An empirical investigation of personal characteristics significantly affecting employment offers from international accounting firms to accounting graduates

University of Arkansas, Fayetteville ScholarWorks@UARK Theses and Dissertations 5-1983 An Empirical Investigation of Personal Characteristics Significantly Affecting Employment Offers from International Accounting Firms to Accounting Graduates John M Alvis University of Arkansas, Fayetteville Follow this and additional works at: https://scholarworks.uark.edu/etd Part of the Accounting Commons Recommended Citation Alvis, John M., "An Empirical Investigation of Personal Characteristics Significantly Affecting Employment Offers from International Accounting Firms to Accounting Graduates" (1983) Theses and Dissertations 3121 https://scholarworks.uark.edu/etd/3121 This Dissertation is brought to you for free and open access by ScholarWorks@UARK It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of ScholarWorks@UARK For more information, please contact ccmiddle@uark.edu AN EMPIRICAL INVESTIGATION OF PERSONAL CHARACTERISTICS SIGNIFICANTLY AFFECTING EMPLOYMENT OFFERS FROM INTERNATIONAL ACCOUNTING FIRMS TO ACCOUNTING GRADUATES AN EMPIRICAL INVESTIGATION OF PERSONAL CHARACTERISTICS SIGNIFICANTLY AFFECTING EMPLOYMENT OFFERS FROM INTERNATIONAL ACCOUNTING FIRMS TO ACCOUNTING GRADUATES A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy By JOHN M ALVIS, B.S., M A Jacksonville State University, 1969 University of Alabama, 1974 May, 1983 The University of Arkansas - ii - ACKNOWLEDGEMENT My sincere thanks to Professor Doris M of my thesis committee, Her cheerful for Thomas W be Jones, friends in one would Professors James P consider normal Modisette and both on my thesis committee, have proved to addition to Indeed these endeavor chairwoman her encouragement and advice help exceeded what under any circumstances Cook, tireless three supporters professionals are of this special people To my late Father, I give thanks for teaching me to see humor in all of life; to my Mother, to my brothers and to excel; friends; to my wife Gail, to my sons, for giving me the desire sister, for being such loyal for showing me love and patience; Johnny and Allen, for giving me purpose - iv - CONTENTS Chapter page INTRODUCTION NATURE OF THE PROBLEM The Faculty’s Perspective The Recruiter's Perspective The Student's Perspective OBJECTIVES OF THE STUDY HYPOTHESES TO BE TESTED 10 RESEARCH METHODOLOGY 11 JUSTIFICATION OF THE STUDY 14 LIMITATIONS OF THE STUDY 16 PLAN OF THE STUDY 18 THE CHARACTERISTICS UNDER REVIEW 19 THE INTERVIEWING PROCESS 19 The Campus Interview 21 The Office Visit 23 LITERATURE RELATING TO CHARACTERISTICS FOR STUDY 25 Business Viewpoint 26 Opinions of Students .27 Opinions of Accounting Firm Recruiters 29 The Seaton and White Study 29 The Murdock Summary 31 SELECTING THE CHARACTERISTICS FOR STUDY 31 The Initial Survey 32 The Follow-Up Survey .33 Review of Candidate Evaluation Forms 36 An Example of Candidate Ratings 41 Survey of Student Recruitment Files 41 PREPARATION OF QUESTIONNAIRE 43 Personal Data 44 Activities 45 Academic Data 46 Overall Courses .47 Accounting Courses 47 English 48 Other Data 48 Self Evaluation 49 Profile Data 51 SUMMARY 51 v RESEARCH METHODOLOGY 53 THE TYPE OF STUDY .53 SPECIFIC RESEARCH OBJECTIVES 55 Objectives and .55 Objectives 3, 4, and 56 Objective 58 Objective 58 Objective 59 A General Profile of Successful Applicants 59 STATISTICAL TECHNIQUES 60 Discriminant Analysis 61 Major Stages of Discriminant Analysis 65 Sample Division 66 Unstandardized and Standardized Models 68 Classification Matrices 69 Probability of Group Membership 71 Multiple Regression 71 Chi-Square Tests .72 DEPENDENT AND INDEPENDENT VARIABLES 75 THE DATA COLLECTION PROCEDURES 79 Selection of the Universities .83 The Sample Selection 83 SUMMARY 86 RESULTS AND INTERPRETATION OF RESEARCH 88 HYPOTHESIS 90 The 0.001 and 0.010 Significance Levels 92 The 0.050 Significance Level 97 The 100 Significance Level 100 HYPOTHESIS 101 HYPOTHESIS 105 The 0.001 and 0.010 Significance Levels 108 The 0.050 Level of Significance 110 The 0.100 Level of Significance 113 HYPOTHESIS 115 Comparison of Models 118 Functions and Variables for Hypothesis 120 HYPOTHESIS 125 HYPOTHESIS 126 Tests of Significance 129 Variables for Hypothesis 129 HYPOTHESIS 132 The Primary Reason 133 The Secondary Reasons 135 HYPOTHESIS 137 CHARACTERISTICS AND VIEWPOINTS 139 The Successful and Unsuccessful Student 139 The Successful Male and Female Student 145 SUMMARY 149 - vi - SUMMARY AND CONCLUSIONS 154 SUMMARY CONCLUSIONS Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Profile Comparison to Other Studies Limitations IMPLICATIONS RECOMMENDATIONS FOR FUTURE RESEARCH Appendix 154 158 158 159 160 162 164 164 165 166 166 167 169 169 173 page A CORRESPONDENCE B QUESTIONNAIRE 188 C EXPANDED STATISTICAL DISCUSSION 192 DISCRIMINANT ANALYSIS Assumptions of Discriminant Analysis Problem Areas Nonnormality Multicollinearity Unequal Dispersion Matrices MULTIPLE REGRESSION 192 195 195 195 197 197 199 D EXPANDED USE OF DISCRIMINANT MODELS 176 202 SELECTED BIBLIOGRAPHY - vii - 205 LIST OF TABLES Table page Factors in Obtaining Employment Importance of Factors as Viewed by Students Characteristics Sought in New Employees by CPA Firms 30 Characteristics Considered by Recruiters - Southwest Region .33 Characteristics Considered by Recruiters - Midwest Region - .35 Probable Grouping of Other Characteristics Information from Coopers & Lybrand Candidate Evaluation Form Communication Skills Described on Candidate Evaluation Forms 38 Leadership Qualities Described on Candidate Evaluation Forms 10 Personal Qualities Described on Candidate Evaluation Forms 39 11 Motivation as Described on Candidate Evaluation Forms 40 12 Technical Qualities Described on Candidate Evaluation Forms .40 13 Hypotheses and 14 Analysis of Responses from 15 Unstandardized Discriminant Functions for Hypothesis 91 16 Standardized Discriminant Functions Derived for Hypothesis .92 Research Methodology 28 36 .37 39 87 the Southwest Region - viii - 27 90 17 Classification Matrix for Hypothesis 0.010 1: 0.001 and 18 Classification Matrix for Hypothesis 1: 0.050 99 19 Classification Matrix for Hypothesis 1: 0.100 101 20 Discriminant Function for Hypothesis 2: 0.100 103 21 Unstandardized Discriminant Functions for Hypothesis 106 22 Standardized Discriminant Functions for Hypothesis 107 23 Classification Matrix for Hypothesis 3: 0.010 0.001 109 24 Classification Matrix for Hypothesis 3: 0.050 113 25 Classification Matrix for Hypothesis 3: 0.100 115 26 Unstandardized Discriminant Functions for Hypothesis 117 27 Standardized Discriminant Functions for Hypothesis 117 28 Classification 0.010 29 Classification Matrix for Hypothesis 4; 0.100 30 Supply and Public Accounting Demand for Graduates 127 31 Standardized Coefficients and Other Data for Hypothesis 129 32 Primary Reasons for Selecting Accounting as a Career 134 33 Second Most Important Reasons for Selecting Accounting 136 34 Third Most Important Reasons for Selecting Accounting 137 35 Chi-Square Test of Homogeneity 138 36 Selected Characteristics of All Candidates 140 37 Selected Viewpoints of All Candidates 143 Matrix for Hypothesis 4: ix 0.001 and and 0.050 and 95 121 124 38• Selected Characteristics of Successful Candidates 146 39 Selected Viewpoints of Successful Candidates 148 40 Breakdown, of Employment Offers by Areas of Entry 149 41 Probability of Group Membership 203 LIST OF FIGURES Figure page Interview Relationships The Campus Interview Two-Group Discriminant Analysis 62 20 - X - study lead to considerable the conclusions limitations on reached of equality The test attempted using Box's M and in the data this study using BMDP- should have been such as can be done was available with SPSS, comparison of the linear using this Biomedical Computer Programs package such quadratic package an alternative on the Having failed perhaps analyzed for a quadratic relationship, was test.62 This that it is based normality assumption of underlying covariance matrices its associated F weakness in the fact test suffers test, of group While no perhaps a and quadratic classification rates statistical package would have been superior Relaxation the of dispersion may assumption also effect differences in group means hit ratios when a dispersions were equality the significance of group test for was used even though The results were Significant differences can occur which are directly related to the differences in the dispersions, the number of variables and the separation among the groups Agreement between the two procedures declines as the differences between the dispersions and the number of variables increase The further apart the groups are for given dispersions, the less important are the differences between the linear and quadratic Ibid 62 Klecka, pp 23-4 "Discriminant Analysis," p 198 460 the summarized as follows: 61 the Gilbert compared the effects on linear model unequal of re suits.63 To compensate variance-covariance method described the separation of group centroids, from the differences the group dispersion in variables which quadratic the lack of multivariate normality and In summary, equality of V, Rao’s previously minimize the used to results multicollinearity of matrices and largest overall provided the was group of the number of variables was reduced by use of the variables, stepwise inequality for the partially to relation multicollinearity between matrices, sample the the size, the predictor number of and the variables are all considered limitations of this study MULTIPLE REGRESSION Multiple regression analyze two the or more is a statistical technique relationship between multiple regression of relative importance The standardized regression independent variables of the the uses One of is to evaluate the to variable and a dependent independent variables used model for this study can be expressed in the following form: where Y1 = C1 Xi1 Yi = The value of salary offer for the ith student + C2 Xi2 + + Ck Xik + ei : 63 Robert A Eisenbeis, '’Pitfalls Discriminant Analysis,” p 879 199 in the Application of = The standardized beta coefficients of the independent variables Cj = The value of the jth independent variable for the ith student, j = 1, 2, , k Xij ei = The random error term for the ith student regression are available; Several approaches to multiple however, the the forward approach, SPSS subprogram REGRESSION provides (stepwise) variable entered only variables are if they statistical criteria and the meet pre-established inclusion Under this inclusion of variables independent only for the respective depends on to explained variance order of contribution of While it each was the only multiple regression approach available with REGRESSION, forward inclusion method was appropriate because of the the number of cases relative to the number of variables involved in the analysis The underlying assumptions of multiple regression include the following: The expected value of the error components is zero, and the variance of the error components is constant The error components are uncorrelated The error components are normally distributed Visual inspection residuals and the of a standardized scatterplot predicted values residuals were uncorrelated and did neteroscedasticity A normal 200 indicated of the that the not display evidence of probability plot of the standardized residuals indicated that the were normally distributed 20 error components Appendix D EXPANDED USE OF DISCRIMINANT MODELS the discriminant function can The derivation of insights interesting some illustration at this At model to the model discriminant point into its potential might add some the 0.050 level of for students lead to use An depth of meaning significance, in general (Hypothesis the 1) was as follows: + 1241 (AGPA) Z = -8.0090 Suppose + 0.7923 (POISE) + 1.0468 (BAP) two accounting students had the following values for the variables in the model: Student A: AGPA = 37 (meaning 3.7 on a 4.0 scale) POISE = (meaning "somewhat below average") - (meaning non-membership in Beta Alpha Psi) BAP Student B: AGPA = 32 (meaning 3.2 on a 4.0 scale) POISE = (meaning "average") - (meaning membership in Beta Alpha BAP Substitution of these Z-scores for Students A values and B 202 into to be the model Psi) yields -1.3327 and the 0.4327, The meaningfulness of Z-scores is enhanced by respectively Table 41 below TABLE 41 Probability of Group Discriminant Score Predicted Group 1006 0.5933 0.0414 -0.324 -0.6238 -0.7625 -0.8985 -1.0347 - 1742 -1.4739 - 1.8397 -2.3970 -2.8997 Table 41 offer, Approximate Probability >.95 90 80 70 60 55 50 55 60 70 80 90 >.95 1 1 1 0/1 0 0 0 shows that Student an 80% about Membership probability of A has, not despite good grades, receiving an whereas Student B has between an employment 80%-90% probability of receiving an employment offer A word of accept 41 too caution is appropriate for rigorously the probabilities Certain conditions should be met for of discriminant analysis discriminant function students who would presented in Table proper application The assumptions for deriving the are multivariate 203 normality of the distributions, and unknown, covariance structures these assumptions but for the have an dispersion equal, violations of groups.64 The impact on the and of the magnitude coefficients of the variables and the probabilities of group The calculation of probabilities in this study membership was based on from the the a priori probabilities of group membership questionnaire responses seventy-two percent As of the respondents shown in in general was discriminant much analysis not There very violations of the assumptions above, with large sample sizes.66 Thus, limited whereas the employment offer for candidates less.65 is 11, received employment offers from the international accounting firms, probability of receiving an Table is evidence that to mild sensitive however, particularly the probabilities have value 64 Joseph F 86 Hair, Jr., et al., Multivariate Analysis, p 65 For example, Claude Rodgers, firm director for personnel development for Arthur Andersen & Co , estimated that of 20,000 interviews in a typical year, 4,000 to 5,000 students are invited for office visits and offers are extended to three out of four of these Thus, offers were extended to only 15% to 18% of the candidates (From Profiles of Public Accounting Firm Careers, p 1, Richard J Murdock, ed.) 66 Joseph F 87 Hair, Jr., et al., 204 Multivariate Analysis, p SELECTED BIBLIOGRAPHY Books Chou, Ya-lun Statistical Analysis with Business and Economic Applications 2nd ed New York: Holt, Rinehart, and Winston, Inc., 1975 Eisenbeis, Robert A., and Avery, Robert B Discriminant Analysis and Classification Procedures: Theory and Applications Lexington, Mass.: D.C Heath and Company, 1972 Hair, Joseph, F Jr.; Anderson, Rolph E ; Tatham, Ronald L.; and Grablowsky, Bernie J Multivariate Data Analysis, with Readings Tulsa, Oklahoma: Petroleum Publishing Company, 1979 Kerlinger Fred N Foundations of Behavioral Research 2nd ed New York: Holt, Rinehart, and Winston, Inc., 1973 Mendenhall, William; Ott, Lyman; and Scheaffer, Richard L Elementary survey Sampling Belmont, Calif.: Wadsworth Publishing Company, Inc., 1971 Spurr, William A., and Bonini, Charles P Statistical Analysis for Business Decisions Rev ed Homewood, Illinois: Richard D Irwin, Inc., 1973 PeriodicaIs Altman, Edward I "Financial Ratios, Discriminant Analysis, and the Prediction of Corporate Bankruptcy." The Journal of Finance, Vol (September, 1968), 589-609 Altman, Edward I., and Eisenbeis, Robert A "Financial Applications of Discriminant Analysis: A Clarification." The Journal of Financial and Quantitative Analysis, (March, 1978), 185-95 Ashton, Robert A., and Kramer, Sandra S "Students as Surrogates in Behavioral Accounting Research: Some Evidence." The Journal of Accounting Research, Vol No (Spring, 1980), 1-5 205 18, Baker, C Richard "Some Observations on Student Values and Their Implications for Accounting Education: A Comment." The Accounting Review, XLIX (July, 1974), 576-7 Blitstein, Allen "What Employers Are Seeking in Business Graduates." The Collegiate Forum, (Winter, 1980/81), Brenner, Vincent C "Additional Comments on Student Values and Their Implications for Accounting Education." The Accounting Review, XLIX (July, 1974), 578 Brenner, Vincent C "Some Observations on Student Values and Their Implications for Accounting Education." The Accounting Re view, XLVIII (July, 1973) , 605-8 Eisenbeis, Robert A "Pitfalls in the Application of Discriminant Analysis in Business, Finance, and Economics." The Journal of Finance, XXXII, No 1977), 875-900 (June, Joy, Maurice, and Tollefson, John "On the Financial Applications of Discriminant Analysis." The Journal of Financial and Quantitative Analysis, (December, 1975), 723-739 Joy, Maurice, and Tollefson, John Comments on Discriminant Analysis." Financial and Quantitative Analysis, 197-205 "Some Clarifying The Journal of (March, 1978), Murdock, Richard J "Career Patterns in Eight Large Public Accounting Firms." The Ohio CPA Journal, (Summer, 1980), 107-11 "Practitioners Forum: On-Campus Recruiting by CPA Firms." The Journal of Accountancy, Vol 152, No (August, 198 1) , 29-31 Seaton, Lloyd Jr., and White, Jackson A "Recruiting Practices of CPA Firms." The Journal of Accountancy, Vol 135, No (May, 1973), 86-7 "Seaton's and Seaton, Lloyd Jr., and White, Jackson A White's Reply." The Journal of Acountancy, Vol 136, (April, 1974), 88 Weber, Richard P., and Stevenson, W C "Evaluation of Accounting Journal and Department Quality." The Accounting Review, LVI (July, 1981), 596-612 206 No Welker, Robert B '’Discriminant Analysis as an Aid to Employee Selection." The Accounting Review, XLIX (July, 1974), 514-23 Other Publications Adams, Bettie M "Student Perceptions and Evaluation of Employee Selection Criteria Used by Public Accounting Firms for Entry-Level Positions." Proceedings of the Thirty Second Annual Meeting, Southeast Regional Meeting - American Accounting Association 1980, 265-9 MacNeill, James H., and Mclnnes, Mary The Supply of Accounting Graduates and the Demand for Public Accounting Recruits: 1979 American Institute of Certified Public Accountants: New York, 1979 Minority Recruitment and Equal Opportunity Committee The First Decade: A Pause to Reflect, Evaluate, and Plan New York: American Institute of Public Accountants, ca 1980 Murdock, Richard J., ed Profiles of Public Accounting Firm Careers College of Administrative Science: The Ohio State University, 1978 Pinches, George E., "Classification Results and Multiple Discriminant Analysis," Working Paper No 116, University of Kansas, 1978 207 ABSTRACT AN EMPIRICAL INVESTIGATION OP PERSONAL CHARACTERISTICS SIGNIFICANTLY AFFECTING EMPLOYMENT OFFERS FROM INTERNATIONAL ACCOUNTING FIRMS TO ACCOUNTING GRADUATES Abstract of dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy By JOHN M ALVIS, B.S., M.A Jacksonville State University, 1969 University of Alabama, 1974 May, 1983 The University of Arkansas This abstract is approved by: Major Professor Dr Doris M Cook ABSTRACT The basis for this study was employment with international account­ to gain ing students which personal characteristics affect ing firms and to know Some issues employment offers follow (1) effects on What student (3) What successful/unsuccessful (5) lary-offer size? this thesis were significant What students re­ were significant differences in Female male students? Which characteristics were careers related (2) characteristics of female/male ceiving offers? (4) addressed by characteristics had significant employment offers? differences in the desire of many account­ students? important predictors of sa­ Were reasons for selecting accounting to receiving employment offers? (6) Was there discrimination because of sex regarding employment of­ fers? (7) What were successful students* their communication skills? ness to travel? sits, opinions regarding Interviewing ability? How many campus interviews, (8) Willing­ office vi­ and employment offers were received by successful stu­ dents? The characteristics considered were of the interviewing process, completed these recruitment nine universities candidate evaluation forms, files characteristics was identified by review A questionnaire completed by sion, and Chi-square tests were lowing findings (1) measuring 187 students Discriminant analysis, and from multiple regres­ employed to reach the fol­ Successful/unsuccessful students dif­ fered in regard to accounting grade-point averages, interviewing, and Beta than successful poorer English grades but Successful and positions in or­ females had more accounting experience ganizations (2) Alpha Psi membership successful males males; Psi, more had more miscellaneous financial sup­ port for college expenses than successful females cessful males were ease of likely to be members raise intense interview guestions, (3) Suc­ of Beta Alpha possess another un­ dergraduate degree, and be younger than unsuccessful males Successful had better females more financial support accounting/English for college expenses, and more at­ (4) Positive tractive appearances than unsuccessful ones factors related to grade-point average, tion initiative tions, salary size during interviews, students ranked viewing skills; Successful interviews, (5) communica­ in organiza­ positions and another undergraduate degree discrimination because accounting the Beta Alpha Psi membership, fers were unrelated to reasons (8) included Employment of­ for career choice of sex was noted themselves higher in grades, (7) (6) No Successful communication/ inter­ unsuccessful students in travel willingness students averaged approximately four office visits, and six campus three employment offers .. .AN EMPIRICAL INVESTIGATION OF PERSONAL CHARACTERISTICS SIGNIFICANTLY AFFECTING EMPLOYMENT OFFERS FROM INTERNATIONAL ACCOUNTING FIRMS TO ACCOUNTING GRADUATES AN EMPIRICAL INVESTIGATION OF PERSONAL. .. effect on employment offers from international accounting firms? Was there a significant difference in the characteristics of male and female students who received employment offers from the international. .. OF PERSONAL CHARACTERISTICS SIGNIFICANTLY AFFECTING EMPLOYMENT OFFERS FROM INTERNATIONAL ACCOUNTING FIRMS TO ACCOUNTING GRADUATES A dissertation submitted in partial fulfillment of the requirements