Are Accountants Made or Born? An Analysis of Self-Selection into the Accounting Major and Performance in Accounting Courses and on the CPA Exam

Abstract

ABSTRACT This study examines whether college students self-select into the accounting major based on accounting decision-making ability that they bring with them to their first accounting course and whether such ability is associated with performance in accounting coursework and on the CPA Examination. We analyzed the performance on three financial and managerial accounting-related tasks of 1,110 students prior to taking a principles of financial accounting course for the first time. We found that students who intend to be accounting majors performed no better on these tasks than other first-time accounting students. However, we found a strong correlation between performance on these tasks and ultimate performance in accounting courses and on the CPA Examination after controlling for measures of intelligence, academic performance, task effort, and demographic factors. Thus, we conclude that high-performing accounting majors start their college education with a greater ability to perform at least some accounting-related tasks, but that those students do not self-select into the accounting major based on these abilities. In a follow-up study upon completion of their accounting degree, we found that students with lower incoming ability to complete these tasks were not able to catch up with their higher-ability accounting major peers. In addition, they did not improve performance on the accounting-related tasks any more than a lower-ability non-accounting major despite having earned an accounting degree. Data Availability: Data are available from the authors upon request.