Feature: CPA Evolution

THE NEW CPA EXAM

TIMING A TRANSITION FOR A NEW EXAM

BY DANIEL J. DUSTIN, CPA

The CPA Evolution Initiative began more than four years ago as an effort to update the current CPA licensure model to address significant disruptors in the profession. Data provided by the World Economic Forum highlighted a changing business environment caused by increasing technological advances. These advances, coupled with new client and business demands, have changed the way CPAs are providing professional services to their clients. To address this rapidly changing practice environment, the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) embarked on a multi-year project to update the licensure model used by the 55 U.S. Boards of Accountancy. Information about the initiative, including a video on the history of the project and frequently asked questions, may be found at www.evolutionofcpa.org.

Initial project steps included assessing each jurisdiction’s laws and rules to better understand what impact the project might have on the jurisdictions as well as developing a new model that would assess the entry-level skills and competencies needed by newly licensed CPAs. After receiving feedback from a broad range of more than 4,000 stakeholders, including state board members, members of the AICPA and state CPA societies, CPAs in public practice, government, and business & industry, as well as the academic community and students, the CPA Evolution Model was approved by the AICPA’s Governing Council and the NASBA’s Board of Directors in 2020. We are now more than a year into the implementation phase of the project which is scheduled for completion in 2024.

Last fall, the AICPA and NASBA created four task forces of subject matter experts from the academic community and CPAs, including members from Boards of Accountancy, to develop the CPA Evolution Model Curriculum which was released in June 2020 at a virtual launch event attended by more than 2,500 educators and other interested stakeholders. The CPA Evolution Model Curriculum is not required for adoption; however, it is a great tool to guide the academic community as they consider revising their accounting programs to align with the evolution of professional practice.

As part of the implementation process, changes will also be made to the Uniform CPA Examination. All candidates will be expected to pass three core sections of the Exam with content in the areas of accounting, audit, and tax. Candidates will also have to demonstrate a deeper level of skills and knowledge by passing one of three disciplines: Business Analysis & Reporting, Tax Compliance & Planning, or Information Systems & Controls. Technology will be woven throughout the Exam.

The Exam will continue to focus on candidates with oneto-two years of experience. Candidates will continue to be required to pass a four-section Exam that will not exceed 16 hours and candidates will also have 18 months to pass the remaining three sections of the Exam once they have initially passed their first section. Similar to the current Exam, there is no experience requirement to sit for the core or discipline sections.

So how will the CPA Exam change? First and foremost, its structure will consist of three core sections plus a discipline section. As a licensure Exam and a test of minimum

competency for licensure as a CPA, once a candidate passes and receives conditional credit for a discipline, they cannot take additional disciplines. All sections of the Exam will contain discrete content and test a range of skills, including higher order skills such as professional skepticism and critical thinking.

Another important aspect of the move to the new Exam model in January 2024 is the transitional credit that candidates in the Examination pipeline will receive for the sections they have successfully passed prior to the launch. NASBA and the AICPA recently announced an Exam transition policy that will provide candidates with a roadmap from the current Exam process to the new Exam. The chart above provides an overview of how conditional credit will be applied to the new Exam

Credit earned on the current Exam will be granted for a section of the new Exam. If the Business Environment & Concepts (BEC) section of the current Exam has not been passed by the date of transition to the new Exam, the candidate must pass a discipline section of their choosing as their fourth part. If the BEC section has been passed by the date of transition to the new Exam, its credit shall be applicable for licensure until credit for that BEC section expires. If the BEC credit expires before the candidate passes all four sections, the candidate must then pass a discipline of their choosing.

Behind the scenes, NASBA will be working with Boards of Accountancy to upgrade their database systems to accommodate these changes prior to the launch of the new Exam.

These are exciting times for those entering the profession. Firms surveyed indicate that revising the education model to include more technology content combined with a new Exam model that will test deeper skills and knowledge will create an environment where the firms place greater value on accounting program graduates resulting in increased hiring from college and university accounting programs. n

Daniel J. Dustin, CPA is the Vice President, State Board Relations for the National Association of State Boards of Accountancy (NASBA) where he serves as an advocate for State Boards of Accountancy and finds new ways and opportunities to provide support and service to NASBA’s member boards. Dustin earned a Bachelor of Science degree and a Master of Science degree in Accounting from Clarkson University, and became a licensed CPA in 1988.

These numbers reflect the current numbers of CPAs and accountants and students who are enrolling in accounting programs. Source: https://ipassthecpaexam.com/number-of-cpa/

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