African-American Candidates for the CPA Exam: Participation and Performance
By Quinton Booker
Accounting organizations have spent decades trying to integrate more minorities into the profession, but even today there is little concrete evidence to evaluate such programs. This study reports findings concerning participation and performance on the Uniform CPA Examination by African-American candidates for 1997 through 1999.
A questionnaire administered by the National Association of State Boards of Accountancy (NASBA) solicits a variety of biographical and demographic information on candidates sitting for the CPA exam in all 54 jurisdictions. Information on race is optional and was supplied by 76% to 79% of candidates in the years surveyed. Although standards for passing the exam vary by jurisdiction, for the purposes of simplifying this study a score of 75% or greater was considered passing.
Participation and Demographics
An average of 5,055 African-Americans sat for the CPA exam each year from 1997 through 1999 (5,038 in 1997; 4,760 in 1998; 5,369 in 1999), more sitting for the November exam than May. African-American candidates who completed the questionnaire represent approximately 5% of candidates who submitted the NASBA questionnaire and 4% percent of the actual candidates each year. Over the period, approximately one-third of the African-American candidates were sitting for the exam for the first time and the rest were repeat candidates.
Exhibit 1 provides selected demographic and biographical information. A majority of African-American candidates have been female. While there has been some fluctuation in the ratio (from 57% to 66%), recent results indicate an increased number of females.
The age composition of the candidate pool has been somewhat consistent over the three years, with the median age of approximately 30. The 30–39 age category consistently includes nearly one-third of the candidates.
A substantial majority of candidates (80% to 82%) had achieved only a bachelor’s degree. However, an average of 30% of candidates had earned 150 or more hours of college credit.
The decision to study accounting is made quite early: At least half of the candidates reported that the decision to major in accounting was made in high school or earlier. Only 6% to 8% of candidates made the decision to study accounting after obtaining their undergraduate degree.
Exhibit 2 provides information on the passing rate for first-time and repeat candidates who passed all subjects of the exam attempted (which, for certain jurisdictions, is not necessarily all parts of the exam). As would be expected, the passing rate for repeat candidates passing all subjects attempted was higher than that for first-time candidates passing all subjects attempted (and, of course, for first-time candidates passing all four subjects). The overall passing rate for repeat candidates ranged from 13.4% to 16.5%—triple and sometimes quadruple the comparable first-time pass rates. The total number of candidates (first-time and repeat) that passed all subjects attemped were 558 in 1997, 562 in 1998, and 614 in 1999. It is encouraging to note a slight upward trend in the number of candidates who have passed all subjects attempted.
Performance by Subject
Exhibit 3 provides passing information by exam subject. Generally, first-time candidates performed best on the Law and Professional Responsibilities (LPR) section, followed by Auditing (AUD). Accounting and Reporting (ARE) and Financial Accounting and Reporting (FARE) were tied for third. For the three years presented, the highest first-time passing rate reported was 19.5%, on the May 1997 LPR. The lowest first-time passing rate reported was 6.4%, on the May 1997 FARE.
Subject passing rates for repeat candidates are also provided in Exhibit 3. The passing rates by section follow the same pattern as first-time candidates, but at a consistently higher rate. The highest repeat candidate passing rate reported was 31.2%, on the November 1998 LPR. The lowest repeat candidate passing rate reported was 12.7%, on the May 1997 FARE.
The primary limitation of this study lies in the data-gathering technique. All of the information other than exam scores was self-reported by candidates and not subject to any verification process. Not all candidates completed the questionnaire, and as expected, some questionnaires were incomplete. In addition, the “race” question is labeled as optional. About 21% to 24% of all candidates either did not submit a questionnaire, or submitted a questionnaire without answering the optional race question. It is impossible to know exactly how many African-Americans are included among these candidates. In most jurisdictions, the simplified definition used here for passing (75%) is a necessary but not a sufficient condition for passing. Additional requirements (e.g., a candidate must pass at least two subjects; a candidate may not have any score below 50%) have not been considered.
This study clearly documents that substantial numbers of African-Americans are taking the CPA exam and passing it. The numbers provided suggest that the profession still has a long way to go before it is fully integrated in fact as well as in ideal. However, significant progress appears to have been made since a 1989 study estimated the total number of black CPAs at 2,500 (“The Status of the Black CPA,” Journal of Accountancy, August 1990). Given the limitations, this study identified 1,734 African-Americans passing the CPA exam over the three years reviewed, an annual average of 578. Nonetheless, additional research on minorities and the accounting profession is needed.
Robert H. Colson, PhD, CPA
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