AICPA Proposes Changes to CPA Exam in Wake of Evolving Profession
Chelsea Reynolds, Audit Senior Manager
On September 1, 2015, the AICPA released an Exposure Draft (ED) containing several proposed changes to the Certified Public Accountant (CPA) exam effective for 2017. The ED is open for public comment through November 30, 2015. Final changes are expected to be announced in spring of 2016. Change is not new to the CPA exam, as it continually evolves with the profession. In recent years there have been two significant changes. In 2004 the exam transitioned to an electronic format and in 2011 the Business Environment and Concepts section was expanded to include testing on International Financial Reporting Standards.
The exam will retain the four current sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Key proposed changes include:
- Expanded examination time from 14 to 16 hours to accommodate additional changes (4 hours for each section)
- Increased weight on existing task-based simulations (40% to 50% for AUD, FAR and REG)
- Content and Skill Specification Outlines will be eliminated and replaced with Blueprints, illuminating necessary knowledge and skills, allowing prospective candidates a better understanding of what to expect on the exam
- More focus on enhanced high-level skills such as critical thinking, problem-solving, and analysis
The section that appears to be impacted the most by the proposed changes is BEC. BEC contains the most eclectic sections including: corporate governance, economic concepts and analysis, financial management, information systems and communication, strategic planning, and operations management. BEC is currently comprised of 72 multiple choice questions and 3 written communication simulations weighted as 85% and 15%, respectively. The proposed change would decrease the multiple choice questions from 72 to 60-65 and add 4-5 task-based simulations. The 3 written communication simulations would remain the same. The weighted score would be 50% multiple choice, 15% written communications and 35% newly added task-based simulations.
BEC has seen other changes in recent history. In 2011, BEC was expanded with the addition of the written communication section and a decrease in the number of multiple choice questions from 90 to 72. Upon review of the passing rates per the AICPA website, the three years following the enhanced BEC exam change saw a 17.67% increase in the passing rate for that section of the exam from 47.13% during 2011 to 55.46% during 2014. This seems to indicate that the change benefited, rather than hurt, CPA candidates.
Although the proposed changes are frightening to potential candidates, changes are necessary to remain current with growth in the profession and to make sure that new CPAs are prepared for the business world they are entering today. CPAs at various stages of their careers tell horrific stories of their CPA examination process—it’s essentially a rite of passage. As a newly licensed CPA, it is easy to reflect on my experience with taking the exam. Throughout the process, I had to learn to accept and adapt my study habits to the changing examination and professional environment. As Millman once wrote, “The secret of change is to focus all your energy, not on fighting the old, but on building the new.”
To read the AICPA’s full ED, visit the AICPA website.
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