SAR 405 The use of AACSB accreditation as an

The use of AACSB accreditation as an indicator of expected performance on the CPA exam has been examined by prior studies (e.g. Barilla et al., 2008, Boone et al., 2006, Grant et al., 2002, Howell and Heshizer, 2006, Lindsay and Campbell, 2003, Marts et al., 1998). While these studies are based on data from the pencil and paper version of the exams, more recent studies analyzing the current computer version of the exam have found similar results (Gaynor et al., 2016, Hahn and Fairchild, 2015, Morgan et al., 2012, Morgan et al., 2008, Nouri and Miller, 2015, Trinkle et al., 2016). In addition, differences in the type of accreditation has also been shown to be associated with CPA exam performance (Bline et al., 2016b, Bunker et al., 2014, Nouri and Miller, 2015, Trinkle et al., 2016). Given accreditation by the AACSB is commonly viewed as an indicator of quality, the following hypotheses are proposed: As mentioned above, the quality of the education received at a particular institution should be considered a primary driver of the potential success of the students in passing the CPA exam. Besides accreditation, another indicator of academic quality is the selectivity of an institution when determining which students to admit. While a battery of variables typically enters into admission decisions, performance on college entrance exams such as the SAT and GMAT provide a standard measure of student aptitude. Earlier studies have found that candidate performance on college entrance exams is positively associated with CPA exam performance (Bline et al., 2016b, Grant et al., 2002). Similarly, graduates from institutions with higher admission requirements, perform at a higher level on the exam (Boone et al., 2006, Nouri and Miller, 2015). Thus, it is reasonable to expect that the relative standardized test score reported for a program will be positively associated with that program’s graduates’ performance on the CPA exam. Therefore, the following SAR 405 is proposed: The quality of an accounting program can potentially be inferred from the credentials of its faculty including education and professional background. While the terminal degree (PhD or DBA) and the CPA license are generally viewed as positive attributes, Fogarty and Black (2014) suggest that the values and priorities of academics and practitioners may not always match. Faculty with a professional background typically have had years of practical training in the field, and their expertise is often evidenced by the CPA license. Bline et al. (2016b) found that the percentage of a program’s faculty members with a CPA license was positively related to its graduates’ CPA exam performance. These faculty have experience in both taking the CPA exam and working in public accounting, which may enable them to better prepare their students for the exam. Alternatively, faculty with a terminal degree have been academically trained which may contribute to a better education for their students. While prior studies of CPA exam performance have not examined this variable directly, the existence of a terminal degree has been positively related to the accreditation of a school (Lindsay & Campbell 2003). Because the terminal degree is seen as the basic requirement to advance in most academic settings, it is likely that higher quality institutions will employ a higher percentage of terminally degreed faculty. Therefore it is reasonable to expect that the greater the percentage of accounting faculty holding a terminal degree, the better the CPA exam performance of its graduates. Based on the above discussion on faculty qualifications, the following hypotheses are proposed: The quality of faculty members has also been linked to both the quality and quantity of research produced at an academic institution. Lindsay and Campbell (2003) found the number of publications per faculty to be positively and significantly related to the accreditation status of a school. Additionally, Boone et al. (2006) found that CPA exam pass rates were positively related to faculty research productivity. More recently, Bline et al. (2016b) provided evidence that shows a strong relationship between faculty research specialization and CPA exam performance. Therefore, the following hypothesis is proposed: