An Insider’s View of the New, Computerized CPA Exam.


An Insider’s View of the New, Computerized CPA Exam
B eginning in April 2004, a computerized version of the Uniform CPA Examination will replace its paper-based predecessor. While CPA candidates can take the test in its current format only twice a year—in May and November—the computerized exam will be conveniently available up to six days a week in two of every three months. The new test will focus on a broader range of audit and attest topics than the current exam does and put greater emphasis on questions relating to general business knowledge and information technology. Most important, it will assess candidates’ communication, research and analysis skills by requiring them to obtain information from professional literature in electronic databases and demonstrate, in simulations of actual business situations, their mastery of a variety of multidisciplinary skills.
Last month, the JofA began a series of articles exploring different aspects of the new CPA exam. This month, a corporate practitioner and member of the AICPA committee that developed the test’s content offers insights into what this version is like and how it will benefit the public interest. The September article consisted of questions and answers explaining how the computerized test differs from the paper-based exam and why it was developed, how it will be administered and where to obtain information useful in preparing for it. Future issues of the JofA will provide details on an exam tutorial and include interviews in which state society leaders, educators and CPA firm partners offer their views of the computerized exam. Also, CPA candidates scheduled to take a preliminary version of the test in the coming months will give readers their firsthand impressions of the experience.

The impetus for many of these innovations was a 2002 AICPA-conducted “practice analysis” survey that asked hundreds of experienced CPAs to identify the most important requirements for those entering the profession. “One thing came through loud and clear,” said Michael A. Bolas, CPA, chairman of the examination content committee of the AICPA board of examiners and president of Miken Companies, a commercial printer with headquarters in Buffalo, New York. “Entry-level candidates have to be able to examine a business situation and identify what, if any, accounting issues or audit or business risks might be involved. So, in addition to fundamental professional knowledge, they must have the ability to analyze, organize and communicate a vast array of technical information to their colleagues and clients.

“In effect,” Bolas said, “the computerized exam sends a clear message to candidates, to the profession and to the public that in today’s business environment CPAs need to be proficient in much more than just auditing standards or tax regulations.”

To Bolas, the most exciting aspect of the exam is that computer-based testing makes it possible to assess not only candidates’ mastery of fundamental concepts but also their ability to provide the complex analysis and reporting clients and employers expect from CPAs. Previously, testing candidates’ research skills would have entailed printed copies of professional standards and tax regulations at each examination site. But anyone taking the computerized exam will have electronic access to specified professional literature and be able to perform the research necessary to answer exam questions. The revised format also will make it possible to test candidates’ spreadsheet skills and ability to express themselves in writing.

Another area in which the computerized exam excels is in creating situations that would occur in actual practice and assessing test takers’ performance in them. Such simulations challenge candidates’ ability to identify the most significant aspects of a fact pattern, determine the potential effects and recommend and explain appropriate courses of action.

“Our profession’s primary mission is to protect the public interest,” Bolas said. But various factors can make it difficult for practitioners to develop the competencies they need to do their part in meeting that responsibility. An enormous volume of accounting, auditing and tax guidance has been issued since the 1980s, he said, and practitioners have turned to the Internet and other computer systems for the technical documents and data they need. That’s why the exam must evaluate candidates’ ability to manage, distill and communicate information to their various constituencies.

Simulations will present a series of facts supported by information from databases and other resources, and candidates will be required to make specific recommendations in response to questions. For instance, the test may ask candidates to identify which of several strategies—such as entering into a capital lease or into an operating lease—would be most appropriate for a client and to explain the tax and financial accounting implications of each option. In the course of answering questions, students must demonstrate their basic competence in the use of computerized spreadsheets and communicate their analyses and conclusions concisely and persuasively.

The first scheduled sessions of the computerized exam will employ simulations in three (Auditing & Attestation, Financial Accounting & Reporting and Regulation) of the test’s four sections. It is anticipated that by the end of 2004 simulations will be added to the revised test’s new Business Environment & Concepts section, which includes general business knowledge questions not previously asked on the CPA exam. For example, besides covering traditional concepts such as inflation and deflation, this section assesses a candidate’s knowledge of computer networks and systems, planning and budgeting techniques, benchmarking and market influences on business strategies.

Although performing research and analysis are essential skills for all practitioners, they’re useless to those who can’t also coherently express their ideas to others.

Some CPAs don’t fully acknowledge this, Bolas said. He believes both experienced and newly certified professionals often underestimate the importance of communication skills. “You might do a terrific job of analyzing a particular issue and coming up with a conclusion,” he said, “but it won’t do your client much good if you can’t communicate those findings clearly and completely. CPAs must be able to construct skillful and articulate reports relaying their findings to their clients, other CPAs and government regulators. The computerized test will assess that capability in a way never before possible.”

With all the talk of how thoroughly the computerized exam will assess test takers’ skills, it’s no wonder would-be CPAs are interested in finding out everything they can about it. Bolas said one question they frequently ask is whether it will be more difficult than the paper-based version. In his view, one of the advantages of the new test is that it will be simpler for candidates to take one or more of the four sections at separate sittings, thus making it easier for them to focus on preparing for each part individually.

As an adjunct accounting professor at St. Bonaventure University in New York, Bolas is well aware of the computerized exam’s importance to students. “They recognize their need for a solid basis of business knowledge not only to pass the exam but also to be effective CPAs,” he said.

Bolas also believes corporate internships are a good way to prepare for the test. But the most effective way for candidates to familiarize themselves with the new format, Bolas said, is to visit , where they can avail themselves of a comprehensive exam tutorial and other useful resources, including the latest news about the exam and a video explaining it. “That’s the best first step candidates can take to understand what will be expected of them,” he said.

—Adam Snyder

Straight From the Horse’s Mouth
The most helpful and convenient place to obtain information about, and get ready for, the computerized Uniform CPA Examination is online at . The site contains general information about the test and offers a variety of resources, including a tutorial covering these components of the new test.

Commonly used tools.
Multiple-choice questions.
Authoritative literature.

The site also contains general information about the test and reports the latest news.

Where to find July’s flipbook issue

The Journal of Accountancy is now completely digital. 





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