The July 1, 2021 Blueprints and Practice Analysis Final Report are now available, but what does it all mean? We’ve reduced the myriad of blueprint revisions down to the most important takeaways by exam here: additional content, content removed, and topics deemphasized with a reduction in the skill level required to be demonstrated. Before we get into those details, here’s the big picture:
- Most of the changes to the CPA exam fall into AUD and BEC and were spawned by the need for CPA candidates to be more familiar with three broad topics:
- Business processes and the information technology (IT) that enables them, including their associated risks and controls
- Data analytics and the data-driven mindset
- System and Organization Controls for Service Organizations: Internal Control over Financial Reporting (ie, SOC 1, Type 2 Reports)
- In AUD, these items will be tested from an auditor’s perspective. In BEC, these items will be tested from management’s perspective.
- FAR and REG have had some reductions in content but have no additional content.
AUD Blueprint Changes Effective July 1, 2021
| Content Added* | |
| Topic: | Highest Skill Level Required: |
| Consideration of technology’s impact on an entity and its environment | Application |
| Obtaining an understanding of the IT systems that are used for financial reporting | Application |
| Effect of key controls (ie, manual controls, IT general controls, application controls) on the completeness and reliability of data | Analysis |
| Internal control walkthroughs and documenting the flow of transactions (i.e., flowcharts, process diagrams, etc.) to include significant business processes and how they relate to the financial statements | Application |
| Use of audit data analytic (ADA) techniques to identify transactions that may have a higher risk of material misstatement | Analysis |
| Using the work of an IT auditor | Application |
| Determining the sources of sufficient appropriate evidence and identifying procedures to validate the completeness and accuracy of data | Evaluation |
| Using automated tools and ADAs in audit sampling | Application |
| Using automated tools and techniques related to recalculation | Application |
| Analyzing the results of an ADA procedure and understanding the significance of notable or unusual items (no Excel skills necessary) | Analysis |
| *Topics are new or expanded. | |
| Content Removed* |
| Communications with management and those charged with governance regarding all matters other than timing of an engagement and internal control related matters Communication with component auditors (in a group audit) and parties other than management and those charged with governance (eg, communications required by law) Auditing opening balances Auditing investments in derivative instruments Reporting on the audit of a single financial statement Letters for underwriters (ie, comfort letters) and filings with the SEC Alerts that restrict the use of written communication (ie, due to the possibility of being misunderstood by other parties) |
| *These topics will no longer be tested. |
| Deemphasized Content* | ||
| Topic: | Skill Level Reduced to: | Previously: |
| Preconditions for accepting or continuing an engagement | Remembering & Understanding | Application |
| Developing a detailed engagement plan | Application | Analysis |
| Defining and identifying related parties | Application | Analysis |
| Litigation, claims and assessment | Application | Analysis |
| An entity’s ability to continue as a going concern | Remembering & Understanding | Application |
| Written representations that should be obtained from management or those charged with governance | Remembering & Understanding | Application |
| Subsequently discovered facts | Remembering & Understanding | Application |
| Reporting on compliance with regulatory or contractual agreements | Remembering & Understanding | Application |
| *The skill level required for these topics has been reduced, so questions received on these topics will be easier. | ||
BEC Blueprint Changes Effective July 1, 2021
| Content Added* | |
| Topic: | Highest Skill Level Required: |
| Business processes and flows of transactions including enabling technology, identifying opportunities to improve efficiency, identifying and designing transaction-level controls, use of SOC 1 reports from service providers, identifying risks and control gaps, and using data and business intelligence in the context of an entity’s significant business processes | Analysis |
| Understanding the need for SOC 1 reports for outsourced IT functions | Remembering & Understanding |
| Extracting and loading data | Remembering & Understanding |
| Transforming and working with data and data relationships (no Excel skills required) | Application |
| Data governance and data management | Remembering & Understanding |
| *Topics are new or expanded. | |
| Content Removed* |
| Regulatory frameworks for corporate governance other than SOX |
| *No longer tested. |
| Deemphasized Content* | ||
| Topic | Skill level reduced to: | Previously: |
| Capital structure (eg, comparing strategies for financing new business initiatives) | Application | Analysis |
| Systems development and maintenance (now called Change Management) | Remembering & Understanding | Application |
| Continuity and recovery plans (now called Business Resiliency) | Remembering & Understanding | Application |
| *The skill level required for these topics has been reduced, so questions received on these topics will be easier. | ||
FAR Blueprint Changes Effective July 1, 2021
| Content Removed* |
| Going concern requirements Compensated absences other than vacation accruals Retirement benefits (eg, calculation of pension cost and funded status)** Differences between IFRS and U.S. GAAP |
| *These topics will no longer be tested. **Note that financial statements of employee benefit plans are still testable. |
| Deemphasized Content* | ||
| Topic | Skill level reduced to: | Previously: |
| Derivatives and hedge accounting (e.g., swaps, options, forwards) | Remembering & Understanding | Application |
| *The skill level required for these topics has been reduced, so questions received on these topics will be easier. | ||
REG Blueprint Changes Effective July 1, 2021
| Content Removed* |
| Federal securities regulation Alternative minimum tax (AMT) Obtaining and maintaining tax-exempt status (tax-exempt organizations) |
| *These topics will no longer be tested. |
| Deemphasized Content* | ||
| Topic | Skill level reduced to: | Previously: |
| Bankruptcy and insolvency (debtor-creditor relationships) | Remembering & Understanding | Application |
| Secured transactions (debtor-creditor relationships) | Remembering & Understanding | Application |
| Net operating losses and capital loss limitations (C Corporations) | Application | Analysis |
| Unrelated business income (tax-exempt organizations) | Remembering & Understanding | Application |
| *The skill level required for these topics has been reduced, so questions received on these topics will be easier. | ||