Not content to rest on their past accomplishments, the AICPA Board of Examiners recently ok’d a dramatic overhaul of the Content Specification Outlines (CSOs) for the CPA Exam. The newly approved outlines are set to more accurately test the skills and knowledge of today’s entry level CPA, and will guide the creation of questions that will appear on the Exam in the coming years. In short, get ready for some serious changes.
From the structure and division of content to the weights placed on that content, candidates will find that nearly every aspect of the CPA Exam will change to a large degree. Some sections are more evenly weighted from area to area, while others have been adjusted to put greater importance on a given topic.
The content of each area can be inferred by the new, and frequently more detailed, titles. For example, Area I in AUD has changed its title from the fairly broad “Plan the Engagement” to the far more descriptive “Engagement Acceptance and Understanding the Assignment.”
Auditing and Attestation (AUD)
Special Note: This section will now include ethics and independence testing, previously a part of the REG section. However, the REG section will continue to test ethics and responsibilities as pertaining exclusively to tax practice.
Area I
- Current: Plan the Engagement (22-28%)
- New: Engagement Acceptance and Understanding the Assignment (12-16%)
Area II
- Current: Internal Control (12-18%)
- New: Understanding the Entity and Its Environment (including Internal Control) (16-20%)
Area III
- Current: Obtain and Document Information (32-38%)
- New: Performing Audit Procedures and Evaluating Evidence (16-20%)
Area IV
- Current: Review and Evaluate Work Performed (8-12%)
- New: Evaluating Audit Findings, Communications and Reporting (16-20%)
Area V
- Current: Communications and Reporting (12-18%)
- New: Accounting and Review Service Engagements (12-16%)
Area VI
- Current: N/A
- New: Professional Responsibilities (including Ethics and Independence) (16-20%)
Business Environment and Concepts (BEC)
Special Note: Business structure topics have been relocated to the REG section. Further content additions include a new corporate governance topic, and a redefined information systems topic presented from a business entity manager’s perspective.
Area I
- Current: Business Structure (17-23%)
- New: Corporate Governance (16-20%)
Area II
- Current: Economic Concepts (8-12%)
- New: Economic Concepts and Analysis (16-20%)
Area III
- Current: Financial Management (17-23%)
- New: Financial Management (19-23%)
Area IV
- Current: Information Technology (22-28%)
- New: Information Systems and Communication (15-19%)
Area V
- Current: Planning and Measurement (22-28%)
- New: Strategic Planning (10-14%)
Area VI
- Current: N/A
- New: Operations Management (12-16%)
Financial Accounting and Reporting (FAR)
Special Note: While not yet mentioned in the new CSO for FAR, the AICPA has confirmed that more guidance on IFRS content is expected within the year. The testing of IFRS is expected to be eventually included in the FAR section of the exam.
Area I
- Current: Concepts and Standards for Financial Statements (17-23%)
- New: Conceptual Framework, Standards, Standard Setting and Presentation of Financial Statements (17-23%)
Area II
- Current: Typical Items in Financial Statements (27-33%)
- New: Financial Statement Accounts: Recognition, Measurement, Valuation, Calculation, Presentation, and Disclosures (27-33%)
Area III
- Current: Specific Types of Transactions (27-33%)
- New: Specific Transactions, Events and Disclosures (27-33%)
Area IV
- Current: Governmental Accounting and Reporting (8-12%)
- New: Governmental Accounting and Reporting (8-12%)
Area V
- Current: Not-for-Profit Accounting and Reporting (8-12%)
- New: Not-for-Profit (Nongovernmental) Accounting and Reporting (8-12%)
Regulation (REG)
Special Notes: REG will now test ethics and responsibilities only as pertaining to tax practice. General ethics and independence testing has been moved to the AUD section. Business structure topics currently included in the BEC section will be added to the business law area of REG.
Area I
- Current: Ethics and Professional and Legal Responsibilities (15-20%)
- New: Ethics, Professional and Legal Responsibilities (15-19%)
Area II
- Current: Business Law (20-25%)
- New: Business Law (17-21%)
Area III
- Current: Federal Tax Procedures and Accounting Issues (8-12%)
- New: Federal Tax Process, Procedures, Accounting and Planning (11-15%)
Area IV
- Current: Federal Taxation of Property Transactions (8-12%)
- New: Federal Taxation of Property Transactions (12-16%)
Area V
- Current: Federal Taxation of Individuals (12-18%)
- New: Federal Taxation of Individuals (13-19%)
Area VI
- Current: Federal Taxation of Entities (22-28%)
- New: Federal Taxation of Entities (18-24%)
Source: AICPA “CPA Exam Alert: Spring 2009”.
We hope this “sneak preview” of the newly approved CSO’s has been informative, but we caution students not to structure their studies based around them. The new content outlines, while approved, have not been implemented yet. Many estimates suggest that the CPA Exam won’t see the new topics and structure until 2010 at the earliest.
Of course, Roger CPA Review students will have access to all the relevant information with ample time to prepare for the CPA Exam. By attending critical AICPA meetings, and leveraging the knowledge of a broad range of industry colleagues, we ensure our Live, Online and USB Drive CPA Exam review courses offer the freshest and most frequently updated information available.