Revised CPA Exam Expected to Reflect a New Era

CPA Exam

Just as the work and responsibilities of CPAs have changed over the years, so has the CPA exam, which is the assessment for the only licensed qualification in accounting. 

As the Uniform CPA Examination approaches its centennial year in 2017, it’s expected to undergo groundbreaking changes, all in the name of relevancy.

That’s the goal, at least, says Michael A. Decker, vice president of examinations for the American Institute of CPAs (AICPA). The association develops, maintains and grades the CPA exam, in addition to working closely with regulators, firms, academics and other stakeholders to address industry changes that may impact the exam’s content.

The exam is administered by the State Board of Accountancy in each of the 50 U.S. states and five jurisdictions.

Each year, tens of thousands of aspiring CPAs sit for the exam. But before they do, most states require candidates to have 150 semester hours of education, which is more than a bachelor’s degree and includes certain course requirements. As for experience, most states and jurisdictions require at least two years public accounting work. 

Before the mid-'90s, the exam lasted 19.5 hours and was administered with pen and paper over two-and-a-half days. Now it’s a computer-based, 14-hour exam divided into four sections — Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). All have multiple-choice questions, and some have task-based simulations, One section calls for written answers. 

We recently asked the AICPA’s Decker to discuss some of the proposed changes for enhancing the exam’s assessment of critical thinking skills and the process for making the changes. 

How would you describe the next version of the CPA exam? 

Decker: With our move to enhance the exam’s assessment of higher-order cognitive skills, the exam is moving beyond remembering and generally applying that knowledge. It’s more about demonstrating you can take the knowledge you have and actually develop a solution to a problem or make a competent evaluation.

Alignment with professional practice is the foundation of the Uniform CPA Examination. This allows the AICPA to provide reasonable assurance that candidates who pass the exam possess the level of technical knowledge and skills necessary for initial licensure in order to protect the public interest.

Would you say the exam has become more difficult through the years?

Decker: The exam has evolved over the years, based on the needs of the profession. While our most recent proposed changes to the exam are quite substantive, that doesn’t mean that the test will be more difficult, just different.

We heard directly from the profession, including those who hire and train in firms, that critical-thinking skills and problem-solving abilities are an absolute necessity for a CPA.  The proposed exam changes are designed to assess these skills to a greater extent than previous exams.

And the test will become longer, is that right?

Decker: Yes, the total CPA exam testing time will increase from 14 to 16 hours – four sections of four hours each.

How comprehensive is the process involved in changing the exam?

Decker: The process is incredibly in-depth and thorough, and can easily take up to two years, as evidenced by our latest effort. Before we propose any changes to the exam, it’s important we have a clear understanding of where the profession is, where it’s going, and what it requires from its newly licensed CPAs.

At the heart of these changes is our practice analysis, which involves meetings, interviews, focus groups and surveys with our stakeholders. It is their input that helps inform what changes we may propose to the exam.

Additional stakeholder comments are requested on proposed changes. This further input is used to finalize the exam content and begin building in the changes, which includes involvement and expertise from our volunteers in the profession. Once the exam is ready to go, a formal public announcement must be made one year in advance to ensure that our stakeholders, and most importantly the CPA candidates themselves, are well-informed of all the details about the exam’s changes.

Our latest practice analysis, which kicked off in 2014, was a rigorous and inclusive process that involved countless hours and input from thousands of stakeholders who are committed to preserving the strength and mission of the profession. Making changes to the exam, based on their valuable insight, is what will ensure that we continue to assess what is important for a newly licensed CPA to know as they enter the profession.

Where can people find the proposed changes and comment on them?

Decker: The exposure draft, which was released on Sept. 1, can be found here: Maintaining the Relevance of the Uniform CPA Examination. The AICPA will consider all responses received on or before Nov. 30, 2015. You can email your submission to [email protected].

Michael DeckerMichael A. Decker is Vice President of Examinations at the AICPA. In this role, he is responsible for the architecture, development, production, administration, scoring and maintenance of the Uniform CPA Examination, a high-stakes test administered in the 54 U.S. jurisdictions and in select international locations by the AICPA, National Association of State Boards of Accountancy (NASBA) and Prometric.

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Editor's note: This post was updated in 2016 to reflect more current information.