Purpose Built upon three components (attitudes, subjective norms, and perceived behavioral control) of the theory of planned behavior (TPB), the purpose of this paper is to analyze the factors that influenced accounting students’ intention to pursue public accounting instead of private accounting as their career choice in China. Design/methodology/approach The TPB is used to predict the rational intention of accounting students in this study. A binary logistic regression analysis was applied to test all hypotheses because of its suitability. Findings The authors find that the variety and marketability of public accounting experiences, high turnover plus, low firm cohesion in the workplace, and perceived difficulties in traveling extensively affected students’ intentions to pursue the public accounting profession significantly. By highlighting these factors that affect students’ intention to pursue public accounting, this paper has important implications for the accounting educators and other stakeholders in China and other emerging economies. Originality/value By understanding the factors influencing the accounting students’ interests in pursuing public accounting, accounting educators and accounting firms could make some changes, redesign accounting curriculum, and enhance internship experience and recruiting process in order to increase more interests in public accounting. Professional organizations and policy makers might learn some lessons to take some actions to encourage young accounting professionals to work for public accounting firms. Moreover, this study has provided a valuable perspective to accounting educators, practitioners, and policy makers in other emerging economies with the same shortage of qualified public accountants.

Based on the theory of planned behavior [Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211], we examine the factors influencing the decisions of accounting students in China concerning the certified public accountant (CPA) designation. Surveying 288 college accounting students, we find that genuine interest, perceived professional independence in the workplace and perceived difficulties in maintaining the certification all affect students' intentions to pursue the CPA credential. Expectations of better market opportunities for those with CPA and the influence of important professional referees also positively influence students' decisions to earn CPA qualification. By highlighting these factors that attract students to pursue CPA, this paper has important implications for the accounting educators and other stakeholders.KEY WORDS: Theory of planned behavior, CPA designation, logistic regression analysis

The growing gap between the pay of executives and employees has been the subject of much media publicity and political attention in recent times. We analyze the pay gap between executives and employees, focusing on three components: executive pay premium relative to industry peers; employee pay premium; and average pay gap at the industry level. We examine how the executive and employee pay premium components of the pay gap drive firm performance. On one hand, economic theories of matching and managerial talent suggest talented executives who generate relatively better firm performance receive wage premiums, implying a positive relation between pay gap and performance. On the other hand, sociological theories suggest that the inequity implied by a larger pay gap lowers firm performance by adversely affecting employee morale and productivity. To test these alternative theories, we utilize pay gap data from China that provides a setting with strong national preferences towards social equity but also with a scarcity of experienced managers and abundance of low-cost labour. Our results strongly support the economic theories-firm performance is largely driven by pay premium for executive talent. Additional tests using a smaller sample of US firms with pay gap data are consistent with our primary findings. Our study is likely to be of interest to politicians, regulators, and company executives responsible for understanding and evaluating pay gap and executive pay.

No abstract

Asymmetric cost behaviour analysis emphasises the role of deliberate managerial decisions. In this paper, we find that asymmetric cost behaviour is also a pervasive phenomenon in China. Specifically, SOEs have more cost stickiness than non-SOEs and companies with executive shareholding have more cost stickiness than those without executive shareholding. Secondly, we find that the cost variability and cost stickiness model (separate earnings into cost variability with sales revenue and stickiness in costs with sales declines) provides substantial improvement in forecasting accuracy over other models using only the line items in financial statements. Finally, we find that both conditional conservatism and cost stickiness influence the linear relation between earnings and performance measures. We suggest that future empirical tests on conditional conservatism should control for the potential confounding effect of sticky costs. Our results from Chinese firms provide evidence on the accuracy of earnings forecast and conservatism, and contain important implications for both cost accounting research and financial accounting research.