The CPA Evolution: Preparing yourself for the new CPA exam

               (RF._.studio / pexels)

Accounting functions constantly change. CPAs must adequately prepare to serve clients and the greater public interest amid all the advancements and adjustments.

One more change is coming for future CPAs—the CPA exam is changing to better reflect the new age of accounting.

The CPA exam is regularly updated. The current changes, nicknamed the CPA Evolution, will take full effect on January 1, 2024. Some deadlines and blackout dates for the 2023 exam may affect you, so let’s go over what you can expect this year and next.

Deeper understanding, technology-driven

CPAs must perform advanced functions, implement new technologies and participate in complex projects earlier in their careers—duties historically assigned to experienced staff. The new exam will measure deeper understanding and skill sets to equip new CPAs better. You’ll find questions in technology peppered throughout.

Exam = 3 core competencies + 1 discipline

Additionally, the exam’s layout will shift. Currently, aspiring CPAs sit for four different exams measuring four core competencies. Starting in January 2024, the exam will change to three core competencies. In addition, candidates will choose one of three disciplines to test in. All in all, future CPAs will have four tests as before, covering 16 hours of assessments in accounting, auditing and taxation skills.

Essentially, what was the BEC (Business Environment and Concepts) section of the exam will disappear. BEC-aligned questions will appear throughout the remaining core and discipline sections. Here’s the breakdown of the three core competencies and disciplines as you’ll see them starting in 2024:

● Core (test in all three):

Financial Accounting and Reporting (FAR)

Auditing and Attestation (AUD)

Taxation and Regulation (REG)

● Discipline (pick one of the following):

Business Analysis and Reporting (BAR)— This continuation of FAR will focus on data analytics, financial risk management, and financial planning techniques. More advanced topics might cover technical accounting and reporting, revenue recognition assessments, lease recognition, business combinations and derivatives, hedge accounting and employee benefit planning on financial statements.

Information Systems and Controls (ISC)— This continuation of AUD will cover information technology and data governance as well as internal control testing, software accesses and information system securities for networks and endpoints.

Tax Compliance and Planning (TCP)— This continuation of REG delves deeper into topics on entity and personal financial planning, inclusions and exclusions to gross income, gift taxation compliance and planning.

Note that questions covering technology and the current BEC portion will be scattered throughout. Also, any discipline chosen results in the same CPA license, so select the one you think you’ll do best in.

Dates to know

Keep the following deadlines and blackout dates for the 2023 exam in mind:

• November 15, 2023, is the last date NASBA will process Authorizations to Test and Notices to Schedule for the BEC exam before it goes away. (Final BEC application deadlines in Ohio are October 1, 2023, for first-time test takers and November 12, 2023, for those retaking it.)
• November 27, 2023, is the first day to apply for new disciplines BAR, ISC, and TSP.
• December 15, 2023, is the last testing day of the current exam model.
• Blackout dates: No exams December 16–31, 2023. That means you have 15 fewer days to sit for the exam this year.
• January 10, 2024, is the first expected day to sit for the new 2024 CPA Exam sections.

What if I’ve already begun?

If you have already tested in some of the core areas of the current CPA exam, no worries. Your passing score will still count in 2024. Those who have already taken and passed the BEC section this year will have it count as their ‘Discipline’ section in 2024.

Those who have taken and passed other portions of the current exam (FAR, REG, AUD) will not need to retake those in 2024.

While the CPA Evolution will better prepare accountants for today’s jobs, you don’t have to wait until changes take effect if you’re ready to sit for it now (just watch those registration deadlines). Feel free to complete all sections in 2023, split them up between this year and next or wait and take them all after the changes take effect.

Recommendations

Always consider your strengths and take into account the following suggestions and opinions as you prepare to take the exam:

• Test in the section you find most difficult first.
• Test in your chosen discipline soon after taking its related core section.
• The BAR most closely aligns with current college curriculums.
• The AUD is reportedly the most challenging because it includes more BEC content.

Perks

Re-test in any discipline without penalty if you receive a poor score.

If you passed at least one section of the CPA Exam before January 1, 2024, you can extend those credits to June 30, 2025.

You can shift the 18-month credit period from when you pass an exam section to when the score is released.

And as mentioned above, the BEC section taken this year will count for your ‘Discipline’ section next year.

College curriculum

The CPA Evolution committee determines guidance on accounting curriculums. Overall, the foundational curriculum won’t change much. Master’s programs will equip future CPAs for one of the three disciplines. Elective courses will meet students’ needs in cases where there are no master’s programs.

Study

Consider interval training when preparing for the exam. For example, study for 50 minutes followed by a 10-minute eye and brain break. Get away from your study area, grab some refreshing water and move and stretch your body.

Make yourself a dedicated study area so your brain knows you mean business when you are there. Understand how you receive information best when planning your study time. Do you need a place away from home, like the library? Does playing light classical music softly in the background help with information recall?

However you study best, turn to your accounting membership organizations, like The Ohio Society of CPAs. We provide all current and aspiring CPAs with the best and most updated information to make our members the best they can be. After all, excellent accountants reflect well on us and our state while boosting our local and national economies.