These are CPA Evolution pass rates for the first and second quarters of 2024. If you have working eyes, you’ll see Tax Compliance and Planning (TCP) has an obscenely high pass rate; 82.36% for Q1 and 75.67% for Q2.

I’m actually glad they covered this in the webinar because I’d wondered myself if TCP was just crazy easy or what. 82.36% is ridiculous.

The benevolent overlords of the CPA exam like to say that pass rates are not indicative of easier or harder exams but rather a reflection of the preparedness of candidates for any particular testing window. Meaning pass rates are higher when candidates are better prepared. To demonstrate this, I lifted this graphic of CPA exam section pass rates from Gleim that covers 2010-2023. Pay special attention to the red line representing BEC (RIP):

Did BEC suddenly get hard in 2023 when it went from a 60% pass rate in 2022 to about 47%? No. I mean, probably not. What did happen was a ton of people rushed to take it before the year ended because any active candidate who hadn’t passed BEC by the launch of CPA Evolution in January 2024 was going to have to choose one of the new disciplines and ain’t nobody got time for that. We can safely assume that many of these people weren’t well prepared thus the section’s pass rate tanked.

Looking at pass rates for 2023, we see a very predictable drop off at the end of the year across all sections except AUD. Again, expected. It’s the end of the year, people are distracted by the holidays, and with CPA Evolution coming around the corner you had a higher number of candidates rushing to sit.

Do they make FAR even harder at the end of the year? Unlikely. But you do get a lot of people who have been dragging ass all year and want to squeeze in a section once it dawns on them that the year is almost over. Those people tend not to be overly prepared.

Back to the topic of TCP. In the NASBA webinar, Joe specifically said that TCP’s pass rate is higher — for now — because “a smaller number of well-prepared candidates did really well” on it in Q1. The AICPA even mentions this on their website:

In review and analysis of candidate performance across Discipline Exam sections in the 24Q1 testing window, the AICPA and the Board of Examiners noted TCP candidates were generally better prepared to take TCP than the BAR candidates were to take BAR and ISC candidates were to take ISC.

If you don’t know, BAR is FAR’s slightly less intimidating cousin. And contains cost accounting which so many people struggle with. So of course candidates didn’t kill it on BAR.

In the webinar, Joe added that he thinks TCP pass rates will go down over time as things normalize. Meaning the hardcore super studiers got it out of the way already, now it’s up to the average CPA exam candidates to take a stab at it.

All this to say, don’t take TCP just because it has the highest pass rate of the disciplines by far. Take it because you fucking love tax.

Related:

The post CPA Exam Tip: Don’t Choose TCP Just Because It Has an Insanely High Pass Rate Right Now appeared first on Going Concern.

On September 10, NASBA received and processed the following scores from the AICPA: pic.twitter.com/fU2fBiPuYN

— NASBA (@NASBA) September 10, 2024

Alright so in this batch of scores for people who sat between July 1 and July 31 we have:

Excluding the international test-takers, that gives us 4,954 discipline scores released in July. We’d say “discipline sections taken” but there are no doubt people who walk out or whose exams get messed up at Prometric so for the purposes of this article, we’re speaking specifically about the number of scores as reported by NASBA.

Going back to the two earlier score releases on June 28 (testing dates: April 20 to May 19):

On June 28, NASBA received and processed the following scores from the AICPA: pic.twitter.com/MCuNsOsKWK

— NASBA (@NASBA) June 28, 2024

And April 24 (testing dates: January 10 to February 6):

On April 24, NASBA received and processed the following scores from the AICPA: pic.twitter.com/WZg939rFs6

— NASBA (@NASBA) April 24, 2024

Adding the number of scores processed in the three score releases of this year gives us this total number of exams taken:

Total domestic discipline sections completed and scored as of July 31, 2024: 9,539

There is one more discipline score release remaining for 2024, due on December 10 for the upcoming testing window of October 1 to October 31. We’ll revise our numbers then.

As always, the mathletes in our audience are encouraged to double-check our math because this author flunked Algebra 2.

The post Doing the Math on CPA Evolution: How Many Discipline Scores Have Been Released So Far This Year? appeared first on Going Concern.

It is now 13 days into August, past the window most people would consider “the beginning” of any month. As one would expect, the CPA candidates are getting restless.

2025 Dates?????????
byu/Catch_Late inCPA

Comment
byu/Catch_Late from discussion
inCPA

I went back to the copious notes I took during NASBA’s CPA Evolution informational webinar in January and the only direct reference to 2025 I found was one of the presenters saying “We don’t know right now what the score schedule will look like in 2025. Hopefully it will be improved.” LOL

The first score release schedule post-CPA Evolution deployment has been unpopular to say the least. Candidates used to regular — I dare say frequent — score releases up until the new exam launched are now waiting weeks to months in some cases. For example, people who sat for CPA exam core sections (AUD, FAR, and REG) between April 1 to June 25 were expecting to receive scores on July 31. For the new disciplines (BAR, ISC, and TCP), candidates who sat between April 20 and May 19 had a target score release date of June 28.

So you can understand why current candidates are eager to see next year’s score release dates show up. “Hopefully it will be improved.” (LOL, again)

We’ll let you know when the dates finally drop. Prepare to be disappointed and you might be pleasantly surprised.

Update: We checked the score release page today, August 16, to see if there had been any update and there was…the language was edited to say “coming soon.”

The post “The AICPA Can Eat a Bag of Dicks,” or Here’s What CPA Candidates Are Mad About Today (UPDATE) appeared first on Going Concern.

On May 29, NASBA received and processed the following scores from the AICPA: pic.twitter.com/K2MYH6Lj0a

— NASBA (@NASBA) May 29, 2024

Candidates were just as surprised as we were to see scores appear early, the target score release date for people who sat for the core sections between January 10 and March 26 was June 4. So some people have been spared another weekend of suffering.

The official score release thread on r/CPA is a good read if you have an afternoon to waste.

Score Release Thread (EARLY) FAR, AUD, REG 05/29/2024 – Good Luck!
byu/Galbert123 inCPA

The remaining core section score release dates for 2024 are as follows.

If you take AUD, FAR, and/or REG between April 1 and June 25, 2024:

If you take AUD, FAR, and/or REG between July 1 and September 25, 2024:

If you take AUD, FAR, and/or REG between October 1 and December 26:

If you sit for your exam between any of those dates but the AICPA doesn’t receive your exam file by the deadline for that window, you’ll be waiting until the next target score release date. And of course, as always, these dates are subject to change. Usually that change doesn’t work in favor of anxious CPA exam candidates but as we just saw, every now and then the universe smiles down upon them.

Congratulations to those who passed — especially those who are DONE! — and to those who didn’t, better luck next time. Remember you’re in good company, last year’s cumulative pass rate across all four parts (RIP BEC) was just a little over half (51 percent).

The post It’s a Miracle in May As Long-Awaited Core CPA Exam Scores Are Released Early appeared first on Going Concern.

Write this down. Or bookmark it, I’ll update if new information comes up.

Score Extensions

Unsurprisingly, the Q&A box was on fire with score questions throughout the hour-long webinar. People are angry about the 2024 CPA exam score release schedule, and they are allowed to be, and there’s all kinds of confusion about the various extensions. Different jurisdictions have different rules and unfortunately, while there is a uniform CPA exam there is not a uniform set of rules followed by each state.

SO. One important thing to get out of the way first. If your jurisdiction has adopted credit extensions, NASBA is still in the process of updating the records. Meaning don’t freak out if your portal doesn’t show a credit extension you’re expecting. Patricia Hartman, Director of Client Services at NASBA and recipient of many angry emails from candidates, said they are still working on updating thousands of candidate records to reflect extensions. They initially hoped to be done with this process by the end of this month but need more time. So be patient and don’t blow up NASBA’s emails screaming at them about your extension.

On the topic of credit extensions themselves, you should note there are two different ones and only one has been adopted by all 55 jurisdictions.

On the recommended Credit Extension Policy (NASBA page on that here), ALL jurisdictions have approved the policy that states any candidate with Uniform CPA Examination credit(s) on January 1, 2024 will have such credit(s) extended to June 30, 2025. So if you had any passing scores still valid as of January 1, regardless of when you sat for those exams, those credits will be pushed all the way to June 30 of next year. Hopefully you’ll be done by then. As mentioned above, your portal may not reflect this extension yet.

The second extension is the one NASBA approved last year that changes the 18-month testing window to 30-months. A map of the credit period decisions by jurisdiction is below (I mean, it says that right in the heading):

This one is very dependent on jurisdiction as some states require a longer process to adopt than others. Additionally, some states are going by the date you sat for the exam while others have made or will make it retroactive to the date of passing credit so in short, it’s a bit of a mess. NASBA has an email you can use specifically for questions on YOUR jurisdiction and YOUR scores: CRI@NASBA.org

“CRI” as in “Credit Relief Initiative” not “y dont u cri moar about it, candidates.”

Exceptions

Don’t expect exceptions if you fall outside of the newly implemented credit periods, this is what you’re getting. You can always petition your state board for additional time due to extenuating circumstances (we all know this means “I dragged ass for 18 months and now I’m bugging out”), good luck with that.

That said, the NASBA representative reminded candidates that they “will work with you” to set a free retake for any candidate affected by circumstances outside of their control on test day. She gave the example of excessive construction noise at the Prometric site but this could also be computer issues, potentially even a severely gassy test-taker next to you disrupting you with farts the whole time. It’s at their discretion so, you know, doesn’t hurt to ask if you meet up with any acts of God on exam day.

2024 Score Release Schedule

They’re aware the score release schedule for 2024 sucks and they’re painfully aware that you all think it sucks. The bad news: AICPA Examinations Team Associate Director Joseph Maslott said, I quote, “Those days are set.”

The good news (I guess?) is that they’re hoping 2025 will be better. “We don’t know right now what the score schedule will look like in 2025,” Maslott said. “Hopefully it will be improved.”

Hopefully.

This is the revised 2024 CPA exam score release timeline they shared:

Note the highlight at the bottom. Expect these to change.

And that’s about it.

The post CPA Evolution Update: What You Need to Know About Scores and Credit Extensions appeared first on Going Concern.

Traipsing haphazardly across the internet as one does, I came across this ancient scroll dated 1988 and entitled “Education requirements for entry into the accounting profession: a statement of the AICPA
policies.” When I say ancient, I mean ancient. Serif fonts hadn’t even been invented yet.

The introduction looks familiar. As the profession evolves, the profession’s gatekeepers are tasked with periodic review of the requirements to become a CPA. This is how BEC got killed off and we ended up with CPA Evolution, because the necessary entry-level knowledge of a CPA today is much different from that of a CPA 15 years ago. Reasonable.

It is the policy of the American Institute of Certified Public Accountants (AICPA) that “ the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA” and “the AICPA should review periodically the standards of admission requirements for CPAs.” To fulfill the AlCPA’s responsibility under this policy, the Education Executive Committee decided in 1986 to review the 1978 Education Requirements for Entry Into the Accounting Profession (the Albers report) to determine how the sample program contained therein should be modified to reflect changes that had taken place and trends that were expected to continue. After identifying significant changes occurring in public accounting, industry, and not-for-profit organizations, the Education Executive Committee engaged in extensive discussions of the impact these changes should have on education for CPAs.

And this is the AICPA’s official policy on education requirements for entry into the accounting profession in 1988:

1. The CPA certificate is evidence of basic competence of professional quality in the discipline of accounting. This basic competence is demonstrated by acquiring the body of knowledge common to the profession and passing the CPA examination.
2. Horizons for a Profession is authoritative for the purpose of delineating the common body of knowledge to be possessed by those about to begin their professional careers as CPAs.
3. At least 150 semester hours of college study are needed to obtain the common body of knowledge for CPAs and should be the education requirement. For those who meet this standard, no qualifying experience should be required to sit for the CPA examination.
4. The scope and content of the educational program should approximate what is described in Academic Preparation for Professional Accounting Careers and should lead to the awarding of a graduate degree.
5. At the earliest practical date, the states should adopt the 150-semester-hour education requirement. The date by which implementation of this policy may be practical may be dependent upon the following factors: (1) the current education requirement in each jurisdiction, (2) the availability of graduate accounting education in each jurisdiction, and (3) appropriate lead time to permit individuals to meet proposed education requirements.
6. Candidates should be encouraged to take the CPA examination as soon as they have fulfilled the education requirements, and as close to their college graduation dates as possible. For those graduating in June, this may involve taking the May examination on a provisional basis. [Ed. note: At the time this was published the CPA exam was given only twice a year, in May and November]
7. Student internships are desirable and are encouraged as part of the education program.
8. The AICPA should encourage the development of quality programs of professional accounting (or schools of professional accounting) and participate in their accreditation.
9. Educational programs must be flexible and adaptive, and this is best achieved by entrusting their specific content to the academic community. However, the knowledge to be acquired and abilities to be developed through formal education for professional accounting are proper and continuing concerns of the AICPA.
10. The AICPA should review periodically the standards of admission requirements for CPAs.

Published prior to the moon landing, Horizons for a Profession – The Common Body of Knowledge for Certified Public Accountants [PDF] is so old it may have initially been written on papyrus paper. That’s what they’re referring to when they say “Horizons” above.

The scanned version is 346 pages so we won’t dig too deep into it but there are some interesting bits in there if you are a nerd who’s into accounting history (me).

Like how many firms performed what services:

Point being, Horizons gets many mentions in the 1988 report as does the “Education requirements for entry into the accounting profession” report published ten years before the one we’re talking about [PDF]. Dubbed the Albers report, the 1978 version came out five years before Florida became the first state to adopt the 150-hour rule.

But let’s get back to 1988 and this part in particular. Many people have questioned why the 150 hour rule lacks any requirement for specific education, especially so now that there’s a contentious debate raging about its continued existence. I mean, if it’s so critical to the public interest then why can it be met with whatever? The 150 hour rule may not have improved the quality of professionals since its widespread adoption but it sure gave us a lot of expert underwater basket weavers.

This is what the report says:

The profession requires that its entrants be men and women whose education has provided them with the foundations for lifelong learning, development, and growth. No attempt is made here to completely delineate the content of a CPA’s general education because it does not always relate directly to the demands of professional practice. Students should come to understand humankind, its history, the philosophies by which it lives, the languages in which it communicates, and the arts and sciences that enrich its existence. Emphasis should be on developing analytical abilities and problem-solving skills, as well as perception, judgment, and integrity. [emphasis ours]

Huh. Who knew.

The post We Get to the Bottom of Why the 150 Hour Rule Doesn’t Require Specific Courses appeared first on Going Concern.

Wyoming and Idaho were the states with the latest application deadline for BEC — November 15 — while most others cut off re-exam NTSs on November 12 and first-time NTSs on October 1. Basically if you were going to do it, you’ve long missed the window. That’s it, it’s gone. Finito. Shame, too, as it has consistently been the section with the highest pass rate since 2011.

We shall now observe a minute of silence for the junk drawer of the CPA exam.

…

…

…

Those who got a section in just before tomorrow’s deadline should expect their scores on December 27. Anyone who didn’t sit before the cut off will be having a good old time waiting for scores come 2024.

The post RIP BEC appeared first on Going Concern.

Today we’re going to look at CPA exam candidate numbers. In a vacuum the 2022 numbers aren’t terrible — 30,251 new CPA candidates, 67,336 unique CPA candidates, and 18,847 CPA candidates who passed their 4th section that year. These numbers are of course all down from 2021 — 32,186 new CPA candidates, 72,271 uniques, 19,544 candidates who passed their 4th section for 2021 — and very, very down from 2016’s high of 48,004 new candidates, 102,291 unique candidates, and 27,889 candidates who passed their 4th section that year but we expected that. 2021 to 2022 that’s a 6% decrease in new CPA candidates, a 6.8% decrease in unique candidates, and a 3.6% decrease in 4th sections passed. Given how ashy the pipeline is at the moment, it could be a lot worse.

Uniques are probably the most important metric here as unique candidates represent overall interest in sitting for the exam. Let’s look at the data going back to 2006.

So unique CPA exam candidates have decreased 34.2% since the last high in 2016 and 35% since the peak in 2010 and the number is the lowest it’s been in the 17 years included in the Trends report. Fun.

About that jump in 2010. I was working in CPA review at the time and remember it well because students were stampeding into the exam so they could sit before the big CBT-e change in 2011. CBT-e added questions on International Financial Reporting Standards to the exam for the first time along with “other sweeping and significant changes” per NASBA messaging at the time. “The new IFRS questions and other changes to the exam are the first major revisions since the CPA exam was computerized in 2004,” read a joint press release from AICPA, NASBA, and Prometric issued January 2011. The very idea of sweeping and significant changes scared the pants off of aspiring CPAs and led to artificially inflated candidate numbers the year prior, a phenomenon widely recognized by the AICPA and CPA review providers as a thing that happens any time there’s a big change coming down the pipe.

In 2017 the exam changed again. Test time increased from a total testing time of 14 hours to 16 hours as multiple choice questions decreased in favor of an increase of task-based simulations, the latter adding an hour of test time to both REG and BEC. Prior to this change there were no simulations in BEC so we can all understand why candidate numbers were high leading up to the April 2017 change. 2015-16 was also the year completed accounting degrees peaked at 79,174 total (BS+MS) and it’s been a downward slide since so there was also a larger potential CPA candidate pool that likely contributed to higher exam numbers in 2016.

All that to say, big change coming = big candidate numbers. There was another big CPA exam change in 2018 though that was mostly a user experience improvement (hello, Excel!) and did not appear to lead to artificially higher candidate numbers.

Being less clairvoyant and more occasionally observant, when I wrote about the 2021 AICPA Trends report last year I predicted big candidate numbers because the redesigned 2024 CPA exam is a big change, bigger even than the biggest change to date since the computerization of the exam nearly 20 years ago. Here’s what I said:

CPA Exam Numbers and The Pandemic

More than any other data point in the 2021 Trends report, CPA exam candidate numbers were most affected by the pandemic due to test center closures, government lockdown restrictions preventing in-person testing, and candidates quarantining after exposure to coronavirus or avoiding in-person testing entirely due to virus concerns. The CPA Evolution project will see the launch of a fully transformed and refined CPA exam in 2024, no doubt “artificially” inflating new candidate numbers in the next few years as we saw happen ahead of the launch of CBT-e in 2010/2011. The sweeping change will mean a flood of candidates who might otherwise have waited to take the exam if taking it at all, a thought that should be comforting to Barry Melancon as he lies awake at night trying to figure out why no one is taking the CPA exam. Should candidate numbers remain where they are or dip even lower in the next Trends report despite the massive CPA exam change in 2024 ahead we have a big, big problem. Let’s not think about that for now.

The AICPA backed up my supposition in this mention under Trends in the number of new CPA candidates by year in the 2021 Trends report:

And this under Trends in the number of unique CPA candidates by year:

Hate to say it but we all might be disappointed and probably shouldn’t play the lotto any time soon. In August of this year, Surgent EVP Liz Kolar wrote a great guest post for us covering pipeline woes and shared her own observations about expected candidate numbers as we approached the final months of testing before CPA Evolution takes over in 2024. She wrote:

Many of the discussions about these shocks have come in a vacuum, mentioning either the pipeline collapse or CPA Evolution, but the two are as connected as they’ve ever been. I’ve seen several major changes to the CPA exam throughout my career as a practicing accountant, university professor and exam prep instructor: 1994 – the exam was shortened from 19.5 hours to 15.5 hours; 2004 – the exam went from a paper and pencil exam to a computerized exam; 2011 – the first Computer-Based Testing Evolution (CBT-e) was enacted and the task-based simulation format was introduced; 2017 – higher order skill testing was introduced; and 2018 – Excel was added as a tool, along with a new user experience. Now, we’re facing the CPA Evolution’s arrival in 2024. Typically, each major change is accompanied by a tsunami of candidates rushing to test before the change takes effect and is followed by a drought of candidates signing up to test immediately after the new exam changes go live. We’re seeing more of a ripple than a tsunami this year and could be in for a massive drought in 2024 and 2025.

Of course this latest Trends report doesn’t cover 2023 so we may be surprised when the next report rolls out in 2025. But everyone’s known since 2019 that a huge CPA exam change was coming and CPA Evolution was officially announced more than three years ago. Where’s the tsunami?

If a 6.8% decrease in unique candidates is the artificially inflated number then things are even worse than they seem. The smaller decrease in 4th sections passed (3.6%) suggests that there may be people with some sections passed who are motivated to finish the exam before 2024 if we analyze historical decreases going back to 2016:

• 5.6% decrease 2020-2021
• 11.4% decrease 2019-2020
• 2.4% decrease 2018-2019
• 6.2% decrease 2017-2018
• 8.5% decrease 2016-2017

So that’s good if true. Let’s hope we’re just being unreasonably negative as usual and wait until the next report comes out before anyone starts freaking out.

The post No One Will Be Surprised to Hear CPA Exam Candidate Numbers Are Down in Every Way the Numbers Can Be appeared first on Going Concern.

If you are a first time BEC section exam candidate most states will stop processing your NTS after next Monday, Oct. 1. Do not delay! Get in your BEC NTS ASAP. BEC has a 60% pass rate – by far the highest. You don’t want to take a discipline! Run, don’t walk to NASBA’s site now. pic.twitter.com/Zn8LrdEVxr

— Jack Castonguay, PhD, CPA (@profjackc) September 25, 2023

If you are sitting for the exam in Arizona or Texas, sorry but your window to apply for BEC as a first-time taker is already closed.

Candidates sitting for BEC for the first time in the following jurisdictions have until Sunday, October 1 to apply for this section:

• Alaska
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• DC
• Georgia
• Guam
• Hawaii
• Illinois
• Indiana
• Iowa
• Kansas
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Missouri
• Montana
• Nebraska
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Dakota
• Ohio
• Oregon
• Pennsylvania
• Puerto Rico
• Rhode Island
• South Carolina
• Tennessee
• Utah
• Vermont
• Virgin Islands
• Virginia
• Washington
• Wisconsin

A few jurisdictions are allowing a bit more time, South Dakota being the most generous with a deadline of November 14. Check the chart if yours isn’t listed above. Check the chart anyway because like an idiot I typed all the states above by hand.

Candidates who want to sit for a retake of BEC before it disappears forever have until November 12 to apply except for those candidates sitting in Idaho (November 15), Kentucky (November 8), North Carolina (October 15 for both first-time and retake BEC sections), Virginia (November 14), and West Virginia (November 8).

Regardless of how much time you have left, we strongly advise getting that NTS in ASAP as the last quarter of the year is typically a very popular period for CPA exam testing and especially so with a big change coming at the start of the new year. There are also rumors about Prometric closing down the less popular testing centers so that’s another variable to keep in mind. Just get it done now if you can.

As the good professor said, you really don’t want to have to do a discipline in 2024. If you pass BEC before CPA Evolution drops in January, you can avoid the new CPA exam sections completely assuming you pass AUD, REG, and FAR before your scores start expiring.

Here, I’ll even save you a click. GO!

https://nasba.org/exams/cpaexam/

Also, and this has nothing to do with anything, October 1 is National Homemade Cookies Day so go ahead and make yourself a batch after you get that NTS in. You deserve it.

The post CPA Exam Candidates: You Better Hurry Up and Apply For BEC Before It’s Gone Forever appeared first on Going Concern.

Unless you’ve been living under a rock, you’re likely aware that the accounting profession is experiencing two simultaneous massive shocks.

These shocks (of our own making) are the collapse of the CPA candidate pipeline and launch of the CPA Evolution, the largest change to the CPA exam since the exam went digital nearly 20 years ago. Of course, exam computerization came after current partners had to walk uphill in the snow both ways to make it to and from the client site. Cue the violins.

Many of the discussions about these shocks have come in a vacuum, mentioning either the pipeline collapse or CPA Evolution, but the two are as connected as they’ve ever been. I’ve seen several major changes to the CPA exam throughout my career as a practicing accountant, university professor and exam prep instructor: 1994 – the exam was shortened from 19.5 hours to 15.5 hours; 2004 – the exam went from a paper and pencil exam to a computerized exam; 2011 – the first Computer-Based Testing Evolution (CBT-e) was enacted and the task-based simulation format was introduced; 2017 – higher order skill testing was introduced; and 2018 – Excel was added as a tool, along with a new user experience. Now, we’re facing the CPA Evolution’s arrival in 2024. Typically, each major change is accompanied by a tsunami of candidates rushing to test before the change takes effect and is followed by a drought of candidates signing up to test immediately after the new exam changes go live. We’re seeing more of a ripple than a tsunami this year and could be in for a massive drought in 2024 and 2025.

It doesn’t look like our profession or university accounting programs should expect the calvary to be coming anytime soon. It’s likely the well-documented pipeline shortage is going to get worse initially because of the CPA Evolution, not better. Fewer candidates are racing to test before the changes despite Business Environments and Concepts (BEC), having the highest pass rate and being a known evil, being eliminated as a section in 2024. This is why Surgent, along with the editors at Going Concern, are encouraging any candidates to sit for BEC (and AUD!) before 2024.

Exam review providers like Surgent know what BEC questions and writing prompts look like. We know how to prepare candidates. And so do professors in accounting programs. The discipline sections replacing BEC are all new: Business Analysis and Reporting (BAR), Tax Compliance and Planning (TCP), and Information Systems and Controls (ISC). Exam candidates must pass one of the three to be licensed. We don’t know how these disciplines will be scored. And the AICPA will need time to collect data and assess performance; it’s why they are bringing back testing blackout periods in 2024.

The change to a discipline-focused CPA exam brings us to the most pressing pipeline issue – the impact that the CPA Evolution will have on enrollments in accounting programs at colleges and universities. Sure, we need more CPA exam candidates to have more CPAs, but given licensure requirements, we need even more collegiate accounting students to have more CPA exam candidates. Exam candidates are in the middle of the funnel. Because the current licensure model requires 150 hours of collegiate credit and a set number of hours in accounting specific courses, accounting students are the top of the funnel and the most important piece. If we don’t get more students to major in accounting, there is no pipeline.

The CPA Evolution may squeeze the funnel even more for colleges and universities by further focusing the exam on more analytical and information systems topics such as digital acumen, data literacy, data analytics, and internal control structures. Do these sound like subjects many accounting students learn in their typical accounting courses? They aren’t in most traditional curricula.

And most universities outside of elite schools and large state schools don’t have the resources or ability to integrate them into the curriculum before 2024. Many universities typically need four to five years, at a minimum, to implement large scale curricula changes. That’s just the nature of the academic beast. There’s already only one semester remaining between now and the CPA Evolution. So, students will be left to rely on exam review providers, YouTube, and other self-study programs to fill the gaps.

At least students knew the old exam matched their coursework. The new one will in time, but that will take four to five years, not the 18 months’ notice the industry was given.

Many accounting degree programs have gone largely unchanged this millennia apart from some added Excel assignments and data analytics courses sprinkled in. And getting those changes took years! The CPA Evolution ignores the pace of play in higher ed. Universities were given less than three semesters to adapt their curricula and prepare their students – the future CPA candidates – and single biggest pipeline fillers. Many have not adapted and are questioning if they even can. Others are wondering which courses they need to change – implying they’ve not responded at all. I believe all the schools want to give their students the best education to match the needs of the profession. But, higher ed is more bureaucratic than the federal government. It does move. It just doesn’t move in three semesters. It rarely moves in three years.

I’ve been in the accounting industry my entire life. I want the profession to succeed. I want the pipeline to grow. Change is often good for industry. But too much change, too quickly, can make our already difficult problems even worse. I worry the CPA Evolution solves a future problem in preparing students for the needs of the firms but comes at the cost of fewer people available to the firms. We could have had both if we gave universities and students the time to prepare.

The post CPA Exam Changes and Pipeline Woes Are a Perfect Storm of Problems For the Profession appeared first on Going Concern.

As of today (July 21, 2023), you have 117 days until NASBA stops processing NTSs for BEC. If you get yours in before that, you have 147 days from today to sit for BEC before it disappears forever and December 15 is the tentative final day of testing for all sections before the new exam debuts in 2024.

Remember these dates:

Note an exception to the above: if you are a candidate in a CPA Examination Services (CPAES) jurisdiction and a FIRST TIME candidate taking BEC you must apply before October 1, 2023 and re-exam candidates in these jurisdictions must apply before November 12, 2023. Boards of Accountancy that do not use CPAES may have slightly different final application deadlines for first-time and re-exam BEC sections, check with yours if needed. More on that from NASBA here.

These are your important 2023 and 2024 CPA exam testing dates directly from NASBA, keep in mind these dates could change:

First, candidates should note that the last day of testing for all current CPA Exam sections (AUD, BEC, FAR and REG) is anticipated to be December 15, 2023. No CPA Exam sections may be scheduled from December 16, 2023, through January 9, 2024, to allow for conversion of IT systems to the 2024 CPA Exam sections. Candidates are encouraged to plan their testing schedules accordingly.

In addition, candidates wishing to take BEC in the latter part of 2023 need to know that the NASBA Gateway system will stop processing Authorizations to Test and Notices to Schedule for BEC on November 15, 2023. This will necessitate that Boards of Accountancy require final application deadlines (first-time and reexam) for BEC sections. These deadlines are yet to be determined and will be published on NASBA’s website once they become available, and shared by each Board of Accountancy.

Conversely, Boards of Accountancy will also need to establish initial application acceptance dates for discipline sections: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP). Authorizations to Test and Notices to Schedule for BAR, ISC and TCP will not be processed by NASBA’s Gateway system until November 22, 2023. These initial acceptance dates are also yet to be determined and will be published on NASBA’s website once they become available, and shared by each Board of Accountancy.

AUD, FAR and REG applications can be continually submitted and processed as the same codes will be used for the core sections that will start in 2024, however the scheduling blackouts do apply.

It is anticipated that testing will commence on January 10, 2024, for all sections. While the core sections (AUD, FAR and REG) will first be available for scheduling through March 26, 2024, in the first quarter of 2024, the discipline sections (BAR, ISC and TCP) will be available through February 6, 2024. Scores are anticipated to only be released once per test section per quarter due to necessary standard-setting analyses and activities.

TLDR:

• NASBA stops processing Authorizations to Test and Notices to Schedule for BEC: November 15, 2023
• First day NASBA starts processing Authorizations to Test and Notices to Schedule for BAR, ISC and TCP: November 22, 2023
• Last day to test for all current CPA exam sections: December 15, 2023
• Tentative first day of CPA Evolution testing: January 10, 2024

Regarding scores, brace yourselves. First the good news: because the initial score releases of 2024 hearken back to the ancient time before NASBA discovered computers, CBT Administration and Executive Directors Committees of NASBA have recommended that Boards of Accountancy allow an extension of valid passing credit when the clock strikes 12:01 on January 1, 2024 that would extend those credits to June 30, 2025. Meaning regardless of how much time you had left on a passing score, if it’s valid on January 1 then it would be extended to June 30, 2025. This is merely a recommendation, it’s up to each state Board to adopt it. A map on NASBA’s site shows which state Boards have adopted the rule as of February 10, 2023. So, most of them.

And the bad news: they’re doing this because scores will not be released as quickly as some candidates might be used to (cue booing and angry emails to NASBA). As much as candidates might want to believe this is intended to further torture them for shits and gigs (an assumption we can’t say with certainty isn’t true), The Powers That Be have to do some tweaking of new material starting out and it’s unlikely score releases will be this bad forever. All the more reason to knock out what you can before December 15.

Remember all of this can and probably will change so be prepared. There will be hiccups, exacerbated by continued Prometric cost-saving measures (i.e. testing center closures), and it will take some time for the benevolent overlords of the CPA exam to smooth out all the kinks. Be prepared, be patient, and most importantly, be flexible. AND TAKE BEC THIS YEAR IF YOU CAN.

The post CPA Exam Candidates: Save These Dates appeared first on Going Concern.

Back to the reason why we’re here, the AICPA has posted a call to all CPAs to help set passing scores for the 2024 CPA exam.

If you answered yes to all the above, you can volunteer and participate in determining the passing score for the 2024 CPA Exam. Nominate yourself or others online! https://t.co/Kc5gE3XyUa pic.twitter.com/Oqt2LdO5ZZ

— American Institute of CPAs (@AICPA) June 29, 2023

Participants will be selected to review one of the six Exam sections (Auditing and Attestation (AUD); Financial Accounting and Reporting (FAR); Taxation and Regulation (REG); Business Analysis and Reporting (BAR); Information Systems and Controls (ISC); or Tax Compliance and Planning (TCP)) based upon their professional experience. There will be one panel per exam section, and each panel will meet for up to two days. Input from these panel meetings will be provided to the AICPA Board of Examiners (BOE), the ultimate authority charged with establishing passing scores for the exam. Selected participants will convene in December 2023 or early January 2024 at the AICPA’s office in Ewing, New Jersey.

Requirements are as follows (sorry, new passers):

• Be a licensed CPA with at least two years of experience (including the past 12 months) supervising the work of newly licensed CPAs. A newly licensed CPA is an individual who has fulfilled the applicable jurisdictions educational and experience requirements and has the knowledge and skills typically possessed by a person with one to two years of experience.
• NOT be affiliated with CPA Exam preparation and review programs.

You can nominate yourself or someone else here, any questions about the program should be directed to this special AICPA inbox. Candidates, please do not blow that inbox up with your CPA exam gripes.

The post The AICPA Needs Some Help From CPAs to Determine the Passing Score For the 2024 CPA Exam appeared first on Going Concern.

The question:

Ignoring the talent shortage what’s the most pressing issue in the profession right now?

— Going Concern (@going_concern) February 20, 2023

Let’s begin with my favorite response of the bunch:

Ignoring the talent shortage

— Kendall Collier (@KendallCollier) February 20, 2023

Really though.

And here’s one from the Illinois CPA Society based on what they’ve heard from their members:

What we hear among our members: retaining existing staff, lack of support for pursuing the CPA credential, and DEI challenges. During busy season, retaining staff will likely be #1.

— Illinois CPA Society (@IllinoisCPA) February 21, 2023

ICPAS has also done some research into why accounting graduates are choosing not to take the CPA exam if you’re interested in that. For the uninitiated, CPA exam candidate numbers have been on the decline since the second half of the ’10s, with a gap between accounting graduate numbers and anticipated CPA exam candidate numbers first appearing around 2014. The number of CPA exam candidates decreased 17 percent between 2019 and 2020 and it saw a 6 percent increase from 2020 and 2021 according to the AICPA Trends report which is basically a thorough physical examination (including blood work and squat and cough) for the profession. A modest increase in examination candidates is expected for 2023 due to the launch of CPA Evolution in 2024, just as we saw in 2010 prior to the significant exam changes ushered in with CBT-e in 2011.

Back to the question of pressing issues. In no particular order, here are the rest of the responses:

• Lack of succession planning of local firms.
• How to leverage tech to make busy season more manageable for professionals
• Pricing. There are still too many firms undervaluing themselves especially for D level clients. Appropriate pricing helps with compression and capacity issues.
• Pricing, deadline work compression, and outdated mindsets.
• Deadline compression forcing more work into q1/q2 is a pain for me.
• I think everything is at least indirectly related to the talent shortage, but I would go with (1) work life balance and (2) credibility/audit failures #ftx and wirecard, which I think are driven in part by the talent shortage

Work-life balance or rather the lack thereof is an issue that has long served as the boil on accounting’s ass and is believed by anyone who has been paying attention to be one of the main factors that has led to a shortage of accounting graduates and public accounting talent from entry level up to senior, second only to offensively low starting salaries. The two are intrinsically tied together as there is a direct correlation between the amount of shit one is willing to take and how much one is getting paid to do it. We suspect that were accounting firms to raise salaries in a significant way, talent would follow. Because salaries did not budge much over the past 15 years and because workloads became heavier and heavier as the years wore on, the perceived value of an accounting career eroded more and more with each passing year. And now we’re where we are.

The problem now is that firms can’t just hire more people to reduce the workload. There are no people. That leaves raising salaries as the big draw, and there has been some positive movement in that area, it may not be enough.

So we’re pretty much screwed there. Anyone want to talk about succession planning?

The post We Asked Twitter What’s the Second Most Important Issue in the Accounting Profession Right Now, Here’s What They Said appeared first on Going Concern.

The post Here’s How People Did on the CPA Exam in 2022 appeared first on Going Concern.

If the @aicpa put you in charge of #cpa exam content today, what is one topic you would add? Remove?
I would add Excel functions & formulas to all sections.
I would make audit/REG specialty sections where a student only needs to take 1. CPAs don’t need both. It’s 1 or the other.

— Jack Castonguay, PhD, CPA (@profjackc) August 4, 2022

One thing is certain: future CPAs of today (or is it tomorrow?) are tested on a far greater breadth of knowledge than the generations that came before them; as the rules and topics in practice grow more complicated, so raises the bar of minimum knowledge tested by the exam. Is it too much? Is that why CPA exam numbers are down? Is it really necessary to test a little bit of everything? Should we throw out government accounting?? Am I the only one who was butthurt when they took written communication out of FAR, AUD, and REG??

The comment section is open, let ‘er rip. IMA representatives are welcome to argue the case for extensive cost accounting testing if they are so inclined. Oldtimers, please refrain from telling us how many hills you had to clamber over barefoot in the snow on your way to the gymnasium where you sat for all four parts at the same time in a repurposed chicken coop.

The post What Would You Like to See Tested on the CPA Exam? appeared first on Going Concern.

The Ohio State Fair is recognized as one of the most celebrated state fairs in the country. Many people remember visiting the fair to see acts such as Bob Hope and famous rock bands. However, many may not know that aspiring Ohio CPAs took the CPA Exam at the Ohio state fairgrounds, specifically on tables in the buildings used for showing prize-winning chickens. When I took the exam in November 1981, we were issued cardboard to place under our exam materials so our No. 2 pencils wouldn’t go through the paper into grooves in the table created by chicken and rooster claws.

Suddenly a windowless room at Prometric doesn’t sound so bad, eh?

We first discussed the possibility of remote CPA exam testing in September 2020, at which time online testing was being considered as a sort of just-in-case should that pesky Rona thing get any worse. Man, if only we’d known then … . When Prometric shut down completely due to coronavirus in early 2020, suddenly the benevolent overlords of the CPA exam had to ask themselves for the first time in history, “What happens if no one can take the exam?” After all, there wasn’t much anyone could do about site closures. It’s not like Prometric was going to go against government guidelines and open its doors just because Barry Melancon wrote a strongly-worded letter about the CPA shortage.

This was the initial discussion about remote testing as a backup plan in the Summer 2020 NASBA State Board report:

The significance of disaster planning has been underscored by the COVID-19 restrictions. Testing options are one of the elements NASBA has been studying as it considers worst-case scenarios, NASBA Executive Vice President and COO Colleen Conrad told the Regional Meetings. Remote proctoring, which would open the possibility of candidates testing from home, is now being studied by NASBA’s Computer-Based Testing Committee and the Executive Directors Committee as a backup plan should testing centers be unable to reopen at some future time.

While Ms. Conrad praised Prometric for their handling of closings and openings of test centers during the pandemic this spring, the question remains: What would happen if the virus comes back in the fall and the centers need to stay closed? “We need a backup,” she said. NASBA and the AICPA are discussing what would be necessary to have a remote proctoring alternative, which is not covered in the current contract with Prometric. “We would want to be sure the Boards are comfortable with it,” Ms. Conrad stated.

In February 2021, NASBA President and CEO Ken Bishop gave remote testing a nod in his President’s Memo, floating the idea while also acknowledging that some stakeholders are — rightfully — worried about the risks that come with letting people take a professional licensing exam at home that has, up until now, been administered under the watchful eye of Prometric proctors in secure rooms:

We realized in late February 2020 that we had to consider an alternative emergency delivery method for the Uniform CPA Examination. History has shown us that candidates must be provided an opportunity to test when they are best prepared. Failure to do so results in lower pass rates and dropouts from the pipeline. NASBA, AICPA and Prometric began exploring a remote testing alternative for the Uniform CPA Examination, and progress on potential implementation has been made.

In the year since that memo, we sort of forgot about it. Remote testing seemed like a worst-case Plan Z, not something they might actually deploy if and when things got back to normal. Prometric has (mostly) worked through the backlog caused by shuttering testing centers early in the pandemic, automatically granted NTS extensions have long since ended, and once vaccines started rolling out, the world at large took a giant step toward returning to normal. Or whatever passes as normal these days, anyway. It started to look like remote testing wouldn’t be needed so why waste any time wringing hands over it?

Well in this list of FAQ solicited from NASBA social media followers and published February 24, 2022, we see remote testing has gotten a small little shout-out which, to me, signals this as a serious possibility. Not just a “what if a virus shuts the entire world down again” backup plan but an actual possibility.

What are the chances that NASBA would consider online testing? NASBA, the AICPA, and Prometric are looking at the possibilities of offering the CPA Exam remotely in the future. However, there are security and software issues that must be addressed in order to protect the Exam.

Now I realize that just a few paragraphs ago I copy-pasted a passage that says basically the same thing. But there’s a big difference between “emergency disaster planning” and a fairly dry sentence about looking at the possibilities. There are 13 questions on the above-linked FAQ, and I doubt NASBA would waste precious bandwidth on including a question like that if it wasn’t something they were seriously considering. We know that Prometric already has the capability to offer remote exams, it’s just a matter of working out the specifics and signing new contracts with them and getting the approval of all interested parties (namely state boards). Easier said than done, I know.

I wouldn’t expect any movement on this anytime soon. After all, we’ve been talking about them talking about it for two years now. NASBA has made it abundantly clear that their focus right now is on “bringing CPA Evolution to fruition” so they’ll be tied up well into 2024. That said, I think it’s something worth watching; they sound a bit serious about actually doing this. So see you a year from now to talk about an update on them talking about it should they bring it up again.

Photo by Andrew Neel from Pexels

The post NASBA Is (Still) Considering Remote CPA Exam Testing Even With Virus Concerns Waning appeared first on Going Concern.

I sincerely hope you didn’t read that last sentence and ask “what change?” because you should know by now that the CPA Evolution launch is going to be the most significant change to the CPA exam since it was computerized in 2004 (early happy birthday to the computerized CPA exam btw, it turns 18 in April). Bigger, even. If you need to catch up, you can find a wealth of information on it that will keep you busy well into 2024 at the official CPA Evolution site.

Alright we get it, it’s a big change. Today we’re here to talk about what’s going to happen to your passed sections if you’re still in the middle of your CPA exam journey when this fancy new redesigned exam hits.

Thankfully the benevolent overlords of CPA licensure do not want you going into this blind and have revealed the transition policy for any current candidate who has not passed all four parts of the exam by December 31, 2023. You’ll note that as long as you are done by that date, none of this applies to you so if there was ever a time NOT to procrastinate, the next 21 months would be it. I’m going to mention something scary here. Don’t get freaked out but 18 months from January 1, 2024 is only four months away. Meaning it’s not only possible but very likely that at least some of you starting your CPA exam journey this year will be affected by this transition as you could potentially have parts nearing expiration at the beginning of 2024. So pay attention.

From NASBA:

The transition policy is quite simple. Candidates who have credit for AUD, FAR or REG on the current CPA Exam will not need to take the corresponding new core section of AUD, FAR or REG on the 2024 CPA Exam. Candidates who have credit for BEC on the current CPA Exam will not need to take any of the three discipline sections.

If, however, a candidate loses credit for AUD, FAR or REG after December 31, 2023, they then must take the corresponding new Core section of AUD, FAR or REG. A candidate who loses credit for BEC after December 31, 2023, must select one of the three Discipline sections to be tested. It is important to note that none of the sections of the current CPA Exam will be available for testing after December 31, 2023. There is a hard cutover from the current CPA Exam sections to the 2024 CPA Exam sections on the January 2024 launch.

You know, usually when people say things are “quite simple” it ends up being some overly complicated side quest complete with algebra problems, hypotheticals, and enchanted cats gifting you magical items with rare buffs, but in this case it really is quite simple. BEC is the biggest wrench in the works as the three disciplines are new, and instead of BEC, candidates will choose one of these disciplines to be tested on. They are:

• Business analysis and reporting (BAR)
• Information systems and controls (ISC)
• Tax compliance and planning (TCP)

As mentioned above, if you have pre-2024 passing credit for BEC then you don’t have to worry about disciplines as long as you pass the other sections before that credit expires. I’m repeating this so you get in your head that it would be a very, very good idea to pass BEC by the end of 2023 if you can.

In case blocks of text are confusing, here’s a nice visual representation:

Makes sense right?

The biggest takeaway here is that if you can, then you should do everything in your power to be done by December 31, 2023. Why? It’s just easier. We like easy. Easy is good. While the core exam sections of 2024 may have the same names as current ones, new blueprints are expected this summer and content could be significantly different from what’s tested today. We’ll keep you updated on that when we hear more, but for now you can browse the transition FAQ for a bit more info. But if you can’t pass all four parts by the end of 2023 I wouldn’t sweat it too much either; the exam will be redesigned, yes, but at the end of the day debits will always be on the left, so even with a new format and updated blueprints, the basic stuff that’s been tested since the dawn of time will still be around.

And now you’re officially caught up on the CPA Evolution transition policy, so plan accordingly. With time being what it is, it’ll be 2024 before we know it.

Photo by Tima Miroshnichenko from Pexels

The post Taking the CPA Exam In 2023? Here’s What You Need to Know About Rolling Your Scores Over In 2024 appeared first on Going Concern.

Accounting — at least as an independent field of study — is becoming obsolete in today’s technology- and analytics-focused world. Its value lies in its interdisciplinary applicability and position as a foundational business curriculum. In recognition of that reality — and to maintain a pipeline of candidates open to CPA licensure, increase the number of engaged accounting students, and keep the profession relevant to the next generation — this author believes that colleges and universities should eliminate the accounting department as a stand-alone department and reorganize accounting under finance and information systems departments.

It’s long been established — and we here at Going Concern have nearly 13 years of evidence littered throughout our archives to prove it — that the accounting profession has a recruitment problem. A decade ago, the profession’s efforts were honed in on increasing diversity, but nowadays it’s about getting people in the door.

The most recent AICPA Trends report [PDF] — published in 2019 — tells us that accounting enrollments are down overall, though it does look like there’s some positive movement on the diversity side:

Total projected accounting enrollments are down 4% from the highs of 2016, but are still among the highest on record. Master’s enrollments are down 6% from 2016. Racial/ethnic diversity has increased in the 2017-18 academic year. Universities have reported increases in Hispanic or Latino enrollees of 3 and 8 percentage points at the bachelor’s and master’s levels, respectively. Seventy-two percent of bachelor’s of accounting programs and 65% of master’s of accounting programs expect to have the same or higher enrollment in 2019.

We are anxiously awaiting the newest AICPA Trends report, which is published every two years and therefore should show up anyday now. Until then, we can only guess on what the next batch of numbers will look like and hand-wring over the data we do have.

The Bureau of Labor Statistics forecast employment of accountants and auditors to grow 13.1% from 2012 to 2022; current BLS data projects 7% growth for this segment from 2020 to 2030, about as fast as the average for all occupations.

About 135,000 openings for accountants and auditors are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Let’s talk about retirements while we’re on the topic. A few years back, the AICPA estimated that a whopping 75% of its members (read: CPAs) would be eligible for retirement in 2020. When you combine this figure with waning interest in accounting as a major, more and more accounting graduates foregoing the CPA exam, an accounting professor shortage, and the pressures of a traditionally reactionary profession to take proactive steps to adapt to new technology, well, it doesn’t look pretty.

The CPA Evolution project aims to address that last issue, and the AICPA and NASBA recently released a revised CPA Evolution Model Curriculum upon which university accounting programs can build their curricula but are by no means required to. I’m hearing grumblings from deep within the bowels of academia that some professors are less than thrilled about this project, but no one is willing to go on record, so if you’re an accounting professor with an opinion on CPA Evolution good or bad and willing to put your name on it, please do reach out.

The problem with this approach, writes Castonguay, is that the new curriculum fails to address the “jack-of-all-trades” problem; early-career accountants in particular are expected to know a little bit about a lot of stuff, essentially.

Even though the CPA Evolution Project is aligning the credential with practice, it is also underscoring that the value in the license lays not within the accounting curriculum that has existed for decades; the new value is the technology, the analytics, the systems, and the tax research. But I believe the curriculum realignment anticipated by the CPA Evolution Project will only lead to an even faster decline in enrollments if accounting remains siloed as a stand-alone major.

As the profession gets more specialized, the accounting curriculum is expanding to include more information, more courses, more skills, and more tracks—but students are less skilled at each one. It’s a cycle that can’t be fixed by repackaging existing courses. It can only be fixed by eliminating the accounting major and unlocking accounting’s interdisciplinary value and specialization within finance, information systems, or other departments.

In order to better recruit future accountants (or should we start calling them accounting analysts?), Castonguay suggests a total rehaul of accounting education, rolling existing accounting curriculum into other departments. This, he says, is preferable to trying to cram technology content into existing accounting programs instead, which seems to be the current plan.

[T]he accounting department itself should be eliminated and reorganized predominately under finance and information systems departments. In the author’s opinion, this approach will unlock the value in the fast-evolving accounting roles that accounting firms and future employers seek from graduating students.

So what do we think? Is accounting a dead major? Is the solution to the profession’s pipeline problem as easy as parasitically latching onto other business majors hoping to snag a couple future CPAs with the captivating glitter of accounting fundamentals?

I’ll say this: the next few years are going to be very, very interesting.

Photo by Ana Arantes from Pexels

The post Is Accounting an Obsolete Major? appeared first on Going Concern.

IMPORTANT UPDATE:
Due to the necessary and important focus on bringing CPA Evolution to fruition, including significant changes that must be made to NASBA’s technology and platforms to reflect the new exam and licensure structure, NASBA has ceased publishing the Candidate Performance on the Uniform CPA Examination publication until this important transition is completed.

NASBA began gathering data on CPA exam candidates in 1982 and started publishing these reports three years later. It says in a description on its website this publication demonstrates “NASBA’s role as a trusted resource to Boards of Accountancy, the academic community and accounting profession.” The most recent physical report sells for $200 and along with jurisdiction and demographic data, contains the following:

• • State Performance
  • University Rankings
  • Program Accreditation Statistics
  • Country Rankings and Performance Breakdowns for the Top Five (5) countries
  • Trending Data
    • Number of Unique Candidates
    • Average Age
    • Percent Pass

In an FAQ, NASBA said it might publish reformatted candidate data in 2025 at the earliest. In the meantime, it will not publish detailed pass rates and statistics for universities, nor will it provide any university-specific data to institutions requesting this information for their own purposes. It will consider requests for data used for research purposes, however this data will be “severely restricted” and considered on an ad hoc basis.

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The post NASBA Will No Longer Publish CPA Exam Performance Data Until the New CPA Exam Debuts in 2024 appeared first on Going Concern.

Where you go after graduation is no longer as clear as it was for the class of 1990; today’s grads are expected to enter the profession with a greater understanding of the work versus those who came before that mostly learned on the job. The CPA Evolution Model Curriculum aims to solve this problem, and in the meantime, recent and soon-to-be accounting graduates should be aware of the single, highly-desired skill that will set them apart in the marketplace: critical thinking.

There was an interesting article in the AICPA’s Extra Credit newsletter the other week that may have flown under your radar if you aren’t an accounting educator since that’s who this was written for. So let’s read it together and see what we can learn.

Today’s accounting graduates will enter a very different profession than those who began their careers 20 or even 10 years ago. In many cases, employers will demand more from them. They’ll be tasked with learning new technologies at a more rapid pace, dealing with larger datasets, and solving more complex problems earlier on in their careers than their predecessors did.

See? Further evidence the profession is changing. Just the fact that this is being discussed and that an entire task force exists to address it should be proof enough, as we know the profession to be traditionally reactive rather than proactive. The profession’s eagerness to head this issue off at the pass rather than wait and see how it turns out signals an uncharacteristic willingness to adapt that is no doubt driven by the urgency of said issue.

New accounting hires today “start at a higher level” than those of a decade ago, said Mark Rocca, CPA, an audit partner at EY’s Boston office, speaking at the 2021 AAA Annual Meeting. “Audits of the past were more procedural and task-focused,” he observed. “Today, using data, analytical tools, and technology, in many cases we can look at all transactions from a company. We are asking our people to do more thoughtful and insightful analysis than I had to do when I started 18 years ago.”

That, he acknowledged, places “more pressure” on new graduates. “They’re a much more important part of the thought leadership of their teams than when I started out,” he said. “We throw all this data at them. It can be overwhelming.”

Shout-out to Mark for co-signing the claim I made three paragraphs ago. You’re appreciated, Mark.

So first, a little good news for you rabble-rousers out there. In today’s workplace, unquestioning allegiance to authority may actually be a detriment in the evolving firm environment.

The same mindset that can earn a diligent student high grades — obediently following directions, pleasing authorities, and not asking too many questions — can cause a graduate to struggle in a workplace where critical thinking is valued. To succeed in the accounting profession today, practitioners said in several panel sessions at the Annual Meeting, new hires need to acquire a different set of skills.

What skills, you asked? Here’s the shortlist:

• Curiosity and a willingness to ask questions
• The ability to know when they need more information to solve a problem
• The ability to acquire the information they need
• Comfort with ambiguity
• Digital flexibility

On the surface, most of these boil down to “know how to Google” but it’s obviously more complicated than that. And it’s difficult to teach these skills, especially in an industry that attracts people who thrive in an environment jam-packed with rules and guidance and more rules. We might wonder if firms’ burning desire for this particular skill set might be behind the trend of non-accounting graduates making up 31% of new hires (up from 20% two years prior). Accounting graduates who can bring this kind of out-of-the-box thinking to their early years at the firm will surely have a leg up on their classmates who shine in rigid, rule-based environments but fall short in the abstract.

Critical thinkers, now is your moment. Stop wasting those skills on picking apart strawman arguments in Reddit threads and go make a difference in the world. Or something.

The abilities employers seek from accounting graduates [AICPA]

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The post The Bar Has Been Raised For New Hires and There’s One Skill In Particular Firms Are Looking For appeared first on Going Concern.

Last week, the Journal of Accountancy updated everyone on the new CPA exam, which is still expected to make its glorious appearance in 2024. Much of the article details what we already know, mainly that the new exam will consist of the core sections of auditing, accounting, and tax organized in such a way to test skills applicable to most early career CPAs. Beyond the core, you have your three disciplines as follows:

• Business Analysis & Reporting (BAR)
• Information Systems and Controls (ISC)
• Tax Compliance & Planning (TCP)

Don’t freak out, you only have to pick one.

On the whole, the change should be beneficial to candidates as it’s a known fact the breadth of exam content has grown significantly since the old days when the soon-to-retire partners at your firm had to walk uphill in the snow both ways to take the stone tablet paper and pencil exam. This means less memorizing topics that many candidates are unlikely to encounter in the wild as early career CPAs and more focus on the technology they will. Not everyone is happy with this change, as evidenced by the IMA picking a fight over management accounting being snubbed in proposed new content, but that’s really not your problem unless you really, really like management accounting for some reason.

There’s an interesting takeaway from last week’s JofA article that stood out as it points to a more flexible profession than any of us are used to seeing.

From the article:

“The Core-and-Discipline model allows candidates to focus on areas that are of either special interest to them or their employer,” said Mike Decker, the AICPA’s vice president–Examinations & Pipeline. “It also gives us flexibility for the future as the profession evolves. We’ll always have a Core, and the Disciplines could potentially shift, in the future, as the profession shifts. Therefore, the new model could provide greater flexibility.”

While this forward thinking and the subsequent change that could result might be scary to accounting students and set-in-their-ways Boomers alike, it is no doubt a step in the right direction toward a truly future-ready profession. As opposed to a profession that claims to be future-ready but in practice happily engages in the same thinking and behavior it has since the beginning of time.

It’s exciting to see this all take shape, and maybe a decade and a half from now we’ll look back on the current CPA exam the same way we look back on ’80s hair. You know, excessive and a lot of work and hideous but still a fun relic to reflect on when we think about how far we’ve come.

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And here in this dystopian nightmare glorious future, technical aptitude is in high demand. Perhaps for an earlier generation of accountants “technical aptitude” meant being able to set the clock on your VCR and delete your own browser cookies, but here in the actual future, data analytics rule. This is no more evident than in the ambitious CPA Evolution project, an overhaul of the CPA exam the likes of which hasn’t been seen maybe since the exam went computerized 17 years ago. Expected to launch in 2024, the “new” testing model under CPA Evolution is intended to better reflect the realities of practice, “requiring deeper proven knowledge in one of three disciplines that are pillars of the profession.”

So here’s the problem. The place bright-eyed and bushy-tailed soon-to-be CPAs get their knowledge from (college, obvs) might not be doing its job and preparing said untainted future CPAs for the new reality. In other words, accounting students might be missing out on the technology-focused education they’ll need to compete in the workplace.

From a March 17 AICPA press release:

There are major gaps in college accounting education today, with fewer than half of all programs teaching emerging topics, such as IT governance and cybersecurity, according to a new report by the American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA).

Accounting Program Curriculum Gap Analysis Report found mixed results for coverage of emerging and technology topics. While more than 60 percent of collegiate accounting programs are teaching topics like data analytics and IT audit, fewer programs cover cybersecurity, predictive analytics or System and Organization Controls (SOC). Each of these topics could be covered more in-depth on the CPA Exam in 2024, pending the results of the current Exam Practice Analysis.

“The accounting profession is becoming increasingly reliant on the use of emerging technologies, information systems and data analytics. Businesses are increasingly seeking technology-related services and advice and it’s important for newly licensed CPAs to be adept in their knowledge, usage and skills,” said Sue Coffey, CPA, CGMA, CEO – Public Accounting, AICPA. “Accounting programs have a responsibility to assure their curricula and course offerings are setting students up for success in the profession.”

The news isn’t all bad, as you can see. Some schools are keeping up, while others are kind of keeping up but missing critical components necessary to mold well-rounded accountants.

From the AICPA’s Do colleges prepare future CPAs? Three key insights:

These topics are often taught as only a part of one or two class sessions rather than a dedicated course or unit of study. For example, system and organization controls (SOC) engagements are a rapidly growing practice area for CPA firms. But, among those surveyed, only 32% of accounting programs with over 100 undergraduate accounting majors cover the topic in their curriculum. At smaller schools, the percentages are less. Some future CPAs may not be learning what they need to compete in the job market as firm services become more technology-focused.

What’s the solution? “The answer is clear,” says the AICPA. “Smaller schools must enhance their offerings or consider other options that will give their students greater exposure to these topics. Due to the demands of the profession, as well as the CPA Exam requirements, faculty at schools of all sizes must assess their capabilities to teach these technologies and commit to evolving so they can more effectively deliver the education students need.”

The AICPA plans to provide a model curriculum sometime this summer that will help accounting educators ensure their graduates are not only prepared for the CPA exam changes three years from now but also for the rapidly-changing profession. I know the profession doesn’t have the best track record for proactively adapting but let’s try to be hopeful here and just wait to see how everything shakes out. Interesting times, that’s for sure.

While we’re on the topic of the future, I’m just gonna leave this here.

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We first heard about the model in late 2019. Here’s a brief bit we wrote about it back then in case you missed it:

The Journal of Accountancy reported last week that under the proposed licensure model, candidates would pick one of three areas in which to show advanced skills in addition to being tested on competency in the familiar core areas of general accounting, auditing, and tax.

The three “bonus” areas to choose from are as follows:

• Tax compliance and planning.
• Business reporting and analysis.
• Information systems and controls.

Sounds kind of interesting as a concept, will be interesting to see how they implement this. The direction they’re going with this is pretty much what we have now (e.g., everyone gets tested in audit concepts even if they don’t plan on being an auditor), just with an added “specialization.”

Writes the JofA:

The new model is designed to:

• Be responsive to feedback by requiring all candidates to demonstrate strong core competencies.
• Enhance public protection by producing candidates who have the deep knowledge necessary to perform high-quality work.
• Be adaptive and flexible, helping to future-proof the CPA as the profession evolves; and
• Result in one CPA license.

Additionally, the JofA reports that candidates in the CPA exam process at the time of implementation “will be able to sit for the current CPA Exam until the new exam launches,” and a plan for those candidates who have started but not finished the exam by the first part of 2024 is in the works.

The good news is the 16 hours it takes to sit for the exam is not expected to change, nor should you expect the additional “core discipline” testing to be its own separate section from the existing four CPA exam sections.

For more information about CPA Evolution and the proposed changes to the exam of the not-so-distant future, visit the CPA Evolution website. You’ve got time to get through it before any of this matters.

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“The model we are proposing reflects the realities of practice today. When you look at the profession 20 or 30 years ago, it’s evident that the demands of CPAs have grown,” said Bill Reeb, CPA/CITP, CGMA, the chair of the AICPA. “… As our body of knowledge has expanded, we’ve stretched the exam and curriculum to cover more and more material, but that approach isn’t sustainable. We need a licensure model that is flexible enough to evolve with our profession.”

Apparently the process of soliciting opinions on this urgent need to revamp the exam went well (more than 2,000 responses!) and the process of finalizing a shiny new licensure model is chugging forward.

The Journal of Accountancy reported last week that under the proposed licensure model, candidates would pick one of three areas in which to show advanced skills in addition to being tested on competency in the familiar core areas of general accounting, auditing, and tax.

The three “bonus” areas to choose from are as follows:

• • Tax compliance and planning.
  • Business reporting and analysis.
  • Information systems and controls.

Sounds kind of interesting as a concept, will be interesting to see how they implement this. The direction they’re going with this is pretty much what we have now (e.g., everyone gets tested in audit concepts even if they don’t plan on being an auditor), just with an added “specialization.”

Writes the JofA:

The proposed model is designed to still result in one CPA license with strong required core knowledge in accounting, auditing, tax, and technology while facilitating candidates’ ability to develop a deeper understanding of one specialized area. Regardless of the candidate’s chosen discipline, the model leads to full CPA licensure, with rights and privileges consistent with any other CPA.

Additionally, the JofA says a few areas were of special concern to respondents who took last summer’s prompt for comment as an opportunity to weigh in on the new licensure model:

• Support for changing the licensure model. The most common comments stated that a bigger emphasis on technology skills and knowledge is needed and that evolving the model would bring important skills to the profession, position the profession for success in the future, and protect the public interest.
• Belief that all newly licensed CPAs should display strong core competencies. A strong core of accounting, auditing, tax, and technology was preferred.
• Implementation questions. Respondents asked how core CPA knowledge would be defined, how education requirements might change, and how licensure changes would be achieved in the current legislative environment.
• Belief that technology is not the only consideration. The impact of technology on the profession was the impetus for the CPA Evolution project, but other factors also are disrupting the profession.

So there you have it, you’re all caught up for now. The benevolent overlords of the profession hope to have this thing knocked out by next summer, and we’ll of course keep you updated as more information is available. You can find out more about the proposed licensure model at the CPA Evolution website in the meantime.

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