Embarking on the CPA Exam journey in 2021? Brace yourself for significant changes as the AICPA introduces updates aimed at aligning the exam with the evolving landscape of the accounting profession. Dynamic alterations to testable content, outlined in the CPA Exam Blueprints, will take effect on July 1, 2021. This guide unravels the key modifications and offers insights into how candidates can prepare for the revamped exam.
Overview of Changes:
The changes outlined in the updated CPA Exam Blueprints will be implemented from July 1, 2021. Candidates planning to take the exam after this date need to be aware of the revised content.
Objective Behind Changes:
The AICPA aims to ensure that newly licensed CPAs are well-prepared for the practical demands of the accounting profession. By focusing on current and relevant topics, the changes intend to equip candidates with the knowledge and skills essential for success in their accounting careers.
The most prominent theme emerging from the changes is the emphasis on cultivating a "digital and data-driven mindset." This underscores the importance of embracing technology and understanding underlying business processes for success in the modern accounting landscape.
Major Changes to the CPA Exam:
More Emphasis on Business Processes:
AUD (Auditing and Attestation):
The AUD section will see increased testing of business processes influencing the development of audit procedures. This includes a deeper focus on IT systems, controls, and manual controls
BEC (Business Environment and Concepts):
The BEC section will introduce content related to "business processes and transaction-level risks and controls," particularly focusing on technology's role in facilitating business processes.
In-Depth Content on Data Analytics and Digital Skill sets:
AUD: The new AUD blueprint expands testing on digital skillsets, incorporating audit data analytics. Test-takers will be required to analyze the results of audit data analytic procedures and identify anomalies.
BEC: The BEC section will delve further into working directly with data, covering topics such as data governance, data relationships, and data extraction and transformation. Task-based simulations (TBSs) will evaluate candidates' data analytics capabilities.
Increased Emphasis on SOC 1® Reports:
AUD: Given the prevalence of firms outsourcing systems and processes to third parties, there will be more testable content on SOC 1® reports. The AUD exam will highlight the differences between SOC 1® and SOC 2® reports.
BEC: The BEC section will cover SOC 1® reports from the user entity's perspective, including complementary user entity controls and a deeper understanding of the need for SOC 1® reports for outsourced IT functions.
While significant content additions are evident, certain content deemed less crucial for newly licensed CPAs will be removed. Noteworthy removals include the "differences between IFRS and U.S. GAAP," as the AICPA found IFRS to be less suitable for testing. Other exclusions involve testing defined benefit pension plans, derivative journal entries in the FAR (Financial Accounting and Reporting) section, and topics like the alternative minimum tax and estate taxation in the REG (Regulation) section.
What Remains Unchanged:
Despite the substantial modifications, the CPA Exam's fundamental structure remains intact, comprising four separate sections totaling 16 hours (4 hours per section). There will be no alterations in the number of questions or score weighting. The exam will continue to assess complex skills such as decision-making, critical thinking, and analytical skills. The written communication assessment in BEC will also remain unchanged.
Guidance from Vishal:
Vishal, a prominent CPA review course provider, recommends candidates focus on passing the AUD and BEC exams early, given the additional content in these sections. As of July 1, 2021, the FAR and REG exams will feature less content, making them ideal for the second half of the year. Vishal will release an updated version of its course content, reflective of the Blueprint changes, on June 1, 2021.
Staying abreast of the upcoming changes to the CPA Exam is crucial for candidates aiming to navigate the exam successfully in 2021. The modifications reflect the evolving demands of the accounting profession, emphasizing digital literacy and a nuanced understanding of business processes. With comprehensive preparation and awareness of the changes, candidates can confidently approach the CPA Exam and embark on a successful accounting career.