computerizing the cpa examination presented to the 2003 aplg meeting by richard devore
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Computerizing the CPA Examination
Presented to the
2003 APLG Meeting
by
Richard DeVore
Agenda
• Computerizing the CPA Exam• Examination Structure,
Content, and Length• Transitioning and
Conditioning• Overview of CBT• Demonstrations of Simulation
Prototypes
CPA Examination Mission Statement
“To admit individuals to the profession only after they have demonstrated the entry-level knowledge and skills necessary to protect the public interest in a rapidly-changing business and financial environment.”
Continue To Protect The Public Interest
Periodic Changes Needed
• Maintain the confidence of various constituencies
• Provide a comprehensive assessment of the entry-level knowledge and skills required by CPAs in changing business and financial environment
What’s Changed?
• Rapidly Changing Business World
• Rapidly changing role of the CPA– Demands for broader-based financial services
– Expansion of the attest function
– Need for professional adaptability and flexibility
– Rapidly-changing technology environment
Change in Entry-Level Practice
What We Need FromA New Exam
• The Ability to Test:– Recall of foundational
knowledge– Research skills– Analytical skills– Integrated knowledge and skills
What We Need FromA New Exam (cont’d)
• The Availability of:– Access to authoritative literature– Current technological tools– Secure computerized test system– Secure administrative conditions– Year-round testing
Responsibility for Decisions
• AICPA Board of Examiners– Content Committee
• Preparations Subcommittees
– Psychometric Committee– Education Task Force– Communication Task Force– Systems Oversight Task Force– Other task forces and working
groups
Outreach to Stakeholders
• Mechanisms to Guide Policy– Exposure Draft on Structure and
Content (Feb 2001)
– Briefing Paper #2 (Mar 2001)
– Exposure Draft on Transitioning & Conditioning (Nov 2001)
• Focus groups of students and young professionals (Summer 2001)
Outreach to Stakeholders
• Education Task Force– Working with AAA– Looking at curriculum and
other academic-related issues– Help students and educators
prepare for the transition to CBT
Outreach to Stakeholders
• Ongoing Communications– New Web site with practice
materials and tutorials• (www.CPA-exam.org)
– Exam Alert• (contact gjohnson@aicpa.org)
– E-mail updates to stakeholders
BOE Decisions
Examination Structure, Content
and Length
Examination StructureChanges
• New mix of content groupings• New section• Testing of skills• Testing of knowledge integration• Length of Exam
Examination Structure
• 4 Independent Sections– Auditing & Attestation
– Financial Accounting & Reporting
– Regulation
– Business Environment & Concepts
(NB: Full Content Specs available on website)
Auditing & Attestation
• Auditing Procedures• Generally Accepted Auditing
Standards• Other Standards Related to Attest
Engagements• Skills Needed to Apply That
Knowledge
Financial Accounting & Reporting
• Generally Accepted Accounting Principles for:– Business enterprises– Not-for-profit organizations– Government entities
• Skills Needed to Apply That Knowledge
Regulation
• Federal Taxation• Ethics• Professional and Legal
Responsibilities• Business Law• Skills Needed to Apply That
Knowledge
Business Environment & Concepts
• Knowledge of Underlying Reasons and Implications of Business Transactions
• Skills Needed to Apply That Knowledge in Audit and Attest Engagements
• To Be Tested In Context of Entry-Level CPA Practice
Business Environment & Concepts (2)
• Economics
• Planning and budgeting
• Corporate financial management
• Cost measurement and pricing
• Management
• Information identification, control, and analysis
Comparison to Current Exam
AUDIT Audit & Attest
LPR Regulation
FARE Account & Report
ARE – Tax Regulation
ARE – Govt Account & Report
ARE – Mngrl Business Environ
Examination Length
• 14 Hours– In Total for Four Sections
• Primary Considerations– Psychometric Reliability– Adequate Content Coverage
Proposed Section Lengths
• Auditing & Attestation – 4.5 hours
• Accounting & Reporting– 4 hours
• Regulation– 3 hours
• Business Environment & Concepts– 2.5 hours
Examination Format
• Multiple-Choice Questions• Case-Based simulations
– Test integrated knowledge
– More closely replicate real world
– Assess research, analytical skills
– Various question formats
– Business simulations 2005
Exam Expectations
• Exam success will require less memorization, more application
• Candidates expected to do their work on a computer
• Candidates expected to have technology knowledge, as well as computer skills
• Candidates expected to integrate across accounting areas
Conditioning and Transitioning
Recommendations,Rationale,
&Benefits
Conditioning Policy
• Candidates can sit for each section individually and in any order
• All 4 sections – including the first one taken – must be passed within a “rolling” 18 month period
Conditioning
Conditioning Policy(cont’d)
• No minimum score requirement for failed sections
• Failed section(s) cannot be retaken within same window
• Credit for passed section(s) retained for 18 months
Major Benefits of Conditioning Policy
• Protects the Public– Tests breadth of knowledge &
skills within a reasonable time period
• Increases fairness to candidates by eliminating minimum scores– Each section is independent
• Increased flexibility for candidates
Major Benefits of Conditioning Policy (2)
• Allows Candidates to Focus Their Study and Prepare For Each Section
• Overall Cost to Candidate is Reduced– Not required to sit for sections not
prepared to pass
– No retake of passed sections due to score on failed sections
Transitioning
• How do you equate the current sections of the CPA exam to the revised sections?
• Upon launch, how do you treat candidates who have conditioned under the paper & pencil test?
Issues to
Consider
Transitioning
Policies
Paper-Based CBT1. Audit 1. Audit & Attest
2. Fin’l. Acctg. 2. Fin’l. Acctg. and Reporting and Reporting
3. Acctg. and 3. Regulation Reporting
4. Law & Prof. 4. Bus. Environ & Responsibilities Concepts
Transitioning
• Conditioned candidates have same number of testing opportunities within same time period remaining
• Candidate can establish credit for sections passed under CBT even if paper and pencil conditioning is lost
Policies(cont’d.)
Moving Forward
Getting
From Here
To There
Launch Date
• November 2003 -- Last Pencil and Paper Administration
• Early 2004 -- First CBT Administration Window
• Will Exams Run in Tandem?– No
Getting from here to there
Computer-Based Testing
• Roles and Responsibilities of State Boards of Accountancy and AICPA Basically Unchanged
• AICPA Remains the Examination Provider
• State Boards of Accountancy Determine if a Candidate has met Requirements to Test
How CBT Will Work
The Testing Process
• CPA Examination Delivered at Prometric and State-Operated Testing Centers
• Candidate Registers with Prometric (phone or web)
• Candidate Takes the CPA Examination at a Prometric or State-Operated Testing Center
How CBT Will Work
The Testing Process
• The Process (continued)– Prometric Forwards Results to
AICPA
– AICPA Compiles and Forwards Advisory Grades and Diagnostics to Jurisdiction
– State Board Advises Candidate of Grades
How CBT Will Work
Examination SecurityIn A CBT Environment
• Test Administration– 2 IDs– Double log-on to computer– Candidate sees only one item
at a time– Video camera and walk through
surveillance– Exit checks
Critical Path Issues
• Key Milestone Areas Include:– Item Development & Pretesting– Tutorials & practice materials– Systems Development– Communications– Legislation
Getting From HereTo There
Simulations
• Definition:
Assessment of knowledge and skills in a context approximating that found on the job through the use of realistic scenarios and tasks, and access to normally available and familiar resources.
Simulation Question Types
• MC • Drop-down selection lists• Check boxes• Spread sheets (enter, drag & drop,
formula)• Forms completion• Written communication• Research (access to standards,
codes, search engines)
Advantages of Simulations
• Affordable performance testing• Skills assessment• Integration of content • Multiple correct answers • Partial credit• Access to resources• Innovative item types• Workplace realism
Simulations Design
• 20 – 40 minutes in length• Complementary to MC portion of
test• Aimed at entry-level• Developed by educators and
practitioners• Approved by practitioners• Practice related
Simulations Interface
• Tab–style screens• Consistent across simulations and
tests• Mouse-driven response• Full-screen on 17” monitors• On-line resources available• Split-screen capabilities• Review capabilities within a
simulation
Simulations Scoring
• Multiple points per task/question• Contingent scoring accommodated• Partial credit possible• Variable credit per task possible
(i.e., credit related to importance)
Demonstrations of Simulation Prototypes
AND NOW...
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