Opportunity, ethnicity, gender, and CPA exam performance

Abstract

Given the preeminence of the CPA certification as a measure of professional achievement and a critical element to advancement in the profession, as well as the concerns over lack of diversity in the accounting profession (AICPA 2017), a key policy question is how to improve candidates’ performance on the CPA exam. In this paper, we examine the role of educational and environmental (socioeconomic and segregation) factors representing opportunity, as well as gender and ethnicity (as defined by the National Association of State Boards of Accountancy), on the CPA exam performance. To accomplish this, we first document CPA exam performance across various demographic, educational, and environmental factors. We then develop several multivariate models to understand the influence of various educational and environmental factors representing opportunity on the CPA exam performance of these groups. Finally, we springboard from our findings to offer suggestions to educators, professional firms, and CPA societies, to implement new, or modify current, programs to meet the profession’s need for more qualified CPAs and its diversity/inclusion goals.