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Factors
The factors influencing influencing
accounting school students’ career intention
career intention to become
5
a Certified Public Accountant
in Japan
Satoshi Sugahara
Faculty of Commerce Sciences, Hiroshima Shudo University, Hiroshima, Japan
Kazuo Hiramatsu
School of Business Administration, Kwansei Gakuin University,
Nishinomiya-shi, Japan, and
Greg Boland
School of Business and Government, University of Canberra,
Canberra, Australia
Abstract
Purpose – The purpose of this paper is to investigate the factors influencing career intentions toward
becoming a Certified Public Accountant (CPA) by students who are studying at the accounting schools
in Japan. This paper focused on students’ work experience, prior major/s at their undergraduate level,
gender, attitude toward the opportunity cost of becoming a CPA and their perceptions of the CPA
profession.
Design/methodology/approach – The sample comprised students studying at 13 accounting
schools in Japan. A questionnaire was given to these students in order to empirically examine the
relationship between these influential factors and their career intention, with particular reference to
those who intended to pursue a CPA career. Those studying in these accounting schools generally
consist of two type of students; those who want to become a CPA and those who merely want to brush
up on their accounting skills and do not wish to sit the CPA entrance exams. A total of 349 effective
responses were analysed.
Findings – Findings indicate that students who have work experience and major in disciplines
other than accounting or business are more reluctant to become a CPA. This is in direct contrast to one
of the objectives for the CPA reform scheme in Japan, which is to extend the diversity of CPA
candidature.
Originality/value – This paper is the first study undertaken in Japan to successfully provide a new
dimension on the factors that influence career intention of students aspiring to become a CPA.
Keywords Accounting, Perception, Accounting education, Japan
Paper type Research paper
Introduction
Since the beginning of the twenty-first century, Japan has experienced serious Asian Review of Accounting
Vol. 17 No. 1, 2009
accounting irregularities similar to those in other countries such as Enron and pp. 5-22
WorldCom in the USA and HIH insurance in Australia (Pontell and Geis, 2007; Miura, q Emerald Group Publishing Limited
1321-7348
2006). For instance, Livedoor Co., Ltd, which was a gigantic Internet service provider DOI 10.1108/13217340910956487
ARA based in Tokyo, had once achieved “Enronesque” successes but suddenly collapsed in
17,1 a maze of stock splits, stock swaps and other falsified accounting incidences (Pontell
and Geis, 2007). Following such accounting failures in Japan, drastic reforms within the
Certified Public Accountants’ profession (CPA) have been undertaken to ensure quality
control and to reinforce the effectiveness of auditing practices. To help achieve these
goals, an action reform plan, driven by the Financial Service Agency (FSA) of Japan,
6 focused on increasing the annual recruitment of CPA examinees. It was argued that a
fair and competitive labor market would force the CPA to engage itself in
self-improvement, which in turn would lead to more transparent and effective auditing
practices. For this to occur, the FSA amended the CPA entrance examination scheme in
2003 to make it more “examinee-friendly” with particular emphasis on making it more
attractive to people with little or no accounting background. With such reform, the
FSA expects the number of CPAs to more than double by 2018 (Financial System
Council, 2002). However, official figures released so far have shown that the number of
CPA examinees have in fact declined over the three years under investigation from
16,310 in 2004 to 15,322 in 2005 with only a slight improvement to 16,210 in 2006 (FSA,
www.fsa.go.jp).
It was believed that such a decline was partly due to the fact that the CPA
profession in Japan had previously required candidates to pass very competitive exams
based on technical knowledge requiring mechanical memorization (Financial System
Council, 2002). This previous examination system is now considered inadequate in the
selection process of suitable CPA professionals. It was also believed that the negative
image toward the profession only attracted those students who did not possess the
diverse competencies required in today’s rapidly changing financial environment
(Financial System Council, 2002).
In response to these criticisms, new accounting educational institutes known as
Accounting Schools were established in Japan. These professional graduate schools
aim to attract and educate as many CPA candidates as possible from a wide variety of
backgrounds and personalities and who have developed certain levels of well-balanced
generic competencies (Financial System Council, 2002). This reform was introduced in
conjunction with the amended CPAs Law in 2003 and reflected the entry requirements
prescribed by the International Education Standards (IES) (Financial System Council,
2003). The International Federation of Accountants (IFAC) has developed and
published IESs since 2003. The standards prescribe the education required in pre –
and post – qualification stages, professional skills, attitude and ethics, and continuing
professional development of IFAC members to ensure the output of highly qualified
global professionals (IFAC, 2003). The Japanese finance authority carefully considered
and incorporated the IES when establishing the new Accounting Schools to assist with
the global convergence in accounting education (Financial System Council, 2003).
It remains debatable whether such a radical reform has successfully achieved its
desired outcomes and the fact that there have been no previous studies examining the
effectiveness of this revised framework has fueled the debate. Our research seeks
answers on whether these accounting schools have actually succeeded in recruiting
students from diverse backgrounds and whether these students possess the
personalities sought by the profession. In preliminary investigations it was found
that there are two types of students enrolling in these schools. These are students who
seek professional accreditation by becoming a CPA (CPA students) and those who do
not wish to become a CPA but simply want to brush up on their accounting skills Factors
(non-CPA students). Accordingly, this study attempts to investigate the reasons why influencing
students are attracted to these accounting schools and the factors that influence their
career intentions. career intention
The CPA reforms in Japan will also have a great impact and present challenges to
neighbouring countries in Asia due to the unique process that occurred in Japan
compared to other Asian countries. The reforms in Hong Kong and Singapore for 7
example were based on directly replacing their current systems with the IES. In Japan
the IES were simply incorporated into the CPA structure rather than one of
replacement. Other Asian countries such as China and Korea are still considering the
most effective way of introducing the IES proposals (Joo et al., 2007). This current
study will provide assistance to these countries when developing their own accounting
education systems and professional CPA structure.
The next section presents a brief overview of the CPA scheme in Japan. The
following two sections review literature, develop hypotheses and outline the research
methods used in our empirical analyses. Statistical analyses are then presented to test
our research hypotheses. The final section summarises our findings and outlines some
important limitations of this study.
Research methodology
The sample
Data for our research was collected via a questionnaire distributed to students who
were studying at 13 of the 17 accounting schools in Japan. Among these schools, two
are affiliated with large northern universities managed by public organizations, seven
with large private universities in eastern Japan with the remaining four in western
Japan being managed by large public universities. Questionnaires were administered
in the classrooms at the end of first semester (July) and during the first week of second
semester (October) of 2006. As previously mentioned there were basically two groups
of students in these accounting schools. One group was preparing for the CPA exam in
order to become a CPA while the second group was seeking additional professional
knowledge to fine-tune their practical skills to work in areas other than the CPA
profession. Our study focused on possible links between a student’s CPA career
intention and factors influencing this decision. The total number of students enrolled in
these accounting schools was 412. Questionnaires (366) were distributed in the 13
accounting schools to students on the day the survey was conducted. After extracting
unusable questionnaires, 349 responses (84.71 percent effective response rate) were
analysed. The unusable responses were eliminated mainly due to incompletion.
Data collection
Table I provides descriptive information for our sample. This table is also categorized
according to students’ career aspirations. Of the total students, 214 intended to become
a CPA (61.31 percent) while the remaining 135 students sought a career other than a
CPA in fields such as finance, business or economics. The average age of respondents
was 28.86 years old reflecting the fact that many students have been in the workforce
for a number of years since completing their undergraduate degree. The surveys were
administered by academics who were not responsible for the course delivery and data
collection was anonymous (no names or ID required).
The questionnaire was divided into three sections. The first section sought
responses on demographic questions such as gender, age, work experience, previous
major at their undergraduate level, academic year, and career intention. The second
section sought responses to 36 queries on a five-point scale using opposing adjectives
based on their perceptions of the CPA (Table II). This method was originally developed
ARA
CPA students Non-CPA students Total
17,1
Age Mean age 27.54 30.92 28.86
Max 65 55 65
Min 21 21 21
Available data 204 125 329
12 N/A 10 10 20
Total 214 135 349
Work experience No experience 124 42 166
In the past 67 31 98
At present 22 52 74
N/A 1 10 11
Total 214 135 349
Previous major Accounting 68 19 87
Other business 87 50 137
Undecided 12 15 27
Others 47 41 88
N/A 0 10 10
Total 214 135 349
Academic yeara First year 132 82 214
Second year 73 35 108
N/A 9 18 27
Total 214 135 349
Gender Male 154 95 249
Female 60 30 90
N/A 0 10 10
Total 214 135 349
Table I. Notes: N/A, non response or not available from students. aFirst year students of the accounting
Descriptive information schools, second year students of the accounting schools
Interpretation
First, the results of our x 2 test reported a significantly lower proportion of CPA students
work at present compared to the other two student groups of those with no work experience
and those who had previously worked. In contrast, the number of non-CPA students who
work at present was relatively larger than those of the other two categories. These findings
were consistent with the results of our logistic regression analysis, where students’ work
experiences were significantly but negatively related to their career intention. This
suggests that students who presently work were more reluctant to become a CPA.
Compared to the prior study by Auyeung and Sands (1997), this finding represented a
contradiction. This prior study discovered work experience as being a positive indicator for
a career choice in accounting among respondent students, but our research found that
although job experience is a strong indicator, it was nonetheless a negative predictor of
career intention for CPA students studying at Accounting Schools in Japan.
The second finding in the x 2 test showed that the number of CPA students who had
previously majored in either accounting or a business related subject were significantly
larger than those who had majored in another discipline. This finding was supported
by the logistic regression analysis that revealed students who had previously majored
in subjects outside accounting were significantly reluctant to become a CPA. This
result is also relevant to the US study of Chen et al. (2005), which empirically probed
the significant association between learning experience and the choice of a major in
accounting. Similarly, an earlier exposure of accounting for Japanese students works
better to encourage their aspiration of becoming a CPA.
Third, our regression analysis also found a significant association between OPP and
students’ intention of becoming a CPA (CAR). This finding implies that the more likely
students find the opportunity cost of studying in the accounting schools high, the less
likely they will pursue a CPA career. In other words, students’ higher sensitivity of
opportunity cost discourages their intention to become a CPA. This finding is consistent
with Allen (2004) in the USA. In addition, our t-test analysis revealed that non-CPA
students tend to avoid bearing its opportunity cost more strongly than CPA students. This
finding also means inversely that CPA students are encouraged by their aspiration of
becoming a CPA regardless of their higher perception of the opportunity cost, which
supports the findings of Bierstaker et al. (2004). In terms of the factor of age as being one of
the opportunity costs, although our study found that the average age of CPA students was
significantly higher than that of non-CPA students, our regression result statistically
illustrated that age did not influence students’ career intention in becoming a CPA. Thus, it
was found that students’ aspiration of CPA is independent of their actual age.
Fourth, the results for both the x 2 test and regression analysis did not produce any
significant evidence suggesting that gender (GEN) could affect one’s CPA career
intention. The survey also found that 28.0 percent were female CPA students and 24.0 Factors
percent were female non-CPA students. Compared with the survey administered in influencing
other countries, the gender proportion of female accounting graduates was found to be
smaller in Japan (Sanders and Romeo, 2005 in the USA; Gasper, 2006 in Hong Kong). career intention
Sanders and Romeo (2005) discovered that females who received accounting Bachelor’s
and Master’s degrees in 2003 and 2004 consisted of 55 and 54 percent, respectively, of
the total accounting students in the USA. This relatively smaller proportion of the 19
female gender in Japanese accounting schools may have an insignificant impact on
students’ aspirations of becoming a CPA.
Fifth, given the results of t-tests for students’ perceptions of the CPA, it was discovered
that significant differences existed between the scores for structure (STR), interest (INT)
and solitary work environment (SOL). However, the findings from our regression reported
that (INT) was the only factor that had a significant relationship with a student’s career
intention of becoming a CPA (CAR). It is interpreted from this outcome that the more likely
students were interested in the CPA, the more likely they were willing to become a CPA.
This finding is supported in a recent Australian study by Jackling (2006), which
discovered that students who were interested in the topics of accounting would more likely
become an accountant than those who were not interested in the topic.
Even though our t-test results reported that the mean scores of (STR) and (SOL) for
non-CPA students were significantly higher than those of CPA students, there were no
significant associations found between the (STR) and (SOL) and students’ career
intention to become a CPA (CAR). These findings indicate that although some
non-CPA students have certain biased images of the CPA in terms of structure (STR)
and solitary characteristics (SOL), these factors were not the influential factors that
predict students’ CPA career intention. Previous global studies have found negative
images do discourage students’ aspiration of becoming a CPA (Albrecht and Sacks,
2000 in USA; Marriott and Marriott, 2003 in UK; Byrne and Willis, 2005 in Ireland; Tan
and Laswad, 2006 in New Zealand; Jackling, 2002 in Australia). However, it was found
in this current study that Japanese students were unlikely to be influenced significantly
by negative images of the CPA profession when they decided on their career choice.
Conclusion
The purpose of this study was to examine the factors influencing career intentions in
becoming a CPA among students studying in Japanese accounting schools. The results
of our empirical analyses revealed that students who had work experience and majored
in disciplines other than accounting/business were more reluctant to become a CPA.
This is in direct contrast to one of the objectives for the CPA reform scheme, which is to
extend the diversity of CPA candidature (Financial System Council, 2002). Accounting
schools in Japan have simply attracted students who have previously majored in
accounting at the undergraduate level and entered directly after graduating from
university without any work experience. This important finding suggests to policy
makers that they should reconsider and redefine whom they want to recruit into
the accounting sector. Literature and official documentation from related institutions
have remained silent on this issue. For example, the Vision Paper recently released
from the JICPA (2007) actively discussed how to encourage potential candidates into
the accounting sector, but ignored whom they should target. Alternate strategies are
required to attract students from these other diverse backgrounds.
ARA It was also found that non-CPA students were more likely to be concerned with
17,1 the opportunity cost of studying in these accounting schools as this was one of the
influential factors affecting their aspiration toward a CPA career. This result was quite
plausible for students in the accounting schools in that they usually take into account
the cost/benefit of their vocational decisions. This result is consistent with some
previous studies in the USA that pointed out the disadvantage of the 150-hour rule
20 (Allen, 2004). This outcome may suggest to policy makers and the professional body in
Japan that they should restructure their marketing plans in order to concentrate on the
benefits of becoming a CPA in an attempt to outweigh these disadvantages. One
possible strategy could be to grant additional exemptions toward the CPA exams,
which would reduce the sensitivity of accounting school students toward the
opportunity cost of becoming a CPA.
A possible solution to enhance positive images of the CPA profession among
non-CPA students could simply lie in promotional strategies aimed at this sector. As
this research also discovered students’ interest in a CPA career was the significant
influential driver of one’s career intention, so successful enhancement through effective
CPA promotions may encourage such targeted individuals to apply for these
accounting schools and pursue an accounting career.
This study does have limitations. First, it investigated statistical associations
among specific influential factors that affect career intentions toward the CPA among
students learning at Accounting Schools. Although our study found significant
relationships in several of these variables, the smaller R 2 of our regression result
implies the existence of other stronger influential factors that this study failed to
incorporate. For example, this research could be extended to address the legislative
architecture of the CPA scheme from both the historical and societal perspectives, due
to the uniqueness of the CPA exam system in Japan compared to other countries.
A cultural comparative study could then be undertaken between Japan and other
countries which would add extra dimensions along this research line.
Second, the sample for our study was quite limited as it comprised only those
students studying in Accounting Schools in Japan. Even though these students make
up the majority of CPA candidature, a large number of CPA examinees and other
non-CPA students still come from undergraduate levels and this aspect was ignored in
this study. Comparative analyses between these other group of students would further
enhance our understanding on the strengths and weaknesses existing in the Japanese
CPA career market and assist in establishing effective strategies.
Despite these limitations, this paper is the first study undertaken in Japan to
successfully provide a new dimension on the factors that influence CPA career
intentions among students studying at the accounting schools in Japan.
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selection differences of male and female accountants”, Managerial Auditing Journal, Vol. 10
No. 7, pp. 17-24.
Corresponding author
Satoshi Sugahara can be contacted at: sugahara@shudo-u.ac.jp