Course Grades or Faculty Intuition: Which is a Better Predictor of Student Success on Professional Accounting Exams?

Abstract

The purpose of this research is to determine whether accounting faculty’s intuition is a better predictor of a student’s success on professional accounting exams than a student’s GPA. In addition to GPA and intuition, this research investigates the predictive ability of four other factors: 1) co-op experience; 2) case competition participation; 3) firm office size; and 4) professional exam preparation programs. A novel dataset is hand collected based on undergraduate students who graduated from Lakehead University and pursued the Chartered Accountant designation. A logistic model is estimated that correctly predicts 81.6% of all student success (and failure) cases. The results reveal that GPA is a better predictor than faculty intuition, although faculty intuition does have some predictive ability. Specifically, the GPA of accounting-related courses is shown to be better predictors of success than other non-accounting business courses. Additional analysis reveals that the GPA from courses in financial accounting, management accounting, auditing, and taxation are all individually predictive of student success. In addition, students who participate in case competitions performed better while co-op experience, firm office size, and preparation programs are shown to be unrelated to student success prediction. Overall, these results are significant to potential employers of professional accounting students and to professional accounting bodies who must determine which, if any, undergraduate course shold significance in terms of professional accounting programs. This information will not only help in establishing pre-requisite requirements for professional exams but also determine whether required competencies under each course are contributing to student success. This paper is especially timely in Canada as the entrance requirements to the new Chartered Professional Accountant (CPA) are being developed.

Keywords: Accounting education; professional accounting exams; GPA and student success

JEL Classification: A22