In the past, most potential CPAs possessed a similar education: a traditional four-year undergraduate degree with a major in accounting. The primary differences in education were measured by academic performance and the quality of the graduate’s university. Today, there are substantial differences in the education paths available to students. Educators should understand the pros and cons of these accounting degree alternatives so they can adequately advise their students. This article will outline the advantages and disadvantages of many programs, so educators can help students choose education programs that are consistent with changing educational objectives.

The four common degrees in today’s educational environment are students with a master’s degree (MS) in accounting, students with a master’s degree in business administration (MBA), students with double major undergraduate degrees -- with more than 150 credit hours -- and students with traditional undergraduate degrees in accounting with less than 150 credit hours. The four degrees differ substantially in terms of objectives and skills developed. Both employers and students must understand the characteristics of each alternative to choose the one that best fits their needs.

Master’s in Accounting. The goal of many MS accounting programs is to enhance and extend technical ability in accounting while providing a sound understanding of business topics. The MS is typically geared toward helping students pass the CPA examination, therefore it provides the best preparation for doing so compared with the other three options. The program emphasizes the various elements of the accounting discipline and provides more in-depth study, regardless of whether a student’s area of interest is public, private, or nonprofit accounting. The MS is an excellent program for developing students’ communications and interpersonal skills and for integrating those skills with technical accounting knowledge. Another advantage of any graduate route -- either the MS or MBA -- is the opportunity for students to receive experience through integrated internships and financial aid through graduate assistantships. And, once finished, the students will have a graduate degree in hand for compensation and promotion purposes. Potential employers and recruiters appreciate an earned graduate degree and the extensive technical skills, even though their firms will incur higher costs for compensation.

There are disadvantages to the MS. Since the focus is on accounting, there is little training in other important business disciplines, such as business administration.

Most students in MS programs have little or no business experience. Consequently there is less practical knowledge to contribute to classroom discussions and group endeavors. Recruiters may wish the students had a more liberal background in terms of the business environment.

Master’s of Business Administration. The MBA is a general degree that offers a comprehensive understanding of the business environment. Although MBA programs in general do not impart a highly specialized understanding of accounting, some programs offer concentrations in accounting or other functional areas. A key advantage of MBA programs is the broad range of students. There tends to be a greater population of students with work experience in MBA programs, and the interaction among students with work experience may enhance the educational experience. Some MBA programs also integrate international travel, which can further enhance the educational experience.

An MBA may be the best choice for accounting students who wish to eventually advance to upper management since many employers believe MBA holders have an enhanced conceptual understanding of business to complement the technical accounting skills learned during undergraduate education. The primary disadvantage of the MBA program -- especially one without an accounting concentration -- is the lack of emphasis on technical accounting topics. That could affect performance on the CPA exam.

Double Majors. Students can meet the 150-hour educational requirements by taking undergraduate level courses, most beneficially through double majors. Double majors, as expected, provide students with two functional areas of expertise. The accounting major component develops the knowledge base, technical skills, and competencies necessary to succeed in the profession, while the second major provides complementary, in-depth study in a related discipline.

There are many disciplines that make good combinations with accounting. A major in information systems, business administration, finance, or international business adds knowledge of broader business issues. Majors outside the business arena can enhance a student’s ability to think creatively, communicate well, and understand the socioeconomic environment in which accountants operate. Because double majors possess two areas of expertise, firms have an added degree of flexibility in assignments.

One of the biggest disadvantages of the double-major approach is the lower compensation compared with that commanded by students with graduate degrees. There are studies that suggest master’s degree holders receive beginning salaries 10 to 20 percent higher than those holding bachelor’s degrees. There is also evidence that students who earn a graduate degree have a considerably higher rate of success in passing the CPA examination. Lastly, students without graduate degrees are promoted to managerial positions less rapidly, if at all. Employers may appreciate the expertise that double majors bring, but may realize the lack of synthesis that is typically gained in graduate education.

Traditional Undergraduate Degree. The traditional undergraduate accounting degree was the standard for individuals entering the field. It provided a solid understanding of accounting that served as a career foundation. Most individuals currently in practice possess this degree. Unfortunately, accountants with undergraduate degrees alone get lower levels of compensation compared with the other three options.

Students may choose to add a minor area of study to the accounting major. Although not as in-depth as a major, minors also increase a student’s knowledge base and skills in another area of expertise. And, just like the second major, can provide a worthwhile complement to the accounting major.

The primary disadvantage of the undergraduate degree is that it does not conform to the education requirement of the CPA exam in some states. This may limit a student’s ability to obtain a CPA certificate and impede future career advancement.

Accounting students should consider the advantages and disadvantages of the degree alternatives when planning for a career in accounting. Please note, that while this overview includes some advantages and disadvantages of various accounting programs, there is a great deal of variability in these programs between universities. Individuals must examine different programs separately to determine which best meets their educational objectives.

About the Authors: Lucinda Van Alst, CPA, DBA, is an associate professor of accounting at Ball State University, Muncie, Ind. She can be reached at lvanalst@bsu.edu. Mark Myring is an assistant professor of accounting at Ball State University. He can be reached at mmyring@bsu.edu.