CPA Evolution and the CPA Exam: Information and insights for accounting academics

The launch of CPA Evolution in 2024 marked the most significant transformation in the CPA Exam and its administration model since the introduction of the computerized CPA Exam in 2004. The CPA Exam blueprints and content underwent substantial revision, including the addition of three new Discipline Exam sections. These changes, along with new test administration policies and schedules, significantly impacted the candidate population.

Accounting faculty play an essential role in preparing and encouraging students to pursue CPA licensure. To provide faculty with insights that could help student preparation, this article explains the basics of CPA Evolution, explores how the AICPA determined CPA Exam content, and examines how the debut of the new exam affected candidate participation and performance.

Background

CPA Evolution established foundational topics that all newly licensed CPAs need to know to protect the public interest. Under CPA Evolution, candidates must pass three Core Exam sections: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Taxation and Regulation (REG). Candidates also must choose and pass one Discipline Exam section: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP). This marks the first time candidates have had the option to select a CPA Exam section. CPA Evolution leads to CPA licensure, and the Discipline Exam section chosen and passed does not limit professional practice.

How was the CPA Exam content determined?

Under the CPA Evolution initiative, the AICPA conducted a formal research project called a “Practice Analysis” to ensure the CPA Exam remained aligned with professional practice and the knowledge and skills newly licensed CPAs need for their role in protecting the public interest. The AICPA engaged with hundreds of subject matter experts and other stakeholders to determine the appropriate content to be assessed in the Core and Discipline Exam sections. The analysis resulted in the Uniform CPA Examination Blueprints, which is the operative document defining the knowledge and skills eligible for testing on each section of the CPA Exam.

The AICPA’s Board of Examiners (BOE) updated and reviewed the individual CPA Exam blueprints, one for each Core and Discipline. The BOE, which is a volunteer committee representing the CPA profession, set the passing score for each CPA Exam section and continually monitored (and monitors) the candidate population and performance, exam section volumes, and exam question performance.

CPA Exam facts

The CPA Exam is not scored on a curve. Candidate performance on each CPA Exam section is measured against that section’s cut score/passing score. Pass/fail quotas do not exist.

The CPA Exam team follows rigorous psychometric and licensing examination standards and focuses on what a newly licensed CPA needs to know and do to protect the public interest (as determined by the Practice Analysis).

The CPA Exam is not a college graduation exam; it’s a licensure exam aimed at protecting the public interest. Equivalent or similar volumes, passing rates, or skill levels across the various CPA Exam sections were not intended.

Test administration policy decisions

Various policy decisions designed to help candidates navigate the period of change to the CPA Evolution-aligned exam impacted testing in 2024 and will continue to impact testing throughout 2025. These include the shift implemented by state boards to allow 30 months or more (depending on the jurisdiction) to pass all required CPA Exam sections as well as the 2024 CPA Exam Transition Policy, a one-time Credit Extension Policy, and the Credit Relief Initiative (CRI).

• The 2024 CPA Exam Transition Policy addressed remaining testing requirements for candidates holding unexpired credits on Jan. 1, 2024, from previous testing.
• A one-time Credit Extension Policy allowed credits held on Jan. 1, 2024, to be extended until June 30, 2025.
• The CRI and similar state-specific programs were instituted by some state boards to restore the credits expired between Jan. 1, 2020, and May 13, 2023, amid state responses to the COVID-19 pandemic.

CPA Exam volumes

CPA Evolution launched successfully in January 2024, with no operational issues. However, the candidate population taking the CPA Evolution-aligned Exam in 2024 and 2025 is in flux and is not representative of the full candidate population. Discipline Exam section volumes were extremely low in 2024 compared to Core Exam sections (less than 20,000 Discipline Exam sections compared to cumulative Core Exam sections of approximately 128,000).

Other candidate data of interest relates specifically to the Discipline Exam sections:

• About 47,000 candidates are exempt from the Discipline Exam sections until the third quarter of 2025 (carrying credit from 2023 to 2024 for passing the Business Environment and Concepts (BEC) section, including the one-time Credit Extension Policy).
• About two-thirds of the approximately 54,000 candidates who did not have credit for passing the BEC section entering 2024 have not yet taken a Discipline Exam section.
• A majority of the approximately 28,000 new candidates that started testing in 2024 have not yet taken a Discipline Exam section.

CPA Exam Discipline pass rates

Given transition policies and credit extensions, tens of thousands of candidates have yet to test for a Discipline Exam section. Thus, we won’t know the new normal until early 2026.

However, some facts about the Disciplines are available from our data:

• Candidates who are doing well in TCP are generally well-prepared candidates who have done well on REG and could have taxation experience through an internship.
• Candidates who are doing well in ISC are generally well-prepared candidates who have done well on AUD and could have audit/advisory experience through an internship.
• Candidates are struggling more with BAR because of the disparate content in the three testing areas involved and the higher concentration of analysis-level content as compared to the other Disciplines.
• Candidates, review course providers, schools, etc. are still adjusting to the increase in analysis-level content. We saw BAR pass rates go from 34% in the fourth quarter of 2024 to 38% in the first quarter of 2025. Unofficial data from the second quarter of 2025 has BAR pass rates in the mid-40s. The adjustment is still happening.

Changes in CPA Exam content

The content changes in the FAR and BAR sections have had the greatest impact on CPA Exam candidates and pass rates. Content previously tested in the FAR section (accounting for state and local governments, stock compensation, business combinations, lessor accounting, and derivatives) and assessed at either Remembering and Understanding level or Application level was moved to the BAR section, resulting in a higher concentration of analysis-level content in FAR. The BAR section has the most disparate content among the Discipline Exam sections and the highest concentration of analysis-level content. Candidates are more challenged by task-based simulations (TBS), especially in the FAR and BAR sections.

CPA Evolution and the CPA Exam will be the focus of an AICPA Faculty Hour on July 18. During the 90-minute webinar, which will start at 2 p.m. ET, AICPA CPA Exam staff will provide a walk-through of an analysis skill level TBS to give educators more insight into TBS. To join the webinar and earn free CPE, go to the Faculty Hour registration page.

Recommendations for educators and candidates

Candidates should select a Discipline Exam section that aligns with their education, experience, interest, and passion. A higher pass rate does not mean a section will be easier. Candidates could sit for the most difficult exam section first or the easiest section(s) first to gain momentum. It is recommended to sit for the Discipline section immediately following the corresponding Core section. Candidates should use the CPA Exam blueprints to focus on the analysis skill level content for each section.

Conclusion

CPA Exam stakeholders will continue to monitor, evaluate, and discuss pass rates, testing volumes, and Discipline choices to ensure the CPA Exam remains a trusted assessment of the knowledge and skills needed for initial licensure.

— Joseph Maslott, CPA, is director–Examinations at the AICPA, and Jan Taylor, CPA, CGMA, Ph.D., is senior director–Academic in Residence at the Association of International Certified Professional Accountants. To comment of this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.