How the next CPA exam was developed

7 things you need to know about the design of the test for licensure
By Ken Tysiac

How the next CPA exam was developed
Image by eli_asenova/iStock

The debut of the next CPA exam on April 1, 2017, reflects an important evolution in the accounting profession.

Advances in technology, along with factors such as globalization and outsourcing, have combined to create an environment where newly licensed CPAs need more advanced skills than ever before. The update of the Uniform CPA Examination was designed to maintain alignment with professional practice and continue to provide state boards of accountancy reasonable assurance that candidates who pass have the appropriate skills and knowledge to perform as newly licensed CPAs. This means that the exam will have a greater focus on higher-order skills such as analysis and evaluation.

What may not be apparent to exam candidates is the care that is taken to make sure that the CPA exam tests the appropriate skills in a fair and objective manner.

"The number of people who are involved in ensuring ... the quality of the questions from a content and technological perspective ... looking even linguistically to make sure that there's nothing that's going to trick a candidate as they read a question [is amazing]," said Rich Gallagher, CPA, director of content for the AICPA Examinations team, which he joined in 2014 after a 38-year career with EY.

Here are seven things that you need to know about how the next CPA exam was put together, whether you're preparing to take the exam or will be an employer or colleague of an exam candidate.


It's well-documented that the AICPA sought the input of the profession in a comprehensive practice analysis to determine what knowledge and skills need to be tested. But the practice analysis was just one part of the research performed in preparation for the next exam. Josh Stopek, CPA, worked with a team of cognitive psychologists and a testing professional for three years before the start of the practice analysis to learn how to better categorize and develop questions about accounting on the exam. The team also studied how other testing organizations operate in presenting their exams to test takers.

"CPAs are very good at focusing on the nuts and bolts and the rules, and how you apply those rules in very, very good detail," said Stopek, the senior technical manager for research for the Examinations team. "But we needed to find a way to organize that thinking in such a way that you could assess the different higher-level skills that a CPA needs on a day-to-day basis."

One thing that emerged from this research was the need to increase the number of task-based simulations on the next exam as those are considered to be highly effective in assessing higher-order skills.


The science of psychometrics—which is the study of how to measure knowledge and skills—is the foundation for the CPA exam. The psychometric elements associated with the CPA exam include:

  • Properly defining the knowledge and skills that need to be assessed.
  • Reviewing empirical and qualitative evidence that shows that the test questions measure what has been defined for measurement.
  • Analyzing the performance of all candidates who take the exam and making sure questions perform the way they should.

"Everyone is focused on a shared goal, which is to have the best possible exam for new CPAs to protect the public interest," said John Mattar, director of psychometrics and research for the Examinations team. "So people are very interested in ... providing expertise as volunteers to spend a lot of time with us defining what should be on the exam and reviewing testing materials and questions."


The CPA exam has a long history as a rigorous prerequisite for licensure. But it's also constructed to be fair (see the sidebar, "Higher-Order Skills: An Inventory Example").

"Our role is not to trick the candidate," Stopek said. "Our role is to figure out the most appropriate way to provide an experience for the candidate so they can give it their best shot and show their best abilities to be a CPA. ... We really want it to be a fair assessment."

The Examinations team carefully researches the best way to write questions and present materials to create a fair exam, Stopek said.


Eliminating cultural bias is a constant focus in test administration. One standardized test for college admission came under fire many years ago for a question that included references to "oarsman" and "regatta," words that later were judged to be more familiar to affluent test takers.

The CPA exam is carefully constructed to avoid bias. "There are a lot of best practices that have been developed over the years in the testing industry to evaluate test questions for potential bias from many different perspectives," Mattar said. "Our test development team is expert in that, and they review all questions according to guidelines that are standardized across the testing industry."


Although the next CPA exam will debut in April, prototypes for material that will be on the exam already have been and will continue to be tested extensively. The Examinations team has built an extensive network of university accounting programs and CPA firms to support field-testing.

The field-testing exercises give the Examinations team a glimpse of how candidates will react to items on the exam and how long it will take to complete certain items. "They provide us with information about whether they're realistic simulations, about whether the directions make sense, about whether the technology makes sense," Stopek said.


The return of scores to candidates at the end of the first testing window will be delayed because the AICPA's experts and the Board of Examiners will need to analyze the results and ensure the exam's accuracy and reliability.

Because this is an updated test and the format has changed, thorough review of the data must be conducted as part of the standard-setting process. This analysis will take time. "It has to be done, and it's got to be done right," Mattar said. "We can't take any risks and send somebody a score and then [later] say, 'Well, that really wasn't your score.' We've got to get that right."


Although the updated exam will be different, it will maintain its well-known rigor, said Michael Decker, AICPA vice president—Examinations. He said candidates who are better at analyzing and evaluating information may perform better. Those who can remember and understand information may face more of a challenge with the next exam if they aren't also able to apply what they learn.

"We think there's going to be a different kind of candidate that will succeed, and the good news is, that's what the profession is demanding," Decker said. "They're demanding higher-level-thinking newly licensed CPAs, and this exam will meet those requirements."

Higher-order skills: An inventory example

Early-career job duties are the focus of the next CPA exam.

Many newly licensed CPAs spend at least some of their time auditing inventory. They may be in a warehouse or a storage facility and often are not in the company of other CPAs who can show them what to do.

"It's something that on day one, you're expected to be able to handle," said Josh Stopek, CPA, the senior technical manager for research for the AICPA Examinations team.

Because auditing and accounting for inventory are common tasks for newly licensed CPAs, the next CPA exam will test candidates' mastery of a broad range of skills related to these tasks. CPAs performing inventory need to be able to work alone and possess mastery of the rules of inventory—and much more. They need to understand the purpose of the audit.

"You need to be able to think at a really high level, and quickly, 'Is what I'm seeing what I need to see? Does something on one side of the warehouse relate to something on the other side of the warehouse? Are the counters doing what they need to do?' " Stopek said.

He contrasts inventory with pensions and derivatives. Pensions and derivatives are important, but they also are very complex. Although newly licensed CPAs need to understand them, on the first day on the job CPAs are not likely to be solving complex derivative questions for clients. So the skills the CPA exam tests for derivatives and pensions may not be as extensive as the skills tested for inventory.

"It's all about level-setting," Stopek said, "and what's really appropriate for a newly licensed person."

Quick facts

Next CPA exam

Debuts: April 1, 2017.

Sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).

Total hours: 16 (4 hours for each section). Testing time for the BEC and REG sections will increase by one hour each.

What's new: More task-based simulations and fewer multiple-choice questions reflect an emphasis on higher-order analysis and evaluation skills and less focus on remember-and-understand skills.

About the author

Ken Tysiac ( is a JofA editorial director. To comment on this article or to suggest an idea for another article, contact him at or 919-402-2112.

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