the CPA Exam
2006 - The AICPA’s decision to change the CPA exam
from a pencil-and-paper–based test to a computer-based
test (CBT) in 2004 was an excellent move forward in the
exam’s evolution. CBTs offer several benefits over
their hard-copy counterparts: They are easier to administer,
more convenient for test-takers, and make analysis a breeze.
But change is never easy, and although the transition to
CBT has been relatively smooth, there have been bumps in
considerable problem in New York State is how the CBT is
scored. The test is graded on a pass/fail basis, and candidates
don’t receive scores on individual sections. That
may be okay for candidates who pass the test, but what about
the significant number who fail? National pass rates in
2004 were about 40% per section—lower than pass rates
for lawyers, architects, and engineers on their respective
professional exams. In other words, after earning a college
degree and weeks (or more) of exam-specific preparation,
approximately 60% of the candidates taking the CPA exam
in New York State fail, and receive little guidance on where
they fell short.
how did New York State end up with a scoring system that
wouldn’t pass Exam Making 101? The problem came about
through a confluence of miscommunications. The New York
State Board for Public Accountancy originally approved the
pass/fail grading structure based on another organization’s
promise to deliver a comprehensive diagnostic scoring system.
The board’s thinking was that relevant and meaningful
diagnostics would help students concentrate more on the
substance of what they needed to study rather than a mere
numerical score. But when those diagnostics were not delivered,
test-takers were left holding the bag.
of how the problem originated, almost everyone agrees that
it needs to be corrected, and soon. The CPA exam is extremely
challenging and costly; candidates have enough to worry
about besides receiving insufficient feedback on why they
failed the exam. It’s also a problem for the profession.
Considering the higher salaries in some other advanced-degree
professions and the impact of the recent accounting scandals,
the profession needs to do everything in its power to attract
tomorrow’s leaders. This includes giving CPA candidates
access to performance barometers that will indicate how
close they are to passing and identify the topics they need
to study to accomplish that goal.
Reason for an Interstate Compact
most frustrating about this situation is that in most states,
the exam is not graded as pass/fail. Standardizing the scoring
system among the 50 states would go a long way toward solving
the problem, and a structure already exists that would accomplish
that: an interstate compact.
is an interstate compact? Simply put, it’s a contract
among states that allows them to solve multistate, regional,
and national problems through voluntary agreement. Compacts
carry the force of law, and, much like treaties between
nations, compacting states are bound to observe the terms
even if they are inconsistent with other state laws.
concept remains the most effective alternative as the profession
continues to address differences in accounting standards
for public companies, the private sector, and nonprofit
and government entities. Interstate compacts can also address
other issues, such as practicing across state lines, substantial-equivalency
standards of professional conduct, and peer review. Now
we can add the CPA exam to the list. How many more issues
will it take for the profession to explore the best option
for its future?
Publisher, The CPA Journal
Executive Director, NYSSCPA