Electronic CPA Examination Presentation to Accountancy Majors

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Electronic CPA ExaminationPresentation to
Accountancy Majors

• Edward F. Hums
• September 24, 2003

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Timeline for CPA Examination

• Final paper-based version will be administered on
  November 5 and 6, 2003
• First computer-based version available beginning
  April 5, 2004

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Joint Press Release

• New Format Will Emphasize Research and
  Communication Skills
• NEW YORK (February 5,
  2003) Today, the American Institute of
  Certified Public Accountants (AICPA) the
• National Association of
  State Boards of Accountancy (NASBA) and
  Prometric, a part of The Thomson
• Corp. (NYSE TOC, TSX
  TOC), announced that the Uniform CPA Examination
  will be delivered in a
• computer-based format
  beginning April 5, 2004. The final paper-based
  version of the CPA examination
• will be given on November
  5 and 6, 2003.
• As of April 5, 2004, the
  computer-based CPA Examination will be offered up
  to six days a week, during two
• out of every three months
  throughout the year, affording CPA examination
  candidates more flexibility.
• Currently, the Uniform
  CPA Examination is offered only twice a year, in
  May and November, by the 54 U.S.
• boards of accountancy in
  the 50 states, the District of Columbia, Guam,
  Puerto Rico and the U.S. Virgin
• Islands. (Log on to
  www.nasba.org for links to the boards and
  www.cpa-exam.org for general
• examination information.)
  
• The computer-based test
  will broaden the scope of the audit and attest
  areas and incorporate the
• assessment of critical
  skills, such as research and communication. The
  CPA examination will also
• increase emphasis on
  general business knowledge and information
  technology.

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Mission of Computer-based Exam

• To admit individuals into the profession only
  after they have demonstrated the entry-level
  knowledge and skills necessary to protect the
  public interest in a rapidly changing business
  and financial environment.
• AICPA Board of Examiners June 2002

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CPA Examination Objectives

• Primary objective of protecting the public
  interest in a cost-effective manner.
• Thus, the Uniform CPA Examination will comprise
  a four-section structure that will allow boards
  of accountancy to draw independent inferences
  about candidates competencies in four areas
  considered to be critical to the protection of
  the public interest when a candidate passes the
  Uniform CPA Examination.
• AICPA Board of Examiner, June 2002

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Currently

• States amending statutes
• AICPA pre-testing
• Prometric developing site protocols

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Examination Content
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Examination Sections
AICPA Board of Examiners
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Auditing and Attestation
AICPA Board of Examiners
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Financial Accounting and Reporting
AICPA Board of Examiners
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Regulation
AICPA Board of Examiners
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Business Environment and Concepts
AICPA Board of Examiners
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General Examination Format

• Multiple-choice questions 80
• Given in form of testlets
• Each section will include possibly three testlets
• There are 10 to 25 questions per testlet
• Return to questions and change answers only
  within the current testlet
• Simulations 20
• Approximately 20 40 minutes in length
• One or two simulations in each examination

AICPA Board of Examiners
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What are Simulations ?
A simulation can be defined as an "assessment of
knowledge and skills in context approximating
that found on the job through the use of
realistic scenarios and tasks, and access to
normally available and familiar resources".
Simply put, simulations are relational case
studies that will test candidates' accounting
knowledge and skills using real life work-related
situations. Each simulation is approximately
20-40 minutes in length and will complement the
multiple-choice portion of the examination. All
simulations are intended to assess knowledge and
skills that are appropriate to expect of an
entry-level accountant. Most of the simulations
will contain some research activity, usually
involving an electronic search or access to
authoritative literature and Internal Revenue
Code and Income Tax Regulations. For audit,
research may also include identifying and
accessing work papers or other published
materials such as annual reports and stock
reports.
AICPA Board of Examiners
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Simulations on April 2004 Exam

• Simulations will appear on the following
  sections
• Auditing and attestation
• Financial accounting and reporting
• Regulation
• Simulations will not appear on the following
  section
• Business environment and concepts
• These simulations will be deferred until future
  examinations

AICPA Board of Examiners
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Simulations

• Candidates are assumed to have basic computer
  skills
• Financial calculations on spreadsheets or
  financial calculator
• Common spreadsheet and word processing program
  skills
• Searching of authoritative literature
• Drag and drop
• Copy and paste

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Simulation Resources

• Common to all simulations
• Financial calculator
• Blank spreadsheet(s)
• Authoritative literature
• Scratch paper and pencils
• Possible resources included
• Industry standards
• Time-value-of-money tables
• Stocks and bonds reports
• Industry working papers
• IRS publications

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Simulation Movie

• www.cpa-exam.org

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Assessment of Skills
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Skills Needed by Entry Level CPAs

• Research
• Communication
• Analysis
• Judgment
• Understanding

AICPA Board of Examiners
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To Demonstrate Research Ability

• Search professional literature
• Identify relevant information
• Draw conclusions

AICPA Board of Examiners
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To Demonstrate Understanding, Analysis, and
Judgment Abilities

• Interpret and apply relevant professional
  literature
• Comprehend and apply professional standards
• Recognize business-related issues and their
  relevance
• Evaluate, analyze, and process entity information
• Identify and select financial reporting methods
• Address, analyze, and address engagement issues

AICPA Board of Examiners
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To Demonstrate Communication Abilities

• Develop a specific communication
• Skills assessed by
• Coherent organization
• Conciseness
• Clarity
• Standard English
• Responsiveness
• Appropriateness to reader
• Content accuracy

AICPA Board of Examiners
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New Examination Schedule

• The computer-based examination will be available
  approximately 60 days out of each calendar
  quarter
• This 60 day period is called a testing window
• Each year will have four testing windows

AICPA Board of Examiners
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Examination Process
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Examination Process - Application

• Apply to state board or their designee
• After eligibility confirmed, state board or
  designee sends applicant a Notice to Schedule
• This notice remains valid as jurisdiction
  mandates
• Applicant calls Prometric to schedule exam time
• May schedule exam at any secure Prometric site
• No restrictions are anticipated on examinations
  taken outside of the jurisdiction
• However, examination not administered outside of
  U.S. jurisdictions

AICPA Board of Examiners
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Proposed Conditioning Policy

• Candidates can sit for each section individually,
  and in any order
• Candidates retain conditional credit for any
  section(s) passed for eighteen months
• Without regard for minimum score on failed
  section(s)
• Without regard to taking other sections
• Candidates may not retake a failed section(s)
  within the same examination window.
• Candidates must pass all four sections within a
  rolling eighteen month period, which begins on
  the date that the first section(s) passed is
  taken
• If all four sections are not passed within the
  rolling eighteen month period, credit for any
  section passed outside that period will expire,
  and that section must be retaken.

AICPA Board of Examiners
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Prometric Testing Site

• Applicants first will arrive and authenticate
  their scheduled time to take examination

Prometrics, Inc.
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Prometric Testing Site

• Applicants first will then wait until called to
  begin examination
• Materials for examination will be distributed
• Materials not allowed in testing areas will be
  collected

Prometrics, Inc.
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Prometric Testing Site
Sample Testing Room
Prometrics, Inc.
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Prometric Testing Site
Applicant at Testing Station
Prometrics, Inc.
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Prometric Testing Site

• Collection of examination material upon
  completion
• Implementation of any post-exam processes

Prometrics, Inc.
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Useful Links

• www.cpa-exam.org
• www.cpa-exam.org/cpa/computer_faqs_1.html
• www.cpa-exam.org/cpa/computer_faqs_2.html
• www.nasba.org
• www.aicpa.org
• www.prometric.com
• www.incpas.org
• www.nd.edu/ehums

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Questions and Comments