State Board Examines Computer-Based Test

State Board Examines Computer-Based Test

By Benjamin Kaplan, Manager of Policy Research

Continued from the Home Page

Since the April 2004 introduction of the CBT exam, base testing fees (excluding individual state board fees) have increased by 16 percent. The original per-hour pricing schedule agreed upon by the National Association of State Boards of Accountancy (NASBA), the American Institute of Certified Public Accountants (AICPA) and exam administrator Thomson Prometric was based on an expected volume of test candidates per year, according to an AICPA report. After the first year of CBT testing did not yield the expected number of candidates, Prometric’s per-hour fee increased proportionally.

“Volume-based pricing isn’t fair to students taking the exam. They shouldn’t be penalized because not enough other students are showing up to take the test,” said Ron Huefner, a professor at SUNY Buffalo and a member of the Society’s Higher Education Committee. “However, I haven’t heard anything from students that would indicate that the test fee is prohibitive.”

Currently, the cost of taking all four sections of the Uniform CPA Examination for a first-time candidate is $547, which is the same fee nationwide. The exam application fee, which varies on a state-to-state basis, in New York is $125, and the state’s CPA licensure fee is an additional $345.

“On top of higher education costs, recent graduates in New York are doubly challenged by the cost of the CPA exam and state licensure fees,” said Priscilla Wightman, a professor at Hartwick College and member of the Higher Education Committee.

“These factors, combined with the phase-in of the 150-hour requirement, are part of the overhead costs that students must consider. We may see a lull in CPA candidates over the next couple of years.”

The AICPA’s recently issued white paper, “Updated Comparison of Costs—Professional Licensure Requirements,” compares the average cost of licensure across eight major professions. According to the report, the total average licensure cost for the accounting profession (based on information gathered from California, Illinois, Missouri, Texas and Virginia) is $725, while the average total cost for licensure in the legal profession is $622. The report also claims that despite the increase in cost related to the switch from a paper-based exam to CBT and the recent increase in testing fees, “the (average) cost of accounting licensure is still reasonable compared to other professions.”

NYSBPA Executive Secretary Daniel Dustin disagreed.

“Based on assumed passing rates and costs per test section, it is not appropriate to make such a claim,” Dustin said of the AICPA report. “They’re not comparing apples to apples.”

In their white paper, however, the AICPA points out that “The largest single expenditure to the candidate for licensure in these professions is the educational requirement.”

Also at issue at the meeting were the methods by which the AICPA arrived at the figures in its report. Brooke Anderson-Tompkins, State Board member and president of Anderson Funding, said the report contained multiple mathematical errors, like dividing by the wrong quantity when calculating averages.

“There are several errors in the math,” Anderson-Tompkins said of the report. “I’m not sure how much value you can put into this document.”

Substantial Equivalency Changes Discussed

The board also discussed a draft revision by NASBA and the AICPA to the Uniform Accountancy Act, a set of regulations jointly published by the two associations designed to provide a uniform approach to regulation of the accounting profession. Of particular interest to the State Board was a proposed revision governing substantial equivalency, which would push back the exemption on the 150-hour rule—which requires 150 credit hours of college credit be completed prior to licensure, as opposed to the previous requirement of 120 credit hours—from 2001 to 2012. Currently, New York does not have a law on the books that recognizes substantial equivalency in the accounting profession.

The draft revision document states that the revision “is being proposed to allow licensees who are from jurisdictions that have not enacted the 150-hour education requirement to gain individual substantial equivalency practice privileges. ... The proposed revision enhances the utility of substantial equivalency by extending (the) exemption available to CPAs who passed the examination prior to 2012.”

Comments on the draft revision are due by Oct. 3.

Additionally, as the result of a request for clarification received by the State Education Department, the board established an ad hoc committee to address whether certain types of tax experience could be considered as qualifying experience for licensure. It was decided that the newly formed committee will deliver a report on that specific issue at the next board meeting, tentatively scheduled for Nov. 16.