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Update for CPA Exam Candidates

Mary-Jo Kranacher, MBA, CPA, CFE

This month, many students will end one phase of their lives and begin another. College graduation is an exciting time, filled with much anticipation and anxiety—anticipation that their academic preparation has given them the knowledge necessary to succeed in their chosen career and anxiety about the challenges that lie ahead. One of the challenges facing accounting graduates is to pass the CPA exam.

Over the years, many college professors have advised their accounting students to prepare and sit for the CPA exam as soon as possible upon completion of their educational requirements. The logic of this advice was based on the belief that students should take the exam while they were still in “test taking” mode. With the release of the CBT-e (computer-based testing–evolution), effective January 1, 2011, those candidates who have prepared for the current format may want to expedite their anticipated date to complete all parts of the CPA exam before the end of this year.

New Content and Other Changes

With the SEC's renewed commitment to its plans to converge U.S. GAAP with International Financial Reporting Standards (IFRS), or adopt it outright, the AICPA Board of Examiners (BOE) has decided to include material covering this topic. IFRS will be tested in three of the four parts of the exam. In addition, new content and skill specification outlines (CSO and SSO) will be implemented. A detailed explanation of the upcoming CSOs and SSOs can be found at www.cpa-exam.org/download/CSOs-SSOs-Final-Release-Version-effective-01-01-2011.pdf.


The FASB Accounting Standards Codification (ASC) was released on July 1, 2009, and supersedes all previous, non-SEC U.S. accounting standards for entities not covered by GASB. It changed the way in which accounting standards are researched and referenced. The CBT-e will require CPA candidates to use this newly restructured body of authoritative literature to complete tasks based on FASB ASC research.

Written communications

One of the most frequently voiced concerns about entry-level accountants is the need to improve their writing skills. Consequently, the BOE has incorporated a writing component into the Business Environment and Concepts (BEC) section of the exam. According to an AICPA representative who spoke at the recent NYSSCPA Accounting Educators' Conference in Albany, the written communication tasks will be graded on the candidate's ability to articulate ideas in a grammatically correct manner rather than on the technical accuracy of the content.


The lengthy simulations in the current CPA exam will be replaced by short, task-based simulations in the CBT-e. It is anticipated that this change will shorten the amount of time needed to score the test. These newly developed questions will be tested in the Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG) sections of the exam.

Section time

Although the total testing time for all four parts of the CPA exam will remain at 14 hours, BEC will increase by 30 minutes to three hours and AUD will decrease by the same amount of time to four hours.

Scoring weights

Multiple-choice questions will account for 60% of the total grade in the AUD, FAR, and REG sections; task-based simulations will account for 40%. In the BEC section, multiple-choice questions will account for 85% and written communication for 15%.

The Cost Factor

Many accounting graduates have struggled to meet the costs associated with preparing and applying for the CPA exam. Information from a representative of the New York State Board for Public Accountancy in Albany brought some welcome relief—New York State will not require candidates who are applying to sit for the exam to pay the $377 licensure fee up front. This means that a candidate can wait until she has successfully passed all four parts of the exam and completed the work experience requirement before applying for, and paying the fee for, licensure.

By the way, the AICPA representative who spoke at the conference in Albany also indicated that the new CBT-e was developed with the expectation that candidates sitting for the exam have the equivalent knowledge and skills of a professional with two years of experience. Surprise, surprise! Who knew that the advice educators have been giving their students for so long was at odds with the AICPA's expectations?

As always, I welcome your comments.

Mary-Jo Kranacher, MBA, CPA, CFE. Editor-in-Chief. mkranacher@nysscpa.org.

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