By Jennifer Cryder, CPA, and Michael Decker

The CPA designation has long been the pinnacle of achievement among aspiring accountants and passing the Uniform CPA Examination (CPA Exam) marked an important step to their entry into a respected and rewarding profession. However, the journey toward CPA licensure recently underwent a significant transformation, reflecting broader shifts in the accounting industry and educational landscape. In this blog we look at the recent updates to the CPA Exam and some of the profession’s initiatives aimed at strengthening the pipeline of future CPAs.

CPA Evolution

The CPA Exam has recently undergone a meticulous update aimed at enhancing its content, structure, and administration to reflect an evolving profession and provide candidates with additional flexibility. This comprehensive overhaul culminated in the launch of the CPA Evolution-aligned CPA Exam in January 2024. The transformation represents the most significant change to the CPA Exam since its computerization in 2004.

CPA Evolution significantly changed the CPA licensure model and the CPA Exam by introducing a Core and Discipline model. Under CPA Evolution, all candidates are required to pass three Core sections of the CPA Exam: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Taxation and Regulation (REG). Candidates then have a choice of one of the three Discipline sections: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).

For further information, please see the CPA Exam Blueprints, which is the official document defining the content knowledge and skills required of new CPAs for protection of the public interest and eligible for assessment on the CPA Exam.

The launch of the updated CPA Exam proceeded smoothly, with no operational issues reported. However, with the announced introduction of a new exam, candidate volume in the first quarter of 2024 has declined as many candidates rushed to sit for the CPA Exam before the CPA Evolution changes launched in January 2024. Navigating the changes in content and structure is challenging for CPA Exam candidates. To address these concerns, stakeholders have emphasized the importance of proactive planning and using available resources to optimize study schedules. For example, a group of friends or colleagues who ask each other questions and take practice exams together can be very beneficial. Firms should support this effort among their new hires. Also, candidates should start sitting for sections as soon as they achieve 120 college credits. Since they are already in study mode from college and the information is fresh, prepping for the CPA Exam may come easier.

Additionally, test-takers should prioritize sections based on perceived difficulty and alignment with each candidate’s educational background and career aspirations. Review course providers suggest sitting for the most difficult section first, then sitting for sections in a declining order of difficulty (based on the candidate’s background and experience). When choosing which one of the three Discipline Exam sections to take, candidates should sit for the Discipline that most aligns with their education, experience, and passion.

Expanding Opportunities through Education

Beyond the update of the CPA Exam, efforts are underway to strengthen the pipeline of accounting professionals through educational initiatives and strategic partnerships. The Pennsylvania CPA Foundation, alongside other stakeholders, is championing initiatives such as the Pipeline Acceleration Plan, Experience Learn and Earn (ELE) pilot program, and additional research like the PICPA Pipeline Research report.

In one effort by the Pipeline Acceleration Plan, a dozen colleges and universities that are growing were interviewed and asked, “How are you growing enrollment, generally and in accounting?” We took their best practices, aggregated them, and published a report. The intent is not to showcase the universities, but rather to highlight the work they are doing to support the accounting pipeline.

The ELE program, a joint effort by the AICPA and National Association of State Boards of Accountancy (NASBA), provides students with a low-cost pathway to obtain the additional college credits (30) required for CPA certification. This flexible and affordable alternative complements traditional educational pathways, empowering students to embark on rewarding careers in accounting without the burden of excessive debt. The AICPA is working with firms to use this offering in their recruitment efforts.

PICPA also launched a Work and Learn Toolkit for CPA Licensure to support conversations between firms and universities regarding the financial and time barriers affecting students who need the 30 additional credits to sit for the CPA Exam.

Addressing Systemic Challenges

As the accounting profession evolves, stakeholders are grappling with systemic challenges, such as educational costs, shifting industry dynamics, and much more. Initiatives like the National Pipeline Advisory Group (NPAG) are spearheading research efforts to identify the root causes of the damaged pipeline and develop holistic solutions.

Through collaboration with firms, educators, and regulatory bodies, the NPAG aims to address the many issues impacting the accounting profession. And as NPAG identifies and isolates these issues, we will look at each factor and seek solutions in a data-informed way.

NPAG  has released the draft report and the final report will be published soon. Everything is on the table, from proposals on the 150-credt-hour issue, to firm business models, to raising awareness of what CPAs do, and much more. These initiatives seek to ensure the long-term sustainability and relevance of the profession without lowering the standard of excellence.

Charting the Future of Accounting

As we navigate the changing landscape of CPA licensure and accounting education, it is imperative that the profession embrace innovation, collaboration, and continuous learning. By fostering a supportive ecosystem that empowers aspiring accountants to thrive, we can uphold the legacy of excellence and integrity that defines the CPA profession.

The journey toward CPA licensure is evolving as industry dynamics and educational needs shift. Through concerted efforts to update CPA Exam content, expand educational opportunities, and address systemic challenges, stakeholders are laying the foundation for a vibrant and resilient accounting profession. As we chart the future of accounting, let us embrace change as an opportunity for growth and advancement.

CPA Exam Pass Rates & General Candidate Recommendations

The CPA Exam pass rates for the first quarter of 2024 (Q1 2024) were recently announced. Candidate performance on the Core Exam sections generally aligns to historical passing rates of the related pre-CPA Evolution Exam sections. In review and analysis of candidate performance across Discipline Exam sections in the Q1 2024 testing window, the AICPA noted TCP candidates were generally better prepared to take that section than the BAR and ISC candidates were to take BAR and ISC, respectively.

The pass rates above are for the first window of testing under the Core and Discipline model and are anticipated to change over time given the changing candidate populations and their preparedness to sit for CPA Exam sections.

General candidate recommendations:

• Select the Discipline that aligns with your education, experience, interest, and passion.
• Sit for the most difficult (for you) section first.
• Sit for the Discipline section immediately following the corresponding Core section (FAR / BAR, REG / TCP, AUD / ISC).
• A section with a higher pass rate does not mean it will be easier for you!
• Pass rates are determined by thousands of candidates. Make your journey your own.

Jennifer Cryder, CPA, is the CEO of the PICPA in Philadelphia. She can be reached at jcryder@picpa.org.

Michael Decker is vice president, CPA examination and pipeline, at the AICPA. He can be reached at mdecker@aicpa.org.

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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.}