The Computerized Uniform CPA Examination

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					Computerizing the
CPA Examination
   Presented to the
 2003 APLG Meeting
   Richard DeVore

• Computerizing the CPA Exam
• Examination Structure,
  Content, and Length
• Transitioning and
• Overview of CBT
• Demonstrations of Simulation
                CPA Examination
                Mission Statement

             “To admit individuals to the
             profession only after they have
To Protect   demonstrated the entry-level
The Public   knowledge and skills necessary
Interest     to protect the public interest in a
             rapidly-changing business and
             financial environment.”
Periodic Changes Needed

 • Maintain the confidence of
   various constituencies
 • Provide a comprehensive
   assessment of the entry-level
   knowledge and skills required
   by CPAs in changing business
   and financial environment
    What’s Changed?

• Rapidly Changing Business World
• Rapidly changing role of the CPA
  – Demands for broader-based financial services
  – Expansion of the attest function
  – Need for professional adaptability and
  – Rapidly-changing technology environment
Change in Entry-Level
 What We Need From
    A New Exam

• The Ability to Test:
  – Recall of foundational
  – Research skills
  – Analytical skills
  – Integrated knowledge and skills
 What We Need From
 A New Exam (cont’d)

• The Availability of:
  –   Access to authoritative literature
  –   Current technological tools
  –   Secure computerized test system
  –   Secure administrative conditions
  –   Year-round testing
Responsibility for Decisions

  • AICPA Board of Examiners
    – Content Committee
         • Preparations Subcommittees
    –   Psychometric Committee
    –   Education Task Force
    –   Communication Task Force
    –   Systems Oversight Task Force
    –   Other task forces and working
Outreach to Stakeholders

 • Mechanisms to Guide Policy
   – Exposure Draft on Structure and
     Content (Feb 2001)
   – Briefing Paper #2 (Mar 2001)
   – Exposure Draft on Transitioning &
     Conditioning (Nov 2001)
 • Focus groups of students and
   young professionals (Summer
Outreach to Stakeholders

 • Education Task Force
   – Working with AAA
   – Looking at curriculum and
     other academic-related issues
   – Help students and educators
     prepare for the transition to
Outreach to Stakeholders

 • Ongoing Communications
   – New Web site with practice
     materials and tutorials
      • (
   – Exam Alert
      • (contact
   – E-mail updates to stakeholders
BOE Decisions

 Structure, Content
     and Length
Examination Structure

•   New mix of content groupings
•   New section
•   Testing of skills
•   Testing of knowledge integration
•   Length of Exam
Examination Structure

• 4 Independent Sections
   –   Auditing & Attestation
   –   Financial Accounting & Reporting
   –   Regulation
   –   Business Environment & Concepts

   (NB: Full Content Specs available on
Auditing & Attestation

• Auditing Procedures
• Generally Accepted Auditing
• Other Standards Related to Attest
• Skills Needed to Apply That
Financial Accounting &

• Generally Accepted Accounting
  Principles for:
   – Business enterprises
   – Not-for-profit organizations
   – Government entities
• Skills Needed to Apply That

• Federal Taxation
• Ethics
• Professional and Legal
• Business Law
• Skills Needed to Apply That
Business Environment &

• Knowledge of Underlying
  Reasons and Implications of
  Business Transactions
• Skills Needed to Apply That
  Knowledge in Audit and Attest
• To Be Tested In Context of
  Entry-Level CPA Practice
Business Environment &
     Concepts (2)
• Economics
• Planning and budgeting
• Corporate financial management
• Cost measurement and pricing
• Management
• Information identification, control,
  and analysis
Comparison to Current

AUDIT       Audit & Attest
LPR         Regulation
FARE        Account & Report
ARE – Tax  Regulation
ARE – Govt  Account & Report
ARE – Mngrl  Business Environ
Examination Length

• 14 Hours
  – In Total for Four Sections
• Primary Considerations
  – Psychometric Reliability
  – Adequate Content Coverage
Proposed Section Lengths

 • Auditing & Attestation
   – 4.5 hours
 • Accounting & Reporting
   – 4 hours
 • Regulation
   – 3 hours
 • Business Environment & Concepts
   – 2.5 hours
Examination Format

• Multiple-Choice Questions
• Case-Based simulations
  –   Test integrated knowledge
  –   More closely replicate real world
  –   Assess research, analytical skills
  –   Various question formats
  –   Business simulations 2005
 Exam Expectations

• Exam success will require less
  memorization, more application
• Candidates expected to do their
  work on a computer
• Candidates expected to have
  technology knowledge, as well as
  computer skills
• Candidates expected to integrate
  across accounting areas
Conditioning and

                Conditioning Policy

               • Candidates can sit for each
                 section individually and in any
Conditioning   • All 4 sections – including the
                 first one taken – must be passed
                 within a “rolling” 18 month
 Conditioning Policy

• No minimum score requirement
  for failed sections
• Failed section(s) cannot be
  retaken within same window
• Credit for passed section(s)
  retained for 18 months
    Major Benefits of
   Conditioning Policy

• Protects the Public
   – Tests breadth of knowledge &
     skills within a reasonable time
• Increases fairness to candidates by
  eliminating minimum scores
   – Each section is independent
• Increased flexibility for candidates
  Major Benefits of
Conditioning Policy (2)

• Allows Candidates to Focus
  Their Study and Prepare For
  Each Section
• Overall Cost to Candidate is
   – Not required to sit for sections not
     prepared to pass
   – No retake of passed sections due to
     score on failed sections

           • How do you equate the current
             sections of the CPA exam to the
 Issues      revised sections?
   to      • Upon launch, how do you treat
Consider     candidates who have conditioned
             under the paper & pencil test?
           Paper-Based             CBT
           1. Audit          1. Audit & Attest

           2. Fin’l. Acctg. 2. Fin’l. Acctg.
Policies      and Reporting    and Reporting

           3. Acctg. and     3. Regulation

           4. Law & Prof.     4. Bus. Environ &
              Responsibilities Concepts

            • Conditioned candidates have
              same number of testing
Policies      opportunities within same
(cont’d.)     time period remaining
            • Candidate can establish
              credit for sections passed
              under CBT even if paper and
              pencil conditioning is lost
Moving Forward

     From Here
      To There
                  Launch Date

            • November 2003 -- Last Pencil
Getting       and Paper Administration
from here
            • Early 2004 -- First CBT
to there
              Administration Window
            • Will Exams Run in Tandem?
              – No
            Computer-Based Testing

            • Roles and Responsibilities of
              State Boards of Accountancy and
How CBT       AICPA Basically Unchanged
Will Work   • AICPA Remains the Examination
            • State Boards of Accountancy
              Determine if a Candidate has
              met Requirements to Test
             The Testing Process

            • CPA Examination Delivered at
              Prometric and State-Operated
How CBT       Testing Centers
Will Work
            • Candidate Registers with
              Prometric (phone or web)
            • Candidate Takes the CPA
              Examination at a Prometric or
              State-Operated Testing Center
             The Testing Process

            • The Process (continued)
How CBT       – Prometric Forwards Results to
Will Work       AICPA
              – AICPA Compiles and
                Forwards Advisory Grades and
                Diagnostics to Jurisdiction
              – State Board Advises Candidate
                of Grades
 Examination Security
In A CBT Environment

• Test Administration
  – 2 IDs
  – Double log-on to computer
  – Candidate sees only one item
    at a time
  – Video camera and walk through
  – Exit checks
             Critical Path Issues

            • Key Milestone Areas Include:
Getting       – Item Development & Pretesting
From Here     – Tutorials & practice materials
To There      – Systems Development
              – Communications
              – Legislation

• Definition:
 Assessment of knowledge and skills
 in a context approximating that
 found on the job through the use of
 realistic scenarios and tasks, and
 access to normally available and
 familiar resources.
Simulation Question Types

  • MC
  • Drop-down selection lists
  • Check boxes
  • Spread sheets (enter, drag & drop,
  • Forms completion
  • Written communication
  • Research (access to standards,
    codes, search engines)
Advantages of Simulations

  •   Affordable performance testing
  •   Skills assessment
  •   Integration of content
  •   Multiple correct answers
  •   Partial credit
  •   Access to resources
  •   Innovative item types
  •   Workplace realism
  Simulations Design

• 20 – 40 minutes in length
• Complementary to MC portion of
• Aimed at entry-level
• Developed by educators and
• Approved by practitioners
• Practice related
Simulations Interface

• Tab–style screens
• Consistent across simulations and
• Mouse-driven response
• Full-screen on 17” monitors
• On-line resources available
• Split-screen capabilities
• Review capabilities within a
    Simulations Scoring

•   Multiple points per task/question
•   Contingent scoring accommodated
•   Partial credit possible
•   Variable credit per task possible
    (i.e., credit related to importance)
  Demonstrations of
Simulation Prototypes

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