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CPA Exam Sitting Requirements and Jurisdiction Choice: Where Do International Candidates Sit for the Exam?

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Title: CPA Exam Sitting Requirements and Jurisdiction Choice: Where Do International Candidates Sit for the Exam?
Language: English
Authors: Jared S. Soileau, Gregory P. Tapis, Spencer C. Usrey (ORCID 0000-0001-6841-3782), Thomas Z. Webb
Source: Accounting Education. 2025 34(1):87-107.
Availability: Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Peer Reviewed: Y
Page Count: 21
Publication Date: 2025
Document Type: Journal Articles
Reports - Research
Education Level: Higher Education
Postsecondary Education
Descriptors: Accounting, Foreign Students, Licensing Examinations (Professions), Certification, Testing, Comparative Testing, Academic Standards, Degree Requirements, Testing Programs, State Licensing Boards, Achievement Rating, Site Selection
DOI: 10.1080/09639284.2023.2289444
ISSN: 0963-9284
1468-4489
Abstract: While the CPA exam is uniform for all jurisdictions, individual jurisdictions are allowed to set the requirements to sit for the exam. These requirements vary by jurisdiction, with some being more restrictive than others. We analyze the decision process of international candidates to proxy for candidates that can choose jurisdictions with less restrictive requirements. Using CPA exam data, we find that international candidates choose to sit in jurisdictions without citizenship or Social Security requirements and in jurisdictions that only require 120 credit hours to sit. However, we find that international candidate performance is higher in jurisdictions that require 150 credit hours to sit. Our results suggest there are tradeoffs between providing easier access to the CPA exam and using higher education levels to encourage greater mastery of tested topics.
Abstractor: As Provided
Entry Date: 2025
Accession Number: EJ1467414
Database: ERIC
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  Value: <anid>AN0184710972;5cb01feb.25;2025Apr28.03:29;v2.2.500</anid> <title id="AN0184710972-1">CPA exam sitting requirements and jurisdiction choice: where do international candidates sit for the exam? </title> <p>While the CPA exam is uniform for all jurisdictions, individual jurisdictions are allowed to set the requirements to sit for the exam. These requirements vary by jurisdiction, with some being more restrictive than others. We analyze the decision process of international candidates to proxy for candidates that can choose jurisdictions with less restrictive requirements. Using CPA exam data, we find that international candidates choose to sit in jurisdictions without citizenship or Social Security requirements and in jurisdictions that only require 120 credit hours to sit. However, we find that international candidate performance is higher in jurisdictions that require 150 credit hours to sit. Our results suggest there are tradeoffs between providing easier access to the CPA exam and using higher education levels to encourage greater mastery of tested topics.</p> <p>Keywords: International candidates; CPA examination; pass rates; 150-hour requirement; 120-hour requirement</p> <hd id="AN0184710972-2">Introduction</hd> <p></p> <hd id="AN0184710972-3">Research question</hd> <p>This study investigates how jurisdiction requirements in the United States (U.S.) to sit for the CPA exam affect where candidates sit for the exam and their performance on the exam. Our study analyzes data from the computer-based Uniform CPA exam from 2013 through 2019 for 53 jurisdictions (50 U.S. states and the District of Columbia, Guam, and Puerto Rico). We use international candidates to proxy for candidates that can choose jurisdictions with fewer restrictions to sit for the CPA exam. International candidates are unique in that they generally have fewer physical or economic ties to a specific jurisdiction. This topic is important because of declines in the number of potential CPAs. The American Institute of Certified Public Accountants (AICPA) reports that the number of new CPA candidates per year has decreased from a high of 49,597 in 2010 to 32,186 in 2021 (AICPA, [<reflink idref="bib4" id="ref1">4</reflink>]). Jurisdictions may limit their pool of potential CPAs due to restrictive policies. Specifically, international candidates (and international countries) represent a potential source for new CPAs in the U.S.</p> <p>The declining number of individuals in the CPA pipeline was discussed as early as the 1990s (Van Wyhe, [<reflink idref="bib17" id="ref2">17</reflink>]). Recently, the CPA pipeline has received more attention due to large declines in accounting program enrollments and new CPAs entering the workforce. To increase the number of CPAs entering the profession, the AICPA proposed several initiatives and programs (AICPA, [<reflink idref="bib4" id="ref3">4</reflink>]). Among the proposals was a directive to increase the promotion of the accounting profession and the CPA license globally. Whether intentional or not, policies enacted or promoted by the AICPA, the National Association of State Boards of Accountancy (NASBA), and individual jurisdictions may function as barriers for international individuals seeking to become a CPA in the U.S. Jurisdictions with more restrictive requirements may lose a pool of future CPAs due to their policies.</p> <p>The 150-credit hour requirement to obtain a CPA license (150-hour rule) promoted by the AICPA with the assistance of the NASBA, and adopted by all jurisdictions, has reduced the number of new entrants into the field (Van Whye, [<reflink idref="bib17" id="ref4">17</reflink>]). While the intent may have been to develop well-rounded accounting professionals, it can be argued that the results have negatively impacted new entrants to the profession. For international candidates, the 150-hour rule could be a significant burden to individuals graduating from international institutions. While accounting programs in the U.S. develop curricula focused on U.S. laws and Financial Accounting Standards Board (FASB) rules emphasized on the CPA exam, accounting programs outside of the U.S., develop their curriculum based on international standards (e.g. IFRS). Most candidates attending a university outside of the U.S. will have to pay for additional education to meet the 150-hour rule, especially when a state specifies specific classes to be eligible to sit for the exam. Jurisdictions that require U.S. citizenship to sit for the CPA exam or to obtain a CPA license would be a significant burden to non-citizens seeking to become a CPA in those jurisdictions.</p> <p>Our results should be of interest to accounting stakeholders. Regulations that limit access to the CPA exam could exacerbate current shortages of licensed accountants. With the attention given to the decline in the CPA pipeline, it is likely that accounting stakeholders are aware of some of the potential effects of restrictive requirements on the pool of potential CPAs. Our study provides evidence that candidates with fewer physical or economic ties to specific jurisdictions will choose to sit in jurisdictions with less restrictive requirements.</p> <p>Our findings should be relevant to accounting educators and students worldwide. From 2013 through 2019, international candidates represented 10.4% of all first-time candidates sitting for a section of the CPA exam. Data limitations prevent the specific identification of the physical location of a candidate; however, on average, 84% of international candidates in our sample attended international universities (NASBA, [<reflink idref="bib13" id="ref5">13</reflink>]–[<reflink idref="bib13" id="ref6">13</reflink>]). Many international students enroll in accounting programs at universities in the U.S. and will be considered domestic candidates due to reporting physical residences in the U.S. These candidates are not the primary focus of our study. International students attending universities inside the U.S. are taught a curriculum focused on content relevant to the CPA exam and receive instruction on when and where to sit for the CPA exam from their university. This training is the same as for domestic students. Therefore, these candidates should be classified as domestic candidates. Our study focuses on international candidates who have not focused on the CPA exam content as part of their accounting program and provides evidence of the performance of these candidates. To our knowledge, this is the first study to investigate the performance of international candidates on the CPA exam. Our hope is that our analysis will spur further discussion and research on this subject.</p> <p>We define an international candidate as a candidate sitting for a CPA exam section for the first time that self-reports a permanent address that is outside of the U.S. at the time of registration for the CPA exam. Due to data limitations, we are not able to determine whether an international candidate is residing in the U.S. but self-reporting an international address. We investigate the association between the number of international candidates sitting for a section of the CPA exam in a jurisdiction and the jurisdiction requiring a candidate to have U.S. citizenship, physical residency, or a U.S. Social Security number to sit for the exam. We find negative associations between citizenship or Social Security requirements and the number of international candidates sitting for the CPA exam.</p> <p>In addition to the number of international candidates, we examine the association between international candidate performance (first time scores and first-time pass rates) and a jurisdiction's educational requirements to sit for the CPA exam. We find a positive association between international candidate performance and a jurisdiction's requirement that a candidate have 150 college credit hours to sit for the CPA exam when compared to jurisdictions that only require 120 college credit hours. However, we find a negative association between international candidate pass rates and the number of accounting hours a jurisdiction requires for a candidate to sit for the CPA exam.</p> <hd id="AN0184710972-4">Contribution</hd> <p>Our findings contribute to the discussion on the effects of jurisdictional requirements on the CPA pipeline. While our primary analysis focuses on international candidates, the implications of our results apply to all potential candidates for the CPA exam. Our hope is that our results can aid stakeholders in their assumed goal of strengthening the CPA pipeline. While our results provide evidence that less restrictive requirements can increase the number of candidates sitting for the CPA exam, they also indicate that international candidates perform poorer on the exam in jurisdictions with more lenient requirements. It is possible that jurisdictions with less restrictive requirements are attracting lesser prepared candidates. We hope our findings on candidate decisions and performance aid stakeholders in their analysis of the costs and benefits of requirements to sit for the CPA exam.</p> <p>Our study contributes to the extant literature on factors affecting the number of CPA candidates and CPA exam performance. We extend this research stream by analyzing the decision process and performance of CPA candidates with fewer economic and physical ties to specific jurisdictions by using a subset of candidates not previously analyzed as a proxy – international candidates.</p> <p>The remainder of the paper is organized as follows. Section 2 discusses prior research that develops our research questions on CPA exam requirements and the number of candidates sitting for the CPA exam and their performance. Section 3 discusses the research design, and section 4 presents an analysis of our results. Section 5 concludes the paper.</p> <hd id="AN0184710972-5">Background and research questions</hd> <p></p> <hd id="AN0184710972-6">Background</hd> <p>Prior research has not investigated the effect of a jurisdiction's citizenship, residency, or Social Security number requirements on the number of candidates taking the CPA exam. Several studies have examined the effects of certification requirements on the supply of new accountants. Bernard ([<reflink idref="bib7" id="ref7">7</reflink>]) and Albrecht and Sack ([<reflink idref="bib1" id="ref8">1</reflink>]) theorize that the additional cost of the required 150 h of college credits to obtain a CPA license may reduce the number of new entrants into the profession. Prior research also finds significant reductions in the number of candidates after jurisdictions enact 150-hour legislation (Barrios [<reflink idref="bib6" id="ref9">6</reflink>], Carpenter and Stephenson [<reflink idref="bib8" id="ref10">8</reflink>], Allen and Woodland [<reflink idref="bib2" id="ref11">2</reflink>]), increased number of candidates in 120-hour jurisdictions when compared to 150-hour jurisdictions (Soileau et al. [<reflink idref="bib14" id="ref12">14</reflink>]); and increased migration from 150-hour states to 120-hour states to sit for the exam (Gaynor, Korb, Gorlowski, and Zhang [<reflink idref="bib9" id="ref13">9</reflink>]). However, these studies provide insufficient information on the effect of certification requirements on international candidates.</p> <p>While the debate on the effect of the number of required college credit hours on the number of new accountants continues, research has also examined the effect of the number of college credit hours required on CPA exam performance. In theory, candidates required to obtain 150-hours of college credit prior to sitting for the CPA exam will obtain the hours by primarily taking additional accounting courses. Therefore, it is expected that these candidates will be better prepared for the CPA exam and will perform better than candidates that are required to only have 120 h of college credit. Soileau et al. ([<reflink idref="bib14" id="ref14">14</reflink>]) and Gaynor et al. ([<reflink idref="bib9" id="ref15">9</reflink>]) find that candidates in jurisdictions that require more than 120-hours of college credit had higher pass rates and scores than candidates in jurisdictions that only require 120-hours of college credit to take the exam. However, these studies provided limited information about the specific impacts on international candidates.</p> <hd id="AN0184710972-7">Terminology</hd> <p>Our study examines the CPA exam and the requirements to sit for the exam. The CPA exam is administered at testing facilities in all U.S. jurisdictions and 18 international countries. A candidate for the CPA exam is anyone who sits for the exam in any jurisdiction. Candidates do not need to be physically present in the jurisdiction where they apply for candidacy when they take the exam. For example, a candidate may sit for the California CPA exam at a testing center in India because CPA exams are uniform across all jurisdictions. Though the format of the CPA exam is scheduled to change in 2024, during the time frame of this study, the CPA exam consisted of four parts: (<reflink idref="bib1" id="ref16">1</reflink>) Auditing and Attestation (AUD), (<reflink idref="bib2" id="ref17">2</reflink>) Business Environment and Concepts (BEC), (<reflink idref="bib3" id="ref18">3</reflink>) Financial Accounting and Reporting (FAR), and (<reflink idref="bib4" id="ref19">4</reflink>) Regulation (REG). To complete the CPA exam, a candidate must pass, with a minimum score of 75 (on a scale of 0–99) on each of the four sections of the exam within 18 months from passing their first section. Our study only includes the scores and pass rates for candidates sitting for a section of the CPA exam for the first time and does not include scores and pass rates for candidates retaking a section.</p> <p>Jurisdictions set the requirements for sitting for the CPA exam, and these requirements can differ by jurisdiction. The most common differences in requirements between jurisdictions are related to citizenship, residency, and educational credit hours attained. A citizenship requirement stipulates that a candidate must be a U.S. citizen before sitting for the CPA exam. A residency requirement stipulates that a candidate have a physical presence, generally a physical residence, in the jurisdiction for a certain period prior to sitting for the CPA exam. A Social Security number requirement stipulates that a candidate must have a Social Security number to obtain licensure. Following Soileau et al. ([<reflink idref="bib14" id="ref20">14</reflink>]), jurisdictions can be classified within one of three categories based on the required number of total college credit hours that must be obtained prior to sitting for the CPA exam: (<reflink idref="bib1" id="ref21">1</reflink>) 120-hours, (<reflink idref="bib2" id="ref22">2</reflink>) 150-hours, and (<reflink idref="bib3" id="ref23">3</reflink>) provisional (states allowing a candidate to take the exam within one year prior to obtaining 150 h). Jurisdictions also have different accounting credit hour requirements to sit for the exam. For the jurisdictions and time periods in our study, the number of accounting hours a candidate must obtain before sitting for the CPA exam ranges from 12 h in New Hampshire to 39 h in Utah. Appendix B details the requirements of the jurisdictions in our study.</p> <hd id="AN0184710972-8">Research questions</hd> <p>Citizenship, residency, and Social Security requirements are likely to affect whether a candidate sits for the CPA exam in a jurisdiction. It is unlikely that a non-U.S. citizen would go through the citizenship process to sit for the exam. International candidates are designated as such due to reporting an international address when sitting for the CPA exam. If a candidate established residence in a jurisdiction prior to sitting for the CPA exam, then it is probable that the candidate would report a domestic address and be considered a domestic candidate in our study. It is also possible that a candidate attended a university in the U.S. and maintained a residence in the U.S. but reported a permanent international address to the NASBA for receiving exam scores. The candidate could provide proof of residence to a jurisdiction with a residency requirement but would be reported as an international candidate. Data limitations prevent the ability to identify the physical presence of a candidate, but candidates with physical presence in a jurisdiction with a residency requirement being reported as an international candidate would bias against finding a negative association between a jurisdiction's residency requirement and international candidates. Most jurisdictions, except those with a citizenship requirement, do not require a Social Security number to sit for the CPA exam. However, a majority of jurisdictions require a Social Security number to obtain a CPA license. Several internet resources that advise international candidates on sitting for the CPA exam specifically mention jurisdictions with no Social Security requirement for licensure as favorable jurisdictions to international candidates indicating that international candidates do consider the Social Security requirements of a jurisdiction. It is likely international candidates will avoid sitting for the CPA exam in jurisdictions with citizenship, residency, or Social Security number requirements; however, with no prior research, we ask the following research question:</p> <p> <bold>RQ1</bold>: Are a jurisdiction's citizenship, residency, and Social Security number requirements to take the CPA exam associated with the number of international candidates taking the CPA exam?</p> <p>Prior research (Soileau et al., [<reflink idref="bib14" id="ref24">14</reflink>]) finds that jurisdictions that only require 120-hours of college credit to sit for the CPA exam are associated with a higher number of candidates relative to jurisdictions requiring more than 120-hours. For domestic candidates within the 50 U.S. States and the District of Columbia, Gaynor et al. ([<reflink idref="bib9" id="ref25">9</reflink>]) find that 120-hour jurisdictions have a greater percentage of candidates with a residence outside of the jurisdiction. They interpret this finding as candidates choosing to sit in jurisdictions requiring 120-hours rather than sitting in a 150-hour jurisdiction where they reside. These studies provide evidence that candidates are aware of the educational requirements of a jurisdiction and will choose to sit in jurisdictions that require fewer college credit hours.</p> <p>Online CPA exam resources such as Uplift Professionals and IPasstheCPAExam.com recommend that international candidates sit in jurisdictions with fewer credit hours required. As part of Uplift Professional's discussion on CPA exam requirements, the company provides a discussion on state boards that are favorable to international students, and these jurisdictions include the following: Alaska, Guam, Virginia, and Washington. For example, Uplift Professionals ([<reflink idref="bib16" id="ref26">16</reflink>]) details that Alaska is a favorable jurisdiction and states,</p> <p>'One can Sit Before Getting 120 Credit Hours [<emph>sic</emph>]. There are quite a lot of international candidates going through Alaska so it's worth mentioning here. Since Alaska allows candidates to sit for the exam before the gradution [<emph>sic</emph>], 3-year BCOM (<emph>Bachelor of Commerce degree</emph>) degree holders can technically sit for the exam as long as they fulfil [<emph>sic</emph>] enough accounting credit hours (the requirement depends on whether you are an accounting or non-accounting major).'</p> <p> <emph>IPasstheCPAExam.com</emph> (n.d) provides a discussion on the best jurisdictions for international candidates to sit for the CPA exam, with total credit hours and accounting hours featured prominently in the discussion. If international candidates utilize these resources and sit in jurisdictions with fewer educational hours required, then states with fewer total credit hours or accounting credit hour requirements should have more international candidates sitting for the CPA exam.</p> <p>Another factor in international candidates selecting a jurisdiction is that accounting programs outside of the U.S. are not generally designed for a student to obtain 150 total college credit hours. In these cases, a candidate would be required to obtain additional education to sit for the CPA exam in a 150-hour jurisdiction. This leads to the following research question:</p> <p> <bold>RQ2</bold>: Are a jurisdiction's educational hour requirements associated with the number of international candidates taking the CPA exam?</p> <p>Soileau et al. ([<reflink idref="bib14" id="ref27">14</reflink>]) find that candidates in jurisdictions requiring 150-hours perform better on the CPA exam relative to candidates in jurisdictions that require less than 150-hours. Gaynor et al. ([<reflink idref="bib9" id="ref28">9</reflink>]) find that candidates sitting for the CPA exam in 120-hour jurisdictions while residing outside of the jurisdiction perform worse than similar candidates that choose to sit in 150-hour jurisdictions. These findings have been interpreted as evidence that candidates with 150 h of college credit are better prepared for the CPA exam because candidates generally acquire the additional 30 h of college credit primarily by taking accounting courses. The content of these courses will generally be related to material on the CPA exam. Gaynor et al., (2019) theorize that candidates choosing to sit in 120-hour jurisdictions may seek a quick path to attempting the exam without adequate preparation. With limited prior research on international candidate performance on the CPA exam, we ask the following research question:</p> <p> <bold>RQ3</bold>: Are a jurisdiction's educational requirements associated with international candidates' first time CPA exam performance?</p> <hd id="AN0184710972-9">Research design</hd> <p></p> <hd id="AN0184710972-10">Sample</hd> <p>The authors manually collected jurisdiction data from 53 jurisdictions from 2013 to 2019 from the annual editions of the <emph>NASBA Candidate Performance on the Uniform CPA Examination</emph> (NASBA, [<reflink idref="bib13" id="ref29">13</reflink>]–[<reflink idref="bib13" id="ref30">13</reflink>]). NASBA began reporting international candidate performance by jurisdiction in 2013 and ceased publishing all candidate data in 2019. Our sample begins with 371 jurisdiction-year observations. We include jurisdictions with zero international candidates (<emph>n</emph> = 94) in the total sample (<emph>n</emph> = 371). An analysis of the jurisdictions without any international candidates indicates that 17% have citizenship requirements, 68% have residency requirements, and 87% have Social Security requirements. Jurisdictions with zero candidates (<emph>n</emph> = 94) will not have data for candidate scores or pass rates; therefore, these observations are dropped from the sample for our primary analysis. For 2019, the NASBA did not report the average age of the candidates for jurisdictions with five or fewer candidates. These observations are dropped from the sample (<emph>n</emph> = 9). Jurisdictions that changed educational requirements during an observation year are dropped from the sample (<emph>n</emph> = 12). Table 1 presents a description of the sample selection.</p> <p>Table 1. Sample description.</p> <p> <ephtml> <table><thead valign="bottom"><tr><td>Sample selection</td><td /><td>Number of Observations 2013–2019</td></tr></thead><tbody><tr><td>Jurisdictions (50 States, District of Columbia, Puerto Rico, and Guam)</td><td>53</td></tr><tr><td>Times: Annual periods from 2013 to 2019</td><td> 7</td></tr><tr><td /><td>Subtotal</td><td> 371</td></tr><tr><td>Less:</td><td /><td /></tr><tr><td /><td>Jurisdiction changed the CPA examination education requirement during year<xref ref-type="table-fn" rid="tfn1">1</xref></td><td>(9)</td></tr><tr><td /><td>Jurisdictions with zero international candidates and missing data<xref ref-type="table-fn" rid="tfn4">2</xref></td><td>(106)</td></tr><tr><td>Final Sample</td><td /><td> 255</td></tr></tbody></table> </ephtml> </p> <p>1 The effective date for the change in education requirements (total college credit hours or accounting credit hours) may have changed during a year. If the effective date was in January or December, the jurisdiction-year observation remained in the sample. If the new effective date was during the year, the observation was removed for international and domestic candidates.</p> <ulist> <item>2 Jurisdiction (Year) dropped in alphabetical order (<reflink idref="bib9" id="ref31">9</reflink>): Alabama (2018), Arkansas (2013), Illinois (2013), Louisiana (2016), Mississippi (2016), Montana (2016), Nevada (2018), New Hampshire (2014), Oregon (2017), and Wyoming (2017).</item> <item>3 Jurisdiction (Year) maintained in alphabetical order (<reflink idref="bib4" id="ref32">4</reflink>): Alabama (January 2016), Florida (December 2009), Massachusetts (effective dat|e January 2007), Tennessee (January 2017), Wisconsin (December 2017)</item> <item>4 Jurisdictions with zero international candidates (94 observations) do not have score or pass rate data. The following jurisdictions had zero international candidates for the entire sample period: Alabama, Kansas, Mississippi, Nebraska, Rhode Island, West Virginia, and Wyoming. The following jurisdictions had zero international candidates in at least one year during the sample period: Arkansas, the District of Columbia, Idaho, Kentucky, Louisiana, Maryland, Missouri, Nevada, North Carolina, Oklahoma, South Carolina, and South Dakota. In 2019, jurisdictions with five or fewer candidates do not report the average age of the candidates (12 observations).</item> </ulist> <hd id="AN0184710972-11">Variables</hd> <p>NASBA reports annually by jurisdiction the aggregate number of (<reflink idref="bib1" id="ref33">1</reflink>) total candidates, (<reflink idref="bib2" id="ref34">2</reflink>) international candidates (<emph>INTLCANDIDATES</emph>), and (<reflink idref="bib3" id="ref35">3</reflink>) domestic candidates (<emph>DOMCANDIDATES)</emph> taking a section of the CPA exam for the first time.[<reflink idref="bib1" id="ref36">1</reflink>] In addition to the number of CPA exam candidates, the jurisdictions report the average of section scores for first-time international (<emph>INTLSCORE</emph>) and domestic (<emph>DOMSCORE</emph>) candidates on the CPA exam. Jurisdictions also report the average of section pass rates for first-time international (<emph>INTLPASS</emph>) and domestic (<emph>DOMPASS</emph>) candidates on the CPA exam. For the citizenship, residency, and Social Security number requirements for each jurisdiction, we analyzed summary documents from the AICPA's <emph>This Way to CPA</emph> (2021)[<reflink idref="bib2" id="ref37">2</reflink>] to classify citizenship (<emph>CITIZEN)</emph>, residency (<emph>RESIDENT</emph>), and Social Security number (<emph>SSN</emph>) requirements for the period from 2013 through 2019.</p> <p>The educational requirements to take the CPA exam vary by jurisdiction (AICPA, [<reflink idref="bib3" id="ref38">3</reflink>]). Following Soileau et al. ([<reflink idref="bib14" id="ref39">14</reflink>]), we classify a jurisdiction within one of three categories based on the required number of total college credit hours to take the CPA exam: (<reflink idref="bib1" id="ref40">1</reflink>) 120-hours, (<reflink idref="bib2" id="ref41">2</reflink>) 150-hours, and (<reflink idref="bib3" id="ref42">3</reflink>) provisional. Therefore, we classify the jurisdictions during the period of interest as (<reflink idref="bib1" id="ref43">1</reflink>) <emph>120HOUR</emph> if the jurisdiction requires only 120 h to sit for the CPA exam (our model base case), (<reflink idref="bib2" id="ref44">2</reflink>) <emph>150HOUR</emph> if the jurisdiction requires 150 h of total college credit to take the CPA exam, or (<reflink idref="bib3" id="ref45">3</reflink>) <emph>PROVISIONAL</emph> if the jurisdiction allows a candidate to take the exam one year prior of obtaining 150-hours. Jurisdictions also have different accounting credit hour requirements to sit for the exam. <emph>ACCHRS</emph> is the minimum number of accounting hours a jurisdiction requires for a candidate to sit for the CPA exam. Consistent with prior literature, we examined licensing materials created by the AICPA, the NASBA, and the jurisdictions' Boards of Accountancy to identify each sitting classification and accounting hours required to sit for the exam (Appendix B)<emph>.</emph> If a jurisdiction changed from one education requirement to another in January or December, the jurisdiction year was maintained within the sample; if the jurisdiction changed during any other month, the jurisdiction year was dropped (<emph>n</emph> = 9).</p> <p>The NASBA also reports the average age of international candidates (<emph>INTLAGE</emph>) and domestic candidates (<emph>DOMAGE</emph>). Soileau et al., (2017) find that candidate age is negatively associated with CPA exam performance. Gaynor et al., (2019) suggest that candidates are attracted to a jurisdiction based on the economic opportunities available. Further, they theorize that candidates who are willing to physically relocate to a jurisdiction with more economic opportunities will be better prepared for the CPA exam compared to candidates simply seeking a license from any jurisdiction. As a proxy for the economic and job opportunities relevant to the accounting profession, we use the number of accounting jobs (<emph>ACCJOB</emph>) in the jurisdiction (by jurisdiction and year) from the U.S. Bureau of Labor Statistics. Appendix A explains the variables in detail.</p> <hd id="AN0184710972-12">Empirical models</hd> <p>To investigate our research questions, we estimate the following regressions in an OLS model. Following Allen and Woodland ([<reflink idref="bib2" id="ref46">2</reflink>]) and Soileau et al. ([<reflink idref="bib14" id="ref47">14</reflink>]), our models use the natural log for all continuous variables. Allen and Woodland ([<reflink idref="bib2" id="ref48">2</reflink>]) stated 'Log forms are used to allow estimates of percentage changes of the dependent variable associated with changes in the independent variables.' (<reflink idref="bib179" id="ref49">179</reflink>). To control for year-to-year changes, including changes to the CPA Exam, we include year fixed effects.</p> <hd id="AN0184710972-13">Number of candidates</hd> <p>To determine the effect of a jurisdiction's requirements on the number of international candidates, RQ1 and RQ2, we estimate model (<reflink idref="bib1" id="ref50">1</reflink>):</p> <p>Graph</p> <p> <ephtml> <math xmlns="http://www.w3.org/1998/Math/MathML"><mtable columnalign="right left" rowspacing=".5em" columnspacing="thickmathspace" displaystyle="true"><mtr><mtd /><mtd><mi>ln</mi><mi mathvariant="normal">_INTLCANDIDATE</mi><msub><mi>S</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>=</mo><msub><mi>B</mi><mn>0</mn></msub><mo>+</mo><msub><mi>B</mi><mn>1</mn></msub><mi>CITIZE</mi><msub><mi>N</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>2</mn></msub><mi>RESIDEN</mi><msub><mi>T</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>3</mn></msub><mi>SS</mi><msub><mi>N</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr><mtr><mtd /><mtd><mspace width="1em" /><mo>+</mo><msub><mi>B</mi><mn>4</mn></msub><mn>150</mn><mi>HOU</mi><msub><mi>R</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>5</mn></msub><mi>PROVISIONA</mi><msub><mi>L</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>6</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCHR</mi><msub><mi>S</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr><mtr><mtd /><mtd><mspace width="1em" /><mo>+</mo><msub><mi>B</mi><mn>7</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCJO</mi><msub><mi>B</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><mi>Yea</mi><msub><mi>r</mi><mi>t</mi></msub><mo>+</mo><msub><mi>e</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr></mtable></math> </ephtml> (<reflink idref="bib1" id="ref51">1</reflink>)</p> <p>Where: <emph>ln_INTLCANDIDATES</emph> = the natural log of the number of international candidates taking a section of the CPA exam for the first time by jurisdiction and year; <emph>CITIZEN</emph> = 1 if the jurisdiction requires a candidate to have U.S. citizenship prior to sitting for the CPA exam, = 0 otherwise; <emph>RESIDENT</emph> = 1 if the jurisdiction requires a candidate to have residency within the jurisdiction prior to sitting for the CPA exam, = 0 otherwise; <emph>SSN</emph> = 1 if the jurisdiction requires a candidate to have a Social Security number to obtain licensure, = 0 otherwise; <emph>150HOUR</emph> = 1 if the jurisdiction requires a candidate to have 150 h to sit for the CPA exam, = 0 otherwise; <emph>PROVISIONAL</emph> = 1 if the jurisdiction allows a candidate to provisionally sit for the CPA exam if they are within one year of meeting the 150 h required for certification in the respective year, = 0 otherwise; <emph>ln_ACCHRS</emph> = the natural log of the minimum number of accounting hours a jurisdiction requires to sit for the CPA exam, calculated by jurisdiction and year; <emph>ln_ACCJOB</emph> = the natural log of the number of accounting jobs in a jurisdiction, calculated by jurisdiction and year; <emph>YEAR</emph> = year fixed effect. Appendix A provides the definitions of all variables.</p> <hd id="AN0184710972-14">Exam performance</hd> <p>To evaluate the association between international candidates and exam performance, we use two measures of exam performance consistent with prior research (Soileau et al., [<reflink idref="bib14" id="ref52">14</reflink>]): (<reflink idref="bib1" id="ref53">1</reflink>) exam scores, and (<reflink idref="bib2" id="ref54">2</reflink>) pass rates.</p> <p>To test the association between international candidate exam scores and jurisdiction educational hour requirements, RQ3, we estimate model (<reflink idref="bib2" id="ref55">2</reflink>) using the average numerical score of international candidates on a section of the CPA exam for the first-time:</p> <p>Graph</p> <p> <ephtml> <math xmlns="http://www.w3.org/1998/Math/MathML"><mtable columnalign="right left" rowspacing=".5em" columnspacing="thickmathspace" displaystyle="true"><mtr><mtd /><mtd><mi>ln</mi><mi mathvariant="normal">_INTLSCOR</mi><msub><mi>E</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>=</mo><msub><mi>B</mi><mn>0</mn></msub><mo>+</mo><msub><mi>B</mi><mn>1</mn></msub><mn>150</mn><mi>HOU</mi><msub><mi>R</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>2</mn></msub><mi>PROVISIONA</mi><msub><mi>L</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>3</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCHR</mi><msub><mi>S</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo></mtd></mtr><mtr><mtd /><mtd><msub><mi>B</mi><mn>4</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCJO</mi><msub><mi>B</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi><mo>+</mo></mrow></msub><msub><mi>B</mi><mn>5</mn></msub><mi>ln</mi><mi mathvariant="normal">_INTLAG</mi><msub><mi>E</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><mi>Yea</mi><msub><mi>r</mi><mi>t</mi></msub><mo>+</mo><msub><mi>e</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr></mtable></math> </ephtml> (<reflink idref="bib2" id="ref56">2</reflink>)</p> <p>where: <emph>ln_INTLSCORE </emph>= the natural log of the average numerical score for international candidates on a section of the CPA exam for a first-time testing event, calculated by jurisdiction and year. Appendix A provides the definitions of all variables.</p> <p>To test the association between international candidate pass rates and jurisdiction educational hour requirements, we estimate model (<reflink idref="bib3" id="ref57">3</reflink>) using the percent of international candidates passing a section of the CPA exam:</p> <p>Graph</p> <p> <ephtml> <math xmlns="http://www.w3.org/1998/Math/MathML"><mtable columnalign="right left" rowspacing=".5em" columnspacing="thickmathspace" displaystyle="true"><mtr><mtd /><mtd><mi>ln</mi><mi mathvariant="normal">_INTLPAS</mi><msub><mi>S</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>=</mo><msub><mi>B</mi><mn>0</mn></msub><mo>+</mo><msub><mi>B</mi><mn>1</mn></msub><mn>150</mn><mi>HOU</mi><msub><mi>R</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>2</mn></msub><mi>PROVISIONA</mi><msub><mi>L</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><msub><mi>B</mi><mn>3</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCHR</mi><msub><mi>S</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr><mtr><mtd /><mtd><mspace width="1em" /><mo>+</mo><msub><mi>B</mi><mn>4</mn></msub><mi>ln</mi><mi mathvariant="normal">_ACCJO</mi><msub><mi>B</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi><mo>+</mo></mrow></msub><msub><mi>B</mi><mn>5</mn></msub><mi>ln</mi><mi mathvariant="normal">_INTLAG</mi><msub><mi>E</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub><mo>+</mo><mi>Yea</mi><msub><mi>r</mi><mi>t</mi></msub><mo>+</mo><msub><mi>e</mi><mrow><mi>i</mi><mo>,</mo><mi>t</mi></mrow></msub></mtd></mtr></mtable></math> </ephtml> (<reflink idref="bib3" id="ref58">3</reflink>)</p> <p>where <emph>ln_INTLPASS </emph>= the natural log of the percent of international candidates passing a section of the CPA exam for a first-time testing event, calculated by jurisdiction and year. Appendix A provides the definitions of all variables.</p> <hd id="AN0184710972-15">Results</hd> <p></p> <hd id="AN0184710972-16">Descriptive statistics</hd> <p>The descriptive statistics in Table 2 represent the averages of summarized data on a per jurisdiction and per year basis for our variables of interest. We also include the number of first-time candidates, average scores, and average pass rates for all, international, and domestic candidates in our sample (<emph>All</emph>, <emph>INTL</emph>, <emph>DOM</emph> respectively). On average there were 173.12 international candidates sitting for the CPA exam for the first time (<emph>INTLCANDIDATES</emph>) per jurisdiction per year. The average first-time score for an international candidate (<emph>INTLSCORE</emph>) on a section was 67.80, whereas the first-time pass rate for an international candidate (<emph>INTLPASS</emph>) on a section was 45.5%. For comparison, the average of the total number of all first-time candidates per jurisdiction was 1,664.61 and the average score and pass rates for all first-time candidates was 72.01 and 54.3%, respectively. On average, there were 1,496.35 domestic candidates sitting for the CPA exam for the first-time (<emph>DOMCANDIDATES</emph>) with an average score of 72.73 and an average pass rate of 55.8%, respectively. International candidates represent 10.4% (not tabulated) of first-time candidates in our sample. Additionally, international candidates have a lower average performance (average score and pass rate) than the overall average performance and domestic candidate performance.</p> <p>Table 2. Descriptive statistics.</p> <p> <ephtml> <table><thead valign="bottom"><tr><td>Variable</td><td>Mean</td><td>Std.</td><td>Min.</td><td>P25</td><td>Median</td><td>P75</td><td>Max</td></tr></thead><tbody><tr><td><italic>All Candidates</italic></td><td>1,664.61</td><td>2,007.65</td><td>109</td><td>472</td><td>1,012</td><td>2,106</td><td>11,103</td></tr><tr><td><italic>All Score</italic></td><td char=".">72.01</td><td char=".">3.11</td><td char=".">59.46</td><td char=".">70.07</td><td char=".">72.57</td><td char=".">74.37</td><td char=".">78.12</td></tr><tr><td><italic>All Pass Rate</italic></td><td char=".">54.3%</td><td char=".">7.2%</td><td char=".">30.7%</td><td char=".">49.7%</td><td char=".">55.3%</td><td char=".">59.3%</td><td char=".">70.3%</td></tr><tr><td><italic>INTLCANDIDATES</italic></td><td char=".">173.12</td><td char=".">322.54</td><td char=".">1.00</td><td char=".">6.00</td><td char=".">29.00</td><td char=".">220.00</td><td char=".">2,512.00</td></tr><tr><td><italic>INTLSCORE</italic></td><td char=".">67.80</td><td char=".">9.27</td><td char=".">19.00</td><td char=".">65.10</td><td char=".">68.40</td><td char=".">72.00</td><td char=".">94.00</td></tr><tr><td><italic>INTLPASS</italic></td><td char=".">45.5%</td><td char=".">21.0%</td><td char=".">0.0%</td><td char=".">37.9%</td><td char=".">45.6%</td><td char=".">53.1%</td><td>100%</td></tr><tr><td><italic>DOMCANDIDATES</italic></td><td>1,496.35</td><td>1,959.17</td><td char=".">51</td><td char=".">298</td><td char=".">892</td><td>1,900</td><td>10,559</td></tr><tr><td><italic>DOMSCORE</italic></td><td char=".">72.73</td><td char=".">2.85</td><td char=".">57.10</td><td char=".">71.40</td><td char=".">73.20</td><td char=".">74.50</td><td char=".">78.10</td></tr><tr><td><italic>DOMPASS</italic></td><td char=".">55.8%</td><td char=".">6.9%</td><td char=".">23.1%</td><td char=".">52.6%</td><td char=".">56.9%</td><td char=".">60.8%</td><td char=".">70.4%</td></tr><tr><td><italic>120HOUR</italic></td><td char=".">0.71</td><td char=".">0.45</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">1.00</td><td char=".">1.00</td><td char=".">1.00</td></tr><tr><td><italic>150HOUR</italic></td><td char=".">0.15</td><td char=".">0.36</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">1.00</td></tr><tr><td><italic>PROVISIONAL</italic></td><td char=".">0.14</td><td char=".">0.35</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">1.00</td></tr><tr><td><italic>ACCHRS</italic></td><td char=".">25.93</td><td char=".">4.99</td><td char=".">12.00</td><td char=".">24.00</td><td char=".">24.00</td><td char=".">30.00</td><td char=".">39.00</td></tr><tr><td><italic>CITIZEN</italic></td><td char=".">0.01</td><td char=".">0.11</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">1.00</td></tr><tr><td><italic>RESIDENT</italic></td><td char=".">0.12</td><td char=".">0.33</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">0.00</td><td char=".">1.00</td></tr><tr><td><italic>SSN</italic></td><td char=".">0.76</td><td char=".">0.43</td><td char=".">0.00</td><td char=".">1.00</td><td char=".">1.00</td><td char=".">1.00</td><td char=".">1.00</td></tr><tr><td><italic>INTLAGE</italic></td><td char=".">30.41</td><td char=".">3.53</td><td char=".">22.40</td><td char=".">28.20</td><td char=".">30.30</td><td char=".">32.30</td><td char=".">45.30</td></tr></tbody></table> </ephtml> </p> <p>5 Note: The sample size is 255 observations. The data source for CPA examination pass rates, CPA examination scores, number of candidates, age, candidate residence, and candidate age is the annual editions of the <emph>NASBA Candidate Performance on the Uniform CPA Examination</emph> (NASBA 2013 to 2019). CITIZEN, RESIDENT, and SSN data are from AICPA's <emph>This Way to CPA</emph>. Table 2's variables are not logged, and Appendix A defines the variables.</p> <p>Regarding educational requirements, 71% of jurisdiction-year observations are classified as <emph>120HOUR</emph> jurisdictions, 15% as <emph>150HOUR</emph> jurisdictions, and 14% as <emph>PROVISIONAL</emph> jurisdictions. The average number of accounting credit hours required to take the CPA exam (<emph>ACCHRS</emph>) was 25.93. In 1% of jurisdiction-year observations, the candidate must be a U.S. citizen, whereas in 12% the candidate must be a resident of the jurisdiction to sit for the CPA exam. Jurisdictions that require a Social Security number for licensure represent 76% of the sample. The average age (<emph>INTLAGE</emph>) of international candidates is 30.41.</p> <hd id="AN0184710972-17">Analysis of research questions 1 and 2: number of candidates</hd> <p>To analyze the effects of jurisdictional requirements to take the CPA exam on the number of international candidates sitting for the exam for the first time (Model 1), we perform an OLS regression using the natural log of the number of international candidates taking at least one section of the CPA exam for the first time (<emph>ln_INTLCANDIDATES</emph>) as the dependent variable. The results of the regression are presented in Table 3.</p> <p>Table 3. Analysis of number of candidates.</p> <p> <ephtml> <table><thead valign="bottom"><tr><td /><td><italic>DV: ln_INTLCANDIDATES</italic></td></tr></thead><tbody><tr><td>Constant</td><td char=".">7.231***</td></tr><tr><td /><td char=".">(0.000)</td></tr><tr><td><italic>CITIZEN</italic></td><td char=".">−1.044***</td></tr><tr><td><italic /></td><td char=".">(0.000)</td></tr><tr><td><italic>RESIDENT</italic></td><td char=".">0.084</td></tr><tr><td><italic /></td><td char=".">(0.604)</td></tr><tr><td><italic>SSN</italic></td><td char=".">−0.384***</td></tr><tr><td><italic /></td><td char=".">(0.001)</td></tr><tr><td><italic>150HOUR</italic></td><td char=".">−0.365***</td></tr><tr><td><italic /></td><td char=".">(0.003)</td></tr><tr><td><italic>PROVISIONAL</italic></td><td char=".">0.021</td></tr><tr><td><italic /></td><td char=".">(0.918)</td></tr><tr><td><italic>ln_ACCHRS</italic></td><td char=".">−3.290***</td></tr><tr><td><bold><italic /></bold></td><td char=".">(0.000)</td></tr><tr><td><italic>ln_ACCJOB</italic></td><td char=".">−0.206*</td></tr><tr><td><bold><italic /></bold></td><td char=".">(0.051)</td></tr><tr><td>Year Fixed Effects</td><td>Yes</td></tr><tr><td><italic>N</italic></td><td>255</td></tr><tr><td>adj. <italic>R</italic><sup>2</sup></td><td char=".">0.2988</td></tr><tr><td>F</td><td char=".">48.102</td></tr></tbody></table> </ephtml> </p> <ulist> <item>6 *, **, *** Denote significance at the <0.10, < 0.05, and <0.01 levels, respectively, two-tailed test (<emph>p</emph>-values in parentheses).</item> <item>7 Note: For all models, <emph>120HOUR</emph> jurisdictions are the base case. Year indicator variables are included in all models but are not reported. Appendix A defines the variables.</item> </ulist> <p>We evaluate whether citizenship, residency, and Social Security number requirements to take the CPA exam (RQ1) and whether educational requirements to take the CPA exam (RQ2) are associated with the number of international candidates taking the exam for the first time. The coefficient on <emph>CITIZEN</emph> is negative and significant. As would be expected, this result provides evidence that a jurisdiction's requirement for a candidate to have U.S. citizenship prior to sitting for the CPA exam is associated with fewer international candidates. There was no statistically significant association between a jurisdiction's residency requirement (<emph>RESIDENT</emph>) and the number of international candidates. This finding suggests that, in the presence of other jurisdictional requirements, a jurisdiction's requirement for a candidate to have residency in the jurisdiction prior to sitting for the CPA exam does not affect the number of international candidates sitting for the CPA exam. The coefficient on <emph>SSN</emph> is negative and statistically significant. This result provides evidence that a jurisdiction's requirement for a Social Security number prior to obtaining licensure is associated with fewer international candidates. This result suggests candidates follow the advice of internet resources to sit in jurisdictions with no Social Security requirement.</p> <p>For whether educational requirements to take the CPA exam are associated with the number of international candidates (RQ2), the coefficient on <emph>150HOUR</emph> is negative and statistically significant. This result provides evidence that jurisdictions with a requirement for a candidate to obtain 150-hours of total college credit are associated with fewer international candidates sitting for the CPA exam than jurisdictions that allow a candidate to sit for the CPA exam after obtaining 120-hours of credit. This finding supports prior research, Soileau et al. ([<reflink idref="bib14" id="ref59">14</reflink>]), that jurisdictional requirements for more than 120 college credit hours to take the CPA exam reduce the number of candidates for the exam in a jurisdiction. There was no statistical association between jurisdictions that allow candidates to sit for the CPA exam using a provisional status (<emph>PROVISIONAL</emph>) and the number of international candidates. The coefficient on <emph>ln</emph>_<emph>ACCHRS</emph> is negative and significant indicating that a higher number of required accounting credit hours to sit for the CPA exam is associated with fewer international candidates sitting for the CPA exam in a jurisdiction. As discussed, CPA exam resources marketed to international candidates promote jurisdictions requiring fewer accounting credit hours as favorable to international candidates. This result provides evidence that international candidates follow this guidance. The coefficient on <emph>ln</emph>_<emph>ACCJOB</emph> is negative and significant indicating that the number of accounting job opportunities is associated with fewer international candidates. This provides evidence that citizenship, Social Security number, and educational requirements to sit are a larger influence on where an international candidate sits for the CPA exam than the economic activity of a jurisdiction.</p> <hd id="AN0184710972-18">Analysis of research question 3: CPA exam performance</hd> <p>To analyze the effects of jurisdictional requirements to take the CPA exam on the performance of international candidates taking the exam for the first time (Models 2 and 3), we perform OLS regressions using dependent variables shown by prior research as proxies for CPA exam performance. Columns (<reflink idref="bib1" id="ref60">1</reflink>) and (<reflink idref="bib2" id="ref61">2</reflink>) of Table 4 present the results of the regressions. In Column (<reflink idref="bib1" id="ref62">1</reflink>), CPA Exam performance is proxied by the natural log of the average score of international candidates taking a section of the CPA exam for the first time (<emph>ln_INTLSCORE</emph>) as the dependent variable. In Column (<reflink idref="bib2" id="ref63">2</reflink>), CPA Exam performance is proxied by the natural log of the average pass rate of international candidates taking a section of the CPA exam for the first time (<emph>ln_INTLPASS</emph>) as the dependent variable. To remove the effect of a small number of international candidates in a jurisdiction on the results, we drop jurisdictions with less than ten candidates (<emph>n</emph> = 90 resulting in a sample of 165 observations).</p> <p>Table 4. Analysis of CPA exam performance.</p> <p> <ephtml> <table><thead valign="bottom"><tr><td /><td>(1)</td><td>(2)</td></tr><tr><td /><td><italic>DV: ln_INTLSCORE</italic></td><td><italic>DV: ln_INTLPASS</italic></td></tr></thead><tbody><tr><td>Constant</td><td char=".">1.681***</td><td char=".">−0.775**</td></tr><tr><td /><td char=".">(0.000)</td><td char=".">(0.148)</td></tr><tr><td><italic>150HOUR</italic></td><td char=".">0.023***</td><td char=".">0.094***</td></tr><tr><td><italic /></td><td char=".">(0.000)</td><td char=".">(0.000)</td></tr><tr><td><italic>PROVISIONAL</italic></td><td char=".">−0.035**</td><td char=".">−0.054*</td></tr><tr><td><bold><italic /></bold></td><td char=".">(0.037)</td><td char=".">(0.050)</td></tr><tr><td><italic>ln_ACCHRS</italic></td><td char=".">−0.014</td><td char=".">−0.161**</td></tr><tr><td><bold><italic /></bold></td><td char=".">(0.471)</td><td char=".">(0.032)</td></tr><tr><td><italic>ln_ACCJOB</italic></td><td char=".">0.010***</td><td char=".">0.024***</td></tr><tr><td><bold><italic /></bold></td><td char=".">(0.006)</td><td char=".">(0.006)</td></tr><tr><td><italic>ln_INTLAGE</italic></td><td char=".">0.065</td><td char=".">0.367</td></tr><tr><td /><td char=".">(0.546)</td><td char=".">(0.123)</td></tr><tr><td>Year Fixed Effects</td><td>Yes</td><td>Yes</td></tr><tr><td><italic>N</italic></td><td>165</td><td>165</td></tr><tr><td>adj. <italic>R</italic><sup>2</sup></td><td char=".">0.148</td><td char=".">0.185</td></tr><tr><td>F</td><td char=".">7.586</td><td char=".">5.303</td></tr></tbody></table> </ephtml> </p> <ulist> <item>8 *, **, *** Denote significance at the <0.10, < 0.05, and <0.01 levels, respectively, two-tailed test (<emph>p</emph>-values in parentheses).</item> <item>9 Note: In Table 4, jurisdiction with less than ten candidates (<emph>n</emph> = 90) are removed from the sample to arrive at our sample of <emph>n</emph> = 165. For all models, <emph>120HOUR</emph> jurisdictions are the base case. Year indicator variables are included in all models but are not reported. Variables are defined in Appendix A.</item> </ulist> <p>For Columns 1 and 2, the coefficients on <emph>150HOUR</emph> are positive and significant. This result provides evidence that international candidates sitting for the CPA exam in jurisdictions that require 150 total college credit hours are associated with better performance on the CPA exam than international candidates sitting in jurisdictions that require 120 total college credit hours prior to sitting for the exam. The coefficients on <emph>PROVISIONAL</emph> are negative and significant providing evidence that international candidates in jurisdictions that allow candidates to sit provisionally are associated with lower performance on the CPA exam than international candidates sitting in jurisdictions that require 120 total college credit hours prior to sitting for the exam. This finding supports the view that candidates who have obtained 150-hours of college credit prior to sitting for the CPA exam are better prepared than candidates who sit with less than 150-hours of college credit. These results are similar to Soileau et al. ([<reflink idref="bib14" id="ref64">14</reflink>]) who found that jurisdictions with more than 120-hours (<emph>150HOUR</emph> and <emph>PROVISIONAL</emph>) required to take the exam were positively associated with higher CPA exam performance for all candidates. The negative and significant coefficient on <emph>ln_ACCHRS</emph> when <emph>ln_INTLPASS</emph> is the dependent variable (Column 2) suggests that requiring more accounting credit hours does not improve international candidate performance. This may result from international candidates taking accounting classes that cover material not tested on the CPA exam (e.g. U.S. GAAP vs. IFRS). The positive and significant coefficients on <emph>ln_ACCJOB</emph> supports the view that jurisdictions with more economic activity will attract better prepared candidates.</p> <hd id="AN0184710972-19">Sensitivity analysis</hd> <p>To examine the sensitivity of our findings for the effects of jurisdictional requirements to take the CPA exam on the performance of international candidates taking the exam for the first time due to sample selection, we estimate Models (<reflink idref="bib2" id="ref65">2</reflink>) and (<reflink idref="bib3" id="ref66">3</reflink>) using OLS regression with the entire sample including jurisdictions with fewer than ten candidates (<emph>n</emph> = 90). The results of this analysis, not tabulated, found that our coefficients on <emph>150HOUR</emph>, and <emph>ln_ACCHRS</emph> were not associated with the CPA exam performance of international candidates. This result means our findings are sensitive to jurisdictions with few candidates. Additionally, we estimate Models (<reflink idref="bib2" id="ref67">2</reflink>) and (<reflink idref="bib3" id="ref68">3</reflink>) using a sample of only jurisdictions with more than 20 candidates. The results of this estimation, not tabulated, are quantitatively similar to the results of the primary analysis presented in Table 4.</p> <hd id="AN0184710972-20">Supplemental analysis</hd> <p>To compare our findings on international candidates to domestic candidates, we estimate Models (<reflink idref="bib1" id="ref69">1</reflink>) through (<reflink idref="bib3" id="ref70">3</reflink>) using OLS regression on a sample of domestic candidates for the same year and jurisdictions. The results of this analysis are presented in Table 5 Columns (<reflink idref="bib1" id="ref71">1</reflink>) through (<reflink idref="bib3" id="ref72">3</reflink>). For the estimate of Model (<reflink idref="bib1" id="ref73">1</reflink>) (Column 1), Citizenship (<emph>CITIZEN</emph>) requirements are not associated with the number of domestic candidates (<emph>DOMCANDIDATES</emph>) sitting for the CPA exam for the first time. This result is expected because most domestic candidates sitting for the CPA exam are U.S. citizens. The coefficients on <emph>RESIDENT</emph> and <emph>SSN</emph> are negative and statistically significant. This provides evidence that jurisdictions that require a candidate to establish residency or a Social Security number prior to sitting for the CPA exam have fewer domestic candidates sitting for the exam than jurisdictions without the requirements. Domestic candidates may not be able to establish residency in a jurisdiction prior to sitting for the CPA exam; therefore, they sit for the exam in a jurisdiction where they have already established residency or residency is not required. This may result in candidates being physically present in one jurisdiction but sitting in another jurisdiction. A further analysis of the Social Security requirements of jurisdictions indicates that there are few jurisdictions that do not require Social Security numbers (<emph>n</emph> = 11) but the jurisdictions without Social Security requirements include several jurisdictions with high numbers of candidates (e.g. Illinois and New York). Therefore, on average, jurisdictions with Social Security requirements have fewer domestic candidates.</p> <p>Table 5. Supplemental analysis of domestic candidates.</p> <p> <ephtml> <table><thead valign="bottom"><tr><td /><td>(1)</td><td>(2)</td><td>(3)</td></tr><tr><td /><td><italic>DV: ln_DOMCANDIDATES</italic></td><td><italic>DV: ln_DOMSCORE</italic></td><td><italic>DV: ln_DOMPASS</italic></td></tr></thead><tbody><tr><td>Constant</td><td char=".">−0.149</td><td char=".">2.090***</td><td char=".">0.602***</td></tr><tr><td /><td char=".">(0.477)</td><td char=".">(0.000)</td><td char=".">(0.002)</td></tr><tr><td><italic>CITIZEN</italic></td><td char=".">−0.028</td><td char="." /><td char="." /></tr><tr><td /><td char=".">(0.596)</td><td char="." /><td char="." /></tr><tr><td><italic>RESIDENT</italic></td><td char=".">−0.139***</td><td char="." /><td char="." /></tr><tr><td /><td char=".">(0.000)</td><td char="." /><td char="." /></tr><tr><td><italic>SSN</italic></td><td char=".">−0.225***</td><td char="." /><td char="." /></tr><tr><td /><td char=".">(0.000)</td><td char="." /><td char="." /></tr><tr><td><italic>150HOUR</italic></td><td char=".">−0.014</td><td char=".">0.004**</td><td char=".">0.013**</td></tr><tr><td><italic /></td><td char=".">(0.551)</td><td char=".">(0.035)</td><td char=".">(0.046)</td></tr><tr><td><italic>PROVISIONAL</italic></td><td char=".">−0.076**</td><td char=".">0.003</td><td char=".">0.007</td></tr><tr><td><italic /></td><td char=".">(0.022)</td><td char=".">(0.427)</td><td char=".">(0.646)</td></tr><tr><td><italic>ln_ACCHRS</italic></td><td char=".">−0.361**</td><td char=".">−0.004</td><td char=".">−0.029</td></tr><tr><td><italic /></td><td char=".">(0.024)</td><td char=".">(0.699)</td><td char=".">(0.427)</td></tr><tr><td><italic>ln_ACCJOB</italic></td><td char=".">0.901***</td><td char=".">0.006***</td><td char=".">0.019***</td></tr><tr><td><italic /></td><td char=".">(0.000)</td><td char=".">(0.001)</td><td char=".">(0.003)</td></tr><tr><td><italic>ln_DOMAGE</italic></td><td char="." /><td char=".">−0.170***</td><td char=".">−0.621***</td></tr><tr><td /><td char="." /><td char=".">(0.000)</td><td char=".">(0.000)</td></tr><tr><td>Year Fixed Effects</td><td>Yes</td><td>Yes</td><td>Yes</td></tr><tr><td><italic>N</italic></td><td>361</td><td>361</td><td>361</td></tr><tr><td>adj. <italic>R</italic><sup>2</sup></td><td char=".">0.869</td><td char=".">0.115</td><td char=".">0.114</td></tr><tr><td>F</td><td char=".">228.138</td><td char=".">8.912</td><td char=".">8.484</td></tr></tbody></table> </ephtml> </p> <ulist> <item>10 *, **, *** Denote significance at the <0.10, < 0.05, and <0.01 levels, respectively, two-tailed test (<emph>p</emph>-values in parentheses).</item> <item>11 Note: For Models (<reflink idref="bib2" id="ref74">2</reflink>) and (<reflink idref="bib3" id="ref75">3</reflink>), <emph>120HOUR</emph> jurisdictions are the base case. Year indicator variables are included in all models but are not reported. Appendix A defines the variables.</item> </ulist> <p>We find no statistical association between the 150-hour requirement to sit for the CPA exam and the number of domestic candidates. This finding is contrary to prior research that a 150-hour requirement was associated with fewer candidates sitting for the CPA exam. Prior research (Soileau et al., [<reflink idref="bib14" id="ref76">14</reflink>]) did not differentiate between international candidates and domestic candidates or examine accounting jobs within a jurisdiction. As discussed, the 150-hour requirement is negatively associated with the number of international candidates. It is possible that the negative association between the 150-hour requirement and the number of candidates is due to the negative effect from international candidates. It is also possible this may result from different sample periods with more jurisdictions adopting the 120-hours requirement to sit for the CPA exam.</p> <p>A univariate t-test, not tabulated, on the number of domestic candidates by the 150-hour requirement indicates no statistically significant difference between the number of domestic candidates in jurisdictions that require 150-hours to sit for the CPA exam and jurisdictions that do not require 150-hours to sit. While the total number of candidates sitting in 120-hour jurisdictions is greater, there is no statistical difference between the average number of candidates sitting in 120-hour and 150-hour jurisdictions. Consistent with the results presented in Table 3, the number of accounting hours required to sit for the exam (<emph>ln_ACCHRS</emph>) is negatively associated with the number of domestic candidates. Although negative and significant with international candidates, the jurisdiction's demand for accountants (<emph>ln_ACCJOB</emph>) has a positive association with the number of domestic candidates. This indicates that domestic candidates sit in jurisdictions with more accounting job opportunities.</p> <p>For the estimate of Models (<reflink idref="bib2" id="ref77">2</reflink>) and (<reflink idref="bib3" id="ref78">3</reflink>) (Columns 2 and 3 respectively), the positive and significant coefficients on <emph>150HOUR</emph> provide evidence that domestic candidates in 150-hour jurisdictions perform better on the CPA exam than domestic candidates in 120-hour jurisdictions. This finding is similar to our findings for international candidates and is consistent with prior research. There is no statistically significant association between the number of accounting hours required and the CPA exam performance by domestic candidates. Most accounting undergraduate programs require a similar number of hours in accounting to graduate with a bachelor's degree regardless of a jurisdiction's requirement. Therefore, candidates in jurisdictions with lower accounting hour requirements may still have similar accounting hours to candidates in jurisdictions with higher accounting hour requirements. The positive and significant coefficient on <emph>ln_ACCJOB</emph> is similar to our findings for international candidates and is consistent with prior research. The coefficient on <emph>ln_DOMAGE</emph> is negative and significant providing evidence that candidate performance decreases with age. This finding is consistent with prior research.</p> <hd id="AN0184710972-21">Limitations</hd> <p>Our study is limited in that the analysis is performed on data summarized at the year and jurisdictional level as opposed to individual candidate data. As a result, we cannot specifically identify individual characteristics of the candidates such as educational level achieved (graduate or undergraduate) when taking the exam, country of origin and degree, time since graduation, supplemental courses taken, and their work experience. Future research on international candidates could conduct a comprehensive survey on individual characteristics that affect CPA exam performance and motivation to sit for the CPA exam.</p> <hd id="AN0184710972-22">Discussion</hd> <p>Some academic research has investigated the effects of candidacy requirements on the number of entrants into the profession, and the effects of requirements on the performance of candidates on the CPA exam. International candidates represent over 10% of candidates for the CPA exam with the potential for further growth. Given the shortage of new CPAs entering the profession, policymakers should understand how their requirements impact this large pool of potential entrants into the profession.</p> <p>We define an international candidate as a candidate sitting for a section of the CPA exam for the first time that provides a permanent address that is outside of the U.S. We find a negative association between jurisdictional requirements to have U.S. citizenship to sit for the CPA exam and the number of international candidates sitting for a section of the CPA exam for the first time. We also find a similar relationship between the number of international candidates and the jurisdiction requiring a candidate to have a U.S. Social Security number. This finding is consistent with the view that international candidates will not invest the necessary resources to obtain U.S. citizenship or a Social Security number in order to sit for the CPA exam when other jurisdictions allow a candidate to sit for the exam without obtaining either. To our knowledge, our study is the first to document this association. We also find that the number of international candidates is negatively associated with jurisdictional requirements for candidates to have 150 college credit hours to sit for the CPA compared to jurisdictions that only require 120 college credit hours. Further, the number of international candidates is negatively associated with the number of accounting hours a jurisdiction requires for a candidate to sit for the CPA exam. This is consistent with the idea that international candidates are likely to have less than 150 college credit hours and fewer accounting hours and will choose to sit for the CPA exam in jurisdictions that require fewer college credit hours and fewer accounting hours.</p> <p>In addition to the number of international candidates, we analyze the performance of international candidates on the CPA exam. We find a positive association between international candidate performance (scores and pass rates) and a jurisdiction's requirement that a candidate have 150 college credit hours to sit for the CPA exam when compared to jurisdictions that only require 120 college credit hours. However, we find a negative association between international candidate pass rates and the number of accounting hours a jurisdiction requires for a candidate to sit for the CPA exam. These findings are consistent with the view that candidates with more college credit hours will perform better on the CPA exam but are not consistent with the same view on accounting hours. International candidates perform worse than their domestic counterparts. This can be, in part, explained by the focus of U.S. accounting curriculum on the CPA exam. Accounting curriculum in the U.S. is designed around the CPA exam, and domestic candidates primarily attend U.S. universities. International candidates primarily attend international universities where the accounting curriculum is not designed around the CPA exam.</p> <p>Our findings contribute to the discussion on the effects of jurisdictional requirements on the number and performance of CPA exam candidates. Our study extends prior research on the effects of jurisdictional requirements on the supply of new accountants and candidate performance on the CPA exam. We extend this research stream by analyzing a subset of the supply of new accountants not previously studied specifically international candidates for the CPA exam. Our results provide evidence that these requirements are barriers to new entrants into the profession, specifically international entrants. While international candidates can sit for the CPA exam in a jurisdiction with less restrictive requirements, these requirements may deter international candidates from choosing to live and work in the jurisdiction.</p> <p>While the debate over 150-hour requirements has gone on for decades (Van Wyhe, [<reflink idref="bib17" id="ref79">17</reflink>]), there is little evidence that it has improved the quality of CPAs (Barrios, [<reflink idref="bib6" id="ref80">6</reflink>]). Our findings indicate that the 150-hour requirement to sit deters international candidates from sitting for the CPA exam in a jurisdiction. However, our findings indicate that candidates in 150-hour jurisdictions have better CPA exam outcomes than candidates in jurisdictions that require fewer than 150-hours. While the majority of jurisdictions only require 120-hours to sit for the CPA exam, all jurisdictions currently require 150-hours for licensure. As our study and prior research show, there are benefits and costs to jurisdictional educational requirements. The accounting profession must decide whether the benefits of the 150-hour requirement outweigh the potential negative impact on the CPA pipeline. It may be time to explore alternatives to the 150-hour requirement. For example, the state of Minnesota has introduced legislation that would allow for a candidate to obtain a CPA license with 120-hours and two years of practical experience (Wedul, [<reflink idref="bib18" id="ref81">18</reflink>]). The AICPA and NASBA oppose this legislation (Strickland, [<reflink idref="bib15" id="ref82">15</reflink>]).</p> <p>Our study specifically focuses on candidates from countries outside of the U.S. Many of these international candidates are students attending a university outside of the U.S. taught by educators at a university outside of the U.S. Our results suggest a need for future research on methods to improve candidate performance on the CPA exam. These methods may include additional accounting education on subjects specific to the CPA exam targeted towards international candidates. International candidates may benefit from taking specific accounting courses from domestic universities. With the growth in online programs, domestic accounting programs may benefit from designing courses targeted toward international candidates.</p> <hd id="AN0184710972-23">Disclosure statement</hd> <p>No potential conflict of interest was reported by the author(s).</p> <hd id="AN0184710972-24">Data availability</hd> <p>This study uses data that is publicly available from the sources noted in the text.</p> <hd id="AN0184710972-25">Appendix A. Variable Definitions</hd> <p></p> <p> <ephtml> <table><tbody><tr><td><bold><italic>CPA Candidates:</italic></bold></td></tr><tr><td><italic>ln_INTLCANDIDATES</italic></td><td>=</td><td>Natural log of the number of international candidates taking a section of the CPA exam for the first time during the year in a jurisdiction; (NASBA)</td></tr><tr><td><italic>ln_DOMCANDIDATES</italic></td><td>=</td><td>Natural log of the number of domestic candidates taking a section of the CPA exam for the first time during the year in a jurisdiction; (NASBA)</td></tr><tr><td><bold><italic>CPA examination Pass Rates and Scores:</italic></bold></td></tr><tr><td><italic>ln_INTLSCORE</italic></td><td>=</td><td>Natural log of the average numerical score for an international candidate on a section of the CPA exam for a first-time unique testing event (scale of 100); (NASBA)</td></tr><tr><td><italic>ln_DOMSCORE</italic></td><td>=</td><td>Natural log of the average numerical score for a domestic candidate on a section of the CPA exam for a first-time unique testing event (scale of 100); (NASBA)</td></tr><tr><td><italic>ln_INTLPASS</italic></td><td>=</td><td>Natural log of percent of international candidates passing a section of the CPA exam for a first-time unique testing event (scale of 0 to 1); (NASBA)</td></tr><tr><td><italic>ln_DOMPASS</italic></td><td>=</td><td>Natural log of percent of domestic candidates passing a section of the CPA exam for a first-time unique testing event (scale of 0 to 1); (NASBA)</td></tr><tr><td><bold><italic>Other Variables:</italic></bold></td></tr><tr><td><italic>CITIZEN</italic></td><td>=</td><td>Jurisdiction required the candidate to be a U.S. citizen prior to sitting for the CPA exam; (This Way to CPA [2012,2019] and NASBA) (Appendix B)</td></tr><tr><td><italic>RESIDENT</italic></td><td>=</td><td>Jurisdiction required the candidate to have residency prior to sitting for the CPA exam; (This Way to CPA [2012,2019] and NASBA) (Appendix B)</td></tr><tr><td><italic>SSN</italic></td><td>=</td><td>Jurisdiction required the candidate to have a Social Security number to obtain licensure; (This Way to CPA [2012,2019] and NASBA) (Appendix B)</td></tr><tr><td><italic>120HOUR</italic></td><td>=</td><td>1 if the jurisdiction required candidates to have 120 h to sit for the CPA exam in the respective year; 0 otherwise; (Appendix B)</td></tr><tr><td><italic>150HOUR</italic></td><td>=</td><td>1 if the jurisdiction required candidates to have 150 h to sit for the CPA exam in the respective year; 0 otherwise; (Appendix B)</td></tr><tr><td><italic>PROVISIONAL</italic></td><td>=</td><td>1 if the jurisdiction allowed candidates to provisionally sit for the CPA exam if they are within 1 year of meeting the 150 h required for certification in the respective year; 0 otherwise; (Appendix B)</td></tr><tr><td><italic>ln_ACCHRS</italic></td><td>=</td><td>Natural log of the minimum number of accounting hours a jurisdiction requires to take the CPA exam; (This Way to CPA [2012,2019] and NASBA)</td></tr><tr><td><italic>ln_INTLAGE</italic></td><td>=</td><td>Natural log of the average age of international candidates; (NASBA)</td></tr><tr><td><italic>ln_DOMAGE</italic></td><td>=</td><td>Natural log of the average age of domestic candidates; (NASBA)</td></tr><tr><td><italic>ln_ACCJOB</italic></td><td>=</td><td>Natural Log of the yearly number of accounting jobs within a jurisdiction based on data from the U.S. Bureau of Labor Statistics.</td></tr></tbody></table> </ephtml> </p> <p>12 Sources: The data source for CPA examination pass rates, CPA examination scores, number of candidates, age, and candidate residence is the annual editions of the <emph>NASBA Candidate Performance on the Uniform CPA Examination</emph> (NASBA 2013 to 2019). <emph>ACCHRS</emph>, <emph>CITIZEN</emph>, <emph>RESIDENT</emph>, and <emph>SSN</emph> data are from NASBA and the AICPA's This Way to CPA.</p> <hd id="AN0184710972-26">Appendix B. Jurisdiction Classifications to take the CPA Exam as of 20191,2</hd> <p></p> <p> <ephtml> <table><thead valign="bottom"><tr><td>Jurisdiction</td><td>Educational requirement classification</td><td>Accounting hours required</td><td>Citizen</td><td>Resident</td><td>SSN</td></tr></thead><tbody><tr><td>Alabama</td><td char=".">120</td><td char=".">30</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Alaska</td><td char=".">120</td><td char=".">15</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Arizona</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Arkansas</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>California</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Colorado</td><td char=".">120</td><td char=".">27</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Connecticut</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Delaware</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>District of Columbia</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Florida</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Georgia</td><td char=".">120</td><td char=".">26</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Guam</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Hawaii</td><td char=".">120</td><td char=".">24</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Idaho</td><td char=".">150</td><td char=".">20</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Illinois</td><td char=".">150</td><td char=".">30</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Indiana</td><td char=".">150</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Iowa</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Kansas</td><td char=".">150</td><td char=".">30</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Kentucky</td><td char=".">120</td><td char=".">27</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Louisiana</td><td char=".">120</td><td char=".">30</td><td>Yes</td><td>Yes</td><td>Yes</td></tr><tr><td>Maine</td><td char=".">120</td><td char=".">15</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Maryland</td><td char=".">120</td><td char=".">27</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Massachusetts</td><td char=".">120</td><td char=".">21</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Michigan</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Minnesota</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Mississippi</td><td char=".">120</td><td char=".">24</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Missouri</td><td>Provisional</td><td char=".">33</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Montana</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Nebraska</td><td char=".">150</td><td char=".">36</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Nevada</td><td char=".">120</td><td char=".">36</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>New Hampshire</td><td char=".">120</td><td char=".">12</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>New Jersey</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>New Mexico</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>No</td></tr><tr><td>New York</td><td char=".">120</td><td char=".">21</td><td>No</td><td>No</td><td>No</td></tr><tr><td>North Carolina</td><td char=".">120</td><td char=".">30</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>North Dakota</td><td>Provisional</td><td char=".">24</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Ohio</td><td char=".">150</td><td char=".">30</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Oklahoma</td><td char=".">150</td><td char=".">36</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Oregon</td><td char=".">150</td><td char=".">30</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Pennsylvania</td><td char=".">120</td><td char=".">24</td><td>No</td><td>Yes</td><td>No</td></tr><tr><td>Puerto Rico</td><td>Provisional</td><td char=".">32</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Rhode Island</td><td char=".">120</td><td char=".">21</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>South Carolina</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>South Dakota</td><td>Provisional</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Tennessee</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Texas</td><td char=".">150</td><td char=".">36</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Utah</td><td>Provisional</td><td char=".">39</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Vermont</td><td char=".">120</td><td char=".">21</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Virginia</td><td char=".">120</td><td char=".">30</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>Washington</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>Yes</td></tr><tr><td>West Virginia</td><td char=".">120</td><td char=".">33</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>Wisconsin</td><td char=".">120</td><td char=".">24</td><td>No</td><td>No</td><td>No</td></tr><tr><td>Wyoming</td><td char=".">150</td><td char=".">30</td><td>No</td><td>Yes</td><td>Yes</td></tr></tbody></table> </ephtml> </p> <ulist> <item>13 Following Soileau et al. ([<reflink idref="bib14" id="ref83">14</reflink>]) we examined summary documents created by the AICPA and the NASBA to determine sitting classifications; if necessary, we contacted the Board of Accountancy, examined Board websites, and/or utilized LexisNexis. Based on our examination, the following jurisdictions changed their educational requirements during the period 2013-2019: Alabama (2016), Arkansas (2013), Louisiana (2016), Mississippi (2016), Montana (2016), Nevada (2018), Tennessee (2017), and Wyoming (2017).</item> <item>14 We examined the AICPA's website <emph>This Way to CPA</emph> for citizenship requirements, residency requirements, and SSN requirements for each jurisdiction. Source: http://www.thiswaytocpa.com/licensure/state-requirements</item> </ulist> <ref id="AN0184710972-27"> <title> Notes </title> <blist> <bibl id="bib1" idref="ref8" type="bt">1</bibl> <bibtext> NASBA reports the number of candidates in aggregate, therefore, it is not possible to identify individual characteristics of a candidate. We use the number of candidates sitting for the first-time to eliminate counting the same candidate multiple times due to retaking a section. If a candidate sits for all four sections in one year (e.g., 2018) then that candidate will count as one candidate for the total number of candidates in 2018. If a candidate sits for a section for the first-time in one year (e.g., 2018) and sits for another section for the first-time in a different year (e.g., 2019), then the candidate will be counted towards the total number of candidates in 2018 and the total number of candidates in 2019. Candidates can have one score from each section; therefore, a candidate can have up to four scores in the sample.</bibtext> </blist> <blist> <bibl id="bib2" idref="ref11" type="bt">2</bibl> <bibtext> AICPA's <emph>This Way to CPA,</emph> created in 2010 to provide information to candidates for the CPA exam, has information for each jurisdiction for the three categories of interest: (1) citizenship requirement, (2) residency requirement, and (3) social security number requirement.<emph>(</emph><ulink href="http://www.thiswaytocpa.com/licensure/state-requirements">http://www.thiswaytocpa.com/licensure/state-requirements</ulink>). We used <emph>The Internet Wayback Machine</emph> (<ulink href="http://www.archive.org">http://www.archive.org</ulink>) to examine archives of <emph>This Way to CPA</emph>, and we noted annual changes in the AICPA's classification. Appendix B has a summary of the four categories by jurisdiction.</bibtext> </blist> </ref> <ref id="AN0184710972-28"> <title> References </title> <blist> <bibtext> Albrecht, W. S., & Sack, R. J. (2000). Accounting education: Charting the course through a perilous future. Accounting Education Series, Volume 16. https://www2.aaahq.org/pubs/AESv16/toc.htm.</bibtext> </blist> <blist> <bibtext> Allen, A., & Woodland, A. (2006). The 150-hour requirement and the number of CPA exam candidates, pass rates, and the number passing. Issues in Accounting Education, 21 (3), 173 – 193. https://doi.org/10.2308/iace.2006.21.3.173</bibtext> </blist> <blist> <bibl id="bib3" idref="ref18" type="bt">3</bibl> <bibtext> American Institute of Certified Public Accountants (AICPA). (2020). CPA examination (international applicants): Become a licensed U.S. CPA. https://<ulink href="http://www.aicpa.org/becomeacpa/cpaexam/forcandidates/internationalapplicants.html">www.aicpa.org/becomeacpa/cpaexam/forcandidates/internationalapplicants.html</ulink>.</bibtext> </blist> <blist> <bibl id="bib4" idref="ref1" type="bt">4</bibl> <bibtext> American Institute of Certified Public Accountants (AICPA). (2021a). AICPA 2021 Trends Report. https://<ulink href="http://www.aicpa.org/professional-insights/download/2021-trends-report">www.aicpa.org/professional-insights/download/2021-trends-report</ulink>.</bibtext> </blist> <blist> <bibl id="bib5" type="bt">5</bibl> <bibtext> American Institute of Certified Public Accountants (AICPA). (2021b). This way to CPA: State & territory requirements. https://<ulink href="http://www.thiswaytocpa.com/licensure/state-requirements/">www.thiswaytocpa.com/licensure/state-requirements/</ulink>.</bibtext> </blist> <blist> <bibl id="bib6" idref="ref9" type="bt">6</bibl> <bibtext> Barrios, J. (2022). Occupational licensing and accountant quality: Evidence from the 150-hour rule. Journal of Accounting Research, 60 (1), 3 – 43. https://doi.org/10.1111/1475-679X.12408</bibtext> </blist> <blist> <bibl id="bib7" idref="ref7" type="bt">7</bibl> <bibtext> Bernard, V. L. (1996). The demand for 150 hours: Let the market decide. Issues in Accounting Education, 11 (1), 207 – 209.</bibtext> </blist> <blist> <bibl id="bib8" idref="ref10" type="bt">8</bibl> <bibtext> Carpenter, C., & Stephenson, E. (2006). The 150-hour rule as a barrier to entering public accountancy. Journal of Labor Research, 27 (1), 115 – 126. https://doi.org/10.1007/s12122-006-1013-0</bibtext> </blist> <blist> <bibl id="bib9" idref="ref13" type="bt">9</bibl> <bibtext> Gaynor, G., Korb, P., Gerlowski, D., & Zhang, T. (2019). An alternate state in mind: The effect of CPA exam credit-hour requirements and economic competitiveness on state-level exam candidate pools and pass rates. Accounting Education, 28 (6), 621 – 641. https://doi.org/10.1080/09639284.2019.1670685</bibtext> </blist> <blist> <bibtext> Gramling, L. J., & Rosman, A. J. (2009). The ongoing debate about the impact of the 150-hour education requirement on the supply of certified public accountants. Issues in Accounting Education, 24 (4), 465 – 479. https://doi.org/10.2308/iace.2009.24.4.465</bibtext> </blist> <blist> <bibtext> Howard, R., Anjo, K., & Gleim, I. (2001). Global demand for the CPA exam. The CPA Journal, 71 (12), 28. <ulink href="http://archives.cpajournal.com/2001/1200/features/f122801.htm">http://archives.cpajournal.com/2001/1200/features/f122801.htm</ulink>.</bibtext> </blist> <blist> <bibtext> IPasstheCPAExam.com. (n.d). Best states to apply for CPA international students + candidates. https://ipassthecpaexam.com/cpa-international-students/.</bibtext> </blist> <blist> <bibtext> National Association of State Boards of Accountancy (NASBA). (2013–2019). Candidate performance on the uniform CPA examination. NASBA.</bibtext> </blist> <blist> <bibtext> Soileau, J., Usrey, S., & Webb, T. (2017). Sitting requirements and the CPA exam. Issues in Accounting Education, 32 (1), 1 – 15. https://doi.org/10.2308/iace-51330</bibtext> </blist> <blist> <bibtext> Strickland, B. (2023). NASBA upholds 150-hour education requirement for CPA licensure. Journal of Accountancy. https://<ulink href="http://www.journalofaccountancy.com/news/2023/feb/nasba-upholds-150-hour-education-requirement-for-cpa-licensure.html">www.journalofaccountancy.com/news/2023/feb/nasba-upholds-150-hour-education-requirement-for-cpa-licensure.html</ulink>.</bibtext> </blist> <blist> <bibtext> Uplift Professionals. (2022). CPA US Course Requirement for US State Boards. https://<ulink href="http://www.upliftprofessionals.in/blog/2022/03/cpa-us-course-requirements-uplift-professionals/">www.upliftprofessionals.in/blog/2022/03/cpa-us-course-requirements-uplift-professionals/</ulink> March 5, 2022.</bibtext> </blist> <blist> <bibtext> Van Wyhe, G. (2007). A history of U.S. higher education in accounting, part II: Reforming accounting within the academy. Issues in Accounting Education, 22 (3), 481 – 501. https://doi.org/10.2308/iace.2007.22.3.481</bibtext> </blist> <blist> <bibtext> Wedul, L. (2023). Broadening the path to CPA licensure. MNCPA Perspectives. https://<ulink href="http://www.mncpa.org/resources/publications/perspectives/january-2023/broadening-the-path-to-cpa-licensure/">www.mncpa.org/resources/publications/perspectives/january-2023/broadening-the-path-to-cpa-licensure/</ulink>.</bibtext> </blist> </ref> <aug> <p>By Jared S. Soileau; Gregory P. Tapis; Spencer C. Usrey and Thomas Z. Webb</p> <p>Reported by Author; Author; Author; Author</p> </aug> <nolink nlid="nl1" bibid="bib17" firstref="ref2"></nolink> <nolink nlid="nl2" bibid="bib13" firstref="ref5"></nolink> <nolink nlid="nl3" bibid="bib14" firstref="ref12"></nolink> <nolink nlid="nl4" bibid="bib16" firstref="ref26"></nolink> <nolink nlid="nl5" bibid="bib179" firstref="ref49"></nolink> <nolink nlid="nl6" bibid="bib18" firstref="ref81"></nolink> <nolink nlid="nl7" bibid="bib15" firstref="ref82"></nolink>
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  Data: CPA Exam Sitting Requirements and Jurisdiction Choice: Where Do International Candidates Sit for the Exam?
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  Data: <searchLink fieldCode="AR" term="%22Jared+S%2E+Soileau%22">Jared S. Soileau</searchLink><br /><searchLink fieldCode="AR" term="%22Gregory+P%2E+Tapis%22">Gregory P. Tapis</searchLink><br /><searchLink fieldCode="AR" term="%22Spencer+C%2E+Usrey%22">Spencer C. Usrey</searchLink> (ORCID <externalLink term="https://orcid.org/0000-0001-6841-3782">0000-0001-6841-3782</externalLink>)<br /><searchLink fieldCode="AR" term="%22Thomas+Z%2E+Webb%22">Thomas Z. Webb</searchLink>
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  Data: <searchLink fieldCode="SO" term="%22Accounting+Education%22"><i>Accounting Education</i></searchLink>. 2025 34(1):87-107.
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  Data: Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
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  Data: <searchLink fieldCode="DE" term="%22Accounting%22">Accounting</searchLink><br /><searchLink fieldCode="DE" term="%22Foreign+Students%22">Foreign Students</searchLink><br /><searchLink fieldCode="DE" term="%22Licensing+Examinations+%28Professions%29%22">Licensing Examinations (Professions)</searchLink><br /><searchLink fieldCode="DE" term="%22Certification%22">Certification</searchLink><br /><searchLink fieldCode="DE" term="%22Testing%22">Testing</searchLink><br /><searchLink fieldCode="DE" term="%22Comparative+Testing%22">Comparative Testing</searchLink><br /><searchLink fieldCode="DE" term="%22Academic+Standards%22">Academic Standards</searchLink><br /><searchLink fieldCode="DE" term="%22Degree+Requirements%22">Degree Requirements</searchLink><br /><searchLink fieldCode="DE" term="%22Testing+Programs%22">Testing Programs</searchLink><br /><searchLink fieldCode="DE" term="%22State+Licensing+Boards%22">State Licensing Boards</searchLink><br /><searchLink fieldCode="DE" term="%22Achievement+Rating%22">Achievement Rating</searchLink><br /><searchLink fieldCode="DE" term="%22Site+Selection%22">Site Selection</searchLink>
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  Data: 10.1080/09639284.2023.2289444
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  Data: While the CPA exam is uniform for all jurisdictions, individual jurisdictions are allowed to set the requirements to sit for the exam. These requirements vary by jurisdiction, with some being more restrictive than others. We analyze the decision process of international candidates to proxy for candidates that can choose jurisdictions with less restrictive requirements. Using CPA exam data, we find that international candidates choose to sit in jurisdictions without citizenship or Social Security requirements and in jurisdictions that only require 120 credit hours to sit. However, we find that international candidate performance is higher in jurisdictions that require 150 credit hours to sit. Our results suggest there are tradeoffs between providing easier access to the CPA exam and using higher education levels to encourage greater mastery of tested topics.
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