Your Guide to CPA Exam Changes & Updates
2017 CPA Exam Changes: Detailed Analysis
The CPA exam is going to have many changes in 2017. The changes culminate in an exam that is more difficult, with questions that test candidates at higher levels of knowledge.
Levels of Knowledge on the 2017 Exam In the field of education, there are multiple levels of knowledge (listed from lowest to highest): Remembering and Understanding, Application, Analysis, and Evaluation. The current CPA exam tests at the Remembering and Understanding and Application levels of knowledge. Beginning in 2017, the CPA exam will also test candidates at the Analysis and Evaluation levels of knowledge via new, more difficult multiple-choice and simulation questions. 01 Remembering & Understanding 02 Application 03 Analysis 04 Evaluation The perception and comprehension of the significance of a topic utilizing knowledge gained. The use of demonstration of knowledge, concepts, or techniques The examination and study of the interrelationships between separate areas in order to identify cause and find evidence to support inferences. The examination or assessment of problems and the use of judgment to draw conclusions. New for 2017 CPA Exam So, as a CPA candidate, you're probably wondering what these educational terms mean to you. To put it into perspective, we'll demonstrate the levels of knowledge with accounting examples. Remembering & Understanding The remembering level (the lowest level) is the ability to repeat back what one has been taught For example, remembering that the IRS allows for a building to be depreciated over 39.5 years. At the next level, understanding, the CPA candidate should be able to not only repeat what has been taught, but also comprehend the principles and theory behind the knowledge. For instance, being able to explain to a client the mechanics (or journal entries) of depreciating a building over 39.5 years Application TheThe application level is where a CPA candidate not only understands the theory, but also can apply what has been learned and perform in accordance with that knowledge. This is the level tested by the current task-based simulations. For example, the ability to make a journal entry for depreciating a building and compile the effects on the balance sheet. Analysis The next two levels of knowledge, analysis and evaluation, can ultimately be combined into one idea: A CPA candidate will need to be able to associate various learned elements with other segments or blocks of learning or accomplishments as well as draw conclusions and make judgments about them. Evaluation Questions that test a CPA candidate's abilities to reconcile, conclude, or evaluate scenarios assess the highest levels of knowledge. For example, uncovering an understatement of ending inventory during an audit should make a CPA candidate conclude the client may be trying to understate profits by overstating cost of goods sold and thereby defer tax liabilities to a later period. The auditor should also be concerned that the client may try to understate profits in other ways, such as by not recognizing sales or overstating other expenses in the current period. Thus, further auditing in these areas may be warranted. This type of inter-correlating information and knowledge demonstrates these higher levels of knowledge. When you are performing at this advanced stage of cognition, you can answer the "so what" questions. If you can explain why something is important or not important, then you have reached the analysis and evaluation levels of knowledge Current CPA Exam: AUD, BEC, FAR, REG Remembering and Understanding 50% 2017 CPA Exam Remembering and Understanding Application Analysis Evaluation AUD 30% - 40% 30% - 40% 15% - 25% 5% - 15% BEC 15% - 25% 50% - 60% 20% - 30% - FAR 10% - 20% 50% - 60% 25% - 35% - REG 25% - 35% 35% - 45% 25% - 35% - Remember that these advanced cognitive skills are not currently tested on the CPA exam. Beginning in 2017, though, all 4 sections of the CPA exam will test at the analysis level, and the Auditing & Attestation section will also have questions testing at the evaluation level. Therefore, this is a really big step for the AICPA, and it demonstrates that the questions on the CPA exam will become much more difficult. In addition, the testing of these cognitive abilities will increase content integration among the sections, e.g., candidates may need to draw on their base-level knowledge of FAR topics while answering an AUD TBS. Document Review Simulation (DRS) The Document Review Simulation (DRS) is a new type of Task-Based Simulation that tests application, analysis, and/or evaluation skills. The DRS will present a realistic document and source documents (exhibits) that require review. Certain words, phrases, sentences, or paragraphs in the DRS document may not be correct, and the candidate will need to select appropriate edits based on the source documents provided. The AICPA believes that the new DRS will increase CPA Exam authenticity, as it represents tasks that newly licensed CPAs may have to perform. In general, Task-Based Simulations (TBSs) on the new exam will include more material and data that a candidate will have to sort through to determine what is relevant to the actual question. Scoring Weights Currently on the CPA Exam, 60% of the score comes from the multiple-choice section of AUD, FAR, and REG. The remainder of the exam score (40%) is from the Task-Based Simulations. MCQs make up 85% of the total score in BEC, with the rest of the weight attributed to the written communications. In 2017, exams will be scored differently to accommodate the increased testing at higher order skills. For AUD, FAR and REG, the MCQ and TBS portions of the exams will make up 50% each of the total score. In BEC, the MCQs will be worth 50% of the score, while the written communications will make up 15%, and the new TBSs will be 35% of the total score. Current 2017 Exam and onwards MCQ Current TBS WC MCQ Current TBS WC AUD 60% 40% 0% 50% 50% 0% BEC 85% 0% 15% 50% 35% 15% FAR 60% 40% 0% 50% 50% 0% REG 60% 40% 0% 50% 50% 0% Time Allotment & Exam Breaks Each of the sections on the 2017 exam will have a 4-hour time limit. Currently, AUD and FAR are the only two sections that give candidates four hours to complete the multiple-choice questions and Task-Based Simulations. BEC and REG currently must be completed in three hours. To make up for the addition of Task-Based Simulations to BEC, the exam will increase by one hour in 2017, thus making it a four-hour exam. Due to the more complete Task-Based Simulations testing at the analysis level, REG will also increase in exam length by one hour, making it a four-hour exam as well. Given that the exams will now be more challenging, and in some cases longer, the AICPA has allotted time for breaks that will no longer count toward the section’s time limit. The allotted time for these breaks will likely be around 10-15 minutes, but this has not yet been finalized. The 2015 and 2016 CPA Exam will continue to penalize candidates for any breaks they take during their Prometric exam session. Current Time Allotment (hrs) 2017 Time Allotment (hrs) Variance AUD 4 4 0 BEC 3 4 1 FAR 4 4 0 REG 3 4 1 Score Release Timelines The AICPA does not anticipate any changes with the current 20-day average turnaround time, therefore score release schedules will be unaffected. There will be an exception with the first two testing windows in 2017, as there will be a delay to statistically validate candidate performance. Microsoft Excel in 2018 In 2018, Microsoft Excel will replace the current generic spreadsheet function. The addition of this program will have the goal of aiding test takers in completing calculations; candidates will not be tested on their Excel skill level.