Roger Philipp, CPA, CGMA presents:
2017 CPA EXAM CHANGES

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Hello and welcome, welcome to the 2017 CPA Exam changes. My name is Roger Philipp, CPA, CGMA of Roger CPA Review and we’re going to spend the next 30 to 40 minutes talking about the exciting new 2017 CPA exam.

Now, when looking at this new exam, they came out with an exposure draft, they being the AICPA. They came out with this September 1st of 2015. Basically they want it back for comment and then they’re gonna issue the final draft the second quarter of 2016, becoming effective sometime the second quarter of 2017.

With the exam, there are different content changes and they’re looking at understanding what we call “higher level skills” and this all came about because of the demands of a CPA with two years of experience. And that’s really what they’re looking at, they’re saying, “What does a typical CPA with two years of experience do in the real world?”

Now a lot of things have changed since my day when I was a new hire at Deloitte & Touche because back in my day my job was to go out there and prepare spreadsheets and do lead schedules and ticking and tying and footing and cross-footing and all that kinda stuff.

Well, in today’s day and age things have changed where computers do a lot of those tasks. So, because computers do those tasks we realize that a CPA has to have a higher level understanding. He needs higher, or she needs higher, level skills. Because of the things we’re gonna be doing, recognizing certain issues, identifying errors, challenging assumptions, applying both professional judgment and skepticism in doing an Audit, for example.

So, because of that there’s gonna be structural changes to the exam, which basically means we’re gonna have more task-based simulations. We’re also gonna be having task-based simulations in areas that didn’t have them previously, like for example BEC, Business Environment and Concepts. Also the purpose of this additional TBS is to test those higher order or higher level skills, especially things like analysis and evaluation.

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We’ll talk about where some of those came from in a few minutes, but they’re looking more at not just understanding, remembering, and application but also analysis and what we call evaluation. There’s also gonna be some administrative changes and then we’ll talk also on just, hey how do you prepare for this exciting new exam?

Now, why are the changes occurring and I just touched upon that a little, but because of the change in the business environment and technology as well their realizing that the demands on the two year CPA has increased traumatically. And what that basically says, is we have an increase in the required knowledge, skills, responsibilities of a newly licensed CPA. Therefore, there was a need to change the exam.

Now don’t freak out, because oh my gosh they’re gonna change the exam! They change the exam all the time. When I took the exam, back when I was an itty bitty kiddy in a cribby back in the 80’s it was five parts- Practice Part 1, Practice Part 2, Theory, Law, and Audit. It was 19 and 1/2 hours, we had hour long problems and multiple choice.

Then, they changed it again, they changed it again. They used to have a part called Accounting and Reporting, that became Regulation. Business Law was its own part, then it became part of Regulation, it became computerized in 2004, so it’s evolving. And every, oh, four to seven years they reevaluate and they try to change it to make sure that it’s meeting the requirements, and what kind of requirements?

First of all, firms expectations for new hires, because we wanna make sure that those new hires are showing the higher order skill set. And that’s one of the feedback the AICPA got, is they felt that a lot of the people that are getting out of college and starting their job and working at a big firm, they didn’t have the skill set required. Yes, they’re good at memorizing stuff, but now they need to apply a little bit more, which we’ll expand on later.

I talked about the public’s confidence in CPA’s, right? We wanna make sure that people feel confident and trust that CPA’s are properly trained and have that experience needed.

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Also, making sure that it authentically tests what it is we need as far as the skill set, so that as we put a CPA out in the workplace, they can immediately fit right in.

Now, the exam is not meant to test the most difficult areas that you covered in college. Instead, it’s trying to cover what you should know as what we call an incoming CPA. How are the changes determined? Well the AICPA’s research and development started back in 2014, which then led to that thing called the exposure draft.

Then they issued the exposure draft, they got some feedback on it, then they’re gonna issue the final one, as I said in quarter two of 2016. Then, it’s supposed to become effective quarter two 2017. A lot of questions come up saying, well will they ever delay it, postpone it? Chances are no. So the big changes we’re talking about will be implemented then, however there’s always minor issues that they’re still discussing and working on that they may have time to implement or they may not.

Now, as far as how these changes were determined, there was input from the stakeholders, from the professors, from the firms, also from Roger CP Review, for example because they reached out to us a course provider and said, what kinda things do you think should be on the exam?

Now I know for example some of the feedback they obtained, some people said, well instead of four parts, let’s get rid of BEC and make that last part like a overall final comprehensive exam, like a capstone, and some people liked that idea. The AICPA said, ya know we like BEC, we think there’s important information in there, we’d like to keep that.

One of the changes though, is there’s gonna be more integration, which means for example that if you’re doing an Audit exam, in the Audit exam they may be talking about inventory, but they’re also gonna ask questions about valuation, and things like that which are normally tested in FAR.

That’s one of the things that I miss about in preparing people for the CPA exam, is in the olden days you had to study for all four and take all four at the same time. So there was a lot of overlap. Now days when we’re teaching Audit, for example, we have to incorporate journal entries even though we cover it in FAR because there’s a chance that there’s that overlap that they’re gonna be testing you on.

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So you’ll see how that kinda affects it, but again they also talked with focus groups, they interviewed a bunch of people, they talked to current CPA’s, they did surveys of CPA’s and so on, and again they looked at that to see what kinda changes they should make.

When will these changes go into effect? As I mentioned earlier, the final draft is expected in quarter two of 2016 and it should go in to effect quarter two of 2017.

Now, what are some of these exciting content changes? You’ll see here that we’re basing this on what we call Bloom’s taxonomy of educational objectives and what these objectives were is it says, what is it? What kind of skill levels do we need to test to see that people thoroughly understand material?

So in doing their research, some of this has already been implemented into the existing exam and then they’re adding more for the future exam in 2017. So they said for example, there’s remembering, there’s understanding, application, analysis, there’s also evaluation and creation. They said, you know what, let’s get rid of creation, but we’ll still use the others. We’re gonna combine remembering and understanding. We’re gonna have application, analysis, and evaluation.

So when looking at this bloom’s taxonomy of educational objectives, they said currently we’re looking at remembering and understanding and application, which are the bottom two. What we’re looking for is continuing to do that, but instead of it being 100% of the exam, let’s make it maybe 60 to 80% and then let’s increase it by adding analysis.

So, we’re going to add analysis to all the parts of the exam, all four of them, and we’re also gonna add evaluation to Audit only, and that’s at this time. That’s what their plan is.

Now in remembering and understanding it talks about perception and comprehension of knowledge, and that’s the stuff where, hey is it operating lease or capital lease? Hey, if it’s TTBPO, 75 or 90? Title transfers, bargain purchase, lease term 75% more of the useful life or 90% for lease and valuable term and lease payments. So, all of these, if you meet one of those four, boom capital lease, debit asset, credit obligation under capital lease, so that’s remembering.

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Application is currently tested, which says now let’s apply this information and show me how much is lease expense and what is your lease liability. So now, you’re applying the concepts and doing a lot of calculations and you’re calculating this to see, how much, what is my journal entry for example.

We’re gonna now add analysis, and analysis says the examination and study of the interrelationships of separate areas in order to identify causes and find evidence to support the inferences. So what we’re doing, for example, is we’re gonna look at external confirmation responses and we’re gonna determine the need for follow up or further investigation.

So, let’s say like what I did in the real world. I’m in charge of accounts receivable confirmations. I’ll send a positive, a negative, a blank to different people. What they haven’t tested till now is now let’s give you those documents and have you go and analyze it and go to the next step and tell us, hey do we need to follow up with these people?

Do we need to do further investigation? Maybe we have an audit adjustment, for example. Now, those are things you do in the real world. They have tested you on that, but not the way they plan to test you. Those are gonna be more probably like a TBS, task-based simulation.

Evaluation, that’s the part that’s only gonna be in the Audit exam. Basically, it says examination or assessment of problems and use of judgments to draw conclusions. So maybe, for example, we’re observing inventory count procedures, and we wanna know how those procedures are impacting the inventory and we’re gonna perform test counts and verify the ending inventory quantity.

So, we’re gonna have something later on called the DRS, document review type simulation, so in this evaluation you could have several documents that you need to look at because we’ve done an inventory observation and we need to evaluate whether or not the results that are    being drawn, the conclusions being drawn, make sense.

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So, all of that is kind of what the changes are. So in the old exam, remembering and understanding and application. In the new exam, remembering and understanding, application, adding to it analysis and and evaluation.

Also, as I said earlier, there’s increased content integration. So for example when you’re doing an Audit question, you may have to bring in some FAR financial accounting reporting knowledge and information. So again, that’s kinda how the overlap goes.

You’ll see here the increased focus on higher level skills, again currently understanding and remembering, application. Moving forward, we’re adding analysis and in the Audit exam only, the evaluation as well.

Now, there’s certain key words to help us understand the nature of the tasks that we’re expected to complete using the different skill sets. So what we need to do, is kind of understand the skill level. What is it that they’re asking us to perform? And you’ll see that as we go up that chart, it gets more difficult.

So currently, for example, you’ve got remembering and understanding. Remembering and understanding could be terms like classify, categorize, identify, so you’ll see certain terms clarify, recall, compare, explain, and so on. But, for example, classify, categorize, is it current? Is it non-current? Is it an operating lease or a capital lease? That’s kinda remembering and understanding the basic terms.

Then we go to application, how do I apply it? That’s where for example I’m calculating my lease expense, my lease liability, my amortization, depreciation, calculations, again that is currently what’s on the exam and generally it’s like 60/40 as far as how it’s tested multiple choice task based simulations.

Moving forward, we’ve got analysis. Analysis is where we’re sitting down and we say, ok, what I need to do now is analyze and kinda see for example that when I look at these confirmations; positive, negative, and blank confirmations, let’s see do I need to distinguish? Do I need to detect? Do I need to, again analyze, analysis, reconcile? So you may be reconciling from one ledger to another, that is part of the analysis.

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Then we go on to evaluation, and evaluation that is again for Audit only. That is where we’re going in and saying conclude, or evaluate, or assess and that might be, for example, where they’re giving you a whole bunch of different documents that you’ve got to look through and see whether or not the conclusion drawn by your assistant is correct.

Because again, we’re trying to set up the exam to look at what a person with two years of CPA experience might come across in the real world.

As far as the skill level tested by question type, again multiple choice questions currently remembering and understanding and some application. Task based simulations are generally all application, although I have seen some where they’re more definitional , but they’re mainly application.

Moving forward, multiple choice, remembering and understanding- application, so that stays consistent. Task based simulations- application, also analysis and this new thing we’ll talk about later- DRS, document review simulations, and I’ll show you an example of one. Exciting stuff, can’t wait, and evaluation again for Audit only.

Written communication is in BEC. Currently they have three BEC essays, of which three are given, two are graded, one is pre-tested. What they’re looking for is a clear, concise, complete use of standard English. Appropriateness for the reader and so on. So they’re looking, proper grammar structure and is it on topic. Doesn’t have to be correct, but it has to be on topic.

There, there’s really no change. So it’s gonna pretty much stay consistent how it has been in BEC, it will only stay in BEC written communication. They’re not gonna move it to the other three parts. No real change and what they’re generally testing there is what we call application, which has existed in the past.

Now the skill level by section, and there was again a lot of talk- should we keep the four sections? Should we rename the four sections? What should we do? They decided to keep the four sections. We’re gonna keep the names and titles as they are.

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For example, in Auditing, in the past it has been 50/50, which is 50 remembering and understanding and 50 application. Moving forward, it’ll be about 60 to 80 remembering and understanding and application, and then we’re gonna add 5 to 15 of evaluation, and 15 to 25 of application. So notice that’s the one pie where it does have evaluation and we’ll talk about. more examples.

Also just so you realize, as we get to 2016 the AICPA will also start releasing examples of these kind of questions and so on. You can check our website and sign up for our blogs, so that as soon as we hear the information we’ll get it back to you, because they like to give the course providers the information because they know that we impact thousands and thousands of candidates. They wanna make sure the information gets properly disseminated.

For BEC, one of the things here, now Audit’s a four hour exam, it will stay four hours, BEC is currently three hours. In quarter two 2017 it’s expected to go up by one hour to four hours. So that means the whole exam will go from 14 to 16 because Regulation will also be increased by an hour. So with BEC plus an hour, they go hey it’s time test some exciting TBS.

In the past it’s 50/50. What they’re saying is, let’s take 50% and what we’re going to do is add 35% of– it used to be 85% and 15% basically it was multiple choice and written communication. There gonna be adding task based simulations. So you’ll see here that our analysis will increase because we’re now gonna test some task based simulations, which I’ll expand on. FAR, continuing on with that, same kinda thing.

We’ve had understanding and remembering and application. Now we’re gonna add analysis and Regulation, going up by an hour will also increase and include the analysis as well. So you can kinda see some of those changes and how they’re impacted.

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Now when we talk about the actual content, you’ll see here what the content area is for example with Auditing, in the past we’ve had six sections, now they’re moving to four different categories. Four areas, in what they call the blueprint, used to be the content specification outline.

What’s happening here, is it doesn’t mean it’s less material. Now they are eliminating some areas that are not heavily tested or things that they didn’t feel a person with two years of experience should have to deal with. Therefore, they eliminated some stuff, but you’ll see for example that most of what was on the old exam is moving forward.

For example, you’ve got area 1- ethics, professional responsibilities, general principles- that’s still there. Area 2 talks about internal control. Area 3 is like substantive testing. Area 4 deals with conclusions, like audit reports.

So when we look at that you’ll see that area 1 and 4 is more remembering and understanding, and some application. Areas 2 and 3 are more analysis and evaluation. Which kinda makes sense. I mean when you look at it, what they’re gonna be testing you on is they’re saying ok, I want you to remember and understand the principles and the rules. I want you to remember and understand audit reports, for example.

But as we move forward into the detail, internal control, substantive testing, and how do you audit cash receivables, inventories, accounts payable, and so- as we’re moving forward we’re also gonna be looking at analysis and also your evaluation because it’s the Audit exam.

Certain things that are being eliminated, for example, they said, things that are not really needed for a newly licensed CPA includes things like international standards on auditing, the ISA. Also, for example, foreign country standards of another country, for example, omitted procedures after the audit report date.

Because they said, you’re probably not the one doing some of those. Maybe after the audit report date a manager or a partner might be looking at that. You’re, again a two year person, so let’s kinda get rid of that because it’s not needed at that level. That’s not part of your skill set.

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With BEC, we had six categories, now we’re gonna have five. You’ll notice, for example, strategic planning- it didn’t just go away- darn. Instead, it got moved into the new areas; which would be one, two, three, and five.

Now, in looking at BEC, as I said it’s gonna increase by an hour, and the increasing by an hour that’s because they’re gonna be adding task based simulations, which we’ll expand on later.

You’ll notice here that with BEC, you’ve got corporate government, you’ve got economics-micro and macro. We’ve got financial management, IT information technology, operations management and so on. In looking at those areas, areas one and four and the written communication, the essays, are generally testing the application. All of them have remembering and understanding.

Then in two, three, and five you’ll have things like analysis and like for example, analysis in two, three, and five could be things like economics, financial management, and area five operations management.

So for example you might have a problem now with TBS for example in cost managerial or in economics or in financial management. Back in my day, we had long problems in cost managerial, so we’re gonna have to what? Kinda reteach that so you can’t just answer multiple choice, but also you now need to be able to answer task based simulations in those areas and written communication, which has been on the exam for many years now.

In looking at FAR, financial accounting and reporting, you’ll see here that we used to have five sections, now we have four. The one section that kind of got, didn’t disappear, which is non-profit accounting. Non-profit accounting, which was 8% to 12%, it got mixed into areas one, two, and three because they said ya know, it’s really just a cruel– It’s a cruel world. It’s a cruel accounting. So why test it separately? Let’s combine it with those other areas which is conceptual framework, selected financial statement accounts, and also select transactions.

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The other thing is governmental. Governmental in the past has been 8% to 12%. Governmental still continues over into area four, state and local governments. Now notice it went from 8% to 12%, down to 5% but up to 15%. So it could be as much as 15%, but it could be as little as 5%.

Now when we look at those areas, area four is more remembering and understanding and that’s gonna be for example remembering and understanding- maybe some analysis, some journal entries, that’s for governmental accounting. So you’ll kinda see that the way it’s been tested in the past.

The other areas are also remembering and understanding but also we’re now gonna add application, which we’ve had, but also analysis. So as we go through, which again in FAR, you’re gonna have journal entries, working through and valuing inventory receivables, accounts payable, notes payable, stockholders equity, and so on. That all still exists, but we’re gonna add where you’re not just applying it and doing a calculation, but we’re actually analyzing it as well, that’s the analysis.

They also talked about they’re still gonna have IFRS, but more just the difference between US GAAP and IFRS. Again, because we’re looking at what a person with two years of experience would actually be dealing with in the real world.

For Regulation, we had six sections, we’re going down to five. In looking at Regulation, what’s happening here is there’s kind of a shift in information. For example, as you look through ethics professional responsibility, business law still exists, but it is hugely decreased.

Now, business law, when I took the exam- when I was your age- business law was it’s own 3 and 1/2 hour exam. And that much content has been on the exam for many, many years, but you’ll see here what’s happening is they’re saying in the past it’s been 17% to 21%, let’s take it down to 5% to 15%.

And they’re gonna get rid of some stuff. Like they said, let’s get rid of UCC uniform commercial code, but we’ll still keep in there secured transactions because we want you to understand what a secured attachment perfection and so on, which we’ll all cover in the course.

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But it’s important to kinda see how they made some shifts. So they’ve said, for example, ethics professional responsibility is still there. You’ve got business law which gets decreased. Federal taxation of property is still there. Individual taxation gets a little heavier tested. Taxation of entity still exists.

Then they’re gonna take that last section, federal tax process procedures, some of them they’re gonna move into other areas. Let’s see, areas one, three, four, five.

But, other areas they said are not higher level skills, these are things you can look up. So they said, for example, extensions or statute of limitations or tax return due dates for example. Those are things that in today’s today and age, you do a quick Google search you can find it very easily, therefore we’re not worried about you memorizing and understanding and that you can look it up. You can do research, would still exist, we’re not too worried about that.

They’re gonna eliminate, as I said, some federal security stuff. They’re reducing business law. They’re reducing or getting rid of stuff like copyrights, patents, there’s a whole list of stuff. Again, you don’t have to worry about that because the materials are set up to exactly cover what it is you need to know to know and understand the information.

Now we have these things called CSO’s, which is a content specification outline and an SSO, which is a skilled specification outline. The CSO’s and the SSO’s are tasks and you can see that in the past we had a list of tasks that you had to perform. That’s the currency SO. It’s changing to what we call a blueprint and these new blueprints, which replaced the CSO’s and SSO’s are talking about the skill level advancement and assessment that exists.

So what skill level needs to exist and how is it it being tested? So they’re giving you a lot more detail in here as far as how is this material being tested? How is it gonna show up on your exam? So it’s kind of exciting. So remembering the terms, remembering and understanding, application. Those have been there. Then we’re adding analysis and evaluation.

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So you’ll see here in this example and the exposure draft has a whole appendix where the detail is here, but they also said, caution don’t assume that this everything. Don’t assume that if it has more items listed that it’s gonna be more heavily tested. It doesn’t mean that necessarily, but it’s a nice way to kinda see the new blueprint where they’re trying to help us to understand how is this information gonna show up on my exam? How is this information gonna be tested? So those are some of the important things.

Now, as far as the structure changes, you’ll see here with structure changes generally they’re reducing the number of multiple choice except in REG it stays about the same, but we’re increasing the task based simulations. The written communication stays the same at three items.

So in Audit, for example, currently you’ve got 90 multiple choice, should go down to about 70 to 75. However, currently there’s seven task based simulations, it’s gonna be increased to eight or nine. Also in the current exam, they generally say that you have about 10 to 20 minutes per question, in the future they’re saying it could be less, 15, well a little bit more than 10, but up to 30.

Now don’t panic, when I took the exam we had 50 to 60 minute problems, so I remember having to do a statement of cash flows from scratch. Operating, investing, and financing, supplementary schedule, and so on and so forth. Then they change it to 10 to 20 minutes, or maybe 15 minutes on average.

Now they’re saying we’re gonna go up to 15 to 30. Maybe 20 to 25 average in some cases, so there might be having a little more detail, giving you a little bit more time to do what we call some analysis.

BEC, again in the past, had no task based simulations. 72 multiple choice- 24, 24, 24. Now it’s gonna have 60 to 65, so maybe 20, 20, 20. If it still has three testlets, but they’re adding a task based simulation. That, you could have 4 or 5 of those. So that’s a change.

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Again, things like cost managerial, economics, financial management, doing calculations and so and we’re in the process as well of creating those kinds of questions so that you can get your hands on experience with those types of simulations.

FAR, 90 multiple choice, going down to 60 to 65. Again increasing the TBS from 7 to 8 or 9. Regulation, 72, which is 24 times 3 currently, it will be about the same, excuse me 70 to 75. It has 6 TBS, it’ll go up to 8 or 9.

Before I go on, BEC currently three hours, becomes four. Regulation currently three hours becomes four. That’s why in the past, Regulation had fewer multiple choice and fewer TBS, 6, it’s in the future gonna have similar to Audit, 70 to 75, and 8 or 9 of those types of questions. So you can see again how these questions are set up, they’re gonna be changing them and adjusting it because of the higher level skills that are being tested.

So to kinda see this an overview; Audit, FAR, REG, currently at 60% multiple choice, 40% TBS, it should be changing to about 50/50 and that means that’s your scoring. How they’re scoring you, 50% multiple choice 50% on your TBS. BEC, big change, it was 85% multiple choice, 15% written communication. The 15% stays the same, but the 85% gets split up between 50 multiple choice and 35 task based simulations, so that again is an area where BEC goes up by an hour to incorporate that task based simulations.

Then you’ve got document review simulations. Now, this is something that will exist on all four parts. These will be a form of TBS, a task based simulation type problem and the purpose of this is to kind of show that you can discern between what’s important and what is not important in solving the problem.

With a document review simulation, again this is to mimic more of the real world, like I said when I was out there and I was doing account receivable confirmations and I had to look through the confirmations and then I had to evaluate them and figure out, do we have to send a second? Do we have to make an audit adjustment? What kind of things do we have to do?

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So what they’re saying here, and I’ll show you an example in a minute the AICPA released, basically is it’s a kind of problem where it could be multiple pages, it could be multiple documents, it could be a question where they’re giving you some fact like financial statement foot note disclosure and you’ve gotta go through and see if you think it’s correct or not or what adjustments need to be made.

It increases the authenticity of the exam by testing, again, more real life kinds of things. One of the few things they did say in the future, is it could include audio, it could include a video, where you’re watching a three minute video of someone talking about stuff and then you’re answering a problem based on that.

So when you look at this DRS, document review simulation, or doctors, when you look at this example you’ll see here where it goes through and it gives you some background information and then it talks about, for example contingent liability disclosures and it says the companies attorney believes it is probable that they will have this issue settled in favor of the vendor. Settlement is anticipated during this year and based on the estimates that the range of potential results, the company expects a gain of a million and one.

Hold on, first of all, so what that sounds like is it’s dealing with if it’s probable and estimable, what do you do? Book ’em. So if it’s probable and estimable you accrue and disclose, so you debit estimated loss, credit estimated liability, and you disclose it on the footnotes.

What they’re saying here is we’re gonna lose money, why would it be a gain? So what that tells you, is maybe there’s something wrong.

The first thing is when you click on it and you’ll see in the next screen the first blue item, hey here’s the first item that they’re asking you about. Do you agree with it? Original statement, leave it or do you wanna change it?

So it says original text, the company’s attorney believes that it is probable that the suit will be settled in favor of the vendor, so that sounds like it’s probable that we’re going to lose some money. Is it probable and estimable? The company believes that the suit will be in our favor. Then we’re not gonna accrue it.

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The contingency believes that it is probable in our favor. The other one says that it believes that the suit is frivolous, if it’s frivolous it ain’t gonna happen.

So, you read each of these and you say, boom, I click on this one because I think that’s correct. So you’ll see here you click on that and you’re answering each of these items. So you’re kinda changing it, either you accept it or you cancel and you can change the choices.

This is just one of the examples, like I said they could also give you a video, an audio, they can give you multiple documents where you’re looking through it to see whether or not these disclosures make sense. So, it’s just again a more involved type of task based simulation called a DRS, a document review simulation.

As I mentioned earlier with time allocation, due to the increase in the task based simulations and the fact that they wanna test the higher level skills, they’re increasing and planning on it again, increasing the time from 14 to 16 hours. Don’t panic. Again, when I took it, it was 19 and 1/2.

16 hours, with that 16 hours Audit is 4, will stay 4. BEC is three, becomes four, and that’s because they’re adding more of analysis, and they’re also adding task based simulations. FAR was four, continues to be four. Regulation was three, becomes four where about same multiple choice, but adding more task based simulations.

One of the other things that they’re considering, one of the proposed adjustments, is actually giving you a time-out. Sounds like I’m with my kids, hey time-out, but while you’re working you go, ugh I’m tired let me take a break. Because right now you do testlet 1, testlet 2, testlet 3, and you can take a break between, but if you take a break the clock keeps ticking. Tick-tock, tick-tock.

What they’re considering is, maybe after there are one, two, three of those testlets, they’ll let you take a break for maybe to 10 to 15 minutes. You take a break, go to the bathroom do whatever and then come back and continue the exam. So, that’s one of the things that they’re considering and the benefit again is it gives you a little bit of time to come up for air.

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In my day, and again I sound like your parents, when I was your age, I was in this big room in LA with like 6000 people, at these tables with a pencil, a scantron, a blue book, and you just had to crank through it for four hours. Or it was actually four and a half hours time two, nine hours of practice and three and a half hours for the other. You just had to crank through it, in three days in a row.

So, that’s how it was. You didn’t get a break, if you got up to go to the bathroom, the clock kept running. What they’re considering is giving you kind of a break. So, that’s one of the nice things again that will kinda help you come up for air and kinda clear your head.

Some of the other proposed administrative changes, obviously since the two parts are going up, they have to pay more money to pro metrics, they wanna pass that on, so probably about a 20 plus dollar inrease for BEC and for REG.

Possible future administrative changes, they’re talking about increasing the windows. Currently, if you take three months- January, February, March- January and February are exam months. March, the third one, is a blackout month, no exams. So months three, six, nine, twelve- no exams.

What they’re doing or considering, is let’s go maybe ten days into that third month, especially like November because the end of November, that’s when the year ends because December there’s no exam. Well it’s Thanksgiving and holidays and on and on, so they said, if we went into ten days of December it kinda make it a little easier.

Plus, they used to need a lot more down time between exams to update it and check it and verify and so on. Now, they don’t need as much time. So those are some of the things they’re considering.

Now, currently we have a 18 month window, you pass a part, keep it for 18 months, they’re suggesting that will pretty much most likely stay the same. So again they’re still evaluating, still early in the game. We’ll know more definitively by quarter two of 2016. We’ll know for sure during that year and then in quarter two of 2017, boom, you’re ready to go. Gosh I’m jealous.

(00:33:55)
Now how do the changes affect you? Alright so you have to think about, okay what category do I fall into? If I’m eligible to sit now, then ya know what, go ahead and take the exam now because I’ve got plenty of time to work through the 14 hour exam and I can get through it between now and the second quarter of 2017.

Let’s say I’m not eligible to sit until 2016, well you might wanna get as many parts done as possible before the exam changes in 2017.

Now, what does that mean? Well when you look at it, let’s think about what’s changing the most? BEC is getting TBS and getting longer. I might wanna nail that one out first. Regulation is getting longer so I might wanna nail that one out as well. Auditing, let’s see, it’s not getting longer, but it’s gonna have this new evaluation. They’re all gonna have analysis, but evaluation as well. And FAR will have analysis as well, but no evaluation. So, you might wanna consider BEC and then maybe REG and then Audit and then FAR. Totally up to you.

Here’s the deal, conditional credit, if I pass BEC as a three hour exam and then it shifts to quarter two in 2017, you still have credit for that for the 18 months, assuming they don’t change the 18 months. So that’s great, so I got to pass a three hour exam instead of a four.

If someone came to me and said hey do you wanna take BEC at three hours and REG at three hours? Or would you rather take them for four hours? I’d rather take three. So that’s something to consider. You may wanna nail those out. Do you get conditional credit? Yes.

Now back in my day, when they changed the exam from accounting and reporting to Regulation, if you passed accounting and reporting, you got credit for the new part. In the olden days we had business law, if you passed that, you got credit for another part which was cool. I think BEC at the time. So you didn’t have to take economics if you passed business law.

That was the conditional credit. Here, the names aren’t changing so just remember if you pass one of the current names they count for the future names moving forward.

What if you’re not eligible to sit until quarter two thereafter of 2017? Well then that’s fine. Exams change, as I said, every four to six years. Just stay informed. Stay on top of the information and no matter when you sit, not a problem. That’s why we’re here, to make sure that you’re properly prepared and properly informed as to what’s expected for you to know in order to pass the exam.

(00:36:07)
We found through the years our students are very well prepared. We have this thing called the Roger method and basically it helps students to make important connections, retain the information, and then boom, apply it at the exam what they’ve learned.

The way it works is learn, practice, support. The first thing I always suggest is go ahead and log on and watch everybody’s course to see the difference, but we actually teach it to you. We walk it to you on a white board step by step by step and show you exactly what you need to know. We set it up, we teach you mnemonics so you can remember and understand it. We teach you the calculations so you can apply it.

We also go through and we’ve been analyzing it from day one, so this part that they’re adding to the exam, analysis , we’ve already been doing. We already do, and not just teach you it. We don’t tell you to memorize it. We go, why do we do what we do?

The goal here is to have it make sense, because if it makes sense you’re not memorizing, you’re understanding. And then if they ask you a different question, you can still apply it to another situation and that’s where I think our students distinguish themselves from others, is they do very well on the exam.

It also provides a great way for you to learn the information. TBS questions that really help to assess your higher level skill and facilitate the critical thinking.

So those are the kinds of questions that we’ve developed, that exactly mimic how the exam is set up with the multiple choice and with the TBS, and also we are currently creating the new kind of DRS, document review simulations. So you can go through and see, okay, how do I apply that information?
So it’s really important to see how that’s gonna help you, how that’s gonna help you prepare and pass the exam.

Now, important to stay informed. What does that mean? Stay tuned for any upcoming web casts or blogs, any newsletters for 2017. Visit our CPA exam’s change page on our website at RogerCPAReview.com. Also, you can check out this site as well.

(00:38:00)
The main thing is don’t panic, right, but be prepared and that’s why we’re here. We’re here to help you accomplish your goal of passing the US CPA exam, so realize you will be prepared. There are a lot of changes coming up, but don’t panic. They change the exam quite often. Every 6 or 7 years. This is just one of the exciting changes which distinguishes you from everybody else, especially as you become a CPA.