The new year will be here before you know it, and our team has been hard at work ensuring our 2018 course materials address the new updates provided to us by the AICPA. These updates will address two types of changes:
- Alterations to the representative tasks laid out in the AICPA Blueprints and;
- Content updates resulting from changes to authoritative guidance.
Below we have provided a basic breakdown to how each Exam section is changing come 2018, and how we are addressing these issues in our course materials:
Auditing and Attestation (AUD)
Blueprint: There were no new content areas added or removed from the AUD Blueprint for 2018. However, one content group and 12 representative tasks have been revised to reflect the terminology changes in SAS 130, An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements. For example, under Area IV, A, 3, the task has been changed as follows: “Prepare a draft report
for an examination of internal control engagement or for an audit of internal control integrated with the audit of an entity’s financial statements, starting with a report example (e.g., an illustrative report from professional standards).”
Content: The AUD section of the Exam will see some notable changes for 2018. Our team has been hard at work overhauling relevant course materials to ensure candidate success:
- SAS 132, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern (AU-C 570)—Eligible for testing Q1
- SAS 133, Auditor Involvement With Exempt Offering Documents (Amends AU-C 560 and 925) —Eligible for testing Q3
Business Environment and Concepts (BEC)
Blueprint: No representative task changes.
Content: No real changes, but a shift in focus.
The CPA examiners have been shifting emphasis within the Information Technology (IT) topic from what computers do to how CPAs use computers. For the 2018 edition of our course, we are re-organizing the IT section accordingly.
This year, the examiners released a list of “new” vocabulary that may appear on upcoming Exams. Remember, questions will vary by CPA candidate; some candidates might not see any questions using these terms and others may see more than one. The “new” vocabulary terms include:
- Artificial intelligence and machine learning
- Big data, data analytics, and data visualizations
- Blockchain and cryptocurrencies (e.g., bitcoin)
- Cloud operations and data storage
- Digital business models
Each of these terms will be discussed in our 2018 course materials.
Also in our 2018 course materials, we expanded our corporate governance coverage by incorporating a discussion of fraud risk management programs. This does not appear in the AICPA blueprint explicitly; however, it is well within the comprehensive task: Describe the corporate governance structure within an organization (tone at the top, policies, steering committees, oversight, ethics, etc.).
Note: Changes issued in September 2017, are not eligible to be tested until April 2018, not January 2018. Thus, the anticipated changes to the COSO Enterprise Risk Management framework will not be tested in Q1 of 2018.
Financial Accounting and Reporting (FAR)
Blueprint: Updates to the FAR blueprints are in line with the authoritative literature changes for nongovernmental and not-for-profit organizations (NGNPO):The AICPA eliminated Area I, C, 4 (Statement of Functional Expenses) and the related tasks.
- The AICPA removed the terms "unrestricted, temporarily restricted and permanently restricted" from representative tasks related to NGNPO.
Content: FAR will be the most significantly altered section of the CPA Exam in 2018, with the most prominent updates to Revenue Recognition. While this will affect several areas within the course, we will have one section predominantly focused on this change, with explicit guidance in the course textbooks, as well as focused lectures from Roger Philipp, CPA, CGMA to ensure full comprehension of the topic in relation to the CPA Exam.
Below is the full list of content updates to FAR, all of which will be eligible for testing Q1 of 2018:
- Revenue Recognition (ASU 2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2017-05, 2017-10)
- Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01)
- Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14)
- Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15)
- Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01)
- Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory (ASU 2016-16)
- Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18)
- Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07)
- Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09)
Note: While there have been recent changes to the lease guidance (Topic 842, ASU 2016-02), it's important to note that these will not be tested in 2018.
Blueprint: “Treasury Regulations” was added to the list of references and “and Regulations” was omitted, so there are wording changes only.
Content: There is nothing new for 2018…yet! However, we are continuously monitoring for any major changes in health care and tax reform, and will keep our community informed of any areas that may be eligible for testing throughout the year.