The Factors that Affect Accountants' Decisions to Seek Careers with Big 4 versus Non-Big 4 Accounting Firms

Abstract

SYNOPSIS Finding qualified accounting staff has consistently been a top issue facing CPA firms. However, little is known about the factors that influence accountants' decisions to seek careers with different types of firms. In our paper, we use Ajzen's (1991) theory of planned behavior to examine the reasons why some accountants seek careers at Big 4 firms, while other accountants seek careers at non-Big 4 firms. We survey accounting students and find that attitudes, subjective norms, and perceived behavioral control each influence firm-choice decisions. To provide additional insight into our results, we survey accounting professionals from Big 4 and non-Big 4 accounting firms. We find that, overall, students' perceptions, while more limited, are similar to those of accounting professionals. Further, we find that accounting professionals provide a number of insightful comments that offer several important implications for accounting firms. Finally, we assess whether accounting professionals perceive that certain types of accounting students are more likely to succeed at Big 4 versus non-Big 4 firms, and whether recruiting efforts are consistent with these perceptions. Data Availability: Data are available upon request.

Understanding the Intentions of Accounting Students in China to Pursue Certified Public Accountant Designation

“…In panel B, 249 respondents either strongly agree or agree that the CPA designation can improve earnings potential. The positive attitudes of Chinese students toward the favorable social status, marketability and earnings potential brought by the CPA credential are consistent with the prior research conducted in Japan, the USA and Canada (Bagley et al, 2012;Felton et al, 1994;Sugahara & Boland, 2006). The variable of Interest has the lowest mean value (2.5128) in panel A and lowest mean value (3.0241) in panel B.…”

“…The coefficient of Difficulty maintain (regression coefficient ¼ 20.781 and Wald-test-statistic ¼ 7.695) is significantly negative, as predicted by H7 b . Overall, H7 a and H7 b suggest that the perceived incapability to implement an action can hinder the execution (Bagley et al, 2012;Sugahara & Boland, 2006). Yeung and Yee (2011) suggest that the probability ratio represents the change in the probability of the dependent variable when the value of an independent variable adjusts by one unit.…”

“…Felton et al (1994), Tan and Laswad (2006), and Sugahara and Boland (2006) find that students who choose a career in accounting would rate the accounting profession with a significantly higher social prestige than the students pursuing other careers in Canada, New Zealand and Japan. More specifically, Bagley, Dalton, and Ortegren (2012) find that students who place a higher priority on prestige (as distinct from work -life balance) would be more likely to work for Big Four accounting firms. However, social status or prestige is not so important to Australian tertiary students (Auyeung & Sands, 1997;Jackling & Calero, 2006).…”

“…Ability to work with numbers and performing well academically can facilitate a student's choice of majoring in accounting (Tan & Laswad, 2006). Comparing Big Four job seekers and non-Big Four job seekers, Bagley et al (2012) find that non-Big Four job seekers were less confident that they would have the academic credentials, such as a graduate degree. It is also suggested that the increase in the education required of the new CPA exam candidates in most states (usually referred to as a 150-hour requirement) of the USA drives some students away from the accounting profession (Albrecht & Sack, 2000).…”

New Canadian Accounting Standards for Private Enterprises and the Adoption Timing Decision

“…Behaviours like early or late adoption of accounting standards can be predicted by the theory of planned behaviour proposed by Ajzen (1991). This theory (and the earlier theory of reasoned action) has been used in several accounting investigations into the decision to major in accounting (e.g., Cohen and Hanno 1993;Jackling and Keneley 2009), the impact of course structure on students' attitudes and behaviours (Shaftel and Shaftel 2005), the decision to seek careers with Big 4 and non-Big 4 accounting firms (Bagley et al 2012), professional accountants' choice to participate in flexible work arrangements (Almer et al 2003), non-professional investors' use of XBRL (Pinsker and Wheeler 2009), public accountants' ethical decision making (e.g., Buchan 2005), auditor aggressiveness in client relations (Cohen et al 1994), fraudulent financial reporting (e.g., Carpenter and Reimers 2005;Cohen et al 2010), tax compliance (e.g., Bobek and Hatfield 2003) and taxpayers' preferences for tax refunds (Bobek et al 2007). …”