By Jack Castonguay, CPA, PhD

The CPA Exam is undergoing a significant shift in format that is set to take effect in 2024. Known as the CPA Evolution, the transformation emphasizes task-based simulations and aims to better assess a candidate's ability to apply their knowledge in practical situations, an essential skill in today's accounting profession. This blog explores the format changes and outlines what candidates, practitioners, and educators need to know to navigate this change successfully.

What Is Changing?

The CPA Exam has always adapted to the business landscape and technological advancements. It has undergone several significant revisions since its inception in 1896. This most recent CPA Evolution initiative, voted in by the National Association of State Boards of Accountancy (NASBA) and the American Institute of CPAs (AICPA) in 2020, will take effect in January 2024.

The new model will still result in one, undifferentiated CPA license, despite the exam's shift to what is known as a core-plus-discipline model. The core pieces of the exam for all takers are Auditing and Attestation, Financial Accounting and Reporting, and Regulation. The discipline options (test-takers will only choose one) are Business Analysis and Reporting, Information Systems and Controls, and Tax Compliance and Planning. The following are among the key modifications being implemented this coming January:

• Candidates will be able to take a discipline test before the core sections.
• Exam candidates will be able to change disciplines at any point. Exam participants don’t have to take a discipline section that matches their specialty or what they will be doing at work.
• Technology, digital acumen, and data analytics will become a part of all six sections of the CPA Exam.
• The Business Environments and Concepts (BEC) section is going away, but the content is not. The content will be disbursed among four of the six exam sections.
• Written communications (essays) will be eliminated.

Strategies for the New CPA Exam  

Preparation for the new CPA Exam format should begin with a thorough understanding of the changes. Familiarize yourself with the new structure, content, and scoring of the exam. This will give you a clear idea of what to expect and allow you to tailor your study plan accordingly.

Next, focus on developing your analytical and evaluation skills. The new CPA Exam emphasizes these skills, so you must incorporate more critical thinking and problem-solving exercises into your study routine.

Also, verify that your study materials are up to date with current accounting standards and practices. This will ensure you are well-prepared for the content tested in the new CPA Exam format.

CPA Exam Format Changes

The new CPA Exam will consist of three mandatory core sections and your choice of one of three discipline sections. The core sections are as follows:

• Auditing and Attestation (AUD): This section tests the candidate’s understanding of auditing procedures, generally accepted auditing standards, and other standards related to attestation engagements.
• Financial Accounting and Reporting (FAR): This section examines the candidate’s knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities.
• Regulation (REG): This section evaluates the candidate’s understanding of federal taxation, professional and legal responsibilities, ethics, and business law.

As mentioned, there are three discipline sections, but candidates need only choose and take one. The options are:

• Business Analysis and Reporting (BAR): This discipline focuses on assurance or advisory services, financial statement analysis and reporting, technical accounting, and financial and operations management.
• Information Systems and Controls (ISC): This discipline covers business processes, information security and governance, information systems, and IT audit.
• Tax Compliance and Planning (TCP): This discipline concentrates on individual tax compliance and planning, personal finance planning, and entity tax compliance and planning.

Each core and discipline exam will consist of a combination of multiple-choice questions and task-based simulations. The duration for each section will remain four hours. Additionally, the AICPA has announced several infrastructure changes for the 2024 exam, including different assessment methods for research and related critical thinking skills, replacing Excel spreadsheets with a JavaScript-based one, removing the written communications task, and eliminating multistage adaptive testing.

A transition policy will be in place for candidates who have started but not finished the current CPA Exam by the end of 2023. All exam parts passed before Jan. 1, 2024, will still count toward CPA licensure. For example, if a candidate has passed the BEC section before January 2024, BEC will be accepted and replace the discipline section requirement.

CPA Exam Prep

CPA Exam preparation specialists, like Surgent CPA Review, can make it easier for you by helping to focus your study on the correct material. If you want to stay on top of the latest updates and changes to the CPA Exam, Surgent has a CPA Evolution resource center that will help support and guide you through the changes.  

Additional Surgent resources include the following:

• A.S.A.P.^R Technology, an adaptive learning technology for faster exam preparation.
• ReadySCORE,™ which predicts your likely score if you were to sit for the test that day.
• Full access to content and software updates until you pass the exam.
• Unlimited practice exams for as many tries as you like before test day.

Conclusion

The changes to the CPA Exam format are reflective of the evolving business and technological landscape. The introduction of the new CPA Exam format in 2024 is intended to ensure that future CPAs have the skills and knowledge necessary to succeed in this dynamic environment.

Remember, these changes aim to future-proof the CPA profession and ensure that it continues to effectively serve the public interest. Prepare for the CPA Exam format change and embrace the opportunity to showcase your deep knowledge in a specific area of the profession. With the proper preparation and mindset, you can turn this change into an opportunity for success.

Jack Castonguay, CPA, PhD, serves as vice president of strategic content development for Surgent CPA Review in Radnor, Pa. He can be reached at castonguayj@knowfully.com.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of the PICPA's officers or members. The information contained herein does not constitute accounting, legal, or professional advice. For actionable advice, you must engage or consult with a qualified professional.