1 Outlook for CPA Examination Changes American Accounting Association 2009 Annual Meeting

2 CBT-e: What Is It? o New CPA Examination release will transform the content, format, and structure of the examination and enhance operational and psychometric quality. o CBT – stands for Computer-Based Testing, -e stands for evolution.

3 CBT-e Background o After three years of computerized CPA Examination administrations, the AICPA Board of Examiners (BOE) requested recommendations for improvements from AICPA Examinations staff. o BOE considered the recommendations in September 2007 and decided to seek input from state boards and other stakeholders.

4 CBT-e Background (continued) o In response to the Invitation to Comment (ITC) on Proposed Uniform CPA Examination Improvements – released in Oct – 82 responses were received. o BOE considered all responses in March and April, 2008, and approved some of the changes. BOE-approved changes constitute basis of CBT-e.

5 CBT-e Background (continued) o In addition, the BOE decided the implementation of new Content and Skill Specifications (CSOs/SSOs) would be part of the CBT-e release. o More recently – in March 2009 – the BOE added Authoritative Literature changes to CBT-e.

6 CBT-e Responsibilities o Work on CBT-e is carried out by AICPA Examinations Team – in consultation with NASBA, Prometric, and State Boards – under the aegis of the BOE and the direct supervision of the CBT-e Sponsor Group, consisting of 4 BOE members.

7 CBT-e Changes – AUD, FAR, REG Current Structure o 3 Multiple-Choice Question Testlets o 2 Written Communication Tasks o 2 Simulations - In Current Format CBT-e Structure o 3 Multiple-Choice Question Testlets o NO Written Communication Tasks o 6/7 Short Task- Based Simulations (TBS)

8 CBT-e Changes - BEC Current Structure o 3 Multiple-Choice Question Testlets CBT-e Structure o 3 Multiple-Choice Question Testlets o 3 Written Communication Tasks on BEC Topics

9 CBT-e Changes - Content o On May 15, 2009, BOE approved revisions to Content and Skill Specifications (CSOs/SSOs) with guidance on testing of IFRS. o New CSOs/SSOs will be effective as of date of CBT-e implementation with the effective date to be announced.

10 CBT-e Changes – Authoritative Literature o New research task format will be introduced. o New tutorial and sample tests will be made available in advance to acquaint candidates with new functionality. o FASB codification will be included on examination. o New authoritative literature platform will be launched to facilitate future updates.

11 Standard – Setting o CBT-e changes will be significant enough to require new passing scores to be set. o Standard-setting process will be conducted and will involve decisions by panels of CPA volunteers, with ultimate decision for new passing scores to be made by BOE.

12 More CBT-e Changes o Weights of examination components will change. o Time allotted to examination sections will be adjusted. (Total testing time for 4 sections – 14 hours – will NOT change.) o Candidate performance reports will be revised. o Spreadsheet with additional functionality will be introduced on examination.

13 CBT-e – Benefits CBT-e will: o Shorten scoring timeline o Enhance candidate experience o Enhance the operational and psychometric quality of the CPA Examination.

14 CBT-e Implementation o Date of CBT-e implementation will be announced before September 30, Announcement will allow ample time for candidates to become familiar with changes. o Effective date of new CSOs/SSOs will be posted on CPA Examination website,

15 After CBT-e Implementation Date Announcement o Over the next few months, several announcements will be issued with details about all CBT-e changes including: new weights of examination components new section time allocations new research task format new tutorial and sample tests candidate performance report revisions, etc.