Technological know-how’s have an impact on the trade world is both vast and deep, and that’s changing the best way CPAs do their jobs. That’s why there can be an replace to the content material proven on the CPA exam.
In its most latest observe analysis, the AICPA has issued a publicity Draft where it proposes revisions to the CPA exam to don't forget the impact of technological know-how, analytics and process automation on newly licensed CPAs (nlCPAs). The AICPA also proposes certain topics that they feel are not principal to the career. Pending the suggestions, they receive on the publicity Draft, the AICPA expects the up to date exam to launch in July 2021.
A Digital Mindset:
Consistent with the AICPA, “The CPA of the longer term needs to have a data and digital attitude to be able to comprehend difficult industry techniques and controls and to work with digital instruments and applied sciences. It's important that nlCPAs at a minimal comprehend data—and the place and the way it may be accessed—to be able to speak with consumers about data and its potential use.”
Examination takers will find many of the alterations regarding technological know-how in the Auditing and Attestation (AUD) and Business Environment and Concepts (BEC) sections. The intention is for nlCPAs to demonstrate the following:
- An understanding of business methods from inception to completion, together with automation, risks and internal controls
- A digital and information-pushed mind-set
- Facility with information analytics
In the AUD portion, for example, there’s an expanded emphasis on techniques and Organizational Controls (SOC 1) reports, which support companies that use carrier companies and their auditors in evaluating the influence of provider institution controls on the person entities’ financial statements. A SOC 1 document would be used, for illustration, to attest that an institution’s payroll processing or cloud computing supplier has mighty interior controls in situation. The revised exam displays the AICPA’s findings that nlCPAs ought to fully grasp the types of SOC 1 experiences, methods to interpret them, their implications to a client’s process of inside controls, and their outcome on deliberate audit methods.
There’s additionally an expanded focus on figuring out trade tactics, expertise methods, information waft, and inside controls. Within the AUD part, for example:
- The staff titled “communique with aspect auditors and events rather than administration and those charged with governance” might be revised to center of attention on engagement-level best manage.
- The staff titled “understanding an entity and its environment” might be multiplied to remember technology’s affect on an entity. It'll even be elevated to incorporate a working out of gigantic business processes, IT system infrastructure and knowledge flows.
- The crew titled “working out an entity’s inner manipulate” will extra largely don't forget an organization’s manage environment, big industry processes and IT methods.
The BEC part will add a brand-new crew “business tactics and Transaction-stage dangers and Controls,” so that it will focal point on describing trade procedures and flows of transactions, including:
- Enabling Technology
- Picking possibilities to beef up effectivity
- Identifying and designing transaction-level controls
- Use of SOC 1 studies
- Opting for risks and manage gaps
- Utilising data and industry intelligence in the context of an entity’s large industry strategies
Streamlining the Core potential:
Even as the affect of technological know-how is a major focal point, the brand-new examination can even take away or revise special sections that the AICPA believes have come to be too extensive, specially within the Financial Accounting and Reporting (FAR) and Regulation (REG) sections of the exam.
Within the group masking Compensation and advantages, for illustration, the AICPA plans to do away with lots of the retirement advantages subject, noting that with the large decline in firms providing outlined advantage plans, the topic is beyond the scope of nlCPA apply.
In a similar fashion, issues overlaying the replacement minimum tax, trusts and estates, and tax-exempt corporations will both be eliminated or limited within the Regulation (REG) section for the reason that the AICPA’s study indicates these themes have grow to be much less fundamental to nlCPAs.
These proposed alterations will seemingly make the AUD part more difficult but higher consultant of the present audit environment. The affect on the other three sections appear to be less disruptive. Additionally, word that these changes are will not change the combination CPA examination time (four hours per exam or 16 total hours).
The AICPA has requested suggestions on particular changes outlined in the exposure Draft. Responses will have to be set to the AICPA with the aid of April 30, 2020. The AICPA has also released an Invitation to comment (ITC) covering two items the AICPA recommends be removed from the CPA examination: BEC written communication questions, and some distance checking out of state and regional government accounting. Feedback on these gadgets should also be submitted by using April 30.
The bottom line is that alterations are coming to the CPA examination. The excellent news is that you've got time to organize between now and July 2021.
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