CPA Exam Changes
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CPA Exam Changes
Each year, the AICPA approves various changes and updates to the CPA Exam, altering pre-existing sections, adding new topics and occasionally removing older ones. Read through the timeline below to learn about Exam changes through the years. Subscribe to our newsletter to ensure you stay on top of all of the latest changes to the CPA Exam.
2017 CPA Exam Changes:
The Next CPA Exam
The next version of the CPA Exam launched April 1, 2017.
The AICPA began research and development for the next version of the Exam in 2013, aiming to ensure that the content and structure were still relevant—and most importantly— reliable measures of the knowledge and skills required to protect public interest as a CPA. The comprehensive research, known as the Practice Analysis, was initiated by market demand for a “higher-order” skillset that CPA Exam candidates need to demonstrate in order to execute CPA job responsibilities effectively. As a result of a multi-year effort consisting of collaboration with the profession’s key stakeholders - including Roger CPA Review - the AICPA Board of Examiners is adjusting the content, skill level, question type, question weight and structure, and time allotment of the CPA Exam.
HOW HAVE THE CHANGES BEEN DETERMINED?
The updated version of the CPA Exam is the result of a comprehensive practice analysis, based on extensive research, with the end goal of determining the knowledge and skills required of newly licensed CPAs. The practice analysis took place in 2013 – 2015 and was multifaceted to ensure the CPA Exam remains relevant to the profession. The research conducted through the Practice Analysis informed the new version of the CPA Exam.
CPA EXAM CONTENT CHANGES
While the subject matter of the 2017 CPA Exam remains the same, the primary change to the exam is the increase in the degree - or skill level - at which that subject matter is tested.
The purpose of the CPA Exam content changes is to ensure that the CPA Exam content tests the skills that newly licensed CPAs must know to continue to protect the public interest, including:
- Critical thinking, problem solving, analytical ability, and professional skepticism
- Effective communication skills
- Well-developed research skills
- A strong understanding of the business environment and processes
- Ethics and professional responsibilities
INCREASE FOCUS ON HIGHER ORDER SKILLS
To ensure they test higher order skills, the AICPA has adopted a skill level framework based on the modified Bloom’s Taxonomy of Educational Objectives.
The previous version of the CPA Exam contained content primarily designed with the following learning framework: Remembering, Understanding, and Application. With the 2017 CPA Exam, more emphasis is on assessing higher-order skillsets: Application, Analysis, and Evaluation.
We see the assessment of higher-order skillsets within the context of questions.
- Remembering & Understanding: Identify, Classify, Recall, Explain, Categorize, Clarify, Compare, Define
- Application: Calculate, Implement, Test, Represent, Prepare, Use, Execute, Carry Out
- Analysis: Reconcile, Deconstruct, Validate, Deduce, Imply, Integrate, Distinguish, Organize
- Evaluation: Justify, Critique, Conclude, Judge, Detect, Verify, Recommend, Assess
INCREASE SKILL LEVEL TESTED ON EXAM SECTIONS
The previous version of the CPA Exam equally assesses Remembering and Understanding and Application level skills in all four exam sections. In the 2017 CPA Exam, there is a distinct shift to test higher order skills - Analysis and Evaluation – as demonstrated in the pie charts below.
AUD is the only section in the 2017 CPA Exam in which the Evaluation skill is assessed.
CSO VS BLUEPRINT
CSOs – or Content Specification Outlines – are released by the AICPA each year to identify the extent of the technical content to be tested on each of the four sections of the CPA Exam.
With the 2017 CPA Exam changes, the AICPA replaced CSOs with Blueprints. According to the AICPA, the purpose of the blueprint is to:
- Provide assurance that the Exam is properly designed to test such knowledge, skills and tasks.
- Assist candidates in preparing for the Exam by delineating the knowledge and skills that may be tested.
- Apprise educators about the knowledge and skills candidates will need to function as newly licensed CPAs.
- Guide the development of Exam questions
SKILL LEVELS ASSESSED BY QUESTION TYPE
The chart below shows the increased caliber of skill levels assessed by question-type for the 2017 CPA Exam.
|Current CPA Exam||2017 CPA Exam|
|Multiple Choice Questions (MCQ)||Remembering & Understanding||Remembering & Understanding Application|
|Task Based Simulations (TBS)||Application||Application
CPA EXAM STRUCTURE CHANGES
INCREASING TASK-BASED SIMULATIONS & DECREASING MULTIPLE CHOICE QUESTIONS
The 2017 CPA Exam includes an increase in the amount of Task Based Simulations in all sections, including the addition of TBS to the BEC section. Outlined in the table below, BEC includes four to five simulations. AUD, FAR and REG each include eight to nine TBSs.
|Multiple Choice Questions||Task-Based Simulations||Written Communication|
On the previous version of the exam, candidates typically alloted 10 to 20 minutes on each TBS. On the 2017 CPA Exam, candidates will need to spend 15 to 30 minutes to complete each TBS, which will now also test higher order skills - Analysis and Evaluation.
While the number of TBSs increased, the number of MCQs decreased for all sections except for the REG exam, which slightly increased. This is a direct correlation to adding more TBSs to the exam since TBSs require more time to answer and will be testing higher order skills.
Document Review Simulations
The AICPA has also announced a new type of TBS called Document Review Simulation (DRS), which is tested on the AUD, REG and FAR exam sections. As of now, this is the only significant CPA Exam change that affected the exam prior to Q2 of 2017. DRSs test candidates’ Application skills, and evolve to test Evaluation and Analysis.
The purpose of these new simulation questions is to increase the authenticity of the CPA Exam by testing real-life tasks performed by CPAs. In short, candidates are required to reference documents, such as legal letters, phone conversation transcripts, and authoritative literature to discern what is and is not important. Click here to learn more about DRSs.
INCREASE TIME ALLOCATION & ADJUST SCORING WEIGHTS:
The chart below shows the changes in question type on the 2017 CPA Exam.
In the previous version of the CPA Exam, Multiple Choice Questions (MCQs) comprised 60% of the scoring weight in AUD, FAR and REG, with the balance of scoring weight attributed to TBSs. MCQs comprised 85% of the scoring weight in BEC, with the remaining 15% of the scoring weight attributed to Written Communication. Because of the increase in TBSs to assess higher order skills, the scoring weight of multiple choice questions and TBSs is now approximately 50 percent each in AUD, FAR and REG. BEC has a score weighting of 50% MCQs, 15% Written Communication and 35% Task Based Simulations.
TIME ALLOCATION CHANGES
The amount of time test takers receive for each section of the CPA Exam changed for the first time since 2011. Business Environments and Concepts (BEC) and Regulation (REG) sections of the CPA Exam increased by one hour to account for increased Task Based Simulations (TBS) and the higher level skills being assessed.
Additionally, As a result of the 2017 exam’s increased focus on testing higher order skills, students received a 10-15 minute break during each exam section. The breaks don't count against candidates’ testing time, as compared to the previous exam, in which breaks counted against testing time.
15 MINUTE BREAK
The new exam includes a standardized 15-minute break in each section that doesn't count against the candidate’s time. Because the exam tests at higher skill levels, essentially requiring more brainpower, breaks were added to allow test-takers a moment to recollect themselves before continuing with the exam.
CPA Candidates see a direct cost increase of $20 for the BEC and REG portions of the CPA Exam, as a result in the increased testing time from three to four hours.
TIMELINE FOR THE FINAL VERSION OF THE NEXT CPA EXAM
- January 2014 – September 1, 2015 - Members of the following groups were interviewed, surveyed, invited to focus groups, and to comment. Information from this group was combined with the practice analysis.
- Newly licensed CPAs
- Direct and indirect supervisors of newly licensed CPAs
- CPAs in business and industry
- Academics, including Roger CPA Review
- Standard setters
- Training directors
- Boards of accountancy executive directors and members
- September 1, 2015 - Exposure Draft
- The AICPA distributed an exposure draft: a final proposal for the next version of the Exam for review by state boards of accountancy, standards setters, regulators, public accounting firms, academics, and state CPA societies.
- The exposure draft was made available to the entire profession, with special distribution to the boards of accountancy, standard setters, regulators, public accounting firms, academics, and state CPA societies.
- The exposure draft contained blueprints, structure, design, and administration of the next CPA Exam.
- Comments from this final round of external review will be used to finish the design of the next version of the CPA examination before its announcement in 2016.
- September 1 – November 30, 2015 - Exposure Draft – Comments Period.
- Q2 2016 – Public Announcement - Next version of the CPA Exam announced.
- Q3 2016 – Document Review Simulations added to the CPA Exam
- Q2 2017 – New version of the CPA Exam launched.
- 2018 – AICPA Proprietary Test Drive Launched (A new testing interface utilizing Excel, audio, and video to be launched in 2018).
- Free Webcast: 2017 CPA Exam Changes
- Free eBook: The 2017 CPA Exam Changes
- How will the 2017 CPA Exam Affect You?
- The 2017 CPA Exam Changes: 10 things you need to know
- Why the 2017 CPA Exam is testing higher order skills
- The CPA Exam is changing sooner than 2017 (the addition of DRSs July, 2016)
- Why the 2017 CPA Exam changes are making CPA Exam resources in the classroom more important than ever
- Breaks added to 2017 CPA Exam
2016 CPA Exam Changes
The most significant change to hit the CPA Exam in 2016 was the introduction of a new type of task-based simulation, called Document Review Simulations, which were added to the AUD, FAR, and REG exam sections on July 1, 2016. Click here to find out more about the Document Review Simulations, what they test, and why they were added to the exam.
Other than the addition of DRSs, the AICPA had few plans for changing the 2016 CPA Exam in light of the significant changes to the 2017 Exam. Most of the content changes on the 2016 exam were a result of recent Accounting Standard Updates issued by the FASB which became testable in the Financial Accounting and Reporting section of the exam during 2016. Auditing and Attestation and Regulation underwent minor changes while Business Environment and Concepts did not change at all in 2016.
FINANCIAL ACCOUNTING & REPORTING (FAR)
- Due to Accounting Standards Update 2015-01 issued by the FASB in January 2015, which eliminates the concept of extraordinary and unusual items from U.S. GAAP, ‘Going Concern’ will replace ‘Extraordinary and Unusual Items’ in the Specific Transactions, Events and Disclosures area of the FAR Content Specification Outline (CSO). The AICPA has explicitly stated the elimination of extraordinary and unusual items will not become effective on the exam until Q1 2016.
- Accountings Standards Update 2015-03, issued in April 2015, simplifies the presentation of debt issuance costs, which we refer to as bond issuance costs or BIC. Currently, BIC is reported as a deferred charge in the asset section of the balance sheet and gets amortized separately on the income statement. Under the revised standard, BIC will be treated similarly to a discount or premium and will be reported as an adjustment to the carrying value of the liability. The AICPA has explicitly stated this change to the accounting for BIC will not become effective on the exam until Q1 2016.
- Accountings Standards Update 2015-05, issued in April 2015, concerns the accounting treatment of cloud computing expenses. This change is testable on the exam possibly as early as Q4 2015, but most likely starting in Q1 2016. When an entity enters into a cloud computing arrangement, an analysis is performed to determine whether some or all of the arrangement represents a software license. If the entire arrangement, such as a platform-as-a-service arrangement, is considered a software license, then its entire cost to include the present value of future payments is treated as an intangible and accounted for similarly to other license. If the arrangement does not include a software license, the entire amount is treated as a service contract with the expense recognized in the period in which the benefit is derived. If the arrangement is a combination of both software license and service contract, the total cost will be allocated between the software license and the service contract.
AUDITING AND ATTESTATION (AUD)
- ‘Applicable financial reporting framework’ replaced ‘generally accepted accounting principles (GAAP) or other comprehensive basis of accounting (OCBOA)’ in the Accounting and Review Services area of the AUD Content Specification Outline (CSO). Therefore, a slight change in mindset is required, wherein a candidate should consider departures from the applicable financial reporting framework, with less emphasis on whether the applicable financial reporting framework is GAAP or OCBOA.
- The CSO reference OMB Circular A-133 has been superseded by OMB Audit Requirements for Federal Awards (2 CFR 200).
- The SSARS 21 updates [link to https://www.rogercpareview.com/blog/ssars-no-21-and-cpa-exam], which most notably created the financial statement preparation engagement, appeared on the exam more frequently in 2016, though they became testable starting in Q3 2015.
- The 2016 REG update didn't represent any changes to the rules and concepts tested on the exam. The update consisted of a few revisions to numerical thresholds indexed for inflation, with allowances made for tax law provisions that are currently expired but may or may not be retroactively renewed by legislative action by the end of 2015.
- For 2016, the AICPA expanded upon the Impact of Multijurisdictional Tax Issues on Federal Taxation topic in the Federal Tax Process, Procedures, Accounting, and Planning area of the REG Content Specification Outline (CSO). The topic now includes the following two subtopics:
- General concepts of state and local tax (non-state specific – for example – nexus and apportionment)
- U.S. taxation of multinational transactions
While these are not new areas for testing, this special attention given in the 2016 CSO indicates plans for increased emphasis in 2016.
BUSINESS ENVIRONMENT AND CONCEPTS (BEC)
The AICPA reported no planned updates for the BEC Exam in 2016.
2015 CPA Exam Changes
Most of the 2015 CPA Exam changes appeared on the Financial Accounting and Reporting (FAR) Exam. Auditing and Attestation (AUD) had some changes, however, none that were a large impact on the exam during the four 2015 testing windows. Regulation (REG) and Business Environment and Concepts (BEC) content went through very minor changes with all of the heavily-tested information remaining the same.
Financial Accounting & Reporting (FAR)
- The AICPA has indicated that understanding the differences between the following Special Purpose Frameworks will now be tested.
- General Accepted Accounting Principles (GAAP)
- International Financial Reporting Standards (IFRS)
- Tax basis of accounting
- Cash basis of accounting
- The FASB modified certain rules to address the needs of smaller companies. There are three specific areas that were pertinent during the 2015 testing windows. The new “Small GAAP” approaches to the following topics were developed to simplify the procedure and reduce the cost of accounting for a smaller operation.
- A new approach was developed for accounting for interest swaps. As a little reminder, interest swaps are derivatives that companies use to “swap” a loan that bears interest at a variable rate into a fixed rate loan.
- A new, simpler, approach was developed for accounting for goodwill. The new approach reduces the cost of testing for impairment and eventually eliminates goodwill from the small company’s financial statements.
- A new approach was developed for lease accounting for “Small GAAP” companies. While publicly held companies are required to perform an extensive analysis to determine if the lessor should be included in the financial statements of the lessee as a variable interest entity (VIE), nonpublic companies are now allowed to avoid analyzing a relationship with the lessor that is related and simply account for the lease by applying lease accounting.
- The AICPA worked on a major update to revenue recognition standards that had a large impact on both the accounting community and the CPA Exam. New International Financial Reporting Standards (IFRS) went into effect as part of the 2015 CPA exam. However, General Accepted Accounting Principles (GAAP) were fully updated in 2017. Though the IFRS change is significant, it will mean much more and is likely to be more heavily tested once GAAP is updated. For the 2015 exam, it was important to be familiar with the updated IFRS rules; however, this update was not be as major as the other two FAR updates described above.
Auditing and Attestation (AUD)
- A minor update to auditor responsibilities was a part of the 2015 exam. According to the new standards, the auditor has additional responsibilities in relation to required supplementary information that accompanies a set of audited financial statements.
- A minor update to external auditor’s ability to use client’s internal auditor was a part of the 2015 exam. This AICPA update further signifies that if analysis and decision information is obtained from the internal auditor, the ultimate evaluation of all information, at every step, is the responsibility of the external auditor.
- A larger update for the AUD exam related to the less stringent compilation and review engagements that may be requested if an audit is not required. Minor changes to how compilation and review services are performed and the associated reports were a part of this update. Perhaps the most significant change was the introduction of the accountant’s ability to also assist their clients in preparation of financial statements. Whereas before an accountant could not submit financial statements without providing at least a compilation report, a new set of standards allows the accountant to assist with preparation of financial statements as a nonattest service.
- The 2015 REG update did not represent any changes to the rules and concepts tested on the exam. The update consisted of a few revisions to numerical thresholds and percentages associated with the passing of the Affordable Care Act and elimination of expiring tax law provisions.
Business Environment and Concepts (BEC)
- The only potentially significant change to BEC resulted from provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that went into effect and was tested during the 2015 testing windows. Sections of Dodd-Frank are already tested as part of the Regulation exam. However, the sections tested on the BEC exam concentrated on the topic of corporate governance, thus testing a more specific set of laws.
2014 CPA Exam Changes
Auditing and Attestation:
As of January 1, 2014, the Clarified U.S Auditing Standards (AU-C) replaced the AU standards (pre-clarified standards) on the CPA Exam. The Clarity Project was created in an effort to streamline auditing standards content, and to merge U.S. standards with international standards. These changes to standards and terminology affected the following areas within Audit Reports:
- Unmodified Report (formerly Unqualified Report) for non-public companies/non-issuers, and Report for public companies (issuers), are now similar to the old Audit Report (3 paragraphs).
- Extra paragraphs are now called Emphasis-of-Matter and Other Matter paragraphs (previously called explanatory paragraphs).
- Each portion of the report will require its own Subheading.
- Division of Responsibility is now called Group Financial Statements.
- Qualified opinions are now called Modified opinions (Qualified except for, Disclaimer, and Adverse).
Other AUD Updates:
- Slight revision to Governmental Auditing Standards (Yellow Book)
- Updates on US standards vs. International AUD standards
- PCAOB Auditing Standards (AS-16) regarding communications with Audit Committees became effective.
- American Taxpayer Relief Act of 2012 was fully integrated into the REG section.
- The Surtax on Unearned Income that resulted from the institution of the Patient Protection and Affordable Care Act (PPACA) was added.
- Adjustments were made to the Treasury Circular 230.
- Adjustments were made to the Federal Security Regulations as a result of the JOBS Act and Dodd Frank Rules enactments.
- Expanded information on the COSO's Internal Control Integrated Framework, which codifies 17 Principles of Internal Control, has been included.
- Dodd Frank Rule adjustments have been incorporated.
- Adjustments made to Governmental Accounting Chapter have been added due to updated GASB Statements.
- Terminology changes were made in the Equity section, changing Net Assets to Net Position.
2013 CPA Exam Changes:
The Clarity Project (Begins Q3 2013): The Clarity Project was created in an effort to streamline auditing standards content, and to converge U.S. standard with international standards. These changes to standards and terminology will predominantly affect the following areas within Audit Reports:
- Unmodified report (old name was unqualified report) for Non-public companies/non-issuers
- Report for Public companies (issuers) is similar to old Audit report – (3 paragraphs)
- Extra paragraphs are now called Emphasis-of-Matter and Other Matter paragraphs (previously called explanatory paragraphs)
- Each portion of the report will require its own Subheading
- Division of Responsibility now called Group Financial Statements
- Qualified opinions now called Modified opinions (Qualified except for, Disclaimer and Adverse)
Other AUD Updates:
- Changes to the Accounting and Auditing Pronouncements took effect on July 1, 2013
- Ethics and Independence
- A Firm's System of Quality Control
- Updates on US standards vs. International AUD standards
- Big changes due to the ASB Clarity Project took effect on January 1, 2013 in the accounting industry; however, these changes were not reflected on the CPA Exam until Q3 2013
- The 2013 REG Exam included the JOBS act as it relates to the SEC regulations Updates due to the Bush Tax cuts are still TBD, so Roger CPA Review provided updates regarding this change as they developed
- American Taxpayer Relief Act of 2012
- Expanded information on the COSO's Internal Control integrated framework Dodd Frank Rule adjustments have also been incorporated
- GASB 65, 66, 67, 68 had made many adjustments to the Government section
2011 CPA Exam Changes
FAR, AUD, REG and BEC - Allotted Test Time
- Allotted test times changed for all four testing sections of the CPA Exam: FAR and REG remained 3 hours, but AUD lost 30 minutes for an allotted test time of 4 hours. BEC gained 30 minutes for an allotted test time of 3 hours.
Exam Scoring Weights
- Score weighting changed for the AUD, REG, and FAR sections. Multiple choice questions moved from 70% to 60%, simulation questions from 20% to 40%, and all written communication questions starting at 10% weight were moved completely into BEC with 15% weight. Multiple choice questions in BEC changed from 100% weight to 85% weight.