September 22, 2018

CBT-e

AICPA’s Concern Over a Building Gap in CPA Exam Candidates Totally Immaterial

Yesterday, Colin stuck the following story in ANR. We're going to go ahead and give it its own spot because this is something worth discussing: The number of New Yorkers obtaining their Certified Public Accounting license from the state remained relatively flat in 2014, according to statistics compiled by the New York State Education Department. […]

Here’s the Real Reason Why CPA Exam Pass Rates Are Up

Sunil Kumar wrote a piece called "CPA Exam Passing Rates and CPA Salaries on the Rise" for Accounting Today the other day that offers up a few theories on why CPA exam pass rates are up these days. Among Kumar's ideas why numbers are up: Pre-2003, the CPA exam was a pen and paper exam […]

Curious CPA Exam Candidate Wants the Scoop on Simulations

I’m digging deep in the mailbag for this one, only because you kids have been awfully quiet lately (a sure sign that we’re in a blackout month). If you have a CPA exam question, comment or complaint for us, please let it launch. Come on, you’re going to be sitting around for the next 2 – 3 weeks waiting for your scores, might as well.

Adrienne,

I was wondering if you could go over what the simulations entails in FAR. I understand that the multiple choice contains 30 questions, and that there are 3 testlets. However, does the break down for the 7 simulations include more than one part.

For example, I know you will have a problem say leases, maybe a research question…but is that 1 simulation or is that 2 of 7?

Thanks,

Recent Grad…miserable studying…

Let’s defer to the good ole AICPA on this one, you can never go wrong getting info straight from the source. From How the CPA Exam Is Scored:

In addition to multiple-choice questions, the AUD, FAR, and REG sections also contain task-based simulations. Task-based simulations are case studies that allow candidates to demonstrate their knowledge and skills by generating responses to questions rather than simply selecting the correct answer. Task-based simulations typically require candidates to use spreadsheets and/or research authoritative literature provided in the Exam.

Well that’s not very helpful, is it?

In FAR, you’ll encounter 7 task-based simulations, of which 6 will be graded. You don’t know which TBS is pre-test so you have to go into it as if they are all graded.

Assume that each of your simulations will be on a different topic and will only require you to complete one tab. You may see more than one research question so be sure to get in some practice in that area (and access your free 6-month subscription to the authoritative literature if you haven’t already – note that you must have a valid NTS to sign up for this).

In previous versions of the exam, one simulation consisted of several tabs. You’d have to get through two of them in 45 minutes a piece and hope you filled in enough tabs to pass. In the latest incarnation of the exam, however, you will receive more varied topics. This works in your benefit as you have a better chance of getting TBS problems on areas you feel comfortable in, whereas in the old exam you had to hope and pray you didn’t get a simulation on a topic you didn’t study well or suck hard in, as you were just about guaranteed to bomb it.

Then again, in the old exam you could blow the sims and still have a chance to pass. Nowadays, however, you don’t have that luxury as simulation problems carry a heavier weight point-wise.

That said, you’ll want to do the tutorial on the AICPA’s website. While review course materials can come close to simulating the actual exam environment, the CPA exam remains the intellectual property of the AICPA, therefore no review course can copy simulation problems exactly. But since the AICPA provides that tutorial, it has the exact look and feel of the questions you will see on the exam.

CPA Exam Candidate Is Worried About IFRS in AUD

The gmailmen have delivered the following reader question:

Hey Adrienne,

I have already passed BEC back in November 2010, and am sitting for AUD next week. I know with IFRS now being included in the curriculum, I can expect to see a few questions related to IFRS topics. I only have 2009 study materials, so they do not include IFRS.

I know with FAR and REG I will most likely need to either A) Buy new materials or B) borrow another coworker’s, but as far as the AUD test, how much emphasis should I put on studying the IFRS material at this point a week before my exam. I figure a day or 2 to skim through the IFRS stuff should suffice?

Thanks in advance for the advice!

Let’s once again for the 10,000th time consult the CSOs (Content Specification Outlines) for the information we need. When in doubt, this is your go-to for what will be covered on the exam and in what concentrations. While the AICPA doesn’t give exact figures (such as “you’ll get 15 bonds questions per FAR exam”), it is a great tool for figuring out what you can blow off and what you’re going to see a lot of. Hint: no matter what the CSOs say, your particular exam will probably contain an unusually large number of questions on whichever topic you chose not to study.

That being said, the good news is that IFRS has very little relevance in Audit at all (in comparison to FAR, as you pointed out). However, international auditing standards will be tested in AUD, and that part you are going to need to know.

Can you study from outdated AUD materials and still pass? It’s certainly possible. New material only makes up 5 – 10% of the 2011 exam by my estimation (based on the CSOs, my gut feeling and feedback from candidates who have sat for the exam this year), so it’s not all that crazy to suggest that you could do really, really well on old material and still pass. Keep in mind, however, that most people do not do really, really well on any material, new or old.

I would suggest, at a minimum, picking up a used 2011 textbook from Amazon and flipping through the new material. Entire sections have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.

Think about it: the exam changes twice a year. So if you have materials from 2009, the exam has changed 4 or 5 times since then, once significantly. Normally this might mean missing a handful of questions but in the case of CBT-e, I suspect the AICPA will be testing larger numbers of new questions going forward as they get more comfortable with the new format.

Good luck!

Q1 CPA Exam Pass Rates Worst in Three Years

Jeff shared some pretty depressing news on Another71 yesterday, it looks like pass rates are down. Way down:

Auditing and Attestation:
2009 Q1: 47.61%
2010 Q1: 46.86%
2011 Q1: 43.88%

AUD passing rates are down 7.8% over 2009 and 6.4% over 2010.

Business Environment and Concepts:
2009 Q1 46.23%
2010 Q1: 46.59%
2011 Q1: 42.32%

BEC passing rates are down 8.5% over 2009 and 9.2% over 2010.

Financial Accounting and Reporting:
2009 Q1 45.54%
2010 Q1: 44.95%
2011 Q1: 42.43%

FAR passing rates are down 6.8% over 2009 and 5.6% over 2010.

Regulation:
2009 Q1: 47.96%
2010 Q1: 49.00%
2011 Q1: 41.28%

REG passing rates are down 13.9% over 2009 and 15.8% over 2010.

What’s strange about this is that REG was the section least changed in CBT-e, leading us to wonder if some CPA exam candidates were, in fact, better at written communication than they thought. Taking these easy 10 points out of FAR, AUD and REG could have something to do with the first quarter’s awful scores, or it could be that candidates were not familiarized enough with the new format to do smashingly this time out.

One commenter on Another71 said “I took REG and felt like I studied for the wrong exam when I saw the questions,” which I’ve heard a lot about BEC but never about REG. In fact, for the last four years I have consistently told candidates that REG is the easiest for some candidates simply due to the cut-and-dry nature of tax and business law. It is not as large and all-encompassing as FAR, nor does it require all the extensive calculations. But this information could be game-changing.

The other strange fact here – and I have no specific numbers on this, going on my perception based on comments I have received from candidates who tested last quarter – is that for those who did pass, it seemed like many of them scored in the high 80s and 90s, as opposed to the usual large number of 75 – 79s like I usually see from passing candidates. Since I didn’t actually aggregate any real data, it’s hard to say whether or not this is an important point to mention. Perhaps I’ll try harder next quarter to get some actual numbers.

It’s also important to recall my conversation with the AICPA earlier this year when we discussed the possibility of changing the passing score in 2011. The exact statement was “In terms of the score reported to candidates, right now the passing score on that reported scale is a 75 and it’s going to remain there because we want to have consistency over time” from John Mattar, Director of Psychometrics and Research. What I took that to mean was that a 75 last year may or may not be the same as a 75 last year, which could explain why more candidates missed the mark this time around.

What do you think?

AICPA Updates Their 2011 Score Release Timeline

A few months back, we got a few moments with the AICPA examinations unit for insight on CBT-e and, most notably, the updated score release plan for this year.

Now it looks like the AICPA has updated their 2011 score release timeline with more details on changes to scoring later in the year, specifically an improvement that will allow them to release scores earlier for the October/November testing window which we first told you about in January. At that time, we were forbidden from telling you how frequently the AICPA wanted this to be but now that they’ve updated the FAQ, this information is all yours to enjoy:

Q. When can I expect to receive my scores after October 2011?

A. During the 2006-2010 testing windows , candidate scores were released in two rounds: The first round approximately one week before the end of the testing window, and the second approximately two weeks after the end of the testing window. In addition, not all candidates who tested early in a window were eligible for the first round of score release. Candidates who took test forms with new test content that required additional analysis and review before scoring were not eligible for the first round of score release.

With CBT-e, improvements have been introduced into the process. Beginning with the October/November 2011 testing window, scores will be released faster and more frequently.

The first round of score release will be approximately one month after the beginning of the testing window. Subsequent score releases will be made every two weeks after the initial release.

In addition, with very few exceptions (see below), candidates who test early in a window will be eligible for the first round of score release.

What are those exceptions? Amazingly, those taking BEC should not expect to get their scores early. The AICPA states that candidates taking BEC will have to wait a little longer for their scores just in case their written communication problems need to be analyzed by the AICPA’s skilled team of robots and/or human beings. They have always been (purposely?) vague about how written communication is graded and we will have to wait for a later talk with their examinations unit to see if we can get more insight on this process, specifically whether or not it will be changing with CBT-e.

Q. Are there any differences in score release by Exam section (AUD, FAR, REG, BEC)?

A. Yes. Candidates who take the BEC section may get their scores in a subsequent release due to additional analyses that may be required for the written communication tasks. Also note that written communication tasks now appear in the BEC section only.

Don’t get disappointed; overall, changes to scoring will improve over previous years and this is a work in progress, meaning the AICPA is working to tweak the candidate experience for the better based on their analysis throughout the year and beyond.

CPA Exam Debuts Internationally in August

For those of you interested in taking the CPA exam in wild locales such as Bahrain or Kuwait, wait no longer, the CPA exam is officially international beginning August of 2011.

Initially announced along with CBT-e, international testing appeared to be slated to begin in January but security issues and further testing necessitated the delay.

So far Bahrain, Kuwait, Japan, Lebanon, and the United Arab Emirates (UAE) are the only countries in which the exam will be administered. After a long two year analysis, NASBA, AICPA and Prometric determined those areas to meet their stringent safety and security guidelines.


We know what you’re thinking. Bahrain?! According to the three agencies, candidate volume demand as demonstrated by candidates from those countries taking the exam in the United States was a huge factor in deciding where to administrate the exam. Sure, Japan seems like a no-brainer but up until now, international candidates have been forced to obtain a visa to physically appear in the United States for their exams, often for marathon sessions of more than one test in a two or three day period.

Other factors in deciding which countries included:

• The ability to deliver the Exam without legal obstacles.
• Security threat to the Exam (both physical security at test center and intellectual property security of Exam content) assessed at levels equivalent to those presented domestically.
• Existence of established Prometric test centers.

Other countries were analyzed ahead of this announcement but I know of at least a handful that were determined unfit for test administration based solely on security issues in those countries. Being proprietary and more heavily guarded than Colonel Sanders’ 11 herbs and spices, protecting CPA exam content was likely one of the largest concerns involved in taking the exam international.

While candidate volume and interest in the exam is also high in countries like India and Korea, security concerns are equally as high (if not higher), therefore excluding these areas for the time being. My understanding is that the AICPA is open to expanding international testing in the future and just with CBT-e, will be monitoring the situation closely after launch, ready to adjust based on results. International candidates will still have to apply with the state board of their choice and are invited to use NASBA’s Accounting Licensing Library to search for a jurisdiction in which to apply.

The AICPA Talks to Going Concern About the New CPA Exam

Because I genuinely care about the well-being of you little CPA exam candidates out there, I recently put aside the inflammatory nonsense for a moment and took some time out of my busy schedule to chat with the AICPA about the new CPA exam that they were proud to say launched early this month without a hitch. We’re pretty excited about that too, mostly because it means we can finally stop talking about 2011 changes and get back to talking CPA exam strategy, which is largely unchanged as a result of CBT-e.

We here at Going Concern value reader input (even if we do value chastising said reader just as equally) and therefore reached out t//goingconcern.com/2011/01/what-would-you-ask-the-aicpa-about-the-new-cpa-exam/”>your input on the sorts of questions we should ask. You spoke and we listened so let’s cut right to the chase and give you some answers.


John Mattar, Ed.D., Director of Psychometrics and Research and Mike Decker, Director of Operations and Development, both of the AICPA Examinations Team, were kind and brave enough to speak with me and give me plenty of insight on the brain behind the new CPA exam.

First of all, we need to talk scoring as that’s the one thing you guys have complained about consistently since the exam went computerized in 2004 (except for written communication but that is an entirely different issue). We’re proud to tell you that we can finally say with certainty that the AICPA will not be changing the passing score from 75 moving forward. That’s right, put down your flaming pitchforks, all you 74s who were ready to flip should the score have been lowered to 70. “In terms of the score reported to candidates, right now the passing score on that reported scale is a 75 and it’s going to remain there because we want to have consistency over time,” John told us.

That means a 75 last year might not necessarily be the same as a 75 this year but a 75 is still passing and that’s what matters. As we all know, the AICPA uses a complicated and mysterious psychometric formula to determine weights for each question and bases a candidate’s score on this formula. It isn’t for you, little candidate, to worry about how they come up with their numbers nor should you feel as though the AICPA gets some sick thrill out of seeing you get a 74. Believe it or not, they’re neutral. They don’t care if you pass or fail, they only care about overseeing a professional examination that successfully tests the knowledge base of entry-level CPAs in the United States. That’s it.

Second, while the AICPA will be using a single score release formula for at least the first three testing windows of the year, candidates can anticipate a new and improved score release system that will hopefully be introduced by the end of the year. This means all candidates who test early in their window will be eligible to receive their scores in the first release and all other candidates can expect to receive their scores in more frequent batches through the end of that window’s blackout month. So forget the Wave 1/Wave 2 nonsense. “Due to a lot of the work we’re doing on the backend, we’re going to be able to release scores faster. We’re not actually going to be able to release the scores earlier until the 4th quarter because we need to do a greater analysis in the first three quarters,” Mike said. So while you guys see the new simulations and international content on the frontend, it’s important to remember that a lot of time and effort went into improving the backend of the CPA exam and faster scoring is one such improvement that we can expect to see by the end of the year. But these changes come at a price so be patient while the AICPA works through the first three windows of this year to finalize their new scoring process.

If you haven’t already, I recommend you check out How the CPA Exam is Scored for more details on this process. Expect an update to that document when new scoring takes effect later in the year.

As for CBT-e content, I initially congratulated the AICPA for finally streamlining some questionable areas of the exam (especially BEC) in the updated CSOs/SSOs but forgot that they don’t actually come up with content on their own. You can thank an extensive practice analysis and subsequent input from practicing CPAs for the CPA exam you know and love today, a process that takes into account input from the profession on what entry-level CPAs should know. That means the introduction of international financial reporting and auditing standards is entirely independent of the SEC’s do-we-or-do-we-not IFRS roadmap. This should be a comfort to some of you who are wondering just how much IFRS will appear on the exam in coming windows as it means the exam will most likely continue to test remedial international content and will mostly focus on major differences between IFRS and GAAP. Entry-level CPAs in the U.S. are not expected to be experts in IFRS, just as they are not expected to be experts in cost accounting, government accounting, non-profit accounting or any number of areas that have been consistently tested on the CPA exam for years now.

The best news is that though the e in CBT-e stands for evolution, those expecting to take the exam in 2012 or beyond shouldn’t expect such a large overhaul as we just saw any time soon. “We don’t plan to change the exam,” John said. “What we plan to do is keep the exam current with the profession to protect the public interest. If we do have significant changes in test content we would have to let candidates know in advance.”

That being said, the largest takeaway I got from my conversation with the AICPA was that they are simply interested in providing a consistent examination that continues to evolve to meet the needs of the profession. I swear to you that they really don’t get a sick thrill out of torturing you guys with changes, scoring delays and new content though it may appear that way sometimes, especially if you’re in the 74 x 3 club. It’s their job to make sure that the CPA exam represents the best interests of the profession, which means revising their strategy to keep up with the evolution of the industry.

We applaud the AICPA on a job well done and congratulate them for a successful CBT-e launch. So far, candidate feedback I have gotten on the new exam format has been mostly positive, which means that their hard work was totally worth it.

The AICPA, NASBA and Prometric Announce Successful Launch of the New CPA Exam

Even though only two testing days passed from the time CBT-e launched and the time the press release came out, the AICPA, NASBA and Prometric are very excited to announce the successful launch of the new CPA exam.


Via the AICPA:

The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy, and Prometric today launched the new Uniform CPA Examination, called CBT-e, which includes for the first time questions on International Financial Reporting Standards among other sweeping and significant changes.

Changes were approved by the AICPA Board of Examiners based on input from state boards of accountancy in response to an Invitation to Comment, and a Practice Analysis designed to ensure the exam tests the modern knowledge and skills that are relevant for today’s entry-level CPAs. The new IFRS questions and other changes to the exam are the first major revisions since the CPA exam was computerized in 2004.

Overall, more emphasis is being placed on skills assessment using case study-based questions known as Task-Based Simulations. Authoritative literature in the CPA exam incorporates use of new Financial Accounting Standards Board codifications of U.S. Generally Accepted Accounting Principles. Professional responsibilities including ethics and independence have been added to the Auditing and Attestation section.

“The testing of IFRS knowledge and other international standards is a response to change in the business world in which new CPAs operate,” said Craig Mills, vice president of examinations for the AICPA. “We are proud and excited to be introducing innovations in this evolution of the computer-based test that both validate and update the content of the exam and improve the experience for candidates. The exam is one of three key requirements, along with education and experience, that help state boards and the profession maintain the highest standards and protect the public interest.”

In related news, I will be speaking with the AICPA this afternoon about the new exam and thanks to your input, will be interrogating them on score releases, potential changes to passing scores, the integrity of the exam (since the old timer paper and pencil folks continue to rag on the new exam as too easy) and the continued evolution of exam content beyond 2011. I’d like to ask them when the hell BEC is going to be more than a junk drawer but having seen some of the new 2011 content on that section, I have to say it looks like they are working on consolidating the most random CPA exam section into a more streamlined piece of psychometric awesomeness. It isn’t too late to get me your questions for the AICPA’s exam unit so if you have one that you haven’t gotten to me yet, get on that or drop it in the comments and I’ll try to sneak it in.

I’ve also spoken to at least a handful of candidates who tested last week and so far feedback is positive on the new format as I suspected it would be. For the love of Excel, please don’t get stressed out over international standards as you shouldn’t expect to receive an exam made up of 70% new content. Try 5 – 10% max.

Update to come on Friday.

What Would You Ask the AICPA About the New CPA Exam?

Lucky me, I’ll be speaking with the AICPA about the successful launch of CBT-e as well as grilling them about the new format, their motivation behind the change, and all this nonsense about changing the passing score from 75.

Because you guys are the ones taking the exam and I’m just the one writing about it, I figured it would be appropriate to give you all the opportunity to weigh in on what I should ask. I swear I’m not being lazy as I have plenty of my own questions to ask but thought it might be nice for all of you with questions to have the chance to get them answered directly from the source.

You’re welcome to put your suggestions in the comments or, if you’re embarrassed because your question also makes you look like a big fat failure, please feel free to email me and I promise I’ll guard your identity like Caleb guards his yoga mat.

Don’t Wait at the Mailbox for Your CPA Exam Score This Year

On top of content and cosmetic changes for the CPA exam in 2011, the AICPA has pledged to deliver scores more quickly and efficiently by replacing the current random two wave system with a simple, single release during the blackout month.

Here’s how it has worked up until now: depending on when you sit for the exam, you can get your scores in either Wave 1 or Wave 2. Wave 1 includes most people who tested early in the window and Wave 2 is (supposed to be) released before or during the blackout month (that’s March, June, September and December) so you can get a new NTS and reschedule a failed part in the next window. Anyone who has waited for a score in the last few windows can tell you this system is flawed and obviously under quite a bit of pressure with increased applicant volume in recent months.


But for the first three windows on 2011, the AICPA is going to try out a new score release system that would mean those who test in January/February will receive their scores in one release in March. Apr/May will be released in June and July/Aug will be released in September. That means California applicants better hope scores come out early in the blackout so they have time to submit a reapplication and wait for a new NTS as the Board of Accountancy there has been overwhelmed with new applicants and current CPA exam candidates, with three fewer days a month to process everyone thanks to Furlough Friday. Unfortunately for them, it looks like scores will be released at the end of each blackout month.

For now, a passing score is still 75 but the AICPA plans to take data from the first window of the year as it considers changing that going forward. Better get in those exam parts while you can!

The AICPA claims that those testing in the fourth quarter can expect an accelerated release but with all these changes and fancy new tricks up the AICPA’s sleeve, I wouldn’t hold my breath.

Making CPA Exam Resolutions for 2011

I can’t believe the year is over and have already gotten my 2010 CPA exam rant out of the way so the following is specifically for those of you excited to get started on the brand-spanking new (not so new) CBT-e CPA exam that launches anew on January 1 or, more specifically, January 3rd, 2011. Or maybe January 4th. Anyway…


Last year, you probably swore up and down you’d be done with all four parts AND the ethics exam (for those of you who actually have to take one) by now but life happens and your plans fell through so instead of making unrealistic resolutions only to be disappointed, let’s tackle this the conservative way.

Don’t bite off more than you can chew One part per window is reasonable unless you are going to end up fired or divorced if you don’t get your CPA in the next two months. If you want to be ambitious and take two in a window that’s fine but the easiest way to get through it is by taking it slowly and carefully. Give each section the time it needs to get embedded in your brain just long enough for you to spit it all out, pass, and move on to the next section. There are always exceptions to the rule (and I’m sure they are going to take this opportunity to remind us how exceptional they are in the comments) but odds are you aren’t the exception so don’t try to overachieve, you don’t get bonus points for most failed attempts or most parts attempted in one testing window.

Plan! I can’t say it enough: if you don’t have a plan, you’re going to bomb miserably unless you’re one of those fantastic freaks who somehow pulls it off despite all your best procrastinating. If you’ve ever made a New Year’s resolution to lose weight, think of your CPA exam plan in the same way you might approach weight loss. If you don’t plan out a specific diet and exercise plan, you’ll be shoveling cookies down your pie hole within a week.

Schedule. As in right now. If you wait until the last minute to schedule your exams (you know who you are, I talk to you all the time and you’re always sort of generally scheduled to take the exam “at the end of the window”), you’re missing an important motivator that can actually encourage you to study. If you schedule early, you’ve got actual dollars invested in an exam part and a big fat carrot to dangle in front of your face when you’re in the mood to blow off studying. Not just that but you have an actual day to circle on the calendar, which will help you when you’re planning how much time to spend studying in the days before.

Hope that helps and Happy New Year to all of you, see you next year!

P.S. – Please get in touch with us after the 4th with any and all (legal) feedback on the new CPA exam format, we’re excited to hear your thoughts on the AICPA’s exam makeover!

AICPA Announces International CPA Exam Locations

Have you, like many foreigners, been tripping about getting into the US to take the CPA exam, battling with strict post 9/11 Visa rules and other assorted red tape? Trip no more, the CPA exam is about to go international. This is huge because the exam is also about to get an international makeover (like IFRS testing in FAR and international audit standards in AUD) but that couldn’t at all be coincidentally related to this announcement from the AICPA:

The Uniform CPA Examination will be offered outside the 55 U.S. jurisdictions for the first time in its history in 2011. The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy and Prometric – the three organizations that jointly offer the CPA Examination in the United States – reached an agreement to administer the exam in international locations.

The CPA Examination next year will be offered in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates.

The international exam will be the same as the one offered in the U.S., using the same computerized format and administered in English. As in the U.S., the purpose of taking the examination will be to qualify for licensure as a CPA through U.S. state boards of accountancy.

Security has been one issue for the AICPA in deciding where to offer the CPA exam even though it will continue to administer the exam through Prometric. International testing will be subject to the same state board or jurisdiction rules that determine eligibility for CPA exam candidates since there is no Dubai Board of Accountancy. Just as now, potential international candidates will have to meet the requirements of whichever jurisdiction they choose to apply. Which I guess makes all the residency-requirement states out of the running to be a part of this epic new spin on the computerized CPA exam?

Some have mentioned on earlier bitch sessions about the AICPA that their motivation is a monetary one. Expanding membership, for example, brings in revenue. Increasing the passing CPA exam score (thereby causing more failures and, one would imagine, more subsequent $$$ retakes after) is another example though that’s just a rumor last I heard. So if one were inclined to postulate as to the motive behind this move and approach it skeptically, you might come to the conclusion that this could equal a pretty significant payday for the AICPA as well as NASBA, Prometric, ChoicePoint and all the CPA review courses who make a living off of this exam. I’m not against it.

I guess we will find out what significance the U.S. CPA exam still holds for the rest of the world. Even if we end up looking pretty bad when international candidates do way better on the AICPA’s new international exam content in 2011.

How Much Harder Is AUD Going to Be in 2011?

Continuing with our previous posts on the 2011 CPA exam for FAR and BEC, we proudly present one heck of an Audit wrap up for those of you planning to take it next year.

Audit, unfortunately, is the one section that I think will be just a tad harder than it is this year but only in one small area. We’ll get to that in a minute.


Simulations – As with FAR and REG, Audit will contain 7 smaller simulation problems next year (called “simlets” or “task-based simulations”) instead of two large simulations. Written communication is gone and placed into BEC. Since AUD was the largest exam time-wise up until now, a half hour will be moved out of Audit and put into BEC. Now 4 1/2 hours, it will be cut down to 4. Since AUD is often one in which candidates run out of time even in 2010, it is all that much more important to learn important time management strategies to assure you do not run out of time.

MCQ – Multiple choice questions will make up 60 – 70% of your score while TBS (task-based simulation) problems will make up the remainder.

Research This is where Audit gets tricky and why I feel it is the only section that will be slightly harder in 2011 than it is now. Currently, research is just a tab buried in simulations and frankly not worth your time unless you have tons left and really love looking through the Code of Professional Conduct (or need something to copy for your written communication, though we would never recommend such a thing).

In 2011, research will be its own TBS with the same weight as other simulation problems (if graded). For FAR and REG this isn’t much of an issue as you only have the ASCs to dig through in FAR and just two sets of code for REG. But for Audit, you have a grand total of TEN different sets of code to search; the Code of Professional Conduct, PCAOB ASs, SASs, SSARS… you get the point. It wouldn’t hurt to try out the new research problems on the AICPA’s website here so you can get an idea of what you are up against. It is very similar to 2010’s research except that it is on its own and actually worth a couple points.

Ethics and Independence – Content-wise, professional ethics and independence are moved out of REG and into AUD (except those that pertain to tax practice, which will continue to be tested in REG) and international audit standards will be peppered in throughout. Planning the engagement will now make up 12 – 16% of problems whereas before it accounted for up to 28% of this section. Internal control is upped to 16 – 20% (from 12 – 18%). Audit procedures will get far less testing than in 2010, going from 32 – 38% of questions to 16 – 20%.

Hope that helps and see you on Tuesday for our last 2011 wrap up, Regulation!

The Quickest 2011 CPA Exam Breakdown You’ll Ever Read

Because we know all of you are very busy tearing up your last exams before CBT-e hits in January of 2011, we won’t waste your time and get right to the point. 2011 is coming, the exam is changing and though we’ve been over it plenty in the last several months, let’s go over it one more time.


Simulations – This year’s simulations are next year’s simlets. Simulation problems will be shorter, task-based problems that should take you about 10 – 15 minutes to complete as opposed to the 45 minutes they take now. AUD and FAR will have 7 smaller simulation problems while REG will have 6. As usual, not all of these are graded.

Multiple choice – BEC and REG will contain 24 MCQ per testlet while FAR and AUD will still contain 30. MCQ will make up 60% of the FAR, AUD and REG exams and 85% of BEC.

Research – if you’re taking the exam this year, research is buried in simulations and doesn’t carry much weight point wise. Next year, however, research will be its own tab worth as many points as any of the other simlet problems. FAR research will be easy as it is limited to the ASCs (Accounting Standard Codification) and REG will mostly draw from the Internal Revenue Code but AUD will come with a dropdown menu that includes PCAOB ASs, the Code of Professional Conduct and SSARS just to name a few. You’ve been warned.

Written communication – WC is out of FAR, REG and AUD and slapped into BEC. You’ll have to write three written communications, of which two will be graded.

International standardsIFRS and international auditing standards will be added to current FAR and AUD content (respectively) while REG is mostly unchanged by this as you can’t really test international standards of federal taxation. Keep in mind that this additional content will most likely be gently mixed in with what is already being tested and does not make GAAP completely irrelevant so don’t use 2011 as an excuse to procrastinate all the way through the holidays.

Now stop wasting your time with inflammatory nonsense blogs and GET BACK TO STUDYING!

(btw: if you have a CPA exam question for us – anything from applying to qualifying to passing – do get in touch)

Don’t Let 2011 CPA Exam Changes Keep You From Studying This Year

I’ve talked to a lot of panicked CPA exam candidates out there who seem to be bewildered and anxious about CBT-e changes coming up in just a few short months and even though we’ve covered it plenty here on Going Concern, I figured I’d take the time to remind you once again to relax. Please. Seriously. Like now.

A few things to keep in mind and then we’ll get to the good part.


1. Accounting is still accounting and IFRS puts debits on the left too. While international standards are spooking everyone, let’s take a deep breath and remember that accounting is still accounting whether it’s GAAP, government, IFRS or that wonky version of financial accounting that the Fed gets to make up. For the first few testing windows, if not years, it is highly likely that the AICPA will take a conservative approach when it comes to integrating the new standards into the CPA exam. They are not going to scrap years worth of effort put in to the computerized exam just to test international standards that aren’t even used in the U.S. so stop thinking 2011’s exam is THAT much different.

2. Regulation isn’t really changing at all. Does it ever? You’d be surprised how little the exam changes from year to year even as new standards are released and introduced to the bank of questions candidates receive. The fundamentals haven’t changed much over time and probably won’t. In the last three years, I can only remember two very large changes: a massive overhaul of Audit in mid 2007 that changed a lot of terminology but not much else and FAS 141(r) or, as candidates know it, business consolidations last year. Beyond that, the meat and potatoes of the exam have remained pretty constant in the 6 years since the exam went computerized.

3. Simulations will be easier. Believe it or not, the new sims should be way easier than the current ones. Instead of hoping you get a simulation that covers the two or three areas you studied (ahem, procrastinators, I’m talking directly to you), you get 6 or 7 smaller simulation problems that cover a multitude of areas. This makes your crapshoot odds of knowing what you’re doing far better than they are under the current structure.

So, now that we’ve pointed out those few things, I think you should know that there’s no reason to hold off on studying this year if your plan is to start taking exams in the beginning of 2011. GAAP will not change and will still be tested, it is just that new international standards will also be added to the mix.

You can certainly get a jump on studying by going over the current material towards the end of the year and then hit the 2011 stuff once it is available. Otherwise you’ll have to cram up to 150 hours of studying into a couple weeks right after New Year’s when you’re probably in no mood to study anyway. Trust me, a fourth quarter 2010 FAR exam isn’t going to be drastically different from a first quarter 2011 FAR exam except for the obvious international stuff sprinkled throughout. No big deal.

You CAN use 2010 books to START to prepare for the 2011 exam, just be sure to update them with 2011 material once it is available. If you rely solely on 2010 materials you will probably fail but you can definitely use them to get the foundation on topics that are still going to be tested in 2011 and beyond in much the same way they have been since 2004.

Hope some of you can now sleep at night. You’re welcome.

Should CPA Exam Candidates Crack Open College Textbooks?

It’s a valid question and we haven’t answered it yet so let’s give it a shot, shall we? Here’s the specific reader inquiry:

I graduated in 2008 with an accounting degree, but I’ve not really pursued anything in accounting since then. Without talking too much about my personal life, I’ll just say I had better opportunities.

Anyways, I’m considering getting back into public accounting, and I plan on beginning taking the CPA exam in 2011, after busy season. If I order a CPA review course, will that be enough, or should I spend some time reviewing my books/notes from college?


Yeah, we’re with you on the “better opportunities,” be that foaming lattes or harvesting certain medicinal plants (depending on your state, of course), so let’s forget about what you’ve been doing since you graduated and focus on the task at hand: passing the CPA exam.

As we’ve told you plenty of times, it’s always best to knock the exam out as soon as you graduate since you likely still have some sort of study habits left over from college and aren’t yet tied down with family and a career but things don’t always work out that way for whatever reason. That’s fine, my professional experience has actually been that those who take some time off after school do better once they do start to tackle the exam simply because they are older, wiser and usually slightly more dedicated than a 22 year old fresh out of college. No offense to the dedicated 22 year olds out there, of course.

But please, whatever you do, don’t bother with your college textbooks. Chances are your cheap, lazy and overworked accounting professors used the same textbooks year after year while the CPA exam changes twice a year. Sure debits still went on the left even in 1903 but keep in mind the CPA exam isn’t necessarily a test of how good of a CPA you will be but a comprehensive skills test that identifies your shallow knowledge of a broad range of subjects. Think of the exam as a lake 15 miles wide but only an inch deep; some of your college texts may delve into some areas in detail that aren’t really tested on the exam or they could skip entire areas completely, especially since you graduated just as the economic crisis was hitting. Things have changed since then and with international standards hitting in 2011, the chances are even lower that these areas were covered in school.

For you, the best thing to do is find a review course that will help refresh your knowledge based on what you learned in school but also give you a general outline of topics that you may have forgotten or never covered when you were in college. I know it’s called “review” but a good review course can teach you as if you have no prior accounting experience whatsoever… assuming you do remember which side to stick the debits on.

Skip the textbooks and spend your time focusing on a review product that will give you exactly what you need to pass the exam. Good luck!

CBT-e Strategies: What To Do When You’re Still Sitting for the CPA Exam in 2011

Those of you who graduated in May should already be buried in your review books and planning to sit for some parts – if you haven’t already – but for some of you, the long wait to get your applications processed is anything but over OR you managed to procrastinate up until this point and haven’t even begun the process. I’ll resist the urge to smack you if you promise to submit those as soon as you’re done reading this post. Regardless of where you’re at in the process, chances are you’re tripping about 2011 changes. Not to worry, my big fat brain packed with CPA exam goodness is here to help.


Accounting Is Still Accounting – Even if they are testing IFRS in 2011, debits still go on the left (at least I’m pretty sure they still do under IFRS) and pension accounting is still really annoying. Keep in mind, IFRS isn’t the norm in the wild – at least in the U.S. at this point – and will not be for several years so it would be irresponsible of the AICPA Board of Examiners to heavily test rules that aren’t even widely accepted in practice. So relax, the changes are coming but they aren’t nearly as scary as you think.

FAR – If you are able to, get FAR done this year so you don’t have to worry about it next year. The first two windows of 2011 will say a lot about the AICPA’s strategy but knowing them, I wouldn’t expect 2010’s exam to be completely different from 2011’s. Those questions cost a lot of time and energy to make and the BoE isn’t about to trash all of them just so they can start testing rules that we don’t even use. With me on this one? Calm down.

CPA Review Materials – If you haven’t yet committed to a CPA review course, be sure to ask about 2011 materials and how changes affect the course you choose THIS year. A good review course will offer updates to the material but be on the lookout for additional product purchase charges or fees to update your materials. For BEC, REG and AUD the changes are minimal: international audit standards will appear here and there and a few things are moved around but for the most part the largest change in these areas will be the cosmetic change in BEC as written communications are moved out of the other three sections and stuck there. This does not change the content, only how you prepare and the point percentages for this section.

You can find the new 2011 CSOs via the AICPA here if you’d like a better look at what you’re in for next year but as I said, it doesn’t take long to figure out that next year’s exam really doesn’t look all that different from this year’s.

How Simulations are Changing for the 2011 CPA Exam

As most of you already know, the CPA exam is changing and our last two testing windows are quickly approaching. If you are concerned about the impact of IFRS on CPA exam content, get FAR done this year. If you absolutely hate written communication, knock out BEC in 2010 as it will contain them in 2011. A few topics will be moving around and for an overview of everything that’s changing starting January 1, 2011, check out the updated Content Specification Outlines for all the gruesome details.

The biggest and most obvious change will be a shift in the thinking of the CPA exam itself
Whereas we have always considered the CPA to be a world-renowned designation and GAAP the be-all-end-all of accounting rules, we now must recognize the global nature of capital markets and future CPAs will be expected to demonstrate a working knowledge of international standards in financial reporting and auditing.


For 2011 simulations, we’re expecting that the AICPA Board of Examiners will continue to use a similar format (you may see tabs that you recognize if you’ve already taken exam parts and done some simulation problems) but instead of getting 2 large sims, you’ll get 7 task-based simlets (6 in Regulation).

Contrary to popular rumor, BEC WILL NOT CONTAIN SIMULATIONS
Blame that on the folks who don’t read but BEC will only contain written communications (3, of which 2 will be graded) and will go from 90 multiple choice to 72. You’ll get an extra 30 minutes to complete this part, which will be taken away from Audit.

The Unknown
It’s difficult to say at this point what candidates should expect come January 2011. Will research still be worth 1 point and therefore easily blown off if you’re running out of time? Will simlets require extended journal entries that can take quite a bit of time to put together? The honest answer is that we don’t know.

The AICPA used to have a tutorial at cpa-exam.org but since they redid their website, these tutorials have moved to their main page and can be found here. The cpa-exam.org site is still down and, presumably, will not be brought back now that everything is stashed on the AICPA’s website.

So our guess is that the new format WILL be available in tutorial form from the AICPA before January though we haven’t seen anything to date. When the research function changed in mid 2008, they made it available for practice at least one window prior to the new function appearing on the exam and 2011’s simlets should be no different. We’ll let you know if we spot the new format available for practice so stay tuned and better knock out some exams while you can, there are only four testing months left before everything changes!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

If I Pass CPA Exam Parts in 2010, Will I Have to Pass Them Again in 2011?

Have a question on the CPA Exam? What section is easiest? How should I study for Regulation? Are pants mandatory at the testing site? Shoot us an email with your query.

It’s the big question on everyone’s minds so we better address it now before you cute little CPA exam candidates start freaking out:

Do you know what will happen if as of December 31, 2010 I have completed two sections of the exam? Will I only have to take the remaining two sections or will I be subject to the new exam parts coming in 2011?


Good question. First of all, keep in mind that a lot of the hype surrounding the 2011 changes is:

A) CPA Review course marketing (“buy new materials! Be sure you’re up to date!”)

B) AICPA marketing (“Hey! Check out how advanced we are and how easily we can integrate a whole new set of standards into our psychometric exams!”)

C) Misinformation spread by candidates who “heard from someone” that BEC will now contain 10 simulations and all of them will be graded.

Just stop. The two biggest changes for 2011 are the addition of IFRS (which will mostly affect FAR) and communications in BEC, that’s it! That means get FAR out of the way this year if you can and throw in BEC before December if you are allergic to written communication. The exam changes twice a year anyway, this is nothing new.

Now that that’s out of the way, the rolling 18 month period also stays the same so whatever you have passed in the last 18 months will still be good. Again, if you’re freaking out about all of this, get FAR done ASAP and you will have minimal IFRS and GAAP codification garbage to deal with. A few sections are moved around (for example, business structures will be moving out of BEC) but it’s mostly the same content. REG is hardly changed at all and AUD will be one half hour shorter with more on professional ethics while BEC will be one half hour longer with written communications.

Simulations are trimmed down to “simlets” and instead of getting one topic, you have a better chance of doing well as they will be smaller and consist of several different topics. In my opinion, the exam is just getting easier.

I’m willing to bet that testing will be a bit of a bumpy ride for the first two windows of the year as the AICPA BoE gets its bearings with the new information and somewhat adjusted formats. But debits are still on the left and credits on the right so it’s not worth getting bent out of shape over; the exam will still suck and you’ll still have to study but thankfully, just like thousands of CPAs before you, you’ll rarely use anything you learned for the exam in the real world.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Just When You Thought You Knew the CPA Exam…Three Ways It Will Change in 2011

Now that we are nearing the end of the second CPA exam testing window in 2010, it’s about time to remind you (once again) that the CPA exam is scheduled for a pretty significant facelift in just two testing windows. Though we have covered it before, we thought it would be helpful to go over some of the planned changes.

Let’s meet your new CPA exam for 2011, shall we?


Changes to Content Specification Outlines – First and most significantly, the CSOs will undergo a huge overhaul. IFRS will be added – initially – to FAR and eventually international accounting standards and demonstration of an understanding of how they work will play a larger role in examination questions. Keep in mind that IFRS testing will be gradual and likely focus on the differences between IFRS and US GAAP initially until the AICPA BoE feels comfortable with candidate performance and the SEC’s procrastination on IFRS adoption. IFRS will also be tested in AUD and BEC (XBRL for one, which they have already been pre-testing for several windows) but expect a skiddish stance from the BoE in the beginning.

Audit loses 30 minutes to BEC – The reasoning behind this to allow candidates more time in BEC for written communications, which will be removed from FAR, AUD, and REG (where they currently are). Don’t bother trying to avoid written communication altogether by taking BEC this year and the other three next year, it’s an easy 10 points as long as you can write a standard business letter. You do not even have to be correct when you answer the question, you need only stay on topic and use good grammar.

International CPA exam testing is coming – Thirdly, the AICPA, NASBA and Prometric are working together to make international CPA exam testing a reality. Chances are if and when Prometric begins administering the CPA exam offshore, testing will be limited to a handful of countries (likely Japan, Dubai, and possibly India, where large numbers of Chartered Accountants tend to also seek the US CPA designation). We’ll see how this unfolds come 2011, as the AICPA would like to begin international testing with new CBT-e changes.

All in all, accounting is still accounting and the CPA exam will be exactly as it always has been: a test of your basic understanding of many broad topics that you may or may not ever encounter in your professional life. CBT-e will most likely be rolled out in pieces and subject to tweaks along the way.