Category: The JDA

Summer Studying: A CPA Exam Plan for Warm Months

Alright, little future CPAs, most of you are probably still recovering from the holiday weekend and if you’re lucky enough to have a job, reluctantly dragging yourselves back to the grind which sometimes means studying for the CPA exam. Taking the summer to study? Good for you! We’ve got some tips for keeping on track when the weather is nice and the work is light.


Don’t overdo it!
If you just graduated and aren’t starting at a firm until the fall, you might be one of those candidates who decides to take all four CPA exam sections in one testing window. That’s all well and good but let’s be realistic: your degree may not post to your transcripts until August and even then you’ve still got to wait for your state board to process your application. Find out how long the process takes in your state and plan accordingly! If you’ve been approved to sit for the exam and have a few months to study, we humbly suggest taking on no more than two sections per testing window. It’s a lot easier to study when you aren’t working but trust us, it’s a lot easier to pass exams when you’ve got the time to concentrate on each section and cramming all four into one window can sometimes put a damper on that process. So slow it down, killer!

Make time for fun
Listen, no one said you have to give up your life to pass the exam and it might be a good idea to retain your sanity through the process so by all means, get out and enjoy yourself in moderation. Once you’ve created a solid study plan by accounting for each hour of each day and planning study time in between, you can afford to pencil in “fun” here and there to keep yourself motivated. Moderation is key, you don’t want to be puzzling out variance analysis while nursing a hangover so save the big bashes for when you pass.

Remember you only have two testing windows left until the CPA exam changes in 2011
Amazing how motivated you can become when you remind yourself that if you don’t get FAR out of the way this year, you’ll be forced to identify differences between GAAP and IFRS. As you know, you learned one of these in school and the other is a big fat unknown not just to many accounting students in America but many of our CPAs as well. If you’ve been putting off the exam or half-assing it for the last several testing windows, now is the time to stop and get serious about your goal. It isn’t getting any easier and it isn’t going to pass itself.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Why Aren’t We Discussing Financial Reform’s GASB Effect?

If we still care about financial reform, we should especially care about proposed changes to the Government Accounting Standards Board because, let’s face it, government accounting could really use a helping hand. Were government pensions forced to use the same reporting rules as every other pension, a $3 trillion hole would open up and we would see immediately that rules in desperate need of repair have remained broken because the current system allows the truth to be buried in the footnotes.

As is, GASB is funded by voluntary contributions given by state and local governments out of the goodness of their hearts (yeah right) and through sales of its publications.

The concern is that should GASB be unable to pay the bills, the federal government may be forced to swoop in and babysit. The potential for conflicts of interest should not escape dear reader as this would be akin to investors owning the SEC or Fed-regulated banks owning the Federal Reserve (oh wait, they already do). Is that any worse than what we’ve got now?

How bad is their financial situation? GASB reported a $3.83 million budget shortfall in 2009 and projected a $4.46 million shortfall for 2010.

So why, if we’re still talking about financial reform, are we not talking about its potential impact on GASB?

Under new financial reform rules, the GAO would be forced to evaluate GASB’s role (read: usefulness) in standards setting within 180 days of the proposal’s passage. How likely would it be for the GAO to call an issuer-funded agency that’s allowed government pensions to conceal $3 trillion in liabilities a blaring and obvious failure? The SEC could then direct FINRA to collect assessments from dealers that would go towards funding GASB. Obviously this piece of legislation has been written by Congressmen who don’t know how to do anything without making it as complicated as possible.

Financial reform has already cleared the House while the Senate is expected to vote within the next two weeks after returning from recess.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

You’re Going to Grad School: Do You Sit for the CPA Exam or Wait?

For many of you it is graduation season and that means planning to start at a firm in the fall or going back to school. But do you really need grad school?

Here’s our question from a reader planning on eventually taking the CPA exam but unsure as to when:

I just finished my undergraduate degree in the summer and therefore did not meet any of the application deadlines for grad school this Fall. I plan on going to grad school in the Spring, but in the meantime, I wanted to register to sit for the CPA exam. Is this a dumb thing to do? Most of my friends are going to grad school and studying for the CPA exam simultaneously. I don’t want to wait to the Spring to start taking the CPA though–but perhaps it will be more beneficial to me to wait. I need all the help I can get to pass. On the other hand, I’ve heard that you don’t necessarily need everything you learn in grad school to do well on the CPA exam, and all that extra information that they feed you can actually confuse you. I would love to hear your input on this.

Let’s be honest here, there are two distinct universes: 1) the CPA exam universe and 2) the actual universe.

Scenarios presented on the CPA exam are often contrived in the way that only made-up content can be and very often fail to match real-world experiences that you will encounter in your exciting career as a CPA. That also means that college may have poorly prepared you for the CPA exam universe, whether undergrad or graduate level. The CPA exam changes twice a year but it’s pretty likely that your college professors used the same books several years in a row. Of course accounting is still accounting but you are right to assume that grad school may not adequately prepare you for the CPA exam. Why do you think review courses make so much money?

Our advice is ALWAYS the same when it comes to loading up your plate with other things while trying to tackle the CPA exam: less is more. If you can trim out part of your social life, take time off of work, and avoid any additional educational or professional responsibilities while studying, you’re in a much better place to focus on the exam. Ask any of your friends who are trying to do grad school and the CPA exam at the same time in a few months how things are working out and I guarantee you they’ll tell you it’s not the cake walk they thought it would be. If you can save yourself the headache, do it, you can always go back to school later.

Grad school may make you more hireable and teach you a few tips and tricks for your career but as far as the exam goes, if that’s your only motivation for getting more education, you’d be better off just picking up some extra units to meet the 150 hour rule and focusing your efforts with a good review program. Again, college texts are usually outdated and don’t cover the same topics as the CPA exam.

It is our humble advice that you apply for the CPA exam immediately and make it your goal to complete all exam parts before you start school in the Spring since you will have the time to focus on the task at hand. Good luck!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Failing the CPA Exam the Easy Way…or: How to Use Your Scores to Determine Your Next Move

Nationally, only 43% of CPA exam candidates who sit for any exam part pass on their first try and that number shouldn’t be too surprising to anyone who has gone into an exam completely unprepared or totally intimidated. Failure may be inevitable but it doesn’t have to be the end, nor does it mean you should give up on trying to become a CPA.

So what do you do if you’ve failed?

There are two paths to take and your option from here depends a lot on how you did. Not all less-than-74s are created equal.


If you scored < 70: If you got anything less than a 70, give or take, you can put this exam off until later and move on to the next section if you are having difficulty grasping the information, especially if you scored in the bottom 60s or lower. UNLESS you are on a time crunch (like you have to get this one passed or you’ll lose credit on another section), blow this one off and move on to another. If you want to continue and try this one again you can but you should start from scratch, use your score report to gain insight into where you need more work, and review EVERYTHING as if you have not studied at all.

If you scored > 70: Pay your re-application fee and get a new NTS for this exam ASAP! A score above 70, while disappointing if less than 75, shows that you have an excellent command of the information and you’ll want to retake this one while the information is still fresh in your mind. DO NOT move on to another section. Use your score report to gain insight into your weaker areas but don’t obsess too much over what it tells you, keep in mind the report compares you to other candidates and you don’t care how other people did on the exam, you need to know where YOU need to do more work. DO NOT waste your time watching all of your CPA review lectures again, focus on doing MCQ/simulation practice questions and brush up on the areas you are weak in. Then, just before your exam, give everything a very quick overview one last time to make sure you have not forgotten the things you already know.

The point is that most CPA exam candidates experience failure at one point in the process, and some will experience failure repeatedly along the way. Be smart about your mistakes, learn from them and move on. You CAN pass, it’s just a matter of understanding how to overcome the many stumbling blocks you may encounter along the way.

Also see:
What Happens When You Get a 74?

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Credentials for Accountants: Certified in Financial Forensics

If you’re the type that enjoyed spy shows as a kid and loves scoping out financial statements like CSIs love autopsying dead bodies, you might want to consider a CFF (Certified in Financial Forensics) when you grow up. Anyone considering this designation may want to add CFF to the end of their name with a CFE or CFA. If you’re looking at a CFF, you might want to hurry up and decide before future CFFs are required by the AICPA, starting September 1st, to pass the CFF examination.

In May of 2008, the AICPA introduced the CFF as a professional credential that combines specialized forensic accounting expertise with the core knowledge and skills that make CPAs among the most trusted business advisers.


Education Requirements
Becauential that represents an extensive knowledge base, CPE is an important component to qualify for and renew a CFF designation. New CFFs are required to demonstrate a certain amount of Lifelong Learning (based on the point system below) and must complete 60 hours every 3 years with renewal of the credential.

Professional Requirements
In order to qualify to become a CFF, CPAs must be an AICPA member in good standing, have five years professional experience in the field of accounting and must score at least 100 points on the application (points based on professional experience, knowledge, lifelong learning and forensic accounting credentials already held). Only CPAs can apply as a valid, unrevoked license to practice public accounting is a requirement as well.

The CFF Exam
The exam, which will be introduced as a requirement on September 1, 2010, is a four hour, 100% multiple choice exam administered by the AICPA. It consists of the following areas and weights (check out the CSOs from the AICPA here)

Professional Responsibilities and Practice Management

• AICPA 5%

• CPA Professional Responsibilities in Civil and Criminal Matters 5%

Fundamental Forensic Knowledge

• Laws, Courts and Dispute Resolution 5%

• Planning and Preparation 5%-10%

• Information Gathering and Preserving 10%

• Discovery 5%-10%

• Reporting, Experts and Testimony 5%-10%

Specialized Forensic Knowledge

• Bankruptcy, Insolvency and Reorganization 5%-10%

• Computer Forensic Analysis 5%-10%

• Economic Damages Calculations 5%-10%

• Family Law 5%-10%

• Financial Statement Misrepresentations 5%-10%

• Fraud Prevention, Detection and Response 5%-10%

• Valuation 5%-10%

Career Options
Many with the CFF credential stick to private practice and use the CFF as a way to distinguish themselves as passionate about forensic accounting.

Compensation and Other Benefits
We all know more letters = more money but in the case of the CFF, little real data can be found on the difference in compensation for CFFs versus plain old forensic accountants. We’re guessing this is because the CFF is a relatively new AICPA credential but as time goes on and frauds get larger and more complicated, we trust that this data will be much easier to come by. As a general rule, crendentialed CPAs are more valuable simply because pursuit of a credential in one’s specialty shows a level of professional dedication adored by HR departments and managers alike.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here

How Simulations are Changing for the 2011 CPA Exam

As most of you already know, the CPA exam is changing and our last two testing windows are quickly approaching. If you are concerned about the impact of IFRS on CPA exam content, get FAR done this year. If you absolutely hate written communication, knock out BEC in 2010 as it will contain them in 2011. A few topics will be moving around and for an overview of everything that’s changing starting January 1, 2011, check out the updated Content Specification Outlines for all the gruesome details.

The biggest and most obvious change will be a shift in the thinking of the CPA exam itself
Whereas we have always considered the CPA to be a world-renowned designation and GAAP the be-all-end-all of accounting rules, we now must recognize the global nature of capital markets and future CPAs will be expected to demonstrate a working knowledge of international standards in financial reporting and auditing.


For 2011 simulations, we’re expecting that the AICPA Board of Examiners will continue to use a similar format (you may see tabs that you recognize if you’ve already taken exam parts and done some simulation problems) but instead of getting 2 large sims, you’ll get 7 task-based simlets (6 in Regulation).

Contrary to popular rumor, BEC WILL NOT CONTAIN SIMULATIONS
Blame that on the folks who don’t read but BEC will only contain written communications (3, of which 2 will be graded) and will go from 90 multiple choice to 72. You’ll get an extra 30 minutes to complete this part, which will be taken away from Audit.

The Unknown
It’s difficult to say at this point what candidates should expect come January 2011. Will research still be worth 1 point and therefore easily blown off if you’re running out of time? Will simlets require extended journal entries that can take quite a bit of time to put together? The honest answer is that we don’t know.

The AICPA used to have a tutorial at cpa-exam.org but since they redid their website, these tutorials have moved to their main page and can be found here. The cpa-exam.org site is still down and, presumably, will not be brought back now that everything is stashed on the AICPA’s website.

So our guess is that the new format WILL be available in tutorial form from the AICPA before January though we haven’t seen anything to date. When the research function changed in mid 2008, they made it available for practice at least one window prior to the new function appearing on the exam and 2011’s simlets should be no different. We’ll let you know if we spot the new format available for practice so stay tuned and better knock out some exams while you can, there are only four testing months left before everything changes!

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

Non-Profits are Now Exempt from Political Contribution Rules (Well Three of Them at Least)

Out of millions of non-profit organizations in America, three have been hand-picked by the authors of the DISCLOSE Act, a House bill meant to bring transparency to political contributions.

The bill is inspired by a Supreme Court decision that overturned a cap on corporate contributions to political campaigns. So to compromise and soften the hard-ass bill a little bit, they threw in an exemption for certain non-profits that meet specific requirements.

They must have more than 1 million members, be at least 10 years old and receive no more than 15% of their contributions from corporations to receive this exemption. OK, how many non-profits could that be?


The NRA and 2 others (AARP and the Humane Society).

Reform at its finest, I guess.

Just a note, Charity Navigator doesn’t do the NRA for the following reason:

We don’t evaluate National Rifle Association.
Why not? We don’t evaluate 501(c)(4) organizations because they are allowed to spend a substantial portion of their revenue on lobbying our government and not every donation to them is tax-deductible. You may be interested in our evaluation for The NRA Foundation.

If you’re curious, “DISCLOSE” stands for Democracy Is Strengthened by Casting Light On Spending in Elections and I don’t think light is what we need in this situation. Companies, unions and other groups that spend more than $10,000 would be required to disclose donors who have given $1000 or more.

Why does this matter? Should lobbying groups really receive any tax deductions at all?

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here.

Three Myths About Simulation Questions on the CPA Exam

6 years after the advent of the computerized CPA exam, candidates are fairly used to simulations by now (just in time for them to change) but they can still be a source of fear and apprehension for candidates just starting out.

Let’s start with debunking some popular myths. Remember, all of this information is current to the 2010 CPA exam and will be changing in 2011. Since it doesn’t make sense to repeat myself, I’m talking about what to expect for the next two windows of 2010.


Only one simulation is graded. Only one written communication is graded but both simulations are definitely graded and there is no progressive difficulty like there is with MCQ. If your second simulation feels harder than the first, it doesn’t mean you’re doing better, it probably means you got screwed on a simulation that covers the one subject you blew off when you were studying. This will get easier next year as more, smaller “simlets” make your knowledge of a broad range of topics more vital to the scoring process than your intimate knowledge of two topics is now.

Research is an important tab. It actually isn’t. It isn’t worth too many points so if you have to save anything for last, it’s research. If you have time left over, by all means, knock yourself out.

Written communications are sometimes hand-graded for correctness. Actually they don’t care at all if you are right, you just have to address the issue you are presented with using keywords and write good English use proper business grammar. It’s easy, you’re supposed to be doing this all the time via e-mail and if you aren’t, maybe you should start practicing. Caleb, this means you with your IDKs.

We will dig into the details onCP 2011’s new “simlets” on Friday.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

If I Pass CPA Exam Parts in 2010, Will I Have to Pass Them Again in 2011?

Have a question on the CPA Exam? What section is easiest? How should I study for Regulation? Are pants mandatory at the testing site? Shoot us an email with your query.

It’s the big question on everyone’s minds so we better address it now before you cute little CPA exam candidates start freaking out:

Do you know what will happen if as of December 31, 2010 I have completed two sections of the exam? Will I only have to take the remaining two sections or will I be subject to the new exam parts coming in 2011?


Good question. First of all, keep in mind that a lot of the hype surrounding the 2011 changes is:

A) CPA Review course marketing (“buy new materials! Be sure you’re up to date!”)

B) AICPA marketing (“Hey! Check out how advanced we are and how easily we can integrate a whole new set of standards into our psychometric exams!”)

C) Misinformation spread by candidates who “heard from someone” that BEC will now contain 10 simulations and all of them will be graded.

Just stop. The two biggest changes for 2011 are the addition of IFRS (which will mostly affect FAR) and communications in BEC, that’s it! That means get FAR out of the way this year if you can and throw in BEC before December if you are allergic to written communication. The exam changes twice a year anyway, this is nothing new.

Now that that’s out of the way, the rolling 18 month period also stays the same so whatever you have passed in the last 18 months will still be good. Again, if you’re freaking out about all of this, get FAR done ASAP and you will have minimal IFRS and GAAP codification garbage to deal with. A few sections are moved around (for example, business structures will be moving out of BEC) but it’s mostly the same content. REG is hardly changed at all and AUD will be one half hour shorter with more on professional ethics while BEC will be one half hour longer with written communications.

Simulations are trimmed down to “simlets” and instead of getting one topic, you have a better chance of doing well as they will be smaller and consist of several different topics. In my opinion, the exam is just getting easier.

I’m willing to bet that testing will be a bit of a bumpy ride for the first two windows of the year as the AICPA BoE gets its bearings with the new information and somewhat adjusted formats. But debits are still on the left and credits on the right so it’s not worth getting bent out of shape over; the exam will still suck and you’ll still have to study but thankfully, just like thousands of CPAs before you, you’ll rarely use anything you learned for the exam in the real world.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here and all posts on the CPA Exam here.

So Your Firm Is Going to Pay For You to Take the CPA Exam: Four Things To Remember

Have a question on the CPA Exam? What section is easiest? How should I study for Regulation? Are pants mandatory at the testing site? Shoot us an email with your query.

Not only do you have a job (congrats!) but you have a job that is willing to pay for you to take the CPA exam. Awesome! But before you load up on review materials, be sure you know what your employer expects and understand that there are situations where you can be held liable for materials if you don’t live up to your employer’s expectations.


This is Business – First of all, though you can’t claim a deduction, reimbursement of your CPA exam expenses (education, exam fees, etc) is treated as a business expense, just like any other training. If you’re desperate to get someone to help out with review course or exam fees, try selling this point to your employer.

Make the Most of Time You Have Now – If you’re in the Big 4 or anywhere down to the middle, chances are your review course fees are covered and your performance on the exam might be rewarded with a bonus. Don’t blow this! It’s easier for you to study and pass exams before you are loaded down with responsibilities and managers are much more lenient with first years looking for time off than they are if you’re in your 4th consecutive year of failing FAR. Take this seriously and realize that your firm will probably only pay once; blow it and you’re going to have to come up with retake fees on your own.

This Isn’t 2006 – Several years ago, firms would happily pay $3,000 and up for overpriced review courses with all the bells and whistles but since belts have been tightened, some are reluctant to cough up a chunk of cash without a guaranteed return on their investment. Look at this subsidy not as a gift but as additional income. Would you blow $3,000 of your own income on something and then never use it?

Ask Your Firms Lots of Questions – If your firm does not already have an agreement with a review course but is willing to pay your fees, ask lots of questions upfront and find out if you can invoice for repeats or supplemental products if you need them. One of the larger firms has a “we’ll pay for anything once” rule meaning they will only cut one check, regardless of whether it’s for $2 or $2,000. Other firms have strict rules about what you can order and when you can start (think government agencies). Regardless of how your firm works, ask about what is covered and what is expected in return.

In this economy, you can’t afford to blow a free review course and discounted or all-expense-paid trips to Prometric.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Will a CMA or CFM Get You Some Kind of CPA Exam “Credit”?

The short answer is no. The medium answer is hell no and the long answer is the rest of this post but first, let’s address the reader question, shall we?

Will any of the sections passed for the CMA and/or CFM count against the requirements for the CPA examination? In other words, can I avoid taking certain sections of the CPA examination because I have passed the CMA and CFM?


ALL candidates have to pass all four parts of the exam and for the lucky ones, there’s even a fifth part to worry about called ethics but that’s not all of you so we won’t get into that. There is no credit given for life experience, other letters after your name, certifications, and/or letters from your Mom attesting to your good moral character. You don’t get extra credit for making your written communications 15 paragraphs long, nor do you get a bonus for having the prettiest scribbles on your scratch paper. Nothing. Sorry kid but them’s the breaks.

CMAs are not automatically eligible to sit for the CPA exam simply because they are CMAs however required coursework for both credentials are similar so if you are eligible to pursue one, you may be eligible to pursue the other without additional education. This career track is best accomplished by getting an MBA or Masters in accounting, not completing your Bachelor’s and simply picking up a few extra units to fulfill the CPA’s 150 hour requirement.

If you are into it, check out some recent IMA numbers on salary potential for CMAs and CPAs. So while you won’t be able to get out of any of the usual CPA exam gruntwork, it still might be worth it to pursue anyway. And bonus, you might just be able to count your CPE units twice for both designations.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

PwC May Have Overlooked Billions in Illegal JP Morgan Transactions. Oopsie.

Now £15.7 billion may not seem like much to you if you are, say, Bill Gates or Ben Bernanke but for PwC UK, it may be the magic number that gets them into a whole steaming shitpile of trouble.

UK regulators allege that from 2002 – 2009, PwC client JP Morgan shuffled client money from its futures and options business into its own accounts, which is obviously illegal. Whether or not JP Morgan played with client money illegally is not the issue here, the issue is: will PwC be liable for signing off on JPM’s activities and failing to catch such significant shenanigans in a timely manner?


PwC did not simply audit the firm, they were hired to provide annual client reports that certified client money was safe in the event of a problem with the bank. Obviously that wasn’t the case.

The Financial Reporting Council and the Institute of Chartered Accountants of England are investigating the matter, and the Financial Services Authority has already fined P-dubs £33.3 million for co-mingling client money and bank money. That’s $48.8 million in Dirty Fed Notes if you are playing along at home.

Good luck with that, PwC. We genuinely mean that.

Inquiries mount after PwC ‘failed to notice’ mistakes [Times UK]