THE 2018 CPA EXAM CHANGES
The 2018 Certified Public Accountants (“CPA”) Exam changes will be less extensive than the changes which we have experienced in 2017. However, it is imperative that we know and understand the changes, be equipped for all CPA Exam eventualities, and know the pros and cons from the student’s perspective.
In summary, the changes are:
- Accounting standards are constantly changing; consequently, the CPA Exam content will undergo changes to reflect new accounting pronouncements which will become effective in 2018.
- Additional changes/updates arising from the 2018 American Institute of Certified Public Accountants (“AICPA”) Blueprint.
- Exam application user interface changes designed to make the exam taking experience more user friendly while utilizing everyday work-based applications such as Excel.
GENERAL CHANGES (EFFECTIVE FOR QUARTER 2)
23 INCH COMPUTER MONITORS FOR CPA CANDIDATES
You must have noticed, and are properly using, large (23” HD and above) and/or dual monitors in the office, which may facilitate multi-tasking and increase efficiency. Beginning 2018, Prometric Testing Centers will provide CPA candidates with 23″ monitors. This is particularly beneficial for the simulation component of the CPA Exam, as this provides CPA Exam candidates the ability to view and answer multi-part simulation question simultaneously.
MICROSOFT EXCEL WILL BE ADDED
Since the introduction of the computer-based CPA Exam, the AICPA has made available to candidates, a generic spreadsheet application to facilitate answering questions. Beginning 2018, the generic spreadsheet application will be replaced with Microsoft Excel.
THE USER INTERFACE UPGRADE
As accountants and consultants suggesting continuous improvements to clients/customers, we should not to talk but lead. So, here comes the improved CPA Exam user experience featuring a complete interface update with new layouts, buttons, fonts, colors, functionality and a sleek, modern design.
COURSE LEVEL CHANGES
AUDITING AND ATTESTATION (AUD)
The 2018 changes to the AUD section of the CPA Exam are primarily because of changes to the Statement on Auditing Standards (“SAS”) as follows:
- SAS 130, An Audit of Internal Control Over Financial Reporting That is Integrated with an Audit of the Financial Statements – One of the content groups and the associated tasks have been revised to reflect SAS 130 terminology changes.
- SAS 132, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern (AU-C 570) – This is a new auditing standard will may be tested from Quarter 1.
- SAS 133, Auditor Involvement with Exempt Offering Documents (Amends AU-C 560 and 925) – This is a new auditing standard which may be tested from Quarter 3.
BUSINESS ENVIRONMENT AND CONCEPTS (BEC)
Information Technology Changes – Certain terminologies will be added to the exam which may be testable beginning in 2018. These terminologies include: artificial intelligence and learning; automation; big data, data analytics, and data visualizations; block chain and cryptocurrencies; cloud operations and data storage; cybersecurity; and digital business models.
For 2018, the information technology section of the exam will test candidates’ knowledge of how accountants use computers rather than what computers do, as was the previous focus.
Corporate Governance – The COSO Enterprise Risk Management Framework underwent changes in September 2017. These changes will be examinable from Quarter 2 of 2018.
FINANCIAL ACCOUNTING AND REPORTING (FAR)
Of the four courses, the FAR exam will have the most extensive changes in 2018. These changes are primarily driven by new Accounting Standards Updates (“ASU”) which become effective in 2018 and, therefore, are testable from Quarter 1 of 2018. These ASUs include:
- ASU (Various) – Revenue Recognition (ASU 2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2017-05, 2017-10) – These changes more align US GAAP with IFRS, as well as, outline new methods of accounting for (recognizing) revenue in a complex information and software driven business environment which has moved away from simple fee-based to more complex fee-based contracts and agreements.
- ASU 2016-01 – Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
- ASU 2016-14 – Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities
- Terms such as “unrestricted, temporarily restricted and permanently restricted have been removed from the nongovernmental and not-for-profit tasks.
- Statement of Functional Expenses and other similar tasks have been removed from the AICPA 2018 Blueprint.
- ASU 2016-15 – Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force)
- ASU 2016-16 – Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory
- ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force)
- ASU 2017-01 – Business Combinations (Topic 805): Clarifying the Definition of a Business
- ASU 2017-07 – Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
- ASU 2017-09 – Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting
Currently, there are no material changes to the content of the REG examination. Current trends which may impact the exam in late 2018 and/or early 2019 may be changes to the tax regulations and healthcare law.
NASBA: New Software in Exam Changes (State Board Report July 2017) – https://nasba.org/blog/2017/07/20/new-software-in-exams-future/
AICPA Examination Blueprints: https://www.aicpa.org/becomeacpa/cpaexam/examinationcontent.html
CPA Examination Announcements: https://www.aicpa.org/becomeacpa/cpaexam/cpa-exam-announcements.html
AICPA: The Future of the CPA is Coming – https://www.aicpa.org/becomeacpa/cpaexam/exampreview.html