Feb 05, 2021

CPA Skills Tests: Supporting the Next Generation of CPAs

Richard Gallagher, CPABy Richard Gallagher, CPA

A CPA acquires a vast amount of knowledge and a range of skills over a typical 30-year career. Technology advances, processes adapt, standards change, and new markets and service opportunities emerge. We grow as CPAs – moving along with our ever-evolving profession. Now, try to nail down what is most important for young accountants to know as they become CPAs.

We may differ on our choices, but we all recognize new CPAs won’t have a large array of experience the moment they walk through the door. I think back to my career, which concluded as a professional practice partner in EY’s New York office. By the time I reached that position, I had accumulated knowledge and experience far beyond what I had upon earning my license. My professional growth was enhanced by the mentoring, training, and guidance I received from experienced CPAs − support that helped me expand upon the basic skills I had at the start of my career.

Newly hired CPA working with experienced CPASo, I ask, what is most important for a newly licensed CPA to know as they enter the profession?

We expect and require newly licensed CPAs to possess a foundational level of knowledge and skills from day one. And this is the purpose of the Uniform CPA Examination (CPA Exam) –assessing the minimum basics essential to the profession.

While the CPA Exam verifies foundational competencies, the roles of newly licensed CPA continue to change with the profession. As I lead those who maintain the CPA Exam and interact with scores of volunteer subject matter experts, I reinforce the need to balance what may be considered the “foundation” with changes that must be introduced because of their relevance to a newly licensed CPA’s work.

The AICPA recently published an updated CPA Exam Blueprint that reflects changes (eligible for testing beginning July 2021) related to our most recent practice analysis. Although previous practice analyses have led to major exam overhauls, the forthcoming changes will not impact the current four-section structure and will remain focused on concepts and skills that candidates should be familiar with given their work in the profession.

Most importantly, candidates’ higher order skills will continue to be assessed, with an increased focus on skills such as understanding business processes from inception to completion, including IT processes and related controls. Topics such as International Financial Reporting Standards, which has not become widely accepted, and estate taxation are not typically relevant to a newly licensed CPA’s role, so they will no longer be covered by the exam. Adjustments such as these refocus attention on areas that are most important to a newly licensed CPA’s role in protecting the public interest.

The exam will also address the need for today’s CPA to possess a digital and data-driven mindset. We’ve heard about the importance of this knowledge repeatedly from the profession. Concentrated primarily in the Auditing and Attestation (AUD) and Business Environment and Concepts (BEC) sections, candidates will be expected to understand procedures related to obtaining evidence, using data, and interpreting the results of analytical procedures.

Other changes, also mostly in AUD and BEC, will reflect the profession’s growing reliance on System and Organization Controls (SOC) reports and the need for newly licensed CPAs to understand their impact on an audit.

The forthcoming CPA Exam changes will represent a marked increase in the assessment of a candidate’s knowledge and skills related to technology and data analysis. These changes, along with a greater emphasis on foundational knowledge and skills, will keep the exam relevant and aligned with professional practice.

The CPA Exam continues to address the basic “must-have” knowledge and skill repertoire. Training, mentoring, and on-the-job experience throughout the CPAs’ careers will further expand their capabilities.

Even though new professionals have proven they have passed through the “gateway” to the profession, you, as experienced CPAs, must do your part to help them grow and succeed. By imparting knowledge, and hopefully a little wisdom, you will prepare them to do the same for the generation of CPAs to come.

Richard Gallagher, CPA, is senior director, examination content, for the AICPA. He can be reached at richard.gallagher@aicpa-cima.com.

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