So, you’ve set your sights on obtaining a CPA license. Your mission, if you choose to accept it, is to fulfill the profession’s “three Es”: education—in New York, you’ll need 150 hours of it at an accredited college or university; experience—at least a year working under the supervision of a CPA; and the third “E”: exam—you’ll have to pass, with at least a score of 75, the accounting profession’s test of might—the Uniform CPA Examination.
If you’ve decided that you are willing to face seemingly endless hours of study, sleepless nights and feelings of isolation, all in the hopes of being among the 57 percent of candidates who pass the exam, then you’ve come to the right place. You probably also know that as of April 1, 2017, CPA candidates across the country and around the globe have had a new exam to contend with, one that tests what exam designers refer to as “higher-order cognitive skills,” such as critical thinking, problem solving, analytical ability and professional skepticism.
In order to test these skills, the new exam features more task-based simulations and fewer multiple-choice questions than the previous exam. In order to better illustrate exactly what types of skills and knowledge you will be tested on, and how they are relevant to the tasks that will be expected of you as a newly licensed CPA, the Content Specification Outline (CSO) and Skill Specification Outline (SSO), which are basically what they sound like—outlines of the content and skills tested on the exam, along with how each section is weighted—have also been updated. They are now referred to as “blueprints” attached to each section that are meant to be more informative for candidates, academics, regulators and other stakeholders.
Some things, however, don’t change. You may still take the required test sections individually and in any order, but you have to pass all four sections of the examination within a rolling 18-month period, which begins and ends at the end of nontesting windows (March 31, June 30, Sept. 30 or Dec. 31). Those who have already passed sections of the previous exam need not worry, as any combination of previous and new sections passed will still count toward licensure, provided they’re taken within the required 18-month window.
Candidates who took the previous exam in March had to wait only two weeks for their results, while those taking the new exam in April and May will have to wait approximately 10 weeks. This delay is necessary in order to provide sufficient time to statistically validate candidate performance on the new exam, according to the American Institute of Certified Public Accountants (AICPA), the national professional association for CPAs that is also responsible for developing and scoring the CPA exam.
Whether the next section of the exam you take is your first, or you’ve sat for the exam so many times that Prometric could name one of its testing centers after you in your honor, what you need to know about the next CPA exam largely boils down to one key difference from the previous exam: more task-based simulations, for a greater emphasis on critical thinking and problem solving. It’s what the profession needs from new hires, especially now that technology has led to the automation of many tasks that entry-level employees may have been expected to perform in the past.
The updated exam is the product of careful study by a group of 60 professionals across several disciplines at the AICPA.
Along with the AICPA, there are two other parties involved in exam administration: the National Association of State Boards of Accountancy (NASBA), which represents the licensing authorities in each state and runs the National Candidate Database), and Prometric, the company that runs the testing centers, and delivers and scores the test.
Among the CPAs, psychometricians (professionals who design standardized tests), planning and operations group members, volunteers and Board of Examiners members, was AICPA Director of Examination Content Richard Gallagher, a retired CPA who spent three decades as a partner at Big Four accounting firm Ernst & Young.
“The exam is constantly evolving because standards change, but this was broader,” Gallagher said of this latest revision process. “This was stepping back and saying, ‘What are newly licensed CPAs doing, and how has that evolved?’ So, that was a much more expansive analysis than what had been done prior.”
But is it a more difficult test?
“The new exam, contentwise, has not changed a whole lot,” said Angeline Brown, director of accounting curriculum at Becker Professional
Education, a CPA exam review provider. However, “the shift has definitely been toward more difficult questions, with the purpose being to make sure the exam tests the students’ ability to do the things that are expected of newly licensed CPAs in the modern world.”
But Jeff Elliott, the founder of Another71.com—a CPA exam-focused site—and NINJA CPA Review study courses, said that the new exam isn’t going to be “as scary as people think,” adding, “If you stop and think about it, the same concepts are being tested … just in a different way. … Pass rates will likely drop as they do whenever there’s a change … but then, things normalize.”
Gallagher believes that some people might even find the new exam easier.
“I’m not really good at memorizing things, but I’m a good problem solver,” he said. “So, I’d probably do better on this exam.”
While task-based simulations are better at testing higher-order thinking, multiple-choice questions provide a greater variety of data about a candidate’s skill level, as well as more data within a testing period, due to the shorter format, said AICPA Director of Psychometrics and Research John Mattar.
“With multiple-choice questions, they’re all independent of each other, so they can be on different topics,” Mattar said, while simulations pose a set of questions within a single situation. “So, you can test the same number of questions, but the main difference in terms of content coverage is [that] a simulation is going to be about one fact pattern, and one specific set of facts. A simulation is an integrated thing, so you don’t have as much flexibility. You don’t have as many degrees of freedom to cover different aspects of accounting.”
As noted above, the AICPA’s CSOs and SSOs for the exam have been replaced with what are now referred to as CPA exam “blueprints.” The CSOs listed the topics covered in each section of the exam, while the SSOs separately described the general skills being tested.
“The blueprint brings those both together and, for every topic in the content outline, it gives you two pieces of info: … the skill level for that piece of content and … one or more representative task[s] that a CPA might have to perform related to that topic,” explained Mattar.
The top of each blueprint provides the scoring weight for each skill level to be tested in a particular section, before leading into a chart that lists relevant tasks and the corresponding skill level.
For instance, the AUD (Auditing and Attestation) section tests understanding of internal controls. At the “analysis” level, exam
takers must identify the internal controls most relevant to an audit of a company’s financial statements, or an examination of its internal controls; at the “evaluation” level, they must determine if those internal controls are effectively designed.
An increase in the number of simulations requires additional time both to create the simulations and to administer them to students, leading to a longer and more expensive exam. This year’s changes, then, also come with a higher price tag.
The total cost for all four sections of the previous exam, including the $150 fee for first-time test takers, was $884.10. But with the BEC (Business Environment and Concepts) and REG (Regulation) sections increasing from three to four hours, the costs for those two sections will increase as well, bringing the total to $923.80, according to NASBA.