Get Ready for the CPA Exam

If you're planning to take the Uniform CPA Examination, you'll be sitting for a significantly different exam than those who have gone before you. There will be no better way to prepare for this computer-based exam than with the leading computer-based Review.

Would you like to receive information on the newest exam developments or find the nearest testing site to your home or office? Click here and we'll add you to our CPA Exam alert list.

With the changes to the exam format that took effect in April, 2004, the Uniform CPA Examination was restructured into new subjects and revised to use a new format. The new exam is designed to assess knowledge and skills in a context that reflects today's professional environment. The new subjects are Auditing and Attestation, Financial Accounting and Reporting, Regulation, and Business Environment and Concepts. The revised exam consists of multiple choice questions and realistic scenarios in condensed case studies, and each exam section consists of four to five testlets. A testlet will contain either twenty to thirty multiple-choice questions or one simulation.

For complete, detailed information regarding the application process, scheduling, testing centers, prohibited items, the grading process, content, etc. please review the Uniform CPA Examination's Candidate Bulletin.

Simulations

Simulations are case studies that require the candidate to review business scenarios common to those required of entry-level CPAs. They will then be required to demonstrate their knowledge through the completion of simulation exercises. The exercises are made up of written communication tasks, spreadsheet responses, and forms completion. Simulations will also include an online search as a required task. The candidates will have access to accounting literature databases during the exam; depending on the section they will be directed to Accounting Standards, Auditing Standards, or Tax Code. At this time, no simulations are being used in the Business Environment and Concepts section.

The New CPA Exam Format

The four examination sections and their related areas are:

• Auditing & Attestation. This section covers knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements, and the skills needed to apply that knowledge in those engagements.
• Financial Accounting & Reporting. This section covers knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge.
• Regulation. This section covers knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge.
• Business Environment & Concepts. This section covers knowledge of the general business environment and business concepts that candidates need to know in order to understand the underlying business reasons for and accounting implications of business transactions, and the skills needed to apply that knowledge.

Auditing & Attestation The Auditing & Attestation section covers knowledge of auditing procedures, auditing standards generally accepted in the United States of America (GAAS) and other standards related to attest engagements and the skills needed to apply that knowledge in auditing and other attestation engagements. This section tests such knowledge and skills in the context of the five broad engagement tasks in the outline that follows.

1. Plan the engagement, evaluate the prospective client and engagement, decide whether to accept or continue the client and the engagement, and enter into an agreement with the client (22%-28%)
2. Consider internal control in both manual and computerized environments (12%-18%)
3. Obtain and document information to form a basis for conclusions (32%-38%)
4. Review the engagement to provide reasonable assurance that objectives are achieved and evaluate information obtained to reach and to document engagement conclusions (8%-12%)
5. Prepare communications to satisfy engagement objectives (12%-18%)

Financial Accounting & Reporting The Financial Accounting & Reporting section tests knowledge of accounting principles generally accepted in the United States of America (GAAP) for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge. Content covered in this section includes financial accounting concepts and standards, and their application.

1. Concepts and standards for financial statements (17%-23%)
2. Typical items: recognition, measurement, valuation, and presentation in financial statements in conformity with GAAP (27%-33%)
3. Specific types of transactions and events: recognition, measurement, valuation, and presentation in financial statements in conformity with GAAP (27%-33%)
4. Accounting and reporting for governmental entities (8%-12%)
5. Accounting and reporting for nongovernmental not-for-profit organizations (8%-12%)

Regulation The Regulation section tests candidates' knowledge of federal taxation, ethics, professional and legal responsibilities, and business law and the skills needed to apply that knowledge.

Ethics, Professional and Legal Responsibilities, and Business Law This portion covers knowledge of a CPA's professional and legal responsibilities and the legal implications of business transactions, particularly as they relate to accounting and auditing, and the skills needed to apply that knowledge. This section deals with federal and widely adopted uniform state laws. If there is no federal or uniform state law on a topic, the questions are intended to test knowledge of the law of the majority of jurisdictions. Professional ethics questions are based on the AICPA Code of Professional Conduct because it is national in its application.

Federal Taxation This portion tests knowledge of principles and procedures for federal income, estate, and gift taxation and their application in practice. To demonstrate such knowledge, candidates will be required to-

• Analyze information and identify data relevant for tax purposes
• Identify issues, elections, and alternative tax treatments
• Research issues and alternative tax treatments
• Formulate conclusions

Regulation Content Specification Outline

1. Ethics and professional and legal responsibilities (15%-20%)
2. Business law (20%-25%)
3. Federal tax procedures and accounting issues (8%-12%)
4. Federal taxation of property transactions (8%-12%)
5. Federal taxation-individuals (12%-18%)
6. Federal taxation-entities (22%-28%)

Business Environment & Concepts The Business Environment & Concepts section tests knowledge of general business environment and business concepts that candidates need to know in order to understand the underlying business reasons for and accounting implications of transactions, and the skills needed to apply that knowledge in performing financial statement audit and attestation engagements and other functions normally performed by CPAs that affect the public interest. Content covered in this section includes knowledge of business structure; economic concepts essential to obtaining an understanding of an entity's operations, business and industry; financial management; information technology; and planning and measurement.

Business Environment & Concepts Content Specification Outline

1. Business structure (17%-23%)
2. Economic concepts essential to obtaining an understanding of an entity's business and industry (8%-12%)
3. Financial management (17%-23%)
4. Information technology (IT) implications in the business environment (22%-28%)
5. Planning and measurement (22%-28%)

2003 vs 2004. Compare the Differences.

The examination's most visible change is its transition from a paper and pencil exam to a computer-based test (CBT). Along with this new delivery method, the examination's content is also being revised. Based on recent practice analysis findings, the revised examination incorporates increased emphasis on information technology and general business knowledge with a broadened scope in the audit area. Significantly, changes include increased skills testing.

The revised computer-based CPA Examination will be a 14-hour test with four sections: Auditing and Attestation; Financial Accounting and Reporting; Regulation; and Business Environment and Concepts.

The following table compares the content areas tested in each section under the current structure and under the proposed structure. The percentages refer to the amount of topical coverage within the specified section of the examination. Current Examination Proposed Examination

1. Candidates who have attained conditional status as of the launch date of the computer-based Uniform CPA Examination will be allowed a transition period to complete any remaining sections of the CPA examination. The transition period is the period of time or maximum number of opportunities (whichever is first exhausted) that candidates who have attained some credit under the paper-and-pencil examination have remaining, at the launch of the computer-based CPA examination, to complete all remaining sections (2). This recommendation is intended to assure that those candidates who have attained conditional status prior to the implementation of computer-based testing (CBT) are not disadvantaged by the change.
2. If a candidate who has attained some credit previously does not pass all remaining sections during the transition period, those credits earned under the paper-and-pencil examination will expire and the candidate will lose credit for those sections. However, any section passed during the transition period is subject to the granting of credit provisions of the computer-based examination as indicated in the aforementioned granting of credit recommendation, except that a previously conditioned candidate will not lose credit for a section of the computer-based examination that is passed during the transition period, even though more than eighteen months may have elapsed from the date the section is passed, until the end of the transition period.
3. It is assumed that candidates will be able to take the computer-based Uniform CPA Examination up to four times per year. An examination window refers to a three-month period in which candidates have an opportunity to take the CPA examination (comprised of two months in which the examination is available to be taken and one month in which the examination will not be offered while routine maintenance is performed and the item bank is refreshed). Thus, candidates will be able to test two out of the three months within an examination window.
4. If, at the time conditional status was attained, a state board specified only a period of time (e.g., three years) to complete the examination, each year would be considered two opportunities to test and the candidate would continue to be able to take the examination six times within a three-year period. If a state board specified only a maximum number of successive examination attempts (e.g., 6 successive examinations) to complete, the candidate would continue to be granted six examination opportunities, limited by a three-year period.