Roger Philipp, CPA, CGMA, creative chief officer of UWorld Roger CPA Review in San Francisco, joins us to talk all things CPA Exam, including when would-be CPAs know they are ready to take the exam, tips for excelling on the day of the big test, and changes to the exam in conjunction with the CPA Evolution Project.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

Along with the role of the CPA, the CPA Exam itself continues to evolve. To catch us up with goings-on in the area of the CPA examination, today we will be talking to Roger Philipp, creative chief officer of UWorld Roger CPA Review in San Francisco. Among the aspects we'll address are study timelines for passing the exam, elements to include in the study plan and how a CPA knows when they are ready to take the exam.

If someone has it as a goal to pass a CPA exam, as hopefully most accountants do, how far out from the date that they are taking it do you think they have to start the process, whether that's scheduling the dates, studying, etc.?

[Philipp] As far as preparing to take the CPA exam, you want to begin as early as possible. That means, the closer to graduation you are, the better you're going to perform on the exam. They've done studies to show that, because it's a highly academic exam. That means there's a strong correlation between what you've been studying in school for the last three, five, nine years and what's going to be on the exam. The exam, the way it's currently set up, is 50% multiple choice. That's for FAR, Audit, REG, and BEC. That means you've got an ABCD-type choice. In life, it's rare that when you're sitting there at work and someone comes up and says, "Hey, Rog. The internal control structure elements are theA , control activity, B, risk assessment, C...” But that's how your brain has to think on the exam, right, because 50% of it is like that.

In the real world, the farther you get from graduation, the more difficult it is for you to kind of shift your brain back into there. So, I suggest begin preparing maybe your last semester, your last quarter, while you're in school. A lot of students are going back and getting a master's in accounting or a master's in taxation. What's great is, you can use, for example, our materials to both study for the CPA exam but also help you finish up your last quarter or semester in school. We also have these comprehensive study planners and they're set up so that you can set up like 3-, 6-, 9-, 12-, 18-month scheduled. That way, you can pace yourself in preparing for the four parts, because back in my day – I feel like the partners, "When I was your age…" – back in my day, we had to sit for all four parts at the same time. You had to pass at least two parts and so on, so we had to study all four parts simultaneously, so it was like a six-month project of just 24/7 studies.

Now you can study one part at a time, right? You study per part, take a part, and so on. Now, I've had students that prepare in one-and-a-half months and pass all four parts. That's, to me, a little crazy, right? I mean, if you have no friends, no work, no school, no life, but most of us have friends and a life, so I recommend maybe one part at a time. The application process from when you apply for the exam to getting your thing called a notice to schedule, that takes the first time about six to eight weeks. What I suggest is maybe begin studying your first part when you apply for the exam. Let's say if you want to take a part in five weeks and, let's say, you're going to study 10 to 15 hours a week. That way you can kind of schedule it. But if you use our study planner, you kind of put in the part you're going to take, the date when you want to take it, and then it'll do the rest as far as setting up a study schedule for you.

What in your mind constitutes a solid study plan for the CPA exam? What sort of elements have to be included?

[Philipp] First of all, you have to come up with the right mindset. In other words, you have to realize that this is a commitment of time. So let your family and friends know, "Hey, I love you. I'm going to miss you because you're not going to see me for a little while," because, again, you need to put in that energy. I tell people it's kind of like scuba diving. I remember years ago when I got certified, they said, "Plan your dive and dive your plan." Because you don't want to end up running out of oxygen at a hundred feet below water. Same thing: you need to look at your life and the things to consider “Are you in school? Are you working? Are you planning a wedding?” You need to make this thing a priority in your life because all the accounting firms will not promote you beyond manager without passing the exams, some of them beyond senior. This is like a thorn in your foot. You really want to get through as early in your career as possible.

Also, a solid study plan that involves blocking out the time to get done what needs to be done. Again, if I'm planning on studying whatever, let's say 15 hours a week, then you need to set that up in your schedule. Also, they've done studies and research that shows that if you start studying at the same time each day, then as you progress it takes less time to get into it. For example, let's say I'm working and then I get home at night. My plan is to start studying at seven o'clock each night. Well, the first night, maybe it takes you 20 minutes to get set and then 15 and then 10. Then eventually, you sit down at 7:00 and you're studying by 7:02. The more you do it, the more effective, the more efficient you get.

I also tell students that, especially if you're, let's say, working, by the end of the day you're so tired and exhausted. I suggest get up at 4:30 in the morning, study for an hour-and-a-half before work while you're fresh, and then go ahead and go to work. You have to adjust, you've got to be flexible. Again, whatever that schedule is, you want to set it up and kind of stick to it.

What tried-and-true study techniques that have been around forever are reliable, and what techniques that people have relied upon for a long time are now less reliable?

[Philipp] I always tell people, "If you study, you will pass," and it's kind of a slogan I've come up with 30 plus years ago. I let students realize that the exam is not an IQ test. It's a test of discipline. In other words, you don't need to be a genius to be a CPA, right? The exam's like an inch deep and a mile wide because in a matter of a minute and a quarter, you've got to jump in your brain from leases, pensions, bonds, deferred taxes, and so on. Our job is to motivate the students to put in the hours to help accomplish their goal of passing the exam. In the olden days, students relied on older techniques, right? Like sitting in a classroom and listening to a lecture and writing notes and reading materials, and we kind of call that passive learning. That's kind of gone more by the wayside because today students demand more. I think part of it is based on social media expectations and influencers and what's going on in the real world out there.

What we've done is we've integrated more of what we call an active learning technique, and that is accomplished by doing. What this does, it motivates the students to stay excited about preparing for the exam and accomplishing their goal. When studying, they use the actual platform that they're going to see during the CPA Exam and also learning from our detailed solutions. In other words, in looking at our solutions, you learn not only why A is correct, but why B, C, and D are incorrect or why they're wrong. Active learning kind of means learning by doing. We just spend a fortune to rewrite all our solutions, and they're very detailed and they have diagrams and pictures to clearly explain why one is correct and the others are incorrect. That's kind of how they learn the key concept.

The activity of compiling quizzes and reading the answer explanations, that's an example of learning by doing. Plus, we have short, concise, high-energy, motivating lectures to keep the students excited. My goal is to have them come home from work and not go, "Ahh, I've got to study," but I want them to be motivated to see what it is they need to see and to stay excited about the concepts. Our goal is not to have students memorize information, but rather I want them to really understand the information and the concepts and that stuff that they're going to see not only in the multiple choice, but on the exam, in school, but also in life. It's funny because I ran into students years later and they still remember because I love using memory aids and mnemonics. So, the students would come up and still remember these concepts and mnemonics, and these are the things that they use not only in school on the exam but also in life as well.

Again, if they really learned the concepts, then they can apply the learned material anywhere in their life and career. It's about understanding, not just memorizing.

How would you say that a would-be CPA knows when they're ready to take the exam?

[Philipp] Well, you never really feel ready. It's kind of like marriage, right? I never really felt ready, but I just jumped in. Same thing with the exam, right? I would joke with my students to take commitment of time, just like marriage. But as I said, if you study you'll pass. What we've done is we've created this thing called SmartPath, and it's basically software that helps the students track where they're strong or where they're weak, and that has helped our students to pass more effectively and efficiently. For example, when you're studying accounts receivable and you got credit loss expense, and they've studied aging of AR, percentage of credit sales, and so on. It's pretty straight forward and easy. What I'll find are students who like to study the stuff they understand and are comfortable with. They'll do it again and again and again.

What the SmartPath will tell them is, look, you've already done enough multiple choice questions and problems, you've gotten the correct percentage right. Now, it's time to move on. Because what I need to make sure is that they're not focusing on stuff they know, but rather the stuff like deferred taxes. Yeah, right? Hate it.

But it's something that they'll be ... if they're strong in an area but weak in another, they're not going to get through the exam. What the software does is it keeps track of how many questions they've done, the percent they'd gotten correct, the time they spent, so it tells them where they need to focus their energy. Basically, once you've completed the program on that section, whether it's FAR, Audit, REG, when they're getting the percentages, studying that they need, then it's time to take the exam.

But the one thing I love to tell my students is, "Warning, warning, you'll never feel good when you walk out of the exam." It's not like you walked out and go, "That was easy." Usually, they don't do as well because when you walk out, you'd go, "Oh my gosh. Was that even in English?" But it's okay not to feel good after the exam, but you'll probably do better than you think. Again, the bottom line is you're never saying, "Okay, I'm ready." You put in the hours, you get through it, you do the software, you see the numbers correct, and then the software will tell you, "Hey, you know what, you're ready to go."

As you say, "If you study, you'll pass," right? But once you've done all of your studying, there's still the matter of excelling on the day of the exam. It's like a sporting event. You can prepare all you want, but then you have to go out and the pressure's on. You've got to perform. Are there tips prospective CPAs should consider for ensuring that they're ready for exam day?

[Philipp] Well, I think leading up to the exam, we want students to take our short quizzes and that helps to reinforce the key concepts that they've been studying for the weeks prior and that also leads up to what we have as a full-length practice exam, so that way they can prepare for exam day. I also tell our students to make sure that they review all the key memory aids and mnemonics because I love memory aids and mnemonics, as I mentioned earlier. That way, just before they walk in, those are the last things they need to remember. Because, again, they've got a minute and a quarter to jump from topic to topic to topic. Repetition is the key and those memory aids will help them as well.

I always say, Murphy's Law, right? Anything that can happen will happen because when you go to take the exam, you're going to a testing center called Prometrics. They're all over the country, all over the world. They give GMAT, MCAT, GRE, truck driving, and the CPA exam. Some people react differently to new things. For example, you're going to Prometrics, you go stand in line, you walk in, they fingerprint you, you go to the locker and put your stuff in there, you sit in a cubicle. Some people, for them, that's not a big deal. Some people are stressed out about that.

For example, I tell students what to wear, like wear a T-shirt with maybe a loose long shirt over it. You can button it up if you're cold because you can't go to the lockers during the exam, only during breaks. Whatever you're wearing when you're sitting in your chair, you have to wear it the entire exam. You can't take it off and hang it over your chair, for example.

Because on the exam, there are five testlets. The first one's multiple choice, second one's multiple choice, third one is task-based simulations, then you get a break.

At that point, you could get up and go. You could take breaks after each testlet, but the clock keeps running. I always tell students, make sure, anything that can happen will happen, prepare. In the past, you could call Prometrics, go and do a walkthrough. For some students, that helps to calm their nerves. I don't know with COVID if they still allow it, but it's something to look into. I mean, I've had students that are sitting there and they've got gangly earrings, and someone says, "You've got to remove those. You have to put them in a locker." It frazzles them. Again, I would tell students, whatever variables you can reduce as far as your discomfort in what's going to happen at Prometrics, you want to do in advance. Preparing in advance is key for helping to pass the exam.

The CPA exam, it's, of course, been evolving especially along with the CPA Evolution Project’s development, right? Are there aspects of the CPA exam, as we have known it, that would-be CPAs no longer need to be as keen on? Are there new aspects that test takers will have to be more up to speed on? What will CPA candidates need to know about that?

[Philipp] The CPA exam is definitely going through exciting changes and especially over the next few years because as technology continues to permeate the business world, newly licensed CPAs need to possess a new set of skills. They're turning more to technology on the exam. For example, Audit and BEC were just updated to include a lot more detail as to what a second-year CPA in public practice needs to know. Because when they set up the exam, that's really what they're looking at is not what a partner needs, but what does a second-year CPA need? The AICPA, they basically go out and they ask professors and firms and CPAs what skills are needed by newly licensed CPAs, and that's how they set up these things called the blueprints. And from those blueprints, that helps us to focus our students on what they need to know and how those concepts will be tested because they use something called Bloom's taxonomy educational objectives, and it talks about what are we testing, remembering, understanding, application, analysis. Then in Auditing, they test evaluation.

You'll see more and more of these concepts on these exams currently and also on future exams, and that's why they're talking about major changes to the exam. When you talk about CPA Evolution, they're talking about major changes coming up in 2024, as far as the parts of the exam and so on. But I want to emphasize that it's really an exciting time to become a CPA because the world is changing more quickly now than ever, especially due to technology. They used to say things change every five, six years. Now with technology, they're saying like, "Every year things are changing." But accounting is the language of business. It helps you to understand how companies run, how they operate. Once you're a CPA, you can do whatever you want, write your own ticket, become a consultant, and entrepreneur.

For example, it helped me to start my company, build the company, and run a successful company for many years. Careers in accounting are always changing. There's new laws, new FASBs, these new tax codes, and that's why one of the nice things is you won't get bored, right? You're never going to get bored because you're always learning and growing. In California, for example, and in most states, to keep your CPA certificate active, you need 80 hours of CPE, which is continuing education 80 hours every two years. That's why you're always learning and growing and keeping up with changing information. As a side note, I am so proud of my CPA certificate. I would joke that when I die, I'm going to put it on my tombstone, "Here lies Roger Philipp, CPA. Fully depreciated." Because there's nothing left. But again, it's an exciting time to become a CPA. Like I said, it's ever-changing especially due to technology.