1. Robert N. Brooks, Executive Director David R. Nance, CPA, Deputy Director North Carolina State Board of CPA Examiners

2. This session will provide accounting educators with current information and facts about the Uniform CPA Examination (Exam) so that educators may assist accounting students in navigating the process of studying for, applying for, sitting for, and ultimately, passing the Exam as a requirement for becoming licensed as a CPA. About the Exam Education Requirements to Sit for the Exam Exam Facts Applying for the Exam Common Issues for Exam Candidates Uniform CPA Exam Practice Analysis Exam Statistics Exam Score Notices Contact Information Questions Scholarship Drawing 2

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4. About the Uniform CPA Examination (Exam) The purpose of the Exam is to provide reasonable assurance to boards of accountancy (the entities that have statutory authority to issue licenses) that those who pass the CPA Exam possess the level of technical knowledge and the skills necessary for initial licensure in protection of the public interest. Public interest is protected when only qualified individuals are admitted into the profession. The Exam is one of the three Es" (education, examination & experience) that constitute the requirements for CPA licensure. Of the three Es, only the Exam is uniform in all 55 US jurisdictions (the 50 states, the District of Columbia, Puerto Rico, US Virgin Islands, Guam, and the Commonwealth of Northern Mariana Islands). 4

5. About the Exam, continued The Exam is offered by the boards of accountancy through a partnership with the AICPA, NASBA, and Prometric. AICPA writes (question development) and scores the Exam; Boards provide applications and score notices; NASBA issues Notices to Schedule (NTS) to candidates based on Board-approved applications, releases scores to boards of accountancy, and maintains a central database of candidate records for the boards of accountancy; & Prometric offers the Exam Monday Friday at 300+ testing centers in the US (NC has sites in Asheville, Charlotte, Greensboro, Raleigh, Greenville, and Wilmington) 5

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7. Education Requirements to Sit for the Exam Bachelors degree (120 hours) from a college or university accredited by one of the regionally accredited associations in any subject that includes, or is supplemented by, a concentration in accounting. A Masters degree or advanced undergraduate degree is not required to sit for the Exam. 7

8. Education Requirements, continued New England Association of Schools and Colleges, Commission on Institutions of Higher Education New England Association of Schools and Colleges, Commission on Technical & Career Institutions Middle States Association of Colleges and Schools, Commission on Higher Education North Central Association of Colleges and Schools, Higher Learning Commission Northwest Association of Schools and Colleges, Commission of Colleges & Universities Southern Association of Colleges and Schools, Commission on Colleges Council on Occupational Education Western Association of Schools and Colleges, Accrediting Commission for Senior Colleges and Universities Western Association of Schools and Colleges, Accrediting Commission for Community and Junior Colleges 8

9. Education Requirements, continued 21 NCAC 08 .0309, Concentration in Accounting (a) A concentration in accounting includes: (1) at least 30 semester hours, or the equivalent in quarter hours, of undergraduate accountancy courses which shall include no more than six semester hours of accounting principles and no more than three semester hours of business law; or (2) at least 20 semester hours or the equivalent in quarter hours, of graduate accounting courses that are open exclusively to graduate students; or (3) a combination of undergraduate and graduate courses which would be equivalent to Subparagraph (1) or (2). 9

10. Education Requirements, continued (b) In recognition of differences in the level of graduate and undergraduate courses, one semester (or quarter) hour of graduate study in accounting is considered the equivalent of one and one-half semester (or quarter) hours of undergraduate study in accounting. (c) Up to four semester hours, or the equivalent in quarter hours, of graduate income tax courses completed in law schools may count toward the semester hour requirement of Paragraph (a) of this Rule. (d) Where, in the Boards determination, an accounting course duplicates another course previously taken, only the semester (or quarter) hours of one of the courses shall be counted in determining if the applicant has a concentration in accounting. 10

11. Education Requirements, continued (e) Accounting courses include such courses as principles courses at the elementary, intermediate and advanced levels; managerial accounting; business law; cost accounting; fund accounting; auditing; and taxation. There are many college courses offered that would be helpful in the practice of accountancy, but are not included in the definition of a concentration in accounting. Such courses include business finance, business management, computer science, economics, writing skills, accounting internships, and CPA Exam review [these courses do not count toward the 30-hour requirement]. 11

12. Education Requirements, continued The Board MAY approve an application to take the Exam prior to the receipt of a bachelors degree, if the concentration in accounting is already complete or is reasonably expected to be completed by the end of the school term within which the examination falls; AND an applicant reasonably expects to receive the bachelors degree within 120 days after the application is received by the Board. However, if the applicant fails to receive the degree within the specified time, the Exam grades will not be released. 12

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14. Exam Facts Computer-based format since April 5, 2004 - prior to this date the Exam was pencil and paper and given twice a year (May and November) On January 1, 2011, CBT-e (Computer-Based Testing evolution) was launched January 1, 2011 - largest revision since 2004 14

15. Exam Facts, continued Four sections Auditing and Attestation (AUD)- SAS & SARS (4 hours) Business Environment and Concepts (BEC) Corp. governance, economic concepts, financial management, IT, operations management (3 hours) Financial Accounting and Reporting (FAR) financial statement presentation, govt., not-for-profit (4 hours) Regulation (REG) ethics, business law, taxation (3 hours) 15

16. Exam Facts, continued Passing score is 75 on a 0-99 scale Question types include multiple choice, simulation, and written communication 16

17. Exam Facts, continued Scoring weights AUD, FAR and REG 60% MC, 40% task-based-simulations BEC 85% MC, written communications 15% Section structure AUD, FAR, and REG 3 MC testlets and 1 testlet containing 6 to 7 task-based simulations BEC 3 MC testlets and 3 written communication task on BEC topics 17

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19. Applying to Take the Exam Exam cost is $953.20, including $230 initial application fee Dont procrastinate Sign up for all four parts while info is fresh. It is a better approach and it saves money (Board charges initial application fee of $230 plus re-Exam fee of $75) Best chance of passing is within the first 6 months of graduation Never know about the future (job demands, marriage, family) 19

20. Applying to Take the Exam, continued Complete the application carefully and submit all necessary documentation Method of contact; Select section(s) to take; Passport-type photo; Official college transcripts (no copies); Three moral character references (no family members); Signature; & Payment Keep a copy of the application & attachments for your records See FAQs on website, www.nccpaboard.gov 20

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22. Common Issues for Exam Candidates Not receiving email from NASBA or Prometric because the message was stopped by spam filters Not getting the day/time you want at the center you want because you didnt schedule soon after receiving NTS Being more than 30 minutes late to testing appointment is considered a no show 22

23. Common Exam Issues, continued Not taking NTS to the test center (without it, not able to test plus forfeit all fees paid) Taking incorrect NTS to testing center (without correct NTS, not able to test plus forfeit all fees paid) 23

24. Common Exam Issues, continued Not taking your IDs (NTS plus primary and secondary IDs) to the testing center or not taking the proper IDs to the testing center Not being admitted to the testing center because the name on you NTS does not match your IDs Showing up at the testing center on the wrong day or at wrong time or for the wrong section or at the wrong testing center 24

25. Common Exam Issues, continued Not being adequately informed about the Exam policies, Exam content, & procedures. Read all material available on the Boards website and the AICPA website (candidate bulletin, content specifications, etc.) Not knowing how to use the Exam software complete the tutorial and sample test 25

26. Common Exam Issues, continued Failure to start (launch) the Exam section After being seated and entering your password, you have 10 minutes to get through the screens and begin the Exam If you take longer than 10 minutes, the Exam session is terminated and it CANNOT be restarted. You use lose your sessionit CANNOT be reinstated and you forfeit all fees paid Writing down mnemonics and notes from a review course can cause this to happen Taking too much stuff to the testing center Only NTS , IDs, & materials provided at testing center (marker, white board, & earplugs) are allowed in testing center Storage is provided for personal itemsonly take what you must have 26

27. Common Exam Issues, continued Exiting out of the Exam prematurely by hitting the Exit button before answering all questions in a testlet Failing to report issues during the Exam to the test center staff. Test center staff may be able to correct the problem & will send a report to NASBA Not notifying NASBA within 5 days of any difficulties experienced during the taking of a completed Exam 27

28. Common Exam Issues, continued A violation of the Uniform CPA Examination policy for testing at a Prometric Testing Center may result in a Center Problem Report (CPR) being issued by the Test Center Administrator (TCA) to the Board. Most of the CPRs issued by the TCAs are problems that do not rise to a level that will affect your Exam test section being disqualified. 28

29. Common Exam Issues, continued The following violations are considered minor Candidate fails to place the computer on break screen when taking a scheduled break; Candidate fails to remove watch at check-in and wears watch into the Exam testing room; Candidate takes an unscheduled break; Candidate fails to sign out with the TCA when taking a break (scheduled or unscheduled). Even though these violations are minor, they take valuable time away from your Exam and that of the TCA whose job it is to ensure that all candidates, CPA Exam or other exam, have an event-free testing environment. 29

30. Common Exam Issues, continued The following major /serious violations may result in the disqualification of your Exam section Candidate takes prohibited items such as cell phone, wallet, or Exam notes into testing room; Candidate accesses prohibited items (stored in locker) during a break; Candidate leaves testing center during the Exam while on a break; Candidate cheats on Exam 30

31. Common Exam Issues, continued The TCA files CPRs on all incidents and the CPRs are sent to the Board. The Board may request security footage from the testing center so that the incident may be investigated. All CPRs are reviewed by the Board staff and major/serious violations are reviewed by the Boards Professional Education & Applications Committee which may recommend that the Board take action against the candidate. 31

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33. Uniform CPA Exam Practice Analysis Practice Analysis Purpose Practice Analysis Steps Invitation to Comment discussion themes 33

34. Practice Analysis Purpose Research project to define the knowledge and skills necessary for newly licensed CPAs in order to protect the public interest A newly licensed CPA is one that has the minimum level of knowledge and skills necessary to protect the public interest Could result in revisions to the content and form of the Exam 34

35. Practice Analysis Steps Exploration (January June 2014) Focus groups and interviews Initial Blueprinting (January July 2014) Estimate of content topics and skill levels to be tested on the Exam Invitation to Comment (September November 2014) Request to comment on possible changes to how content is tested on the Exam 35

36. Practice Analysis Steps, continued Survey (November 2014) A large-scale survey of CPAs will be conducted in order to further validate information gathered from Exploration The purpose of the survey is to explore deeper into the content areas to understand the breadth and depth to which a particular subject area needs to be tested on the Exam Revised Blueprint (January March 2015) Staff and Exam subcommittees will update Blueprints based on Invitation to Comment and Survey 36

37. Practice Analysis Steps, continued Blueprint Exposure (April 2015) Blueprints based on Invitation to Comment and Survey results will be exposed for comment to select audience Exposure Draft (August October 2015) The final proposal describing the next version of the Exam will be sent to stakeholders for comment This document will include the Exam Section Blueprints, the Exam design (number and description of Exam sections), and Exam length 37

38. Potential Change to the Exam Currently, other accounting licensure exams across the globe, such as CPA Canada, are implementing integrative sections that require a candidate to consider content from multiple sections and complete larger case studies 38

39. Potential Change to the Exam, continued Integration An Integrative section on the Exam could replace the current BEC section The content from the BEC section will continue to be tested in the Integrative section in part and cover topics in corporate governance, economics, financial management, information systems, strategic planning, and operations management The simulations or case study in the Integrative section would draw upon content and themes from AUD, FAR, and REG, as well as BEC 39

40. Potential Change to the Exam, continued Integration A Capstone? A Capstone section could replace the current BEC section Same as the Integrative section example, except that a candidate would be required to pass AUD, FAR, and REG prior to taking the Capstone section A Capstone could help ensure that CPAs who pass the Exam are able to blend elements of content knowledge and skills such as analysis, communication, and research after they have passed the foundational sections AUD, FAR, and REG 40

41. Project Timeline 2013 Set Strategic Direction Board of Examiners (BOE) Strategy Discussion and Planning Practice Analysis Alignment with Strategic Plan 2014 Exploration Interviews, Focus Groups Confirmation Invitation to Comment Survey 41

42. Project Timeline, continued 2015 Design Draft of Exam and Blueprint Schedule Exposure Exposure Draft Approve and Finalize Exam Blueprint and Schedule 2016 Announce next version of Exam 2017 Launch next version of Exam 42

43. North Carolina Candidate Performance Summary on Uniform CPA Exam Second Quarter, 2014 Provided by NASBA 43

44. Residency In State Address, 83.30% Out of State Address, 16.70% Out of State Addresses = 148 In State Addresses = 739 Foreign Addresses = 0 44

45. Demographics Number of Male Candidates v Number of Female Candidates Male Female 46% 54% Male candidates = 411 Female Candidates = 476 45

46. Exam Type By Percent First Time (initial) 71% Re-Exam 29% 46

47. New Candidates v Candidates Passing Fourth Section Re-Exam 22% New 78% New = 355 Passing 4th Section = 98 47

48. Degree Type 94.70% 3.00% 2.30% Bachelor's Advanced Enrolled/Other 48 Bachelors = 840 Advanced = 27 Enrolled/Other = 20

49. Jurisdiction Ranking (1 to 53) North Carolina ranks 4th for pass rate North Carolina ranks 7th for average score 49

50. Overall Stats Count Candidates 887 Count Sections 1,204 First Time Sections 857 Re-Exam Sections 347 Average Pass Rate 60.6% Average Score 75.5 Average Age 28 50

51. Exam Score Notices NC Exam candidates can access their Exam scores online through the NASBA Gateway www.nasba.org/exams/cpaexam/northcarolina/ Scores are usually available 24-48 hours after the AICPA releases grades to NASBA Check the Boards Twitter feed and Facebook page for notification 51

52. NC Page on NASBA Gateway 52

53. Online Score Retrieval 53

54. Questions? 54

55. Contact Information Robert N. Brooks Executive Director 919/733-1425 rbrooks@nccpaboard.gov David R. Nance, CPA Deputy Director 919/733-4215 dnance@nccpaboard.gov Phyllis Elliott Exam Specialist 919/733-4224 phyllise@nccpaboard.gov Lisa R. Hearne Communications Manager 919/733-4208 lhearne@nccpaboard.gov (Activity Review, Twitter, Facebook, website, press releases, scholarship program) 55

56. @NCCPABoard 56

57. facebook.com /NCCPABoard 57