Abstract
In this paper we consider whether experience gained on the job through an internship results in knowledge that can help with passing the CPA exam. It would seem that a candidate for the CPA exam would be better prepared if they had the combination of education and practical experience. We examine the CPA exam performance of 72 graduate students that completed a public accounting internship prior to sitting for the CPA exam compared to 98 graduate students that did not complete an internship in public accounting. Our analysis indicates that on average students completing internships score higher on all parts of the CPA exam. In addition, on average, students completing internships had a higher overall pass rate for each section of the exam, with the pass rate for the Regulation (REG) section being significantly higher for students that have completed internships; we also find that on average students with internships pass 2 sections of the exam prior to graduation as compared to 1.69 for students that have not completed internships.
Highlights
T he CPA exam gap refers to the difference between those who graduated with accounting degrees and those that go on to sit for and pass the CPA Exam
Our analysis indicates that on average students completing internships score higher on all parts of the CPA exam
Our analysis indicates that on average students completing internships score higher on all parts of the CPA exam, but the difference in scores are only statistically significant for the Business Environment and Concepts (BEC) section
Summary
Given that most students prefer application- as opposed to concept-based learning, internship experience should be invaluable in preparing students to successfully complete the CPA exam. Our analysis indicates that on average students completing internships score higher on all parts of the CPA exam, but the difference in scores are only statistically significant for the Business Environment and Concepts (BEC) section. Students with spring internships obtain the highest scores on the Financial Accounting and Reporting (FAR) and Regulation (REG) sections as compared to students completing fall internships scoring highest on the Audit and Attestation (AUD) and Business and Economic Concepts (BEC) sections.
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