For all young aspiring CPAs, the road to career success begins with the CPA exam. It requires comprehensive preparation that involves studying for the core sections, gaining a strong grasp of the content material and being up to date on how revisions to key sections will appear on the exam.
The Uniform CPA Examination Blueprints document is overseen by the Board of Examiners (BOE) of the AICPA. Changes for the exam being administered in 2019 were approved by the AICPA’s BOE last May 2018, and represent the fallout from the Tax Cuts and Jobs Act (TCJA) law. Changes have been made to three core sections including Auditing and Attestation (AUD), Regulation (REG), and Financial Accounting and Reporting (FAR). There were no revisions made to the Business Environment and Concepts (BEC) section for this year. The process for managing the exam involves the AICPA BOE developing content, and then NASBA, the National Association for State Boards of Accountancy, handles the processes for applications, evaluating credentials and reporting scores to individual state accountancy boards.
We checked in with Kevin Fountain, a Board member for the state of RI’s Board of Accountancy, which provides accreditation and licensing oversight for certified CPAs in the state. We asked in the wake of the major tax code overhaul, do students need to do a greater amount of preparation for the exam as things they learned in their accounting programs in college may have shifted a bit? “This is true, especially if a couple of years have elapsed from the time the student graduated from college,” observes Kevin. “Most successful candidates complete a CPA Examination Review course in preparation for the CPA Exam,” he says and adds that those reviews are critical.
In the test section on Auditing and Attestation, (AUD) the revisions focused on adding more detail to the ethics questions. The changes seemed to add an extra weight to the area of "professional skepticism" in the question section on auditing. Kevin said the demands of auditing and the complexity of the service provided has grown in recent years, placing an expectation of higher expertise on the accountant which is carrying over to the exam. The expansion of “fintech” into the profession seems to be impacting the auditing and analysis sections of the test also. “I believe the CPA Exam will continue to expand the ‘Data Analytics’ content area, due to the advances in technology,” explains Kevin.
Changes to the exam in the Regulations (REG) section are directly tied to areas where the tax reform law made significant changes. Revisions to question areas covered topics such as:
Federal Taxation of Property Transactions: pertaining to depreciation, depletion and amortization.
Federal Taxation of Individuals: pertaining to filing status, exemptions, calculation of the qualifying business income (QBI) deduction.
Taxation on Entities/C-Corps: topic areas in questions on computations, including allowable alternative minimum taxable income; issues related to multijurisdictional businesses and partnerships.
“These areas are eligible to be tested beginning in July 2019,” advises Kevin, “and again, the CPA Examination Review courses will help the candidates prepare for these topics.”
The last major topic area where revisions have been made pertains to tax reporting issues revolving around non-governmental organizations and not-for-profit entities, found in the Financial Accounting and Reporting (FAR) section of the exam. Questions were revised pertaining to the notes that accompany financial statements on items such as identified errors or omissions.
Anyone wanting more information in Rhode Island about the exam process can contact the RI Board of Accountancy at (401) 462-9550.