Pre-college preparedness and institutional factors for student success on the uniform CPA examination in Texas

This study examines determinants of accounting students' successful bid for the uniform Certified Public Accountant (CPA) examination in Texas. With a sample of data from 30 public universities in Texas from 2005 to 2007, our analysis suggests that academic deficiency of incoming first-year students explains 49% of the institutional variation in the CPA exam pass rate. In contrast, educational quality (as measured by faculty salary, AACSB accreditation in accounting and accounting programme size) provides a less pronounced contribution to success in the CPA examination (13% of the institutional variation). Thus, the institution-level variation in the CPA exam pass rate among public universities in Texas seems to be predetermined to a great extent by the pre-college preparation of the students they admit.