Graduates of Online Accounting Programs Have Lower CPA Exam Pass Rates

I received a response from a state senator's office, and they deferred to the Board of Public Accountancy's explanation.

This is what I wrote in response.

Thank you for your response. Mr. XXX showed me a study that found that students at less-selective schools have higher CPA pass rates when they attend class on campus. The study didn't do a direct comparison between on-campus and online students within the same school, and it didn't include highly-selective schools. So, the generalizability of the results is quite limited. It should also be noted that, in 2017, Texas was not in the Top 10 states with the highest CPA exam pass rates.

 

A staff member from my state senator's office said that there are several professors on the Board of Public Accountancy. The way she mentioned it made it seem as if she was implying that they were trying to protect their profession. She said that she would bring this up with their legislative staff.

 

I have noticed generally that in "fly over" country and generally less-desired places to practice law, the Bar passage rates are higher (e.g., Kansas). In more desirable places to practice law, the Bar passage rates are lower (e.g., California, New York). States are more able to manipulate this because half of the Bar exam is state-specific, and they can make it as tough as they want--or make the passage standards as high as they want. Of course they can also manipulate this through not allowing reciprocity or making other standards higher or lower. What a coincidence that the states where they'd have more of an incentive to keep people out just happen to find ways to keep them out, and the states where they have more of an incentive to let them in just happen to find ways to let them in--and yet they'll all come up with all kinds of "pay no attention to the man behind the curtain" rationales for their standards. They never, ever seem to just say "we need more lawyers" or "we want less lawyers".

It might be harder for accounting boards to manipulate this, because the CPA is standardized, but of course they find their ways by making the standards higher in other ways, such as the Texas Board not allowing the fully online degrees.

It's hilarious, because the University of Illinois (ranked #1 in the country for accounting research output, and ranked #2 in the country overall, right behind UT-Austin) and UNC (top-10 accounting program) both offer 100% online accounting degrees. Does the Texas Board thing THEY"RE not rigorous enough? That's a laugher. So a person who graduates summa from Harvard B-school, then heads over to #2-ranked Illinois for a masters in accountancy is not good enough to sit for the Texas CPA. I don't know why they just don't be honest with themselves--but I guess that's too much to ask of accountants (written with irony, the profession is supposed to be all about open disclosure and honesty).

 

There is an exception. The Board might accept non-traditionally delivered courses if the school can prove that the non-traditional courses have the same outcomes as the on-campus courses. I don't know how many colleges have done or are willing to do an institutional review.

What's funny is that Thomas Edison State University consistently has high CPA exam pass rates and beats out most schools in Texas.

https://www.accountingdegreetoday.com/schools/new-jersey/

 

Probably because they have a lot of self-starting adult learners (like most people on this forum) who can run circles round the average teenage or twenty-something kid studying accounting.

 

One more thing: I don't know what other exceptions they provide, or what they mean by "outcomes" (probably CPA pass rates), but let's assume that the University of North Carolina, one of the elite accounting programs in the country, has first-time CPA pass rates for all four sections of 65% for traditional delivery, 60% for online delivery (made-up numbers, I have no idea, just for the sake of argument). Then let's suppose that Southeastern Northwestern State is one of the worst accounting programs in the country, and they have first-time CPA pass rates for all four sections of 5% for traditional delivery, 10% for online delivery (and that this is all documented and can be presented to the Texas State Board).

Does the online grad of SENW get to sit for the Texas CPA exam, while the UNC grad doesn't? Just wondering, and too lazy/busy to look into their policies to see.

 

That's my guess. A lot of TESU's accounting students probably already work in accounting-related positions. I have a coworker who is attending WGU, and prior to coming to the government, she was in banking for a long time. I had to tell her that Texas likely won't let her become a CPA unless she takes some night courses.

 

I wrote test bank questions for WGU's accounting curriculum years ago. Your friend may have taken one of my (frightfully boring) questions in a class. Small world!

 

I don't know, but I looked up last year's pass rates, and many Texas universities had pass rates well below 50%. I wonder if one could argue that, even though TESU is practically 100% online, that their pass rates are higher than most private and public universities in Texas. Otherwise, TESU has no face-to-face courses to use as a comparison.

WGU, another 100% online school, had the highest 2015 CPA exam pass rate in Utah among test takers with advanced degrees.

https://www.mastersinaccounting.info/utah/

 

You kidding me? BYU is arguably the best accounting program in the country--or at the very least right on UT-Austin's tail. For WGU to beat them in any metric is remarkable. Texas can have whatever policy they want, and people whose brains function and who are able to think a little can call it out for the horse puckey that it is.

 

The CPA exam is nasty tough. I'm not a CPA, but plan to take it after I finish some more grad accounting work. It's tough enough that to my knowledge, only one of my colleagues (virtually all of whom have PhDs from major universities, many of whom have Big 4 experience) passed all four sections first time through. My father-in-law, who taught accounting almost 40 years in higher ed, couldn't pass all four first time, and he made full prof. It's killer hard for anyone, I can't see Texas' rationale for locking anyone out who has the accounting degree and/or sufficient credit hours. Are they concerned that test-takers who aren't ready will have their feelings hurt when they don't pass? Are they concerned about unqualified people becoming CPAs? Of course, that would be ridiculous, because the ability to pass the thing at all demonstrates pretty good intellectual chops. What are they concerned about? Would they feel bad for collecting people's exam and registration fees when they're not likely to pass? About 5 out of 6 don't pass all four sections first time anyway, so it can't be that. Of course not. It's either about some old guard people who stopped learning anything new around 1999 with some creaky old and discredited notions about online education, or it's about pure self-interest, limiting those coming into the profession, or both. I can think of no other options.

 

On a related note, I confirmed with the Board of Legal Examiners that distance education degrees do not qualify someone to sit for the Bar. I think they'll make an exception for the hybrid, ABA-accredited J.D. programs, but the rules specifically say that distance education, foreign law degrees and distance education, American LLMs (LLM is required for foreign applicants who weren't trained under common law) are not acceptable.

Meanwhile, Texas will let you test out of a nursing degree at Excelsior, earn a psychology doctorate online, a master's in counseling or social work online, a degree in occupational or physical therapy online, a master's in physician assistant studies online, etc. Granted, almost all of these programs require practicums, internships, and/or clinical rotations, but the Excelsior program doesn't. I guess they think the clinical rotations from an LVN/LPN or paramedic program are enough.