Preparing for the CPA Exam - BC

PreparingfortheCPAExamNovember18,2020

SlidesavailableontheAccountingDepartmentHomepage

Margaret Duncombe, 2020 PwC Core Assurance BostonNick Stasium, 2020 PwC Tax Practice BostonOlivia Zdrojewski, 2020 Deloitte Audit BostonProfessor Dianne Feldman - Accounting DepartmentProfessor Liz Quinn – Accounting Department

Introductions&ContactInformation

o MargaretDuncombe:Margaret.r.duncombe@gmail.com(774)283-1775

o NickStasium:nstasium@gmail.com(207)450-1967

o OliviaZdrojewski:Olivia.zdrojewski@gmail.com(978)771-7471

TheCPALicenseo TheCPAcredentialisalicenseissuedbyoneofthe55statesorterritoriesof

theU.S.thatauthorizestheholdertopracticeasaCPAinthatjurisdiction.o Onecomponentofthelicensingrequirementdesignedtoensureonly

qualifiedindividualsbecomelicensedasCPAsistheUniformCPAExamination.

o TheCPAlicenseisissuedatthejurisdictionlevel.TobecomeaCPA,youmustbedeclaredeligiblefortheexamination,andsubsequentlylicensed,bytheBoardofAccountancyinoneofthe55U.S.jurisdictions.

o TheConstitutionoftheU.S.grantseachstateorterritorythepowertoregulatethepracticeoftheprofessionswithinthatjurisdiction’sborders.Eachjurisdictionsetsitsownrequirementsforeducation,examinationandexperience.

CPAExam:Playerso TheAmericanInstituteofCertifiedPublicAccountants(AICPA):TheAICPAis

thelargestnational,professionalorganizationforCPAs.TheAICPAprovidesmemberswithresources.FortheUniformCPAExamination,theAICPAdeterminesthecontentoftheexamination,preparestheexaminationquestions,determinesthemethodofscoring,preparesadvisoryscoresandconductsstatisticalanalysesofexaminationresults.

o TheNationalAssociationofStateBoardsofAccountancy(NASBA):The55U.S.andterritorialBoardsofAccountancyarethemembersofNASBA.NASBAexiststoserveitsmembers.NASBAtakesontheroleofacentralclearinghousewherealljurisdictionssubmitinformationoneligiblecandidatesandfromwhichalljurisdictionsreceiveadvisoryscoresandotherexaminationdata.Youmayaccessthesitehere:NASBA.

o CPACentral:Youmayrequest,completeandsubmitanapplicationonlineinmoststatesat:CPACentral.

o Prometric:Prometricisthegloballeaderintechnology-enabledtestingandassessmentservicesforinformationtechnologycertification,academicadmissionsandprofessionallicensureandcertifications suchastheUniformCPAexam.Prometricoperatestestcentersaroundtheworld.

CPAExamo TheUniformCertifiedPublicAccountant(CPA) Examination isdeveloped

bytheAICPAwithsignificantinputandassistancebyNASBAandstateboardsofaccountancy.Itis designedtoassesstheknowledgeandskillsentry-levelCPAsneedtopracticepublicaccountancy.

o OnApril1,2017,theAICPAlaunchedthenewestversionoftheUniformCPAExamination,afour-section(AUD,BEC,FARandREG),16-hourassessment(fourhourspersection)thatplacesagreateremphasisontestingacandidate’shigher-ordercognitiveskillssuchascriticalthinking,analyticalability,problemsolvingandprofessionalskepticism.n Auditing&Attestation(AUD)– 4hoursn BusinessEnvironment&Concepts(BEC)– 4hoursn FinancialAccounting&Reporting(FAR)– 4hoursn Regulation(Tax&BusinessLaw)(REG)– 4hours

CPAExam:GeneralInformationo TherequirementstotaketheCPAexamareasubsetoftherequirementstobelicensedasaCPA.

o Youcantakethe4differentpartsinanyorder.o 75isthepassinggrade.o ThecomputerizedCPAexamisadaptive,i.e.,thelevelofdifficultychangesaccordingtoyourperformance.

o YoumayscheduleyourexaminationatanyPrometricsiteinanyofthejurisdictions.Youdonothavetositinthesamestatewhereyouappliedtobelicensed.

o Testingwindowshavebeeneliminatedinmoststates,theexaminnowadministeredonacontinuousbasis(notcontinuousyet:CT,MI&SC*).

o Onceyoupassonepartoftheexam,youhave18monthstocompletetheremainingparts.Otherwise,youwillneedtoretakethepart(s)thatyoupassedthatis(are)over18monthsold.

o Ifyoudonotpassasection,younolongerhavetowaittoreschedule,youmaydosoassoonasyourofficialscoreisreleased.

CPAExam:QuestionFormatso TheCPAexamemploysacombinationofquestionformats.Itincludesthetraditional

multiplechoicequestionsandwrittenresponses,aswellashighlyinnovativesimulations–questionsthatreplicateworkplacesituationsandrequiretheapplicationofknowledgeandskillstoarriveatsolutions.

o Candidateswillreceiveatleastoneresearchquestion(research-orientedTBS)intheAUD,FARandREGsectionsthatrequirethecandidatetosearchtheapplicableauthoritativeliteratureandfindanappropriatereference.

o Pretestitemsareusedtodevelopfutureexaminations.Theyarenotusedincomputingexaminationscores.Anysectionmayincludepretestitems.

CPAExam:Testlets

TutorialsandSampleTestscanbeaccessedattheAICPAwebsiteat:Tutorials&SampleTests

q Theexamsectionsareadministeredinfiveblockscalledtestlets,withMCQsandtaskbasedsimulations(TBSs)inallsectionsandthreewrittencommunicationtasksonlyinBEC.ThenumberofMCQsandTBSsvarydependinguponthesection.

CPAExam:Structure&Prometricsq Arriveon-time,bring2validformsofIDthatmatchyournameontheNTS(checkthelistofacceptableIDsonyourNTS).

q Requestacalculatorifnotprovided.q DuringeachExamsection,candidateswillbeofferedastandardized,15-minutebreakafterthefirstTBStestlet,whichisapproximatelythemidpoint –twohours.The ExamclockstopsforthestandardizedbreakafterthefirstTBStestletiscompleted.Acandidatemaychoosetodeclinethestandardizedbreakandcontinuetesting,butthebreakwillnotbeofferedagain.Optionalbreakswillcontinuetobeavailable,butitcountsagainsttotaltestingtime.

CPAExaminationProcess

atPrometrics.com

SittingfortheCPA:MArequirementsoBeatleast18yearsold.oBachelorsdegreewithcompletionofatleast120semestercredithours.Note:APcreditswillnotbeincludedonyourtranscriptuntilyougraduate.

oUnderupdatedregulations,MAcandidatesmayapplyforORtakeanexamsection90daysbeforetheirofficialgraduationdatebyprovidingaCertificateofEnrollmentandbyprovidingaCertifiedtranscriptwithin90daysoftakingtheexam.

o Takenatleast21AccountingcredithoursincludingcoverageinFinancialaccounting,Management(Cost)accounting,TaxationandAuditing.

o Takenatleast9businesscredithourswithcoverageinFinance,BusinessLaw&InformationSystems.

SittingfortheCPA:NYrequirements

oCompleteatleast120semestercredithours.Note:APcreditswillnotbeincludedonyourtranscriptuntilyougraduate.

oUnlikeinMA,candidatesmusthavecompleted120credithoursPRIORtoapplyingfortheexam.

oCompleteacourseineachofthefollowing:financialaccounting,costormanagementaccounting,taxation,auditandattestation.

CPAExam:ApplicationProcesso ObtainCandidateBulletin:Access2020Candidate'sBulletinHere

o Sendapplicationformstostateyouintendtopractice(applyon-lineforyourstateatwww.nasba.org ordirectlytoyourBoardofAccountancy).Note:NameonapplicationmustmatchthenameonyourID.

CPAExam:ApplicationMaterialso Anofficialtranscriptfromeachschoollistedonyourapplication.Transcriptsmustbesentdirectlyfromyourschool(s)StudentServicestoCPAExaminationServices(sendviamailisrecommended).

o CertificateofEnrollment,ifapplicable (inMAonly)o Thisformisevidencethatyouarecurrentlyenrolledandthatallcoursesandgraduation

requirementswillbecompletedpriortothedatethatyousitforthefirstsectionoftheexam.Theformmustbesignedbyanauthorizedofficialofthecollege(notarized)andsignedbyyou.TheofficialformcanbedownloadedfromtheNASBAwebsite,donotusetheBCform.

o NASBAAdvisoryEvaluation– availableincertainstatesincludingMA&NYo ApplicationandExamFees:

n ApplicationFeeforFirstTimeCandidates:@$195n Examinationfeewillvarydependingonthenumberofsectionsyouareapplyingfor

(e.g.InMA$117foronesection,$137fortwosections,$157forthreesectionsand$177forfoursections).

n Thecostofeachexamis$200+(variesbystatee.g.$209inMaine,$225inMass.)Note:Youlosetheexamfeeifyoudonottaketheexamappliedfor,sobecarefulhowmanyexamsectionsyouregisterfor.

CPAExam:ApplicationProcesso Allowatleast8weeksforNASBAtoprocessapplicationandsend

NoticetoSchedule(NTS).Shorterdelayduringoff-season?

o OnceNTSreceived,scheduleexam(s)withPrometrics.com–exam(s)canbetakenanywhereintheU.S.Schedule45daysinadvancerecommended,butnolaterthan5daysinadvance.YoumusttakebeforeyourNTSexpires(inmoststates6months).

NOTE:NTSmustbebroughttotheexam,italsocontainsyourlaunchcode.

ExaminationBlueprintso ExaminationBlueprintshavebeencreatedforeachoftheExam’s

foursections.TheBlueprintscontainapproximately600representativetasksacrossthefoursections.ThepurposeoftheBlueprintsisto:n Documenttheminimumlevelofknowledgeandskillsrequired

forlicensure.n AssistcandidatesinpreparingfortheExam.n Appriseeducatorsofknowledgeandskillscandidateswill

require.n GuidethedevelopmentofExamquestions.

o TheBlueprintscanbeaccessedontheAICPAsite:2019CPAExamBlueprints.

ExaminationBlueprints

Auditing&Attestationcoveredin:q ACCT3309(Audit&Assurance)orACCT8815

(FinancialAuditing)q ACCT6618(AccountingInformationSystems)q ACCT4409(AdvancedAuditing)q ACCT6634(Ethics&Professionalism)q ACCT6635(ForensicAccounting)q ACCT6640(Dive,Dissect&DecidewithBig

BusinessData)q ACCT8825(Assurance&ConsultingServices)

ExaminationBlueprints

FinancialAccounting&Reporting:q ACCT1021(FinancialAccounting)q ACCT3301(FAST1)q ACCT3302(FAST2)q ACCT6601(FAST3)– equivalenttoAdvanced

Accountingq ACCT3351orACCT8824(Financial

StatementAnalysis)

ExaminationBlueprints

BusinessEnvironment&Concepts:q ACCT1022(ManagerialAccounting)q ACCT3307(ManagerialCostAnalysis)or

ACCT8817(InternalCostManagement)- MSAq Alsotoucheson:CSOMcoreclasses(Finance,

OperationsManagementandEconomicsprimarily),AIS(ACCT6618),&BusinessWriting(ACCT5588or8810,orBCOM5588,6688or8810)

Regulation:q BSLW1021(BusinessLaw)q ACCT4405(FederalTaxation)q ACCT6615(AdvancedFederalTaxation)q BSLW1022(BusinessLawII)orBSLW8803

(BusinessLawforCPAs)q ACCT8826(Taxes&ManagementDecisions)

Whentotaketheexamo Taketheexamassoonaspossible--- whileyou’restillina

“studentortest-taking”frameofmind.Thelongeryouwait,themorelikelyitisfornewstandardstobeadoptedandforyourtest-takingskillstodiminish(seefirst-timetesttakerresults).n Youaresignificantlymorelikelytopasstheexamifyousitwithin

oneyearofgraduation.

o ConsidertakingasectionduringSeniorspring.BCstudentsdoverywellonBECandthissectionnormallyrequireslessstudyhoursthentheothersections.Wordofcaution!

BCPassRateallCandidates:2014-2019

52.80% 51.90% 48.30% 48.70% 49.80% 49.50%

56.70% 56.30% 54.10% 53.30% 54.30% 54.60%

81.00% 79.40%

75.00% 74.00% 74.10% 72.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2019 2018 2017 2016 2015 2014

OverallCPAExamPassRate- AllTesting

National Massachusetts BostonCollege

BCPassRateFirstTimeCandidates:2014-2019

58.60% 57.50%

52.90%54.40% 55.00% 55.00%

62.90% 62.20%59.30% 58.90% 59.90% 59.20%

88.30%

84.40%

79.70%81.80% 82.50%

72.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2019 2018 2017 2016 2015 2014

CPA Exam Pass Rate - First Time Exam Candidates

National Massachusetts Boston College

BCPassRateFirstTimeTakersbySection:2014-2019

84.60%

94.90%

88.30%

85.40%

65.00%

70.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

2019 2018 2017 2016 2015 2014

BCPassRateFirstTimebySection

Audit BEC FAR REG

2019#4RankingforLargeProgramPassRate

Whatordertotaketheexams?o Whatclasseswillyoubetakingjustbeforeorduringthe

review?n Takethatpartoftheexamthatismostconsistentwith

theclassesyou’retaking.o Avoidleavingthehardestsections(FARorREG)forlast.o Remember,youonlyhave18monthsfromthetimeyoupass

thefirstparttogettherestofthepartscompleted.o Ifyou’retakingtheexamcontinuously,yourmindand

concentrationstarttolagafterthefirsttwoparts.

Whentoregisterandexamorder?o Whentoregister(BCSeniors):

n MACandidates:ApplyinmidtolateMarch(6monthwindowforNTS)bycompletingCertificateofEnrollment.

n NYCandidates:ApplyinmidtolateMarchifyouhave120credits(notincludingAPs)asofthebeginningofSpringsemester.Otherwise,mustwaituntilgraduation.

o ExamOrderandTiming(Suggestion):n StudylateMayandJuneforFARorREG(mostmaterialandconsidered

mostchallenging).TakeexamstartofJuly.n StudyrestofJulyandearlyAugust.TakeREGorFARearly-midAugust.n StudyrestofAugust.TakeBECorAUDattheendofAugustorearly-

midSeptember(caution– testingfatiguemaysetin).n StudyinSeptemberforlastpart.TakeearlyOctober.Note:Auditbest

totakelastifworkinginassurance.

Appendix

CPAcertificationrequirementsinMA

o PasstheCPAexam.o Completeatleast150semestercredithours(Mostfirms

requirethisbemetbeforestartingwork).o Haveatleastoneyearofpublicaccountingexperience

(waivedforgraduatedegreeholdersinaccounting,businessorlaw).

o Completeatleast30Accountingcredithoursand24business(non-Accounting)credithours.

CPAcertificationrequirementsinMA

o Coursescanonlybetakeninregionallyornationallyaccreditedinstitutions.Communitycollegecoursesnowcount.

o Coursescanbetakeninmorethanoneinstitution(alltranscriptssubmitted).

o Onlinecoursesareokayifofferedbyanaccreditedinstitution.

CPAcertificationrequirementsinNY

o Atleast21yearsofage.o Beofgoodmoralcharacter.o PasstheCPAexam.o Atleastoneyearofqualifyingexperience.o Completeatleast150semestercredithours.o Completeatleast33Accountingcredithoursincluding

financialaccountingtheoryandreporting,costormanagerialaccounting,taxation,auditingandattestationservices andcomplete36business(non-accounting)credithours.

CPAcertificationrequirementsinNY

o Complete36generalbusiness(non-Accounting)credithoursingeneralbusinesselectivesinanycombinationofthefollowingareas:businessstatistics;businesslaw;computerscience;economics;finance;management;marketing;operationsmanagement;organizationalbehavior;businessstrategy;quantitativemethods;andinformationtechnologyandsystems.

o Thecurriculummustalsoincludecoverageofbusiness/accountingcommunication(BCOM6688)andethics&professionalism(satisfiedbyACCT3309or6634).