Improvements Imminent for CPA Exam

Improvements Imminent for CPA Exam

By Forrest Whitesides

ALBANY, N.Y. -- At its Aug. 30 meeting in Albany, N.Y., the New York State Board for Public Accountancy (NYSPBA) voted to recommend to the New York Board of Regents a critical improvement to the computer-based CPA exam: the adoption of numerical scoring of the exam rather than the current pass/fail reporting. The NYSBPA also voted to recommend to the Regents an amendment to the 18-month timeframe during which a candidate must pass all four parts of the exam.

Numerical Score Reporting

In August, the NYSSCPA delivered a report to the NYSBPA outlining the Society’s areas of concern and recommendations for improvement of the computer-based CPA exam. Of the changes to the exam suggested by the Society, the implementation of numerical scoring -- rather than the current policy of pass/fail reporting only -- sat atop the list. Currently, New York is the only state that reports exam scores on a strictly pass/fail basis.

The Society’s CPA Exam Task Force, chaired by Bob Kawa, earlier this year conducted a survey of 619 recent CPA exam candidates and found that nearly 80 percent of respondents said the reporting of scores on a pass/fail basis impeded their ability to determine their performance on the exam. Further, more than 90 percent of survey respondents said that New York state should give a numerical grade rather than report only on a pass/fail basis.

“In a profession where transparency has been heightened and disclosure scrutinized, it is ironic that CPA exam administrators do not disclose numerical grades to our candidates,” Kawa stated in the report to the NYSBPA.

That the State Board voted to recommend the adoption of numerical score reporting bodes well for future CPA exam candidates, Kawa said.

“Numerical score reporting is, without a doubt, the most needed improvement to the CPA exam as implemented in New York state,” he said. “I believe that this change will be tremendously beneficial to those who sit for the exam.”

On a national basis, less than half of exam candidates passed the exam in 2004, according to the Task Force’s report.

“A numerical score will allow a candidate to have a better understanding of which areas should be studied more thoroughly before a retest,” Kawa said.
NYSBPA Executive Secretary Dan Dustin said that prior to the roll-out of the computer-based exam, there was an expectation that the new test’s diagnostic performance reporting would be superior to the paper-based exam.

“The current ‘diagnostic’ score reporting does not represent an enhancement over the reporting methods used for the old pencil-and-paper CPA exam,” Dustin. “Exam candidates have made it clear that they prefer numerical scores.”

Exam Completion Timeframe

The NYSBPA also voted to recommend an amendment to the current 18-month window within which a candidate must past all four parts of the CPA exam. The recommended change would alter the window to be six testing periods after a candidate passes the first section, rather than beginning the 18-month term on the date on which the candidate passed the first section of the exam. CPA exam windows are two months long followed by one “dark” month during which no exams are given, for a total four exam windows per year.

“This recommendation was made in order to insure that candidates get the full 18 months to pass all the sections,” Dustin explained. He said that under the current policy, it is possible for a candidate’s 18-month deadline to fall in one the four dark months, effectively reducing the candidate’s window by as much as a month. The recommended amendment would eliminate such an occurrence, he said.

Candidates who do not pass the four exam sections within the specified timeframe lose credit for the sections they passed and must reapply and begin the testing process anew.

Possible Implementation Date

Dustin said that it is important for current and prospective exam candidates to note that the State Board’s recommendations likely will not go before the Regents until the end of the year.

“Assuming things go smoothly, I would expect that the recommended changes could go into effect in early 2007,” he said.