Evolution of the CPA Exam

By Laura Hay, CPA, OSCPA executive vice president

More than four years in the making, and many years in the planning, changesfrom the CPA Evolution model have been incorporated in a draft U.S. CPAexamination framework.

The exposure draft, Maintaining the Relevance of the Uniform CPA Examination® - Aligning the Exam with the CPA Evolution Licensure Model, issued on June 27, 2022, proposes a model to recognize the rapidly changing skills and competencies the practice of accounting requires and will require for the future.

With the transformational impact of technology on the work newly licensed CPAs currently perform, and the expansion of the core body of knowledge all CPAs must have to serve the public interest, the need was identified for a foundational change in the Uniform CPA Examination model. Appendix B of the exposure draft details the rigorous process, beginning in 2018, through which the CPA Evolution initiative consulted with more than 4,000 professionals to collect input on how to transform the requirements for the CPA. Important considerations identified by members of the profession include:

• CPAs agreed with the need for changes to positionthe profession for the future.

• There should be one common CPA with the same rights and privileges, a core body of knowledge and a foundation of serving the public interest.

CPA Evolution proposal

In 2020, governing bodies of the AICPA and NASBA voted to advance the CPA Evolution initiative, with a Core plus Discipline model and a plan to launch a CPA Evolutionaligned Uniform CPA Examination in January 2024. In the model, all candidates are required to complete a strong core of three exam sections: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Taxation and Regulation (REG), with an underpinning of technology content in all exam sections. Each candidate also chooses one discipline in which to demonstrate a greater depth of

knowledge and skill in a particular domain: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).

Regardless of the candidate’s chosen discipline, all CPAs receive the same rights, privileges and responsibilities, consistent with the current CPA designation. The chosen discipline does not affect the CPA’s ability to practice, and all CPAs are required to exercise due care and obtain professional competence for the work they undertake.

Implementing the proposal

All iterations of the CPA Examination are supported by a Practice Analysis. Upon approval of the model, the AICPA Board of Examiners kicked off a formal Practice Analysis research project, including subcommittees for each exam section. The research focused on the work newly licensed CPAs perform in each of the areas to be tested. Current exam content was reviewed to determine how it should be allocated to the Core + Discipline model, with foundational content important to all CPAs retained in the core, and more specialized content that those not working in that area are unlikely to encounter relocated to the disciplines.

Data and technology content was added to all core and discipline exam sections. Technology content will not focus on any specific software, but rather concepts such as how data can be transformed for useful decision-making or used to identify trends and anomalies, and how information is structured and flows through underlying systems.

Exposure draft components

After framing the exam structure, Appendix A of the proposal includes the draft CPA Examination Blueprints, which detail the content and weighting of that content for each exam section. All exam sections will now include the full continuum of skill levels, including:

• Remembering and understanding

• Application

• Analysis

• Evaluation

The first two are primarily tested with multiple choice questions, and the latter two with task-based simulations. Higher-order skills, such as critical thinking and professional judgment, will now be tested in all exam sections. In addition to content groups and topics, the blueprints also detail representative tasks to be tested in each topic.

Blueprint drafts were reviewed with focus groups for each discipline, particularly with those who supervise newly licensed professionals, to ensure that they were representative of tasks performed in those areas, including the impact of technology on those tasks.

Commenting process

Comments on the exposure draft may be sent to practiceanalysis@aicpa.org no later than Sept. 30,

2022. Comments will be reviewed by each content areasubcommittee, an overall content committee, and then bythe AICPA Board of Examiners, with projected approval offinal CPA Exam Blueprints in Dec. 2022. A 2024 CPA ExamFinal Report, including commentary on how conclusionswere reached, is scheduled to be published in Jan. 2023,for a planned revised examination launch in Jan. 2024. Thisschedule provides stakeholders about one year to plan for the2024 CPA Exam.

CPA exam transition policy

The transition policy announced by NASBA in Feb. 2022, isas follows:

• Candidates with credit for AUD, FAR or REG on thecurrent CPA Exam that is still in their examinationwindow will not need to take the corresponding newCore section of AUD, FAR or REG on the 2024 CPAExam – these sections map 1-to-1.

• Candidates who have credit for BEC on the current CPAExam that is still in their examination window will not needto take a 2024 discipline section.

• However, if a candidate loses credit for AUD, FAR or REGafter Dec. 31, 2023, they must take the correspondingnew Core section of AUD, FAR or REG.

• And if a candidate loses credit for BEC afterDecember 31, 2023, they must select one of the threenew discipline sections for testing.

There is a hard cutover from the current CPA Exam to the2024 CPA Exam as of the January 2024 launch.

We’d love to hear from you

As we communicate these changes to OSCPA member groups, we’d love to hear your opinions if you are responding to the exposure draft or have comments. Please forward a copy of your responses to Lhay@ohiocpa.com and we’ll collect and communicate common themes.

Laura Hay, CPA, CAE, is executive vice president of The Ohio Society of CPAs and staff liaison to the Accounting Auditing, Professional Ethics Committee and Peer Review Committee. She can be reached at Lhay@ohiocpa. com or 614.321.2241.