • • • • • • • • • • • • • 42
12. Comparison of the Number and Percent of Candidates Who Passed and F<liled thz CPA Exmnin:lt:ton frQm November, 1945, Through May, 1957, Among College Graduates Who Wure Accounting Najors Wi.th Thl)SI:! Who Were Not Accounting Majors • • • • • • • • • • • 43
13.
14.
Comparison o:C the Number and Percent of Candidates Who Passed and Fail.ad the CPA Examination f:rorn November, 1945, Through May, 1957, Among College Graduates Who Had Overall Averages of B or H:tgher With Those Whose Overall Average Was Below B • • • • • •
Comparison of the Number and Percent of Candidates Who Ps.ssed and Failed the CPA Exarrd.nation from November, 1945, Through Hay, 1957, Among College Graduates Who Att~n<led Mernbe1· Schools of the American Association of Collegiate Schools of Business With Those Who Attended Non-Member Schools . • • • • • •••
15. Comparison of the Number and Percent of Candidateg Who Passed and Failed the CPA Examination from November, 1945 !trough Nay, 1957, Who Wer.e College Gr.actuates With Those Non-College Graduates Who Received Their Accounting Training From Technical Schools • • • • • . .
16. Comparison of the N1.m1bc1: and Percen.t of Ser .i.ous Who Passed and Failed the CPA Examination 19Li.S, Through Hay, 1957, Who Were Collzge With Those Who Were Not College Graduates
Candidates from November, Graduates
45
47
48
49
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LIST OF FIGURES
Figure
17. Comp.arison of the Number and Percent of Serious Candidates Who P~ssed and Failed the CPA Examination from Noverr.ber, 19.~,5, Through May, J.957, Among College Graduates Who Were Accounting Majors With Those Who Were Not
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Accounting Majors • • • . • • • • • • • • • • • • • • • • 51
18. Comparison of the Number. and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 19i~5, Through Ma:r, 195 7, Among College Graduates Who Had Ovet'a.11 Av£n:·agcs of B o:r Higher With Those Who Rad an overall Average of Below B • • • • • • • • • • • • • 52
19. Comparison of the Number and. Per.cent of Serious Candidates 1'1ho Passed and Failed the Cl?A Examination from November, 19L~5, 'thro1~\gh M~y, 1957, Among Coller;e Gr.<'!.dliates Who Attenned Memb~r Schools of the American Association of Collegiate Schools of Business With Those 't-1ho Attended Non-Member Schools • • • • • • • • • • • • • 54
20. Comparison of the Ni.Jmber and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 194-5, Through May,, 1957, Who Were College Graduates With Those Non--{;ollegc Graduates Who Received Their Accounting Training From Technical Schools • • • • • • • • • • • • • 55
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CHAPTER I
THE STATEMENT OF THE PROBLEM
The Preview of the Problem
In this chapter some of the history and background of Accounting
will be given. The problem and the objectives will be stated. The
purposes and limitations of the study will be determined. Certain
terms will be defined to help the reader follow the discussion. A
review of some of the other studies related to this problem is
followed by a statement of the procedures used in the pursuance of
a solution to this study. The chapter is concluded with a statement
of the setting of the problem and the need for its solution.
The ranks of Certified Public Accountants (CPA 1s) have grown
by leaps and bounds over the past thirty years. The requirements
of the Internal Revenue Service with regard to financial records of
individuals and businesses, the requirement of publication of financial
statements of banks and other businesses, and the need for financial
information about business by owners, leaders, creditors and managers
have all contributed to the demand for individuals who are qualified
to judge and interpret this information. The Certified Public
Accountant is probably the best qualified person to perform these
services. He has responsibilities to his clients, to readers of
his reports, and to the public. Standards for entrance into the
ranks of Certified Public Accountants are high -- and necessarily so.
9
Since the public puts their trust in these men, only men of high
caliber, ability, character, and determination should be licensed.
The Certified Public Accountants Examination has been designed with
these objectives in mind and is a difficult test. It is important
to have some indication of which persons might reasonably be expected
to pass this difficult examination and, thereby enter the gateway to
this profession. It is the purpose of this study to attempt to
<leterilline such an indication.
The Historical Setting of ~he Problem
The art of bookkeeping, which is the forerunner of accounting,
can be traced back to the days of the Greeks and Phoenicians.
Accounting was recognized as a profession in the Sixteenth Century.
11 •• As long ago as 1581 accounting was recognized as a specialized
occupation. That year, the first College of Accounting was founded
iu Venice. To join this guild, a boy had to serve a six-year
app:r~nticeship, pass an e~wmination and present a certificate of
good character signed by a magistrate. ,jl lt can thus be seen that
even at this early time every attempt was made to attract the most
capi:lble men to the profession.
As the years passed, the work of the accountant became better
knowa. Benjau1in Franklin hired an accountant to audit the books of
1 Carey, John L. "Should Your Child be an Accountant':" (from an advertisement of New York Life Insurance Company) 1956.
10
Franklin and Hall, printers, in 1741. 'Today, accounting is the
nerve center of almost all business. The modern businessman relies
on facts rather than hunches, and his financial facts are organized
for him by accountants." 2
In recent years, grm·1ing requirements of government and big
business have caused greater increases than ever before in demand
for accountants. The work of the Certified Public Accountant has
kept stride.
It was stated above that the profession has had tremendous
growth in recent yea.rs.
' 10f all the professions, accounting is growing the fastest. In 1900 there were only 243 Certified Public Accountants in the United States. In 19li-O there were 20,000. The total is now more than 50,000 •.• There is good reason for this spectacular rise in accountancy. The fact is that the more our economy expands, the more accountants are required to make it work." 3
The questions may be asked; Why is the Certified Public Accountant
so important'? What does he do't
11The CPA has many jobs. He can help a client company install an accounting system which will enable it to keep adequate records of its transactions. Thereafter, he may audit these accounts periodically, giving his professional opinion as to whether they fairly reflect the company's profit or loss ••• this ~equires seasoned judgment as well as technical ability.''
In rende1:ing this service, the accountant has a prime responsibility
to the public. It is this responsibility to reveal and explain the
true facts he had found in the course of his audii: that sets the CPA
2 Ibid 3 Ibid 4 Ibid
11
apart from the other professions. Since there is this important
responsibility to the public, it becomes evident that the CPA must
be a very capable man of high caliber. Then who is to be the judge
and how is the man to be judged? By what authority does the CPA
practice'? Each of the forty-eight states has a body similar to
Virginia's State Board of Accountancy which is composed of one
practicing attorney, one educator, and three practicing certified
public accountants. These men review the candidates' qualifications
i11 accordance with si:ate laws (Code of Virginia, Section 54--84
through 54-102). They determine which applicants shall sit for
the examination. If the candidate passes the e,;amination and has
met the experience requirement, he will be granted a certificate
by the state board to practice public accounting in his own name.
The Problem
The problem is to determine the relationsi1ip of college
preparation and college grades to success on the CPA e):amination.
The Objectives of the Problem
1. To compare the success on the examination of candidates
who were college graduates with that of candidates who were not
college graduates.
2. To compare the success on the examination of college graduates
who were accounting majors with that of college graduates who were not
accounting majors to determine the effect of collegz accounting training
for the field.
12
3. To compare the success on the examina~ion of college graduate
candidates whose overall college average was B or higher with that of
college graduate candidates whose overall college average was below B.
4. To compare the success on the examination of college graduate
candidates who attended colleges which a.re members of the American
Association of Collegiate Schools of Business with that of college
graduate candidates who attended colleges which are not members of
the association in order to determine if either group of schools
provides better preparation than the other for the accounting field.
5. To compare the success on the e'~amination of college graduate
candidates with that of candidates who attended technical schools.
The Assumptions
For our discussion> it is necessary to assume that success on the
CPA examination is indicative of future success in the field of
accounting. Further we shall assume that success o-r failure on the
CPA e~~ami11ation is an accurate measure of the overall preparation for
entrance into the field of accounting.
The Limitations
This study will be limited to the CPA exruuination as administered
by the State Board of Accountancy in Virginia during the years 1945
through 1957 and will include graduates of colleges, universities and
technical schools who were accepted to sit for the examination. No
effort will be made to determine the influence of experience in public
13
accounting or CPA coach classes on success on the examination since
information about these phases were not readily available.
The Definitions
Certain terms in general use by accountants should be defined
before proceeding with a discussion of our problem
Accountin&• The committee on terminology of the American Institute
of Certified Public Accountants has defined "accounting" as !I ••• the
art of recording, classifying, and summarizing in a significant manner
and in terms of money, transactions and events which· are, in part at
least, of a financial character, and interpreting the results thereof.''
American Association of Collegiate Schools of Business. A national
association of schools granting degrees in business. Member schools
must meet certain requirements for faculty degrees and loads, libraries,
and faculty-student ratio. (In this study this association will be
referred to as AACSB.)
American Institute of Certified Public Accountants. This is the
national association of Certified Public Accountants and is frequently
referred to as the Institute or the AICPA. It is the voice of CPA's
throughout the nation. This organization was foi-merly kno~m as the
American Institute of Accountants or the AIA.
Certified Public Accountant. Eric L. Kohler, in "A Dictionary for
Accountants, '1 defines a certified public accountant as 11 ••• an accountant
who, having met the statutory requirements of a state or other political
subdivision of the United States of America as to age, education,
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residence, moral character and ability, has been registered or licensed
to practice public accounting and is permitted to call himself 'certified
public accountant' and use the initials 'CPA' after his name. 11 (TI1e
usual abbreviation of CPA will be used in this study.)
Uniform Certified Public Accountant Examination. This examination.
is required by all states, territories and the District of Columbia
as one st~p in determining the quuli.fications of applicants fot: the
right to the titie of Certified Public Accountant. It is prepared
under the supervision of t"b.e American Institute of Certified Public
Accountants by the Institute's Board of Examiners. The Board of
E~rnminers select questions which have been submitted by the State
Boards of Accountancy for use on the Uniform CPA Examination. The
examination consi.sts of four parts: Accounting Theory, Audit:tng,
Business Law, and Accounting I.>:cactice. The poj;tions of the examination
covering Accounting Theory~ Auditing, and Business Law are each allotted
three and one-half hours. During this time the ca;1c.:1.idate writes the
best answers he can to a series of searching questions on the given
subject. The e::~amination on Accounting :Practice is divided into two
sessions each of -;.Jhich is four ar!d one-half hours long. The two
sections include graded problems involving a working knowledge of all
phases of accounting, including cost and fund account:b1[;, auditing and
taxation. Passing grade on each of the four paL·ts is seventy-f:i.ve
percent.
There are some other terms used in this study g1.vcn special
meaning.
15
To sit for the examination. Means to take the CPA examination.
Technical Schools. This group included correspondence schools,
night schools, and private business colleges.
College &raduate. A graduate of a degree-granting college or
university.
Candi~<!~~.. A person who, because of his qualifications, has
been accepted to sit for the CPA e~·mmination. According to the Code
of Virginia, an applicant must be a citizen of the Uuited States or
must have declared his :i.ntention l:o become such; he must: reside or
work in Virginia; he must: be twenty-one years of. age; and he must
have the equivalent of a high school education. He ll1ust also have
taken courses in introducto~y, intennediata> advanced ancl cost
accounting, audi.ting au<l business law or their equivalent. The
applicant or candidate cannot be certified unless he can satisfy
certain expe:t:ience requirements.
Serious Candidate. One who passed all four parts of the examination
on the first attempt or one who attempted more than on.cc.
!_o_!l-serious Candi<late. One who did not pass all tour parts on
the first attempt and did not attempt again.
A~teme_t. Each time e. candidate sat: for one or more of the four
parts of the CPA examination.
The Setting and Need
While studies of a. similar nature have been conducted in a
few other states in recent years, none has been made in the Com.-nonwealth
16
of Virginia. None of the other studies attempted to show a relation-
ship between college grades and success on the c~{ainination.
The study will be of interest to the following groups:
1. The State Board of Accountancy who might use it as an
aid in maintaining or establishing standards of acceptance of
candidates for the examination.
2. Teachers in the field of accounting who might use it as
an aid in guidance and counseling work. It would also serve as a
basis for rec01mnending that a student apply to take the examination.
3. Students who desire to enter the field 0£ public accounting
could use the results of this study to help them dctenuine their
chances of success in the profession.
The Certified Public Accountants Examination is the only
screening device used in the selection of qualified persons who
wish to enter the profession of Certified Public Accountants. It
is desirable to find some indication of success on the examination.
One of the possible indications is the overall .'sradc average of
college graduates who apply for the examination. It was the primary
purpose of this study to establish that this average is an indication
of success on the CPA examination.
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CHAPTER II
THE REVIEW OF LITERATURE
There was a paucity of information having a direct relation
to this study, and no information could be found which related to
the main question: Is there a relationship between college pre-
paration and college grades and success on the CPA examination'!
Other studies which had a relationship to the problems involved
here agreed in some of their conclusions. Some of the major points
of those studies are presentc<l here.
The CPA examination has been criticized as being too hard and
too selective. One criticism showed a very smali percent of candidates
passed the examination during a fourteen year pe1·:i.od. 5 It indicated
that usually less than 20 percent of all candidates passed the
c~<:am:tnation in any given yeur. 'fhis criticism is answered by the
Institute as follows: "The test is essentially a measure of the
judgment and intelligence with which candidates a1·e able to apply
the conventions and principles of accounting. Every effort is made
to keep the problems both broad in principle and specific in detail
to make them the kinds of problems CPA's must be able to handle in
the course of their practice. In the case of specialized questions,
the candidate may be given some choice in order that he will not be
5 Editorial, "The Richmond News Leader, 11 ,August 17 2 195L;.
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tr.ipped by n forgotten or unusual detail of information." 6
In an analysis of 206 candidates out of 1,063 who sat for
two examinations in Illinois, Grossman 7 found that 22 .L~ percent
had high school graduation plus college work in prescribed subjects
but no degree; ·while 62.6 percent had a college degree and an
additional 15 percent had a college degree plus graduate or
professional study.
Kessler, 8 in an analysis covering 22 examh1ations over an
eleven year period in Illinois, found that of 3,083 serious candidates
63.2 percent ultimately passed. Of these 3,038 serious candidates,
556 or 18 percent urote once and passed. Another 1,395, or 45.2
percent:, \·JroL:e two or more ti.mes and passed. The remaining 1, 137,
or 36.8 percent wrote two or more times, but had not passed through
the November 1954 examination.
Howarth, 9 in a study made at Boston University in 1955 with
the cooperation of the AIA, found that amounts of education had a
considerable effect on success on the examination. The greatest
degree of success on the examination was achieved by candidates with
attainments at the graduate school level, the next greatest: degree
6 The CPA Examination, American Institute of Accountants, 1950. 7 D. A. Grossman, "The Illinois CPA Exarninadons, November, 1953
.::md Hay, 1954." The Illinois Certified Public Accountant, 36 December, 1954.
3 Louis M. Kessler, "Cl>A E:;~mnination Statistics 3 11 The Illinois Certified Public Accountant, 33 June, 1955
9 Harold Howarth, 'A study of the effects of education and accounting experience on achievement in the uniform CPA e:,cu.nination," M. Ed. thesis, Boston Univers:i.ty, 1955.
19
of success was achieved by college graduates who majored in accounting.
College graduates who did not major in accounting, but studied accounting
elsewhere, had the next highest degree of success on the examination.
All groups in his study performed better than accounting majors who
graduated from non-member schools of AACSB. However, "Individual
member-schools' passing percentages ranged from 61.5 percent dol·m
to 6.4 percent. These findings suggest that there is a wide variation
in quality of education fo;: accounting (as measured hy the CPA
examination) amon~ schools which are rucmbers of the American Association
of Collegiate Schools of Business."
Of 1, 894 successful cai.1dit.lates out of 9, 829 cand:tdateG attempting
the e:.;;amination in Illinois in May and November, 1949; May, 1950;
and May, 1951, Robert L. Kane, Jr., lO found that 64. percent had
college degrees and 9 percent had continued their studies at the
graduate or professional level.
Kane drew some of the same conclusions reached by Howarth,
namely:
1. Experience in public accounting up to a total of four years irtcreases the candidate':; ch.saces nf passing the CPA examination.
2. An increased amount of education in general enhances the candidate's chances of success in the examination.
3. A cou1bin&t:i.on of ~ college degree and at least some experience in public accounting appears to be a very effective background :for candidates taking th1:: examination.
Kane in his study of lli-00 candidates taking the November, 19/~9
CPA exar.:.ination said, ·1Tl,ere is a lack of aubc;tantial evidence that
lO "AIA Issues Study 011 Exam Results," The Certified Public Accountunt.:, t\pril, 1952.
20
an accounting major in college produces much better results than
a degree without a major.a Howarth indicated that accounting majors
did better.
Kane in his study of 3,341 candidates taking the May, 1950
CPA examination, goes on to conclude that graduates of member schools
of AACSB have a better likelihood of passing than do graduates of
non-member scho~ls.. He continues this point by stating that they
do better in the repeat attempts.
Previous studies indicate that the an10unt of formal education
is a factor in predicting success on the CPA examination. The
more formal education the candidate has, the greater are his
chances for success on the e~~amination.
These studies also show that experience is a factor in
predicting success on the eltatnination. Howarth and Kane both
found that candidates at all educational levels performed best
on the exarnination when they had between two and four years
experience.
21
CHAPTER III
THE PROCEDURES
Before starting on a project such as·this, it was necessary
to for.ffi a plan for its solution. 1'he following is a statement of
the plan which was used.
1. The Journal of the American Institute of Certified Public
Accountants, The Accounting Review of the American Accounting Association,
and The Virginia Accountant of the Virginia Society of Certified Public
Accountants were examined for the period covered by this study and
twenty years before.
2. Permission was obtained from the State Board of Accountancy
to examine such of the records in the of fices of the Department of
~rofessional and Occupational Registration as might be helpful in
the solution of this problem
3. A form for collecting data was prepared that would resemble
the form used by the State Board of Accountancy· to record progress of
candidates. This form was criticized by the advisers and recommended
revisions were n1ade. (Appendix A) •
4. Four areas of filing in the offices of the Department of
Professional and Occupational Registration in Richmond were exan1ined.
These included active and inactive files of unsuccessful candidates,
files of successful candidates who had been granted certificates, files
of successful candidates whose certificates were being held pending
22
completion of the e:cperience requirement, and card files of all
candidates for the e1caruination showing education and progress on
the exa..rninai:ion.
The following information was recorded for each candidate:
college or school attended, degrees obtained, college major and
parts passed and failed on each attempt on the CPA e:xan:ination.
For candidates who attended colleges or universities outside
of Virginia, grade averages were obtai.ned from the transcript of
their grades included in their original application. For candidateB
who attended Virginia colleges or universities this information was
obtained from the college registrars.
5. The cards were separated into groups representing the
college, university or technical school attended. The next separation
was between serious and non-serious candidates in each school group.
The serious candidates were then divided according to success or
failure on the examination.
6. Tabulations were made of the numbers of candidates in
the various classifications who took the examination. The classifications
were college graduates, non-college graduates, accounting majors, non-
accounting majors, candidates with B or higher average in college,
candidates with lower than B average in college. candidates attending
member colleges of AACSB, candidates attending non-member colleges of
AACSB and candidates attending technical schools.
1. Comparisons were made of the groups within each classification,
the results stated as percentages of the whole, and portrayed in bar graphs.
23
8. After these relat:fon.shipll had been established and portrayed
graphically, objectives were answered. In some cases an answer re-
quired the use of more than on.•.:: .:.,f the graphic presentations.
9. Conferences were held with the advisers to discuss the
meaning of the various analys~s.
10. The final report was prepared, in.corpora.ting the answers
obtai.ried. Conclusions were stated and recommendations were made.
24
CHAPTER IV
THE PRESENTATION OF THE DATA
The Tables
The data which were collected are presented in tabular form.
The tables present the number and percent of candidates who passed
and failed the CPA examination.
The e2tamination of the ca.rd file of all candidates who took
the CPA examination revealed that during the period November. 1945
through May, 1957 there were 1088 different candidates who took the
exarninD:tion, of whom 535 were college graduates and 553 were not
college graduates (See Table I). They represented thirty-two
technical schools and ninety-eight degree granting colleges and univer-
sities throughout the United States. It is important to note that of
1088 candidates who sat for the exmnination during the period concerned
336, or thirty percent, passed.
Table I. Number and Percent of Candidates 'Who Passed and Failed the CPA Exmnination Who Were College Graduates and Non-Col lege Graduates.
Number Percent Non S e r i o u ~ Hon S e r i 0 u s
Total Ser- Failed Passed Ser- Failed Passed ious ious
College Graduates 535 186 149 200 35 28 37 Non-College Graduates ..m 190 227 136 34 41 25
Total 1088 376 376 336 35 35 30
There were 535 college graduates who sat for the e;rnmination.
One hundred eighty-six were non-serious and 349 were serious. Two
hundred passed the examination while 149 serious and 186 non-serious
failed. Classifications were arranged of the college graduates:
Accounting majors and non-accounting majors, candidates with B or
higher average in college, candidates with below B average in
college, candidates attending member colleges of AACSB, and candidates
attending non-member colleges of AACSB.
Only 70 candidates who were college graduates did not major
in accounting, and of these 26 were non-serious. Sixteen of the
L~b.· serious candidates passed. The fi.65 candidates who majored in
accounting were divided into 160 non-serious candidates and 305
sel·ious candidates, of whom 184 passed. (Table !I).
Table II. Number and Percent of College Graduate Candidates Who Passed and Failed the CPA Examination ~~10 Were Accounting Majors and Non-Accounting Majors.
Number Percent Non S e r i o u s Non S e r i o u s
Total Ser- Failed Passed Ser• Failed Passed ious ious
Accounting Major '•65 160 121 134 34 26 40 Non-Accounting Major 70 26 28 16 37 40 23
Total 535 136 149 200 35 28 37
The 535 college graduate candidates included 265 whose overall
college average was B or higher, 231 whose overall college average was
below B, and 39 for whom no college avei·age was available. (See Table III).
One hundred twenty-five of the higher average candidates passed.
26
The 140 higher average candidates who failed included 53 serious and
87 non-serious candidates. Among the lower average candidates, 61.•
passed and 167 failed. Of the lower average candidates who failed,
82 were serious and 85 were non-serious. No average of college grades
was available for 39 candidates. In this group, 11 passed and 28 failed.
The 28 failures were equally divided between serious and non~serious
candidates.
Table Ill. Humber end Percent of College Graduate Candidates Who Passed and Failed th~ CPA Examination Who Had an overall College /;verugc of B or Higher, Below B 01· For Whom No Average Was Available.
=======~·=·:=:=::::~•: ~·==~-~======:=·====~==~====-==-=-=-~===··==:::==.:.:.·~·-================= Number Percent Non
Total Ser-ious
S e r i o u s Non Failed Passed Ser-
ious
S e r i o u s Failed Passed
B or Higher Below B No Average
'.Lot.al
265 231 ~ 535
87 85 ll~
186
·-------·-----------
53 82
_lLi 149
125 33 64 37 11 -·- 36
200 35
20 35 36 28
Of the 176 graduates of members of AACSB, 71 out of 112 Herious
can.didates passed. There ~.,ere 64 non-serious candidates. There were
359 candidates who graduated from colleges which were non-memhe.rs of
AACSB. One hundre<l twenty-nine of 237 serious candidates passed and
122 candidates were non-serious. (Table IV).
47 28 23 37
27
Table IV. Number and Percent of College Graduate Candidates Who Passed and Failed the CPA Examination Who Attended Member Schools of AACSB and Who Attended Non-Member Schools of AACSB.
Number Percent Non S e r i o u s Non S e r i o u s
Total Ser- Failed Passed Ser- Failed Passed ious ious
Members of AACSB 176 64· 41 71 36 23 41 Non-McnJ:ier-s of AACSB 359 122 108 129 34 30 36
Total 535 186 149 200 35 28 37
'£here we·.ce 553 nort-college graduates (See Table V). l'b.is number
included 136 who passed and 417 who failed. There were 227 serious
candiciutes who failed a.'1.d 19C non-sex·ious candidates. Of 525 candidates
from the technical schools, there were 180 non-serious and 345 serious
candidates. Of ~he serious candidates, 128 passed. The remainder of
the no1;.-cullege group was made up of 21 candidates who were admitted
on the basis of experience only and 7 candidates for wi.1om no record of
education or a:-cpe:cience was available. Of the 28 candidates thus admitted,
8 passed and 20 failed. The failures were equally divided among serious
and non~serious candidates.
Table v. Humber '1n.d l?~rcen;;: of Noll"College G-raduute Cs.ndiclac~s Whi:> Passed and Failed the CPA Examination t·fuo Atl:ended Technlcal Schools am: Who Were Admitted ori. the Basis of Experience Only or For Whom No Record Was Available.
Number Percent Non S e r i 0 u s Non S e r i o u s
Total Ser- Failed Passed Ser- Failed Passed ious ious
Technical Schools 525 130 217 123 34 41 25 Experience or No
Record Available 28 10 10 8 ,...,. .;>0 36 28
Total 553 190 227 136 34 41 25
28
The Graphs
Bar graphs are also used to portray the facts revealed by this
study. Figure 1 presents information on all of the candidates who
sat for the examination from November, 1945, through May, 1957. The
remaining graphs are divided into four groups. The first group
(Figures 2 - 3) deals with college graduates and the second group
(Figures 9 and 10) deals with non-college graduates. The third group
of graphs (Figures 11 - 15) shows comparisons of total candidates in
various classifications and the fourth group of graphs (Figures 16 - 20)
shows comparisons of serious candidates in the same classifications.
The necessity for separating serious and non-serious candidates
was apparent because very few candidates pass all four parts of the
examination on the first attempt. 0£ the 535 college graduate candidates
who took the examination, 47 (9 percent) passed on the first attempt.
This number was less than 25 percent of the 200 college graduates who
passed the examination. There were 553 non-college graduates who took
the exan1ination during this period of whom 27 (5 percent) passed on the
first attempt. They represented less than 20 percent of the 136 non-
college graduates who passed.
Figure l shows the number and percent of all candidates who
passed and failed the CPA examination from November:> 19L~5 through
May, 1957. Of 1088 candidates who sat for the examination during this
time, 336, or 30 percent, passed. There were 712 serious candidates
of whom the 336 who passed represented 47 percent.
29
All Candidates Serious Candidates
1088 712
Passed Passed
336 336
30t
Failed Failed
752 376
7ot 53t
Figure 1. N1.D11ber and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957.
30
The first two groups of figures (2 - 8 and 9 - 10) indicate
(1) the number of candidates in each classification who passed or
failed; (2) the number of serious candidates who passed or failed;
(3) the percent of all candidates in the classification who passed
or failed and (4) the percent of the serious candidates who passed
or failed. Figures 2 - 8 treat the groups of college graduates and
figures 9 and 10 deal with the non-college graduates.
The third and fourth groups of figures (11 - 15 and 16 - 20)
present comparisons of candidates in the classifications presented
in figures 2 - 10. Figures 11 - 15 present comparisons of total
candidates in some classifications and figures 16 - 20 present
comparisons of serious candidates in the same classifications.
An approach not considered in previous studies is first presented
in figures 5 and 6. In these figures college graduate candidates were
grouped according to overall grade averages on their college work. It
is recognized that different colleges have different standards for
grading and that teachers do not all grade on the same basis. Even so,
there are important differences in the results of these groups.
Coniparisons of total candidates and serious candidates in these groups
are presented in figures L' and 18.
These are the facts concerning 1088 candidates for the CPA
examination as administered in the Conuuonwealth of Virginia from
November, 19Ld, through May, 195 7.
31
All Candidates Serious Candidates
535 349
Passed Passed
200 200
57%
Failed Failed
335 149
43%
Figure 2. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates.
32
All Candidates Serious Candidates
465 305
Passed Passed
184 184
401.
Failed Failed
281 121
60'7. 40'7.
Figure 3. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Majored in Accounting.
33
All Candidates Serious Candidates
70 44
Paaaed Passed
16 16
23i 36%
Failed Failed
54 28
rn. 64'%.
Figure 4. Number and Percent of Candidates W'ho Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Did Not Major in Accounting.
34
All Candidates Serious Candidates
265 178
Passed Passed
125 125
47% 70'7.
Failed Failed
140 53
5 3'7. 30'7.
Figure 5. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates Who Had an Overall College Average of B or Higher.
35
All Candidates Serious Candidate•
231 146
Paaaed Passed
64 64
281 44t
Failed Failed
167 82
72t 56t
Figure 6. Number and Percent of Candidates Who Pasaed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates Who Had an Overall College Average of Below B.
36
All Candidates Serious Candidates
176 112
Passed Passed
71 71
417. 63io
Failed Failed
105 41
59'Z
Figure 7. Nwnber and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Attended Member Schools of American Association of Collegiate Schools of Business.
37
All Candidates Serious Candidates
359 237
Passed Passed
129 129
36'%. 54%
Failed Failed
230 108
64% 46%
Figure 8. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were College Graduates and Did Not Attend Member Schools of American Association of Collegiate Schools of Business.
38
All Candidates Serious Candidates
553 363
Passed Passed
136 136
2S't 374
Failed Failed
417 227
75't 637.
Figure 9. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were Not College Graduates.
39
All Candidates Serious Candidates
525 345
Passed Passed
128 128
251
Failed Failed
397 217
75'%. 63'%.
Figure 10. Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957 Who Were Not College Graduates and Who Received Their Accounting Training from Technical Schools.
40
CHAPTER V
THE INTERPRETATION OF THE DATA
The Use of Tables of Comparison
All the candidates who sat for the CPA examination were
classified in various ways as shown in the figures in the previous
chapter and by the designations of the rows and columns in the tables
of comparison in the appendixes. A x2 test of independence was run for
each table using the actual numbers rather than the percentages. For
each table we were interested in testing whether the row classifications
were independent of the coltlil4• classifications. For example: in
Table I of Appendix B we wantad to know if a candidate who was a
college graduate had a greater chance of passing and a smaller chance
of failing the CPA exaa~ination. To test this, we set up the hypothesis
of independence which was that the college graduate had the same chance
of passing or failing as the non-college graduate. The x2 was then
computed. The hypothesis was then accepted or rejected by comparing
the calculated x2 with tabled x2 values at a given probability level.
In the example we rejected the hypothesis that the college graduate
and the non-college graduate had an equal chance of passing. The
alternate hypothesis was then true: That the college graduate did
not have the same chance of passing or failing as the non-college
graduate. In this case the college graduates had a better chance of
passing and less chance of failing than did non-college graduates.
41
The tabled values of x2 used in this study were the values for
x2 at. one degree of freedom. This value at the one percent level is
6.63, while at the five percent level it is 3.84. Any values calculated
that were larger than either of the above two \Talues indicated that the
hypotheses were rejected at the preassigned probability level.
The objectives of the problem were approached first by comparing
the results of the total candidates in the various groups (figures 11 - 15)
and second by comparing the serious candidates in the same groups
(figures 16 - 20). The interpretations of figures 11 - 15 resulted in
the same conclusions as the interpretations of figures 16 - 20.
The Interpretations of Data on Total Candidates
Figure 11 compares total candidates who we1·e college graduates
with total candidates who \'l'ere non-college graduates. 'l'he college
graduates have a passing percentage of 37 percent while the non-
college graduates have a passing percentage of 25 percent. There
was a difference of 12 percent. Table I of Appendix B shows a x2
value for this comparison of 21.106, which is in c:~cess of the 6.63
necessary for significance at the one percent level. It is safe to
say that candidates who are college graduates have a better chance
of passing than non-college graduates. This conclusion agrees with
previous studies.
:t'igu1:e 12 compares total candidates who we.re acccunt:ing majors
with candidates who were non-accounting majors. The c;\Ccount:ing majors
had a passing percentage of 40 percent while the non-accounting majors
42
College Graduates Non-College Graduates
535 553
Passed Passed
200 136
25'7.
Failed Failed
335 417
63't 751
Figure 11. Comparison of the Number and Percent of All Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Who Were College Graduates With Those Who Were Not College Graduates.
43
Accounting Major Non-Accounting Major
465 70
Passed Passed
184 16
4ot
Failed Failed
281 54
777.
Figure 12. Comparison of the Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Among College Graduates Who Were Accounting Majors With Those Who Were Not Accounting Majors.
had a passing percentage of 23 percent. There is a difference of
17 percent. Table II of Appendix B shows a x2 value for this
comparison of 7.038 which is in excess of the 6.63 necessary
for significance at the oae percent level. It is safe to say that
college graduate car,didates who were accounting majors have a better
chance:;: of passing than college gl"aduate candidates who were not
accoun:i:.ing majors. This conclusion also agrees wi.i.:.h pi.·evious
stud:.i.es.
Figure 13 compares the total candidates t.iit1ong college graduates
who had an ovcn:all average of B or higher w:i.th those avet·age was below
B. The higher average candidates had a passing percentage of 47 perce11t
while the lower avei·age canui<lates had a passing average of only 2.3
percent. There was a diffo:rence of 19 percent. ~Cable III of Appendix B
shoiJs u x2 value for this comparison of 19. 7 88p wM.ch is in excess of
the 6 .63 necessary for significance at Che one pel."cent: level. It is
scfo to se.y that college gi:aduate candidates wno had an overall college
a.ve:1:ag~ oi I.\ or higher have a batter chimce of passing than those
coll<~ge graduate candidates whose ove1·all average was below B.
li'igu:ra 14 compares total ca:.tciidates among college graduates who
attenci.ed member .schools of AACSB with those ·vii.lo attended non-member
~cl1oo!s. '£hose whu attendecl menit.ar schools had a rassing percentage
cf 41 pe:i:cent while those wiw attended non-member schools had a passing
percentage of 36 percent. 'Ihere was a difference of 5 percent. Table IV ,.,
of Appeadix 'fi shows a X"' vaiu~ for this comparison of 1.30 which does not
approach the 3.84 necessary for significance at che five percent level.
45
B or Higher Average Below B Average
265 231
Passed Passed
125 64
47t
Failed Failed
140 167
53'%. 727.,
Figure 13. Comparison of the Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Among College Graduates Who Had overall Averages of B or Higher With Those Whose overall Average Was Below B.
It is safe to say that college graduate8 who attended member schools of
AACSB and college graduates ~n10 attended non-member schools of AACSB have
an equal chance of passing or failing. This is in conflict with Kane's
conclusions but is in agree111ent with those of Howarth. It should be
pointed out that of the colleges making up the various groups, some
had a high percentage of passing while others had a low percentage
of passing.
Figure 15 compares total candidates who were college graduate&
with those nou-college graduates who received their accounting training
from technical scbools. The college graduates hnd a passing percentage
of 37 percent while the technical school graduates had a passing percentage
of 25 percent. There was a difference of 12 percent. Table V of Appendix
B shows a x2 value for this comparison of 20.410 1 which is in ~m:ceas of
the 6.63 necessary for significance at the one percent level. It is
safe to say that college graduates have a better cha11ce of passing than
do those candidates who received their accounting training from technical
schools. This conclusion also agrees with previous studies.
The Interpretations of Data on Serious Candidates
Figure 16 compares serious candidates who were college graduates
with those who were not college graduates. the college gr.ad;.1ates had
a passing average for serious candidates of 57 percent while the non-
college graduates had a passing percentage for serious candidates of
only 3'7 percent. There was a difference of 20 percent. Table I oi
Appendix C shows a x2 value for this comparison of 27.626, which is
47
Members AACSB Non-Members AACSB
176 359
Passed Passed
71 129
4l'Z 367.
Failed Failed
105 230
59'%. 64%
Figure 14. Comparison of the Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Among College Graduates Who Attended Member Schools of the American Association of Collegiate Schools of Business With Those Who Attended Non-Member Schools.
48
College Graduates Technical Schools
535 525
Passed Passed
200 128
37% 25%
Failed Failed
335 397
75%
Figure 15. Comparison of the Number and Percent of Candidates Who Passed and Failed the CPA Examination from November, 1945 Through May, 1957, Who Were College Graduates With Those Non-College Graduates Who Received Their Accounting Training From Technical Schools.
49
College Graduates Non-College Graduates
349 363
Passed Passed
200 136
sn. 37%
Failed Failed
149 227
43t 63'%.
Figure 16. Comparison of the Number and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Who Were College Graduates With Those Who Were Not College Graduates.
so
in e~\.cess of the 6. 63 necessary for significance at the one percent
level. The conclusion reached in the analysis of figure 11 that
college graduates have a better chance of passing the CPA examination
than non-college graduates is confirmed.
Figure 17 compares serious candidates among college graduates
who majored in accounting with those who did not major in accounting.
The serious accounting majors had a passing percentage of 60 percent
while the serious non-accounting majors had a passing percentage of
only 36 percent. There was a difference of 24 percent. Table II of
Appendix C shows a x2 value for this comparison 0£ 8.589 which is in
excess of the 6.63 necessary for significance at the one percent
level. The conclusion reached in the analysis of figure 12 that
candidates who were accotit-:':ing majors have a better chance of passing
than candidates who were not accounting majors is confirmed.
Figure 18 compares serious candidates among college graduates
who had overall averages of B or higher with those whose overall
average was below B. The higher average candidates had a passing
average of 70 percent while the lower average candidates had a
passing average of 44 percent. There was a difference of 26 percent.
Table III of Appendix C shows a x2 value for this comparison of 22.617,
which is in excess of the 6.63 necessary for significance at the one
percent level. The conclusion reached iu the analysis of figure 13
that college graduate candidates who had an overall average of B or
higher have a better chance of passing than those college graduates
whose overall average was below B is confirmed.
51
Accounting Major Non-Accounting Major
285 44
Passed Passed
184 16
60% 36io
Failed Failed
121 28
40%.
I Figure 17. Comparison of the Nwnber and Percent of Serious Candidates
Who Passed and Failed the CPA Exal!lination from November, 1945, Through May, 1957, Among College Graduates Who Were Accounting Majors With Those Who Were Not Accounting Majors.
52
B or Higher Average Below B Average
178 146
Passed Passed
125 64
707. 44't
Failed Failed
53 82
307. 56'7.
Figure 18. Comparison of the Number and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Among College Graduates Who Had overall Averages of B or Higher With Those Who Had an Overall Average of Below B.
53
Figure 19 compares serious candidates among college graduates
who attended member schools of MCSB with those who attended non-
member schools. The serious candidates from member schools of
AACSB had a passing average of 63 percent while the serious candidates
f roru non-member schools had a passing average of SL~ percent. There
was a difference of 9 percent. Table IV of Appendix C shows a x2
value £or this comparison of 2.632 which does not meet the 3.84-
necessary for significance at the five percent level. The conclusion
reached in the analysis of figure 14 that college graduates who attended
member schools of AACSB and college graduates who attended non-member
schools of AACSB have an equal chance of passing or failing is confinned.
Figure 20 compares serious candidates who were college graduates
with those non-college graduates who received their accounting training
from technical schools. The serious college graduates had a passing
percentage of 57 percent while the serious technical school graduates
had a passing percentage of only 37 percent. There was a difference
of 20 percent. Table V of Appendix C shows a x2 value for this
comparison of 28.323 which is in excess of the 6.G3 necessary for
significance at the one percent level. The conclusion reached in the
analysis of figure 15 that college graduates have a better chance of
passing than do those candidates who received their accounting training
from technical schools is confinned.
No other analyses of the data were deemed necessary for a satis-
factory solution to the problem. The facts elicited above from the data
presented provided answers to all of the questions raised in this study.
54
Members AACSB Non-Members AACSB
112 237
Passed Passed
71 129
631 54'Z
Failed Failed
41 108
37l 461..
Figure 19. Comparison of the Number and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Among College Graduates Who Attended Member Schools of the American Association of Collegiate Schools of Business With Those Who Attended Non-Member Schools.
55
College Graduates Technical Schools
349 345
Passed Passed
200 128
51't 371.
Failed Failed
149 217
63%
Figure 20. Comparison of the Number and Percent of Serious Candidates Who Passed and Failed the CPA Examination from November, 1945, Through May, 1957, Who Were College Graduates With Those Non-College Graduates Who Received Their Accounting Training From Technical Schools.
56
CHAPTER VI
THE SUMMARY AND THE CONCLUSIONS
The Surranary
The chief problem of this study was to determine the relationship
of college preparation and college grades to success on the CPA
examination. The approach to the solution of this problem was
through five objectives. First, to detennine if college preparation
for the CPA examination is better than non-college preparation;
second, to determine if college graduates who majored in accounting
have more success on the examinntion than do college graduates who
do not uiajor in account:i.ng; third, to determine if candidates whose
overall college average was at least B have more success than those
whose overall college average was below B; fourth, to determine
if candidates who graduated from member schools of AACSB have
more success than those who graduated from non-member schools of
AACSB; and fifth, to determine if candidates l~10 are graduates of
degree granting colleges have more success than those who attended
techn.ical schools.
The data required to answer the objectives were collected
on forms in a manner previously described. These data were presented
in tabular and graphic form. The data were then interpreted with
the aid of comparative graphs and tables of comparisons involving
x2 values.
57
'!he Conclusions
The following conclusions were drawn from the interpretation
of the data in the preceding chapter and answer the five objectives
previously stated.
l. A higher percent of college graduates passed the CPA
exaraination than did non-college graduates. thirty-seven percent
0£ all college graduate candidates and 57 percent of serious college
graduate candidates passed while 25 percent of all non-college graduate
candidates and 37 percent of serious non-college graduate candidates
passed. The differences of 12 and 20 percent are significant at
the one perceni; level.
As a result, this indicates that college graduates are better
prepared to pass the CPA examination than the non-college graduates.
2. A higher percent of college graduates who majored in
accounting passed the CPA e~tamination than did college graduates
who did not major in accounting. Forty percent of ali accounting
major candidates and 60 percent of serious accounting n18jor candidates
passed while 23 percent of all non-accounting major candidates and 36
percent; of serious non-accounting major candidates passed. The
differences of 17 and 24 percent are significant at the one percent
le'Vel.
As a result, th.is indicates that those college graduates who
majored in accounting are better prepared to pass the CPA examination
than those who did not major in accounting.
3. A higher percent of college graduates who had overall
58
averages of D or higher passed the CPA examination than did
college graduates who had an overall average below B. Forty-seven
percent of all B or higher average candidates and 70 :?ercent of
serious B or higher average candidates passed, while 28 percent of
all below B average cancii.dates and ~>4 percent of serious below B
average candidates passed. The differences of 19 and 26 percent
were significant at the one percent level.
As a result, this indicct,;s that thoee college gr:adi..e.tes whose
overall average was B or higher are hotter prepared to pass the CPA
examination than those college graduates whose overall average was
below B.
t~. A higher percent of college graduate candidates who
attended member schools of .. &..ACSB passed tht:! Cl'A e~:amination tb.an
did college graduate candidates who attended non-memb·2r schools
of AACSB. Forty-on~ percent of all member scl-.ool candidates and
63 percent of serious member school cand1.dates pa.s:sed while 36
per·~r.mt of all non-membet' school candidates .''.'otd St;. percent of
serious non-member school candidates passed. The differences of
5 and 9 percent were not sigaificaut at the five perce:it le,1el.
As a result~ this indicates that those college graduates
who attended member schools of AACSB and those who att~nded non.-
member schocls of AACSB are equ::llly well prep.;;rcd to pass the
CPA e:;rni.uination.
5. A highcl' percant. of college graduate candidates passed
the CPA examination than die! no·n·college gre.di.ia.te candidates who
59
received their accounting traini11g fron. t:~chnical schools. 'l'hirty-
seven percent of all college Graclua·te cand:l.dac~s and 57 pi:;;rcen.t of
serious college graduate ca11did~.tes passed. while 25 iJercent: of all
technical school candidates a11d 37 percent of serious technical
school candidates passed. The di:fferen.ccs of 12 and 20 percent a:re
significant at the one percent level.
As a result, this indicates that college gt•aduates are better
prcpm~ed to pass the CPA oxnminati.01.1 than arc those candidates who
;:ece!ved their accounting training from technical schoolD.
As a result of the conclusions stated above, it can definitely be
stated that college preparation and college grades are related to
success 011 t!1e CPA examination. College grade averag~s are an
indlcat.lon of expecte,d succass 011 the CPA exami11aticn to tha extent
that of those college graduates who have overa.11 averages of B or
higher, 4·7 percent of those who take the examination can be
expecte<l to pass. On the other hand, of those college graduat~s
whose overall averages wer~. below B, 28 percer.!: of those who take
the e-xaminatio11 Cfill be e~;.:pec·ted to pass. The candidate with the
h:i.gh~t· average has al1.nost twl.ce the: expectation of passir,g the
CPA examinati.on as the candidate with the lower average.
If one were to draw a profile, based en this study, of the
candidate for the CPA exan;inatiou who had the greatest expectation
of passing, he would be one who had graCi.uated fror,1 a d.egr2e
granting college or university tvlth an overall average of B or higher
and who had majored in accounting. Acco1·ding to st1Jdies by Kane and
60
Howarth> he would also have had from two to four. years experience
in public accounting.
'l'he Recommendations
Because of the facts revealed in the course of this study and
i:hc conclusions ste.ted above, the following recomrnendations are made:
1. That studies be made of course content and teaching methods
and techniques cit the different types of schools represented in this
study to determine if any similarity exists in the presentation of
mgi:crial in aGcounting courses.
2. That further studies be made to determine the indications
of success on the examination of (a) I. Q. of candidates; (b) grades
on various accounting aptitude and achievement tests; (c) refresher
courses or coaching classes.
3. That instructors and counselors of persons studying
accounting fam.iliarize their students with the facts revealed
1.n this study in or.dcr that possible f:utul:e candidates for the
examb1ation. might be made aware of their likel:i.hood of: success
on the axanination.
6 J.
ACI<NOWJ.EDGMENT.S
This thesis coitld not have been written withot..~t the cooperation,
encnuragcment~ assist(l,nce, understanding, ancl pati.ence of. e number of
p<:~rsons to whom 1. shrn1ld li.ke to e:i-:press my heartfelt thanks.
To r11y w1.fe, who typed the thesi.s, for her long hours of wm~k
and hei· faith in me.
To t:he Stoi:e Board of Accountnncy for permission to exam:i.ne their
:r.ecor.ds.
To and cf the Office cf
1) r: • -i.. ro:cessionai and Occupational Registration for their .assistance in
recording the original data.
To for l1is d:lrectio11 in i.J.1tcrprcting the dat2.
To for his suggestions.
To , Uead of the Vocat1.ond Educ~.tion Department,
for. hi;-; cooperation and permission. to use a depa.rtr.rient typew:dter •
To m:r advisors: and • for
thc:b: susgesti.ons and criticLn:1s.
62
SOLlkCBS CONSULTED
"AIA Issues Stud~, on E~;,arn Re!>ult:c~ 1 ' The Cer:tii.:ieu Public .1-'\ccountant, membership bulletin of the Ameri'CanlnS'ti't'Ute of Accountants, April" 1952.
Star:.s, Uau:i:icc H. ~ 1.h£ ?rufen:.>:i.on E.f Accour:.ting_, iurn::L:i..can :Cnol:itul.:e of Accountants, New York.
American Accounting Association, ~ Accounting Review, January 1930 throueh Jun.e, 1957.
Au:e!:'ican lnst:i.~ui.:~ oi: ,:\cco:..lntants, The Journ.?..l 2f :-~~~CJ, January, 1930 through June, 1957.
Association of Certified Public Accountant Examiners, ~erpts 2f 1:.2,g Annual Heu ting~ Hou~~tr.m, ~C<3xas, :;.9.::,2.
Curey, Johu L, ~ ''Should Your Citild he .:m. Accounta.nt·z" (:Zrom an advertisement of New York Life Insurance Company) 1956.
The ~ .~xamination, The American Institute of Accountants, April, 1952.
Crossm!.m, D. i~.~ ·;The .i..llin0is CPA E~:a1r:inations, Hove.:illc::;:·1 1943 and May, 1954. ii The Illinois _g~rtified Pub lie !££s>untant, December, i954.
::rowarth, Hzu·oid, ;& Stu<ll: E.f ~ E:i:f•::!Cts .2f E<luca.tio~ ~ ~.c2.~mting. E:i;:J2._c::_lj..~ £.!! Achie~ in ~ ~~ CPA Examination. (;,.mpublishc<l Haste:· 1 s thesi.z, Boston Unive:csL:y, Bo~ton, Massachusetts, 1955).
Kane, Robert L., Jr., A-t~alisi~ of t~ Education ~1d ~xperience .2! ll~OO Cs.nd.idutcs Taldng the Novembet", 19l~9 Cl?A Examination, ~ographed report prepared for the Baard-of ~"fi1ers of the American Ins ti tuti~ of Accoun-cants, Sep i:.~mbe:c, 1950.
Anal/sis Ef ~ E<luc.::ticn ~ Expericn~..':. ~E 3~ 341 .candi~at~ Taking~ .M~, l21Q. m Examination and Cwnulative Analysis of 1h!:£.~ E:x:arni~1ai:.ion.s, miu1eog:c·a.phr.;d report i,)l'epared for the Board of Examiners of the American Institute of AccCi . .mtani:r;, Marci< 1951..
K~s::: !er, Louis t1., 'CPA E:<~ardnation S t.:.tis tics, " ~ nli.Ilili Certified Public Accountant, June, 1955.
63
Kohler 1 Eric L., ~ Dictionary ~ Accountants (New York, Prentice-Hall, Incorporated, 1957).
Mendex, Henry E., ~ ~ Content £! ~ Examinations, a paper presented at the Fifty-Ninth Annual Meeting of the American Insti'i:ute of Accountants, Atlantic City, 1946.
Peragallo, Edward, Origin ~ Evolution of Double Entry Bookkeeping, (New York, American Institute Publishing Company, 1933).
Virginia Society of Certified Public Accountants, T'ne Virginia A.ccountant. January, 1930 through Summer, 1957.
Virginia State Board of Accountancy, Annual Register for ~ Fiscal!!!,! Ending~ 30, ~' Richmond~ Virginia, 1957.
The vita has been removed from the scanned document
65
APPENDIX A
Samples of Forms Used in Collection of Data
66
Sa.mp le I
Fonn Used s~ Record by State Board of Accountancy
--------------- Ciry- ---------------
!Z:.lrAMINATION UECORD ~~~"'t,Jl;W1 Ul ; :-az:::1Uh'Ji'.t.::i.'W!Z;t;Ll::CC:U
y- ! :::i I.----!.'!~~ TA~_!i_ ~ TI...!~ A..!., Lo" --=--!- -=1=~1=,= ---!-- - -1 1-l-
----......=~-, ;:.==::;::::;----. =-: =. =, =;;--~-1- -l--1· :=J---lJ...,,.-1~: _Adv:___! _ __9ost + A:>t!. _ _J_ {,,_::_ __ : C.P.A. '--__ -j _-_--=/ =l----=r---1 ===
~~-~-~~~-~:~:~:-----=----~~----_-_T-:;~~-~-~n--.----_--_--____ --------~-,,,,-"_-_-_- · __ =/ ~~----1------=--=1~----1==--Na~ of -------------------------- --1---1----1---1---Employer , 1 1 --1----l--l---+---1---
Priot- Employment: _}~!'.:__~i St-Ker_-__ I~;.,,. ____ _J_~,.. _ ----i---l---i---1-- ---Yr«. l Yra. I Y~. J YrB. ~j_
Applicr.rion: Th11e
:a. a. l H.B. Ott«\ Yr.i. I Yrz.
Ac=ciog: School ----- -----
Age
-l Cd!. -I Cti. G~=----!--"'~:!_ ___ I I y,._ n.,. I °":!· -
Dt1 ---- ------------ N;_sht
C.or. Ccur:>~
Completed
Pub. Acctg. CEitTil'lCATE
----------·--------________ __,.--N-l-J~-.<BF.R
--------- -- -·------- ---·---------------··----------- ----- ··---------
67
Sample II
Form Used in This Study for Col lectl.on of Data
Na.me _______ ~------------
r·o11 .. -'-'! Locci tion --- ·-·-- ---Ac-counting M:c jor: Yes 1jo ---- ~~,--
68
APPENDIX B
Tables of Comparisons of Total Candidates
in Selected Classifications
69
Table I
Pnssed Failed
College Graduates 3 7'%. 63%
Non-College Graduates 25% 75%
L ..J _____ _
')
XL : 21.106
Table II
Passed Failed
-Accounting Majors 40% 60%
i
~1on-Accounting I>lajora 23% rn
x2 = 7. oJB
B or Higher Average
Below B Average
Members AACSB
Non-Members AACSB
70
Table III
Passed
47t
281.
x2 - 19.788
Table IV
Passed
41'7.
367.
x2 = 1. JOO
Failed
531
Failed
597.
64t
College Graduates
Technical Schools
71
Table V
Passed
3 77.
257.
x2 = 20 .410
Failed
63'%.
757.
72
APPENDIX C
Tables of Comparisons of Serious Candidates
in Selected Classifications
College Graduate•
Non-College Graduate•
Accounting Majors
Non-Accounting Majors
73
Table I
Passed
5 71.
371.
x2 = 27.626
Table II
Passed
36t
x2 = 8.589
Failed
43t
63t
Failed
64t
B or Higher Average
Below B Average
Members AACSB
Non-Members AACSB
74
Tab le III
Passed
7Cf7.
44%
x2 = 22.611
Table IV
Passed
63%
54't
x2 = 2.632
Failed
30%
56%
Failed
3 71.
467..
75
Table V
Passed Failed
College Graduates 57% 43%
Technical Schools J 7% 63%
x2 - 28.328
THE RELATIONSHIP OF COLLEGE PREPARATION AMD r
COLLEGE GRADES TO SUCCESS ON THE CPA EXA1-1INATION
by
Robert Bruce Prouty
AN ABSTP.ACT
The problem of the study was to determine 1:he relationship
of college preparation and college grades to success on the CPA
e:tamination. The solution to the problem was approached through
five objectives:
To compare the success on the examination of
1. College graduates and non-college graduates.
2. College graduates who were accounting majors and those
who were not accounting majors.
3. College graduates with overall averages of B ox higher
and those with overall averages below B.
4. College graduates who attended member schools of the
American Association of Collegiate Schools of Business and those
who attended schools which wexe not members of the Association.
5. College graduates and technical school graduates.
Data were gathered from the records of the State Board of
Accountancy and presented in tabular and graphic form. The data
were then interpreted with the aid of tables of comparison. The
conclusions reached as the result of the interpretations were
stated.
2
The results of the study showed that some groups are better
prepared to pass the CPA examination than other groups. The
candidate with the best preparation for passing tha CPA examination
is one who has graduated from a degree granting college o:c university
with an overall average of B or higher and a major in Accounting.
College grade averages are an indication of expected success
on the CPA examination to the extent that of candidates whose
average was B or higher, /.i.7 percent will pass» \·.rhile of those whose
average was below B, 28 percent will pass.