by Jessica L. Hildebrand, CPA, and James W. Sunday, CMA | Sep 28, 2022
The Uniform CPA Examination is about to change significantly under the CPA Evolution Initiative, a joint effort by the National Association of State Boards of Accountancy (NASBA) and the AICPA. Set to launch in a little over a year (January 2024), it is important for those preparing to become CPAs to understand the new CPA Exam structure and how it might impact their journey. By getting a handle on the new process now, those taking the exam in the 2023-2024 time frame have an opportunity to be strategic in their planning.
Core + Discipline Model
Newly licensed CPAs are expected to know more than ever before. In addition to accounting acumen, the demands of the profession in 2022 require broader skill sets, including problem-solving and data analysis, among other musts. After taking in feedback from stakeholders such as state boards of accountancy, CPA societies and firms of all sizes, academia, and others, the CPA Evolution Initiative approached its revision of the exam so that it not only strengthens licensees’ public protection mandate but also reflects how CPAs work today.
The CPA licensure and exam model will transition to a Core + Discipline model.1 This approach still includes three required core sections – financial accounting, auditing, and tax – but then candidates will also choose a fourth section from among three options that are more-focused discipline sections. Exam candidates can choose from the following specialty areas:2 Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP).
BAR will test areas related to assurance and advisory services, financial statement analysis and reporting, technical accounting, and financial and operations management. ISC will focus on business processes, information systems, information security and governance, and IT audits. TCP will test areas related to individual tax compliance and planning, personal financial planning, and entity tax compliance and planning.
Exam Infrastructure Changes
In addition to the Core + Discipline licensure model, the AICPA announced four infrastructure changes coming to the CPA Exam in 2024.3
First, research and related critical-thinking skills will be assessed differently. The current research task-based simulation that focuses on standards will be eliminated, as well as the corresponding authoritative literature tab. A new research task-based simulation will be introduced.
Third, because BEC will no longer be a section in the new CPA Exam, the written communication tasks will be eliminated.
Fourth, the new CPA Exam will have a linear design, with each multiple-choice testlet being weighed equally in difficulty. The exam will no longer use multistage adaptive testing where the second and third multiple-choice testlet is based on the candidate’s first testlet performance.
Strategies for Emerging CPAs
While the main topics in FAR, AUD, and REG will still be included in the three core sections of accounting, auditing, and tax, they will not be exactly the same. The 2024 CPA Exam Final Report outlining the knowledge and skills required for each of the core and discipline sections will be published in January 2023. However, a transition policy has already been developed for candidates who are in the process of taking the exam at the time of the transition. If an individual passed one, two, or three parts of the CPA Exam prior to January 2024, the transition policy would apply. Unexpired exam credit will count for the following 2024 CPA Exam sections:
- AUD = Core: Auditing and Attestation
- FAR = Core: Financial Accounting and Reporting
- REG = Core: Taxation and Regulation
- BEC = One of the three specialty disciplines
This transition policy provides an opportunity for new strategies for emerging CPAs who plan to begin the CPA Exam in late 2022 or in 2023:
- Although the three core sections have the same names as in the current exam, the content will be changing as part of the CPA Evolution Initiative. CPA candidates should review the changes in content for these three sections to determine areas of strength and weakness. This will help a candidate decide if they want to take the current version of an exam section or defer to the new exam in 2024.
- Exam candidates with strong written communication skills can elect to take BEC before it is eliminated. If passed, a candidate will not be required to take one of the new discipline sections as long as the BEC credit does not expire. Furthermore, candidates may elect to take BEC first, prior to January 2024, to avoid the new discipline sections altogether since study materials for BAR, ISC, TCP may not be available until the end of 2023.
- Exam candidates should become familiar with authoritative literature exhibits starting now. It is anticipated that these exhibits will be added to the CPA Exam prior to January 2024. Although most changes are expected to be implemented in January 2024, this will be one change candidates can see beforehand.
Those who start the exam process in 2024 must take the new exam; however, there are strategic opportunities to consider. For example, candidates may take the three core and selected discipline sections in any order. Those who will finalize their required college credits in 2024 may want to begin with the discipline section since they most likely learned this upper-level accounting content in their senior year or graduate level of college.
Beyond the CPA Exam model, the other requirements for licensure have remained unchanged as of now. Credit for passing a section of the exam is valid for 18 months, 150 credits are required to obtain a CPA license, professional experience standards are not changing, and the ultimate goal remains unchanged – to become a CPA.
1 NASBA, Transition Policy Announced for the 2024 CPA Exam Under the CPA Evolution Initiative. https://nasba.org/blog/2022/02/25/transition-policy
2 Heather M. Demshock and Robert E. Duquette, “CPA Exam: A Look Inside the CPA Evolution Updates,” Pennsylvania CPA Journal (Winter 2022).
3 AICPA, Infrastructure Changes to the CPA Exam in 2024. www.aicpa.org/resources/download/infrastructure-changes-to-the-cpa-exam-in-2024
Jessica L. Hildebrand, CPA, is an assistant professor of accounting and James W. Sunday, CMA, is an assistant professor of finance at King’s College in Wilkes-Barre. Hildebrand can be reached at firstname.lastname@example.org and Sunday can be reached at email@example.com.