The AICPA, NASBA, and state boards make the CPA exam harder than it needs to be because they make more money off exam fees when you fail. That’s the (totally unconfirmed) tinfoil theory thrown out here by a user of r/CPA:
Tinfoil hat – Personally feel like it’s a money grab, AICPA/NASBA/State Boards purposely don’t tell you what questions you got wrong and how they grade the tests so it’s not about application of what you know, it’s more about memorizing as much as you can while hopefully getting lucky on what questions you get on the exam. They’re hoping you fail at least once so they can make more money off it. If they cared about actually testing you on accounting principles and knowledge, they’d remake the test to be standardized, but with a large question bank, and inform you on how it’s scored and what you got right/wrong each time. But they don’t because they want you to keep taking it until you blindly pass.
The question they were responding to was why does FAR have such a terrible pass rate. For Q1 2024, FAR has the lowest pass rate of the core exam sections at 41.92%.
Core Exam Sections
- AUD: 44.63%
- FAR: 41.92%
- REG: 63.42%
Check out that Business Analysis and Reporting (BAR) pass rate tho:
Discipline Exam Sections
- BAR: 42.94%
- ISC: 50.93%
- TCP: 82.36%
But let’s address the tinfoil hat theory. If you aren’t aware, NASBA publishes an annual report every year. In this report, we can see total revenue broken down by revenue source. This is from 2023 [PDF]:
Keep in mind 2023 revenues were temporarily inflated as a result of candidates rushing to sit for the exam before CPA Evolution launched in 2024.
And 2022:
Apologies for the potato quality screenshot, that’s how it looks in NASBA’s PDF.
And let’s revisit 2021, a recovery year that followed significant revenue hits in 2020 due to lockdowns and Prometric closures on top of declining CPA examination numbers. This one is also potato quality unfortunately.
There’s a bit in the 2021 annual report that I think is relevant if we’re going to be donning our tinfoil hats. Said NASBA of 2021 revenue:
Total revenue in fiscal 2021 increased by 27.2% from fiscal 2020. Most of this increase is from examination-related services. This revenue rebounded in fiscal 2021, after a decline in the prior year, due to the effects of the pandemic. One-time anomalies, such as the extension of notice to schedule expiration dates from fiscal 2020 into fiscal 2021, along with other pandemic-related circumstances, brought upon significant swings in revenue between fiscal 2020 and fiscal 2021. In addition, expanded testing opportunities to assist CPA Examination candidates living in countries outside the United States increased examination-related international testing revenue. The increase in this service is shown in the international section volume on the previous page.
It was announced in early 2020 that candidates in India could sit for the CPA exam at eight Prometric testing centers across the country without having to leave home. Well, they’d have to leave their home. Just not their home country. At the time, NASBA said the decision was driven in part by concern for candidate safety related to the pandemic as if this decision was made in March 2020 and implemented the following month and not something that had been in the works long before the Rona existed:
At the time of the announcement they said:
During this extraordinarily challenging time, we know you have many concerns — the health of your families and friends, your coworkers and your communities. The Coronavirus pandemic has affected all of us in ways we could not have imagined. Nearly overnight, the world has changed.
Amidst this disruption, we want to help alleviate one concern you may have — taking your U.S. CPA Examination. We know you have dedicated an incredible amount of time preparing for this next step in your professional development. We also recognize that current travel restrictions, test center closures and other factors make it difficult or impossible for you to take the U.S. CPA Examination as planned. So, to support you on your pathway to CPA licensure, and to maintain your health and safety, we will now administer the Exam in India at eight Prometric test centers (Ahmedabad, Bangalore, Calcutta, Chennai, Hyderabad, Mumbai, New Delhi and Trivandrum). We hope the convenience of taking the Exam in your country eases some of your burden while you think about your family, friends and colleagues.
Sure, they could intentionally fail domestic CPA candidates to pump up those examination fees — which, by the way, have increased over the time period discussed here both nationally and in some states — but wouldn’t it be more lucrative in the long run to open up CPA exam testing to international markets like they just did in the Philippines? It’s not like they have to personally build testing centers, Prometric is already set up abroad.
Since international CPA exam testing was first launched in 2011 with Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates, many more countries have been added. This is the full list as of September 2024:
- Bahrain
- Brazil
- Egypt
- England
- Germany
- India
- Ireland
- Israel
- Japan
- Jordan
- Kuwait
- Lebanon
- Nepal
- Philippines
- Republic of Korea
- Saudi Arabia
- Scotland
- United Arab Emirates
I’ll see if I can dig up some numbers on international CPA exam testing revenue. Then we can really get the foil burning.