The CPA Journal

Getting to 150 Hours: A Survey of CPA Exam Candidates

By Joseph G. Donelan and Kirk L. Philipich

How well prepared for entry into the accounting profession are CPA exam candidates that meet the 150-hour requirement? Does it matter whether those candidates meet the 150-hour requirement through their undergraduate program or through alternative curriculum paths, such as master’s of accountancy, MBAs, or other graduate programs? To answer these questions, the authors surveyed more than 500 recent 150-hour CPA exam candidates in five states that have implemented the requirement. The survey asked them how they met the 150-hour requirement and how satisfied they were with their college preparation for entry into the profession.

The results of this survey are directed toward—

anticipating the strengths and weaknesses of new entrants into the profession,
describing the differences between those who meet the 150-hour requirement through various curricula,
advising potential candidates about the advantages and disadvantages of alternative curricula, and
designing cost-effective continuing education and on-the-job training.

Of the CPA exam candidates surveyed, 60% work in public accounting, 24% work in industry, and 16% work in government, nonprofit organizations, or “other” fields.

How did you get 150 hours? Although the 150-hour education rules do not require a graduate degree, the survey showed that the graduate degree was the most popular curriculum path (Exhibit 1). Thirty-five percent of candidates enrolled in master’s of accountancy programs and 22% in MBA or other graduate programs. The remaining 43% met the 150-hour requirement through undergraduate credits. Candidates who worked for Big Five firms were more likely to have completed graduate degrees: 53% completed a master’s of accountancy and 19% completed an MBA or other graduate degree. The graduate degree proportions were smaller for candidates that worked in other (non–Big Five) CPA firms, and smaller yet for those who worked in industry, government, or elsewhere. Candidates working in the nonpublic sector were more likely to have completed an MBA or other graduate degree as opposed to a master’s of accountancy.

How satisfied are you? How CPA candidates meet the 150-hour requirement is important to the extent it affects the quality of their preparation for entry into the profession. To measure this quality of preparation, the survey asked about candidates’ satisfaction with their college’s coverage of the core competencies and core services that comprise the CPA Vision (see www.aicpa.org/ vision/index.htm). Exhibit 2 shows the Vision elements and the questions used to measure candidates’ satisfaction with their preparation in those areas.

Not surprisingly, candidates employed in public accounting were more satisfied with their accounting training if they enrolled in master’s of accountancy programs as opposed to other graduate business programs (Exhibit 3).

Among candidates that worked in industry, government, and other organizations (Exhibit 3), the survey results showed that MBA and other graduate degree candidates were more satisfied than other candidates with their preparedness in the business fundamentals and broad business issues areas. There were no statistically significant differences, however, between satisfaction with a master’s in accountancy and other master’s degrees for any of the other core competencies or services.

Where did you go to school? We found that the type of university—accredited versus unaccredited, state versus private, small versus large—candidates attended did not significantly correlate with their satisfaction. Perhaps candidates’ commitment to the profession at this level outweighs such differences.

Uses for the Data

Anticipate strengths and weaknesses. Although the results suggest that the type of university does not affect candidates’ satisfaction, the results do differ by degree and type of employment. This would seem to indicate that public accounting firms may be best off hiring candidates with master’s of accountancy degrees as opposed to MBAs or other graduate degree candidates. Nonpublic accounting recruiters should consider the position against a candidate’s background. If critical thinking and communications are crucial, for example, then master’s of accountancy or MBA candidates would be equally well prepared. However, if broad business skills are critical, an MBA candidate may be a better fit.

The following are some other observations from Exhibit 3:

Candidates that satisfy the 150-hour requirement through undergraduate credits are consistently less satisfied with their education than those that have a graduate degree.
Staff training is most needed in the areas of broad business issues, financial planning, and global issues.These elements had the lowest overall satisfaction ratings of all the core competencies and services.
Graduate accounting programs appear to be doing a better job at satisfying their students in the area of information technology. This final observation is important because technology is a critical component of both core competencies and core services.

Strengthen relationships. Because many of the best students have made their curriculum path decisions by their sophomore year and their career path decisions by their junior year, establishing an early relationship with students is an important recruiting tool. Part of the professional-student relationship should include advice and guidance. But an effective mentor should also be well informed about degree requirements and CPA candidacy requirements. A recruiter should be prepared to discuss advanced degrees, the state regulatory requirements for CPA candidacy, and state licensing requirements. Moreover, professionals should understand the advantages and disadvantages of the alternative curriculum paths available to meet the 150-hour requirement.

Modify curricula. These survey results show that CPA candidates with a graduate background are more satisfied with their preparedness than candidates with an undergraduate background. Therefore, undergraduate-only accounting programs may need to modify their curricula and their advice to students about preparation for the profession. Business schools with graduate programs can use these results to benchmark their coverage of the CPA Vision elements in undergraduate and graduate curricula.

What’s Next?

Several factors contribute to a complex and challenging recruiting environment:

Thirty-one states are implementing their 150-hour requirements between 2000 and 2009. These legislative changes will create irregularities in the supply of accounting graduates.
The educational background of new accountants is more varied than it was in the past. The “cookie cutter” days of similar background, similar age, and similar ability are gone.
Other professions are drawing away many of the best students.

In this uncertain environment, potential employers must work hard to establish relationships with recruits early in their academic careers. Recruiters that understand the educational issues facing accounting students will have an advantage over those that do not. And employers that understand the strengths and weaknesses of their new recruits will be able to develop more cost-effective training programs.

Joseph G. Donelan, PhD, CPA, is an associate professor at the University of West Florida, and
Kirk L. Philipich, DBA, is an assistant professor at the Ohio State University.

Editor:
Thomas W. Morris
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The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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