CPA Evolution: What is the early thinking on three CPA Exam Disciplines?
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CPA Evolution: What is the early thinking on three CPA Exam Disciplines?

May 12, 2021 · 4 min read · AICPA & CIMA Insights Blog

Nearly 10 months ago, the AICPA® governing Council and the National Association of State Boards of Accountancy (NASBA) Board of Directors overwhelmingly supported advancing the CPA Evolution initiative to position the accounting profession for the future. Since then, our teams started working toward implementation of the new licensure model by January 2024. The redesign of the Uniform CPA Examination® (CPA Exam) to include a new Core and Disciplines structure is one of the challenges.

The first phase of the AICPA’s CPA Exam practice analysis began late last year with the guidance of subject matter experts, including — but not limited to — information systems specialists, auditors, tax professionals, CFOs, controllers and financial advisers. These volunteers gave us insight into the role of today’s and tomorrow’s newly licensed CPAs. They confirmed a preliminary view of the content for the CPA Exam’s Core sections and helped identify potential content topics for each of the three proposed CPA Exam Disciplines.

Initial thinking about Disciplines

The AICPA is still in the initial stages of the practice analysis. But it’s important to share what we learned from those who specialize in these areas as well as those who supervise and/or perform these activities at a newly licensed level and how their input led to the current state of the Discipline sections. Final content for each section will be assessed based on tasks newly licensed CPAs might undertake in those areas of practice.

  1. Business Analysis & Reporting (BAR) — For BAR, candidates would likely be interested in assurance or advisory services, financial statement analysis and reporting, technical accounting, and financial and operations management. Content may have a data analytics focus and assess topics such as financial risk management and financial planning techniques, including projections. We also anticipate BAR covering more advanced technical accounting and reporting topics at higher-skill levels, including assessment of revenue recognition and leases as well as business combination, derivative and hedge accounting, and employee benefit plan financial statements. Current plans for BAR include an area on state and local government accounting that could address content and skills currently tested in the Financial Accounting and Reporting (FAR) section of today’s CPA Exam.

  2. Information Systems and Control (ISC) — ISC is focused on technology and business controls and targets for candidates interested in assurance or advisory services related to business processes, information systems, information security and governance, and IT audits. This Discipline may have content focused on IT and data governance, internal control testing and information system security, including network security, software, access and endpoint security. The performance of SOC engagements is also likely to be covered in this section.

  3. Tax Compliance & Planning (TCP) – TCP would cover taxation topics involving more advanced individual and entity tax compliance, plus additional content focused on personal financial planning and entity planning. Individual tax planning topics could cover areas such as inclusions and exclusions to gross income and gift taxation compliance and planning. Advanced entity tax compliance coverage might include consolidated tax returns and multijurisdictional tax issues, and transactions between an entity and its owners. Entity planning could include the tax treatments of the formation and liquidation of business entities. Finally, TCP would also likely cover property transactions, including like-kind and involuntary exchanges and related party transactions.

Keep in mind, wherever we land on the Disciplines, it won’t mean a candidate is an expert after passing a section. Discipline sections are meant to allow future CPAs to choose a path that interests them without requiring a commitment to work in a specific area. The overall licensure model will position them to take on roles in emerging areas such as data analysis, information security, digital transformation, and risk management.

Helping our academic partners

We know the move to a Core and Disciplines CPA Exam structure is a substantial change. It’s one of great interest to many of you, especially the academic community. As former students, we all recognize the critical role professors played in not only preparing us for our careers but also getting us ready for the CPA Exam. They are the front line — educating current students who’ll be the first to test with a new CPA Exam structure.

As the CPA Exam evolves, so too must the accounting curriculum. Many schools have already begun to make the necessary transition to students’ future-readiness. Our AICPA and NASBA colleagues are working with educators and providing support as they evaluate their programs.

On the AICPA Academic Resource Hub, educators can find a variety of resources, including:

  • A searchable database that has hand-curated course content from the AICPA, accounting
    firms and the academic community.

  • The AICPA’s “Faculty Hour webcast series, where we share CPA Evolution updates and host subject matter experts who present topics relevant to the classroom experience. This year, the well-attended series has touched on the use of an Excel dashboard, data analytics software and cybersecurity.

  • The future home of the CPA Evolution Model Curriculum, which we’ll publish next month. The curriculum will address the essential knowledge students need as they enter the workforce and have successful accounting careers. We hope this will be one of many valuable resources accounting programs will use to meet the needs of their students.

Stay engaged

The next step of the practice analysis will include fine-tuning proposed content for the BAR, ISC and TCP Disciplines and, once again, getting feedback from stakeholders. In the coming months, AICPA’s Examinations team will share more details about the direction of the CPA Exam’s Core and Discipline sections. We encourage you to stay engaged, including when you’re called on for feedback throughout the practice analysis.

When the AICPA and NASBA embarked on this CPA Evolution journey in 2019, we knew it would be a major change for the profession. Through continuous stakeholder engagement, we have been able to better understand your expectations of newly licensed CPAs and move toward a licensure model that recognizes the role of the next generation CPA. Your insights will continue to inform and help shape our work throughout the rest of this journey.

Susan S. Coffey, CPA, CGMA

Colleen K. Conrad, CPA

Conrad is responsible for all NASBA operations, including services related to the CPA Examination, CPA licensing, the National CPA Registry and other services and products, as well as IT and risk management. Conrad also oversees governmental, international and professional relationships.

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