March 2003

Explaining Salary Differences Among Accountants

By John R. O’Malley, Bruce M. Bird, and J. Harrison McCraw

What variables explain the salary differences among accountants? In an attempt to answer this question, the authors analyzed the responses of 216 members of a large southeastern chapter of the Institute of Management Accountants (IMA). Thirty-four of the respondents were public accountants and 174 were accountants in industry (eight participants did not identify their area of practice). Of the industry accountants surveyed, 125 were employed by for-profit organizations and 49 by other organizations. In addition, 96 of the 216 respondents possessed a CPA, CMA, or both.

Salary Information

The salary information from the 210 complete responses is shown in Exhibit 1.

The median salary of those surveyed was $75,000, with the mean falling slightly lower.


The authors performed a regression analysis using salary as the dependent variable and the following data as independent variables:

Initially, only gender, years in the profession, education level, and hours of IT training had significant coefficients at the .05 level, meaning only four of the 12 variables were significant predictors of salary. Certain variables may have the effect of canceling each other out. By reducing the number of independent variables, it is possible that the remaining variables might demonstrate more predictive power.

After systematically adjusting the regression model, the significant variables increased from four to five with the addition of hours worked per week. This model explains a total of 24.9% (adjusted R-square) of the variance in salary among the accountants surveyed. Exhibit 2 presents the standardized coefficients for each of these variables and their statistical significance.

Impact of Age Upon Salary

In examining the above equation, it is somewhat surprising that an accountant’s age is not related to salary. To better determine how age impacts salary, the results were sorted into two groups, respondents older than 41 and those 41 or younger. For those participants 41 or younger, a regression analysis using hours worked per week and years in the profession as independent variables explains 39.4% of the variance (adjusted R-square). In this regression model no other variable is significant. Exhibit 3 presents the standardized coefficients and statistical significance related to these two variables.

For those survey participants older than 41, the significant predictors of salary are CPA or CMA certification, gender, hours of IT training, and year last degree was completed. This regression analysis explains 31% of the variance (adjusted R-square). Exhibit 4 presents the standardized coefficients for each of the variables and their statistical significance.

Effect of CPA Certification

Using only the survey responses from CPAs, a regression equation was calculated using salary as the dependent variable and gender, education level, years in profession, hours worked per week, and hours of IT training as the independent variables. Only two variables, education level and years in profession, are significant at the .05 level; another, hours of IT training, is significant at the .10 level. The adjusted R-square is .252. Exhibit 5 presents the standardized coefficients for each of these variables and their statistical significance.

Implications of Results

The results paint an interesting picture of the accounting profession. The analyses in Exhibits 2 and 4 suggest that being female is a significant negative predictor of salary; however, the results in Exhibit 3 suggest that progress is being made in this area. For those survey participants age 41 and younger, being female is not significantly correlated with a lower salary. The results suggest that accountants ages 41 and younger who have more experience in the accounting profession and who work more hours per week tend to earn higher salaries, regardless of gender.

The results from Exhibits 2 and 3 suggest that an accountant’s years in the profession are a significant predictor of salary; for those participants older than 41, this variable is no longer significant, but being certified is. The results suggest that members of the younger group are more likely to possess CPA, CMA, or both certifications. Thus, for those in the older group, certification can be a better predictor of salary. For those 41 and younger, being certified provides a perceived advantage in obtaining or keeping an accounting job.

In general, the survey led to the conclusion that, among accountants that are CPAs, those that have more experience in the accounting profession and a higher level of education—regardless of gender—tend to earn higher salaries.

John R. O’Malley, PhD, is an assistant professor at Belk College of Business, University of North Carolina at Charlotte.
Bruce M. Bird, JD, CPA, is a professor at Richards College of Business, State University of West Georgia, Carrollton, Geo.
J. Harrison McCraw, PhD, is an associate professor at Richards College of Business, State University of West Georgia, Carrollton, Geo.

Robert H. Colson, PhD, CPA
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