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Saturday, January 27, 2024

What the CPA Evolution blueprint tells us about the way forward for accounting

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In 2019, the American Institute of CPAs launched a analysis report whose findings have been alarming for the accounting career.

In line with the report, hiring of recent accounting graduates declined 11% for the reason that earlier tendencies report in 2016, with the quantity having fallen a whopping 30% throughout the earlier two studies. However this did not replicate much less hiring amongst CPA corporations; non-accounting hires in public accounting corporations elevated by 11 proportion factors to just about a 3rd of whole employees. This pattern displays the evolution of the accounting career, which requires accounting corporations to rely closely on know-how and information evaluation. The narrative gleaned from these findings was that accounting curricula — and the CPA examination itself — have been behind the occasions and the wants of the trade itself. 

The AICPA and the Nationwide Affiliation of State Boards of Accountancy responded with a “hole evaluation” to find out particularly the areas which are turning into more and more necessary to the career, discovering these areas embody information analytics and IT audit, however much more so cybersecurity, IT governance and programs and group management engagements. This culminated with the discharge final month of the AICPA’s long-awaited publicity draft detailing its proposal for the construction and content material of the brand new CPA examination, which is able to launch in 2024. Which means present accounting college students graduating after 2023 shall be taking the brand new examination, as will every other college students who could graduate earlier than then however take it after 2023.

The method by which the proposed new examination was devised is named CPA Evolution, an initiative by the AICPA and NASBA to establish a very powerful tendencies and expertise gaps within the accounting career. The proposed CPA Examination Blueprint tells us not simply what the long run CPA examination will appear to be, however the route wherein the career itself goes and what the general public accountant of the approaching decade shall be doing. Earlier than we discover the larger image, although, let’s take a look at the main points of the publicity draft. 

Accounting school and employers, in addition to college students who will take the CPA examination in 2024 and past, ought to be intently reviewing the publicity draft, particularly because the AICPA’s public remark interval ends on Sept. 30.

The proposed adjustments to the examination construction benefit consideration, with a shift from the present 4 examination sections to 3 “Core” sections: Monetary Auditing and Reporting (FAR), Auditing and Attestation (AUD), and Taxation and Regulation (REG) plus three “Self-discipline” tracks, of which a CPA candidate must move one. These tracks are as follows: Enterprise Evaluation and Reporting (BAR), Data Techniques and Controls (ISC), and Tax Compliance and Planning (TCP).

This alteration may look like including extra to the CPA examination, however on the Core stage these adjustments signify a streamlining of the content material presently coated on the examination, which is able to make it simpler to review for the Core exams and permit candidates to concentrate on tougher and career-specific content material on their chosen Self-discipline examination. 

The proposed adjustments to the examination content material are additionally notable. One is that know-how and information are extra completely built-in into the blueprint than ever earlier than — each within the obligatory Core sections and within the Self-discipline tracks. This shall be achieved by testing the candidates’ understanding of the function of information in IT programs, utilizing that information to make key selections, verifying the accuracy of information and utilizing the outputs of automated instruments, visualizations and information analytic methods.

As well as, there may be an elevated concentrate on IT audits, particularly SOC engagements. Knowledge-derived choice making can also be emphasised, and so is choice making extra broadly. Moreover, there may be now a Private Monetary Advisory Providers module within the TCP Self-discipline, which is indicative of elevated demand for tax planning round private wealth associated to property, present, belief and retirement points. 

So, what do all these adjustments say in regards to the accounting career as we go into the mid-2020s and past? How is our discipline altering, what are the weaknesses and alternatives, and what competencies will CPAs want sooner or later? 

First, the long run accountant shall be extra specialised. That is mirrored within the plan to exchange the 4 obligatory sections with three obligatory Core sections after which one in all three Self-discipline sections. College students considering a profession in accounting however involved in regards to the breadth of the CPA examination ought to welcome this modification; it is going to enable them to raised concentrate on the profession monitor and/or the kind of group wherein they need to work, in addition to pursue a monitor that matches their expertise and pursuits. This could be a game-changer for college students involved about their means to grasp all 4 present sections; it means they’ll be capable of higher tailor their research to what they’re good at, that means much less stress over programs and the examination itself. And corporations cautious of hiring CPAs they might see as generalists will be capable of choose extra specialised and targeted new hires based mostly on what Self-discipline monitor they pursued.

Secondly, passing the CPA examination will present the newly licensed CPA has the tech expertise anticipated right now. The heavy emphasis on know-how, information and IT audit within the AICPA blueprint is aimed squarely at overcoming the present hole that makes accounting corporations look past the CPA pool for workers. In step with the examination adjustments, the AICPA launched the CPA Evolution Mannequin Curriculum, which outlines the subjects accounting packages ought to embody of their curriculum to raised acquaint college students with the newest subjects and know-how used within the discipline, permitting CPAs to do extra within the tech area than ever earlier than, or a minimum of to raised perceive how know-how and information can be utilized to glean insights for choice making. 

College students and instructors alike could also be cautious of those adjustments, however they’ve been crafted with the route of the career in thoughts and embody the way forward for accounting. They will even in some ways make issues easier for aspiring CPAs, as they streamline the preparation for the examination along with introducing new competencies. And for the career as a complete, it represents shifting with the occasions to repeatedly evolve according to the wants of a altering world.


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