SPECIAL REPORT
Computerized CPA Exam Only Months Away
The Uniform CPA Examination is entering a new era that gives individuals more flexibility as they prepare to take the exam. A joint effort by the AICPA, the National Association of State Boards of Accountancy (NASBA) and Prometric, a developer of technology-based testing services, has led to a groundbreaking achievement: the computerization of the Uniform CPA Examination. Beginning April 5, 2004, the computer-based test (CBT) will be offered year-round at Prometric and state-board-of-accountancy-authorized testing centers across the United States and its territories. The paper version of the exam will be given for the last time on November 5 and 6. Here is a series of questions and answers providing information about the test to help candidates prepare for it.

1. Why is the Uniform CPA Examination changing?
The exam has long played a role in licensing CPAs. To keep pace with the evolution of the accounting profession and the business world—especially in the areas of technology and skills assessment—and to provide ongoing protection of the public interest, the exam itself is changing. By staying aligned with the expanding practical requirements of entry-level CPA work and by evaluating candidates’ skills in critical areas, the revised exam will help ensure that CPA exam candidates continue to demonstrate the knowledge and skills needed to protect the public.

2. Aside from its being computer-based, what’s different about the new test?
Even more important than the way the test will be administered are the revisions to its content. In keeping with the nature of current accounting practice, the computer-based test will emphasize information technology and general business knowledge and take a broader approach to testing candidates’ understanding of auditing concepts. Other significant changes include increased testing of skills in areas such as research and analysis.

3. How has the structure of the exam changed?
The revised exam will have four sections and will be 14 hours long (the paper test is 15¹/2 hours). Three sections—Auditing & Attestation, Financial Accounting & Reporting and Regulation—will cover much of the same content as the paper test. The fourth section, Business Environment & Concepts (BEC), will address general business knowledge. The format will change to include multiple-choice questions and new, condensed case studies, which are referred to as “simulations.” In April 2004 each section of the exam—except for the BEC section—initially will contain two simulations. Those for the BEC section will be included at a later date. All sections will test candidates’ skills in applying knowledge in the specific content areas.

Auditing & Attestation (4¹/₂ hours). This section evaluates the individual’s understanding of auditing procedures, generally accepted auditing standards and other standards related to attest engagements.

Financial Accounting & Reporting (4 hours). This section tests the candidate’s knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations and government entities.

Regulation (3 hours). This area tests comprehension of federal taxation, ethics, professional and legal responsibilities and business law.

Business Environment & Concepts (2¹/₂ hours). This section covers candidates’ knowledge of the general business environment and the concepts needed to comprehend the underlying reasons for—and accounting implications of—business transactions.

Details about the structure, length, content, skills definitions and content weighting are available on the CPA exam Web site (www.cpa-exam.org/cpa/computer.html).

Simulations test candidates’ knowledge and skills by means of realistic work-related situations. Each simulation complements the multiple-choice portion of the exam. All simulations will assess the knowledge and skills appropriate for, and expected of, an entry-level CPA. Most of the simulations will contain some research activity—a new component of the test—usually involving an electronic search of or access to authoritative literature, the Internal Revenue Code and income tax regulations. For example, a candidate researching an audit question might need to consult AICPA professional standards to answer questions within a simulation. Questions of this type also will require candidates to complete tasks such as writing a brief letter or memo.

4. What assistance is available to help candidates prepare for the revised CPA examination?
An online tutorial is provided at www.cpa-exam.org. It will familiarize students and CPA exam candidates with the types of questions and responses used in the computer-based test and with moving from one section to another. All CPA exam candidates should review this tutorial before taking the exam. More information about the computerized test, a revised tutorial and sample test questions and simulations will be available at www.cpa-exam.org beginning in the fall of 2003.

5. Will the exam’s administrative process change when the computer-based version is launched?
Much of the process will remain the same; what will change is where and when the exam is given. Each state board of accountancy will continue to determine whether a candidate in its jurisdiction meets the requirements to take the exam. The AICPA will continue to create and grade the CPA exam. NASBA will be responsible for a new national database through which information about all candidates who are scheduled to take the exam will be channeled. Prometric will administer the test to candidates at testing centers in the United States and its territories.

Candidates will apply for the exam as they do now—through a state board or its designee. If a state board determines a candidate is eligible to sit for the exam, it or its designee will send him or her a “notice to schedule” (NTS), which will be valid for a period of time established by the jurisdiction. So, candidates will have a specific period of time after the NTS is issued to schedule—and take—the exam section(s) for which they have applied.

Approved candidates then will register directly with a testing center, either by phone or via the Internet, to take one or more sections. Although candidates can register and take the exam anywhere, their test results will be sent to the state under whose jurisdiction they fall. After an exam is completed, the AICPA will compile and forward advisory grades to the state board, which, after approving them, will notify candidates of the results.

Once a candidate passes a section of the exam, he or she generally will be allowed a maximum of 18 months to pass all remaining sections. For details about new credit-granting policies, candidates should contact the state board in the jurisdiction in which they plan to take the exam. They also should check the exam Web site (www.cpa-exam.org) or the NASBA Web site (www.nasba.org) for policies and links to state boards.

6. Will the exam be offered more frequently?
Yes. One of the benefits of computerization is the ease of scheduling tests more often. Currently, the CPA exam is administered in May and November. Once the computer-based version is introduced, candidates will be able to take it at least five days a week during two of every three months throughout the year; these periods are referred to as “testing windows.” For example, the exam will be offered in April and May 2004, July and August 2004, October and November 2004, and January and February 2005. In most jurisdictions, eligible candidates will be able to take any or all sections of the exam during any testing window. However, they will not be allowed to take the same section more than once during any testing window. International candidates will continue to be required to test in one of fifty-four jurisdictions that currently administer the CPA exam.

7. Will the computer-based test (CBT) inhibit state boards’ ability to monitor candidates?
No. State boards’ responsibilities will not be diminished or negatively affected by the CBT. State boards will continue to determine eligibility and notify candidates of their grades. The boards will have the responsibility to oversee the administration of the CPA exam in their jurisdictions as they do today.

8. How will current credit for exam sections transfer?
Current exam credit will be transferred to sections of the computer-based test (CBT) as follows:

9. How will candidates’ current credit for sections passed change under the computer-based test? Will credit received on the paper exam be lost?
Generally, “conditional” credit for sections passed on the paper exam carries over to the CBT. However, each state board will set the length of time and/or maximum number of attempts that candidates in its jurisdiction who have earned conditional credit will get to complete the exam. For example, if a candidate has one or more sections remaining under the paper-based exam, he or she likely will be allowed a specific number of opportunities or time period to pass those remaining sections on the computer-based test.

10. How soon after taking a section of the computer-based exam will candidates receive their grades?
Distributing grades is the responsibility of state boards of accountancy. Initially, advisory grades and diagnostic information will be provided to the state boards, or their designees, at the end of the third month of each testing window. For example, grades for candidates who take the exam during the first window—between April 5 and May 31, 2004—will be sent to the state boards on June 30, 2004. Each board sets its own schedule for how frequently it will approve and release grades to candidates.

11. Will all candidates take the same exam, or will each candidate take a different test?
Candidates will take different, equivalent exams. In the computerized testing environment, each candidate’s exam will consist of items drawn from a pool of test questions according to defined specifications, which will ensure the results are comparable. The specifications will also include “exposure controls” to limit the extent to which examinees are administered the same sets of questions.

12. With candidates taking different tests, how do you ensure each candidate is being correctly assessed?
All tests meet specific content and psychometric specifications. The testing package delivered to test centers will contain not only test questions and simulations but also the rules for administration of exams drawn from that collection of topics. All exam material is classified according to its content and statistical properties before being administered in an operational test. The testing software then will select items according to the specifications to ensure that each candidate receives a test of appropriate content coverage and difficulty.

13. Where can I get more information about the computerized CPA exam?
A Web site (www.cpa-exam.org) contains useful information and links to the Web sites of the AICPA, NASBA and the various state boards of accountancy. Also available for downloading from the site is a variety of documents, such as white papers and outlines of the subject matter each exam covers.

A 10-minute video, “Preparing for Success: The Revised Uniform CPA Exam” explains the transition to the computer-based CPA exam and provides general information about it. The video is an introduction to the new exam and is suitable for a wide range of audiences; it can be viewed at www.cpa-exam.org/video/cpaexam.html.

—Gregory Johnson, CPA,
director of CPA examinations at the AICPA

Mr. Johnson is an employee of the AICPA and his views, as expressed in this article, do not necessarily reflect those of the Institute. Official positions are determined through certain specific committee procedures, due process and deliberation.