Getting Prepared for CPA Evolution
CPA Evolution — a new model for CPA licensure — is forging ahead with an anticipated launch of January 2024. This initiative was set forth by the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) to address the changing demands of accounting practice. With feedback from key stakeholders, CPA Evolution was developed to provide a licensure model that focuses on enhancing the following skillsets: critical thinking; professional judgment/skepticism; problem-solving; understanding of business systems, controls and risks; data management and analysis; and System and Organization Control (SOC) engagements.
The result is a new uniform CPA Exam format that will include a core focus on accounting (Financial Accounting and Reporting or CORE FAR), auditing (Auditing and Attestation or CORE AUD) and tax (Taxation and Regulation or CORE REG) with an overarching theme of technology. It will also require CPA candidates to select one of three discipline areas: Business Analysis and Reporting (BAR), Tax Compliance and Planning (TCP) or Information Systems and Controls (ISC). Although candidates will choose one discipline for their licensure, they will be able to pursue a different career path than the specialization selected for licensure.
In 2022, the AICPA and NASBA made headway with the plan by communicating a transition policy, issuing an Exposure Draft for public comment and providing guidance on the last testing dates under the existing CPA Exam format.
The existing FAR, REG and AUD portion of the exams will align with the new uniform CPA Exam’s CORE sections of CORE FAR, CORE REG and CORE AUD, respectively. If a candidate has not passed FAR, REG or AUD, the corresponding CORE section will need to be completed instead.
Additionally, the existing Exam’s BEC section will align with the discipline areas (BAR, ICS and TCP) of the new licensure model. A candidate is not required to take the discipline component of the new licensure model if BEC is completed prior to January 2024. However, if BEC is not complete, candidates will need to select one of the disciplines to meet the CORE+1 model as outlined in the CPA Evolution initiative. The 18-month rule should still be factored into a candidate’s plan; therefore, if any passed section expires after Dec. 31, 2023, the candidate will need to take the corresponding section under the new CORE+1 licensure model.
In July 2022, the AICPA issued its Exposure Draft “Maintaining the Relevance of the Uniform CPA Examination — Aligning the Exam with the CPA Evolution Licensure Model” to further help key constituents understand and weigh in on the new exam format. The Exposure Draft included a CPA Blueprint for each section of the exam that assists potential CPA candidates with exam preparation by outlining the exam content; informs educators about the knowledge and skills necessary for CPA licensure; and aids CPA Exam question development. After reviewing stakeholder feedback, the AICPA is expected to provide a final CPA Blueprint by early 2023.
The last day of testing for the existing exam format of AUD, BEC, FAR and REG is Dec. 15, 2023. NASBA will stop processing BEC exam applications on Nov. 15, 2023, and the last exams for BEC will be administered by Dec. 15, 2023. No CPA Exams will be scheduled or administered by NASBA between Dec. 16, 2023 and Jan. 9, 2024, to allow for the existing IT systems to transition to the new CPA Exam format. Testing under the new format begins on Jan. 10, 2024.
CPA Evolution intends to better prepare future CPAs for a profession that is heavily influenced by technology and data analytics, requires skills in problem-solving and critical thinking, and necessitates an understanding of business risks and how data is managed. As the launch approaches, it is critical for potential candidates to stay abreast of key developments and transition policies that are communicated by the AICPA and NASBA.
Amy Lysak, CPA, Ph.D., is an assistant professor in the Department of Accounting and Finance in the Rohrer College of Business at Rowan University.
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This article appeared in the Spring 2023 issue of New Jersey CPA magazine. Read the full issue.