1. 1 CPA Examination Presentation to Students Edward F. Hums March 21, 2006

2. 2 Certified Public Accountant  License to practice  Issued by individual states  State Boards of Accountancy  Basic Requirements  Vary by jurisdiction  150-hour rule  Pass the Uniform CPA Examination  Professional experience

3. 3 Mission of Uniform CPA Exam “To admit individuals into the profession only after they have demonstrated the entry-level knowledge and skills necessary to protect the public interest in a rapidly changing business and financial environment.” AICPA Board of Examiners

4. 4 Examination Content

5. 5 Volume and Pass Rates  Pass rates range between 41% - 45% per section  Higher pass rate that paper examination  Candidate volume lower than expected  Possibly due to professional work load  Possibly due to flexible schedule www.cpa-exam.org

6. 6 Examination Sections Paper-based ExamComputer-based Exam Auditing (4.5 hours)Auditing and attestation (4.5 hours) Financial accounting and reporting (4.5 hours) Financial accounting and reporting (4.0 hours) Accounting and reporting (3.5 hours) Regulation (3.0 hours) Business law and professional responsibilities (3.0 hours) Business environment and concepts (2.5 hours) AICPA Board of Examiners

7. 7 Auditing and Attestation AICPA Board of Examiners

8. 8 Financial Accounting and Reporting AICPA Board of Examiners

9. 9 Regulation AICPA Board of Examiners

10. 10 Business Environment and Concepts AICPA Board of Examiners

11. 11 Assessment of Skills

12. 12 Skills Needed by Entry Level CPAs  Research  Communication  Analysis  Judgment  Understanding AICPA Board of Examiners

13. 13 General Examination Format  Multiple-choice questions – 80%  Given in form of “testlets”  Each section will include possibly three testlets  There are 10 to 25 questions per testlet  Return to questions and change answers only within the current testlet  Simulations – 20%  Approximately 20 – 40 minutes in length  One or two simulations in each examination AICPA Board of Examiners

14. 14 What are Simulations ? A simulation can be defined as an "assessment of knowledge and skills in context approximating that found on the job through the use of realistic scenarios and tasks, and access to normally available and familiar resources". Simply put, simulations are relational case studies that will test candidates' accounting knowledge and skills using real life work-related situations. Each simulation is approximately 20-40 minutes in length and will complement the multiple-choice portion of the examination. All simulations are intended to assess knowledge and skills that are appropriate to expect of an entry-level accountant. Most of the simulations will contain some research activity, usually involving an electronic search or access to authoritative literature and Internal Revenue Code and Income Tax Regulations. For audit, research may also include identifying and accessing work papers or other published materials such as annual reports and stock reports. AICPA Board of Examiners

15. 15 Simulations  Candidates are assumed to have basic computer skills  Candidates are assumed to have basic communication skills  Financial calculations on spreadsheets or financial calculator  Common spreadsheet and word processing program skills  Searching of authoritative literature  “Drag and drop”  “Copy and paste” AICPA Board of Examiners

16. 16 Examination Process

17. 17 New Examination Schedule  The computer-based examination will be available approximately 60 days out of each calendar quarter  This 60 day period is called a “testing window”  Each year will have four testing windows AICPA Board of Examiners Testing is AvailableTesting is NOT Available January and FebruaryMarch April and MayJune July and AugustSeptember October and NovemberDecember

18. 18 Examination Process - Application  Apply to state board or their designee  After eligibility confirmed, state board or designee sends applicant a “Notice to Schedule”  This notice remains valid as jurisdiction mandates  Applicant calls Prometric to schedule exam time  May schedule exam at any secure Prometric site  No restrictions are anticipated on examinations “taken outside of the jurisdiction”  However, examination not administered outside of U.S. jurisdictions AICPA Board of Examiners

19. 19 Taking the Examination  Arrive early  Must bring notice to schedule  Must bring two forms of identification  Must match application exactly!!!!  One with photograph  Both with signature and current  Breaks and confidentiality policies  Misconduct, cheating, and copyright infringement  Grounds for dismissal

20. 20 Scoring the Examination  Numeric scale of 0 – 99  Does not represent “percent correct”  “A score of 75 reflects examination performance that has been judged to represent the knowledge and skills needed to protect the public”  The computerized exam is weighted: Multiple choice – 70 percent Simulations – 30 percent Objective portion – 20 percent Written communication – 10 percent AICPA Board of Examiners

21. 21 Conditioning Policy  Candidates can sit for each section individually, and in any order  Candidates retain conditional credit for any section(s) passed for eighteen months  Without regard for minimum score on failed section(s)  Without regard to taking other sections  Candidates may not retake a failed section(s) within the same examination window.  Candidates must pass all four sections within a “rolling” eighteen month period, which begins on the date that the first section(s) passed is taken  If all four sections are not passed within the “rolling” eighteen month period, credit for any section passed outside that period will expire, and that section must be retaken. AICPA Board of Examiners

22. 22 At the Test Center  Report equipment or computer issues to test center staff immediately.  Keep the Confirmation of Attendance after your exam; use to follow-up on any issues.  Test center staff cannot:  answer content questions  explain how to use CPA Exam software  extend or adjust exam time  Be prepared before you take the exam  Read The CPA Exam Alert for more test tips www.cpa-exam.org

23. 23 Prohibited items include, but are not limited to: Books Briefcase Calculator/Portable Computer Calculator Watch Camera, Photographic or Scanning Device (still or video) Cellular Phone Cigarette/Tobacco Product Container of any kind Dictionary Earphone Earplug (not provided by Test Center) Eraser Eyeglass Case Food or Beverage Handbag/Backpack/Hip Pack Hat or Visor (except head coverings worn for religious reasons) Headset or Audio Earmuffs (not provided by Testing Center) Jewelry – Pendant Necklace or Large Earrings Newspaper or Magazine Non-Prescription Sunglasses Notebook Notes in any written form Organizer / Day Planner Outline Pager / Beeper Paper (not provided by Test Center) Pen / Pencil (not provided by Test Center) Pencil Sharpener Personal Digital Assistant or Other Electronic Device Plastic Bag Purse/Wallet Radio/Transmitter/Receiver Ruler/Slide Ruler Study Material Tape/Disk Recorder or Player Umbrella Watch Weapon of any kind Locker provided

24. 24 Prometric Testing Site Sample Testing Room Prometrics, Inc.

25. 25 Helpful Hints  Apply early  Schedule early  Explore the AICPA website of:  www.cpa-exam.org www.cpa-exam.org  Take the practice exam  Program is not Microsoft Word or Excel  Do not learn as you go  Study material available  Do not walk into the testing center unprepared!

26. 26 Advice for Candidates (from one)  Determine how much time you can commit to study;  Be prepared to drop other activities;  Schedule study during times you are more productive;  Choose study method in line with the way you learn best;  Contact your state board about requirements to sit for the exam;  Working professionals should closely look at schedules;  Make sure you become familiar with researching the authoritative literature  Practice, practice, practice;  Simulations;  Don’t burn the candle at both ends; and  Relax on the day prior to your exam. www.cpa-exam.org

27. 27 New from AICPA Available at: www.cpa-exam.org Guidelines for registering for the examination Guidelines at the testing centers Taking the examination Receiving the scores

28. 28 Useful Links www.cpa-exam.org www.nasba.org www.aicpa.org www.prometric.com www.incpas.org www.aicpa.org/pubs/jofa/jul2005/holder.htm www.nd.edu/~ehums

29. 29 Questions and Comments