CPA exam sitting requirements and jurisdiction choice: where do international candidates sit for the exam?

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.

KEYWORDS:

• International candidates
• CPA examination
• pass rates
• 150-hour requirement
• 120-hour requirement

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability

This study uses data that is publicly available from the sources noted in the text.

Notes

1 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.

2 AICPA’s This Way to CPA, 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. (www.thiswaytocpa.com/licensure/state-requirements). We used The Internet Wayback Machine (www.archive.org) to examine archives of This Way to CPA, and we noted annual changes in the AICPA’s classification. Appendix B has a summary of the four categories by jurisdiction.