Navigating the July 2021 CPA Exam Changes: A Comprehensive Guide

Navigating the July 2021 CPA Exam Changes: A Comprehensive Guide

As the summer approaches, significant changes are on the horizon for the CPA Exam, set to take effect from July 1, 2021. These modifications, outlined in the new 2021 Blueprints by the AICPA, might instill a sense of apprehension among candidates. However, rest assured that the alterations are designed to enhance the exam's relevance and align with the evolving landscape of the accounting profession. In this comprehensive guide, Vishal's Director of Curriculum, Mike Potenza, breaks down the content additions, removals, and changes, offering valuable insights to help candidates optimize their study approach.

  • Chapter 1: Overview of Changes

  • Retaining the Structure:

    The CPA Exam will maintain its traditional four sections – AUD, BEC, FAR, and REG. The fundamental structure remains intact, with a 4-hour time limit per section and no adjustments to the number of testlets and questions.

    Varying Impact Across Sections:

    While all sections will see some modifications, the extent of changes varies. FAR and REG experience minimal adjustments, while AUD and BEC undergo more substantial content changes.

  • Chapter 2: Changes by Section

  • FAR:

    Content Removals:

    Discontinued operations as a separate topic

    Going concern

    Journal entries for derivative/hedging transactions

    Defined benefit pension plan accounting

    Differences between IFRS and U.S. GAAP


    Content Removals:

    Alternative minimum tax (AMT)

    Estate taxation

    Tax-exempt organizations – obtaining and maintaining tax-exempt status

    Securities Exchange Acts of 1933 and 1934

    Simplified Testing:

    Net operating loss and capital loss limitations

    Tax-exempt organizations – unrelated business income

    Secured transactions

    Bankruptcy and insolvency


    Content Removals:

    Alerts restricting the use of written communication

    Single statements

    Opening balances

    Auditing derivatives

    Communication of "other matters" with management and those charged with governance

    Communication with component auditors and parties other than management and those charged with governance

    Letters for underwriters and filings with the SEC

    Simplified Testing:

    Subsequently discovered facts

    Developing a detailed engagement plan

    Preconditions for an engagement

    Related parties

    Going concern

    Litigation claims and assessments

    Written representations

    New Topics Introduced:

    Business processes and internal controls

    Audit Data Analytics

    SOC1 and SOC2 Reports


    Content Removals:

    Regulatory frameworks other than SOX

    General macroeconomic content (calculating GDP, aggregate demand curve, money supply, and analysis of impacts on the overall economy)

    Simplified Testing:

    Capital structure

    IT systems development and maintenance

    IT continuity and recovery plans

    New Topics Introduced:

    Business processes

    Data management and analytics

    Systems development and change management

    Chapter 3: Study Recommendations

    Strategic Planning:

    BEC: Suggested study period in April and May, with the exam in mid-May.

    AUD: Recommended study period in the second half of May and June, sitting for the exam in late June.

    FAR or REG: After July 1, 2021, suggested order based on personal schedules and study preferences.

    Flexibility for Success:

    Candidates are encouraged to adapt the study order based on individual circumstances. Vishal acknowledges that success is the ultimate goal and offers support and guidance to candidates in their unique study journeys.

    As the CPA Exam undergoes these changes, candidates should approach them with a strategic mindset. The alterations aim to align the exam with the expectations of newly licensed CPAs, promoting relevance and effectiveness. Vishal committed to providing the latest and most relevant content, will release an updated course version on June 1, 2021, reflecting the Blueprint changes. In this dynamic landscape, staying informed and proactive is key to success. Happy studying!

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