CPA Exam - Requirements, Review, Information
Related Keywords: CPA exam, CPA exam Requirements, CPA Exam review
The Uniform Certified Public Accountant Examination was created and maintained by the American Institute of Certified Public Accountants (or the AICPA), with the administration of the test being the responsibility of National Association of State Boards of Accountancy. The CPA exam is accepted by the regulatory bodies of all 50 states plus the District of Columbia, Puerto Rico, Guam, and Virgin Islands.Up until the 1990s, the CPA exam was 19.5 hour test given over a 3 day period, consisting of 4 subject areas which were tested in 5 parts: Theory (3.5 hours); Business Law (3.5 hours); Auditing (3.5 hours) (including tax audit);and Practice I & II (4.5 hours each). The exam was given the first Wednesday, Thursday and Friday in May and November of each year. Test takers were only allowed to use paper and pencil (no electronic calculators or computers of any kind).
During the 1990s, the CPA exam was converted into a 2 day exam, in 4 sections (with calculators being allowed):
* Business Law and Responsibilities
* Financial Accounting and Reporting - Business Enterprises
* Accounting & Reporting - Taxation, Managerial, and Governmental and Not-for-Profit Organizations
* Auditing
Since April 5, 2004, the CPA exam has been entirely computer based. Research skills as well as using a word processing and database software are requirements.
The year is divided into 4 windows. In each 3-month window the candidates are allowed to take any number of the sections, once for each section on a window, in the first two months (January and February, April and May, and so on).
The sections have been reorganized as follows:
* Financial Accounting & Reporting (4.0 hours): Section covers typical items in financial statements, knowledge of concepts and standards for financial statements, accounting and reporting for governmental agencies, specific types of transactions and events, and accounting and reporting for NGO's and not-for-profit organizations.
* Business Environment & Concepts (2.5 hours): Section covers knowledge of economic concepts, business structures, information technology, financial management, and measurement and planning.
* Regulation (3.0 hours): Section covers knowledge of professional responsibility and ethics, Federal tax procedures and accounting issues, business law, Federal taxation of property transactions, Federal taxation (Income Tax, etc.)for individuals and entities.
* Auditing & Attestation (4.5 hours): Section covers internal controls, knowledge of planning the engagement, reviewing engagements and evaluating information, obtaining and documenting information, and preparing communications.
Multiple-choice questions for the CPA exam comprise 80% of the exam, while the other 20% consists of simulations. Accounting knowledge is tested in specific simulations through a variety of tasks, some of which might require searching databases, completing written exercises, as well as working with spreadsheets and forms. The skills that simulations are intended to measure are: judgment, analysis, research, and communication.
In all simulations, CPA exam candidates are presented with a situation and instructed to write a letter or memorandum on a specific topic.
Written communication responses are then scored on the basis of 3 criteria:
* Organization - structure, ordering of ideas, and linking of ideas to one another.
* Development - presentation of all supporting evidence.
* Expression - use of standard business English jargon and terms.
Answers that do not address the topic are not scored.
In Auditing and Attestation, Financial Accounting and Reporting, and Regulation, multiple choice tests account for 70% and simulations 30% of the score. The 30% simulation portion is divided into 10% for written communication and 20% for all other parts. In Business Environment and Concepts, multiple-choice questions account for your entire score (100%).
The new CPA exam will be offered up to 6 days a week, during two out of every three months. The results are available within 60 days of completion of the CPA exam. Each credit for a passed section is valid for 18 months. Therefore, a candidate must pass all 4 sections within an 18-month period. If all 4 sections are not passed within an 18-month period, sections passed (outside the 18-month period) must be retaken.
The score represents the test candidate's overall performance on the identified examination section. Scores are reported on a numeric scale from 0 to 99, with 75 as a passing score allowing the candidate to become a CPA. The scale does not represent "% correct." A score of 75 indicates an examination performance reflecting a level of knowledge, understanding, and skills sufficient for the protection of the public.
