In case you missed it, there are some significant changes in the works for the CPA exam that will go into effect next year. Part of the change relates to the content, skills and research aspects of the exam. The other major change will be offering the CPA exam in some international locations on a pilot basis in 2011.
It might be good to overview the organizations involved in the CPA exam as I find that when I talk to members, not all of them are aware of the players and their roles. There are three groups –AICPA, the National Association of State Boards of Accountancy (NASBA) and Prometric.
First, AICPA is the organization responsible for developing and scoring the exam. Next, NASBA provides oversight to the exam development process and also is responsible for the National Candidate Database. NASBA helps assure that the licensing boards in the U.S. can rely on the exam, and it also helps the state boards in the administration and issuance of grades to candidates. Finally, there is Prometric. Prometric is a wholly owned subsidiary of ETS (Educational Testing Service – the SAT folks) that is responsible for the delivery of the exam at authorized test centers across the U.S.
So those are the players. What are the changes that will soon be occurring?
Well, there will be new content and skill specification outlines used, a new question format and a greater use of “simulations” versus multiple choice questions. There will also be an increase in the testing of writing skills by adding essays to the Business Environment and Concepts (BEC) section of the exam. The move to the computerized exam nearly six years ago has now provided over a million test administration’s worth of data that are being used to improve the exam and make it more relevant to testing the knowledge and skills that CPAs need in today’s world.
In addition, starting next year the exam will begin to test candidates on IFRS. Initially, the IFRS questions will be small in number and they will appear in the various sections of the exam. Over time, they could grow if the shift to IFRS evolves. Research shows that increasingly new CPAs need to be familiar with IFRS because of preparing financial reports for foreign owned companies in the U.S., auditing companies that report in IFRS, and working for U.S. companies that need to convert IFRS financials into U.S. GAAP.
Finally, the exam will be offered on a test basis in a few international sites next year. Currently, about 10 percent of the total exam takers are foreigners who travel to a U.S. exam location to take the test. Guam (a U.S. jurisdiction and an exam location) currently tests more candidates than any other U.S. location. Offering the exam internationally will make it easier and less expensive for these candidates. It will also help the CPA profession respond to the global marketplace for accounting credentials. But that is a subject for another blog!
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