Let’s skip the pleasantries and get right into what you’re dying to know, how bad is Regulation going to be next year?
Things they are a-changin’…but not much – The good news is that REG is hardly changing at all. After all, you can’t test international standards of federal taxation as globalization hasn’t completely taken over so don’t expect to see much different content-wise come 2011. You will see the new simulation problems and notice there are no longer written communications. But beyond the cosmetic changes, the actual content that makes up Regulation will be quite similar to what’s already being tested. Of course, that is true across the board as a good 90 – 95% of what is being tested will still be tested next year if my gut feeling is still any good. You guys have to remember – next time you are freaking out about new exam material – that CPA exam questions are difficult to develop and the AICPA Board of Examiners isn’t about to trash all their useful questions just to start testing you on the international stuff.
Tax year overlap – One thing to keep in mind when taking REG – in the first two windows of the year you can be tested on both current and former tax year numbers. This means if you take it in January of 2011 you may see 2010 tax numbers or you may see 2009 or a mix of both. Chances are the newer numbers will not make their way to the exam (hey, the AICPA BoE is super busy getting those IFRS questions in working order!) but just something to be aware of. That doesn’t mean you have to memorize tons of different tax tables but it would be wise to stay up on tax changes in the year ahead as many tax rates are still in the air at the point many review courses are rushing to go to print.
Who said anything about ethics? – Ethics and professional responsibility are moved out of REG and put back into AUD except for those pertaining to tax practice and will still be tested about the same as 2010: 15-20% versus 15-19% in 2011. Business law will carry less weight, making up 17-21% of all questions. Federal tax procedures get a boost from 8-12% in 2010 to 11-15% in 2011. Great news for those of you who really do not like taxes, federal taxation of entities gets a downgrade from 22-28% to 18-24%. Individual tax stays about the same, going from 12-18% to 13-19%. Don’t expect much of a break, it is Regulation after all.
Other than that, REG won’t see much of a change. Business structure (partnerships, et al.) has been moved out of BEC (rightfully so) and will only be tested in REG but you already know most of that stuff if you have passed either section in 2010.
If you can, I advise holding off on Regulation until the last two windows of the year so you have a better chance of getting only one year of tax numbers (the AICPA will generally test the previous year’s tax numbers) but if you are looking for a good one to hold off on taking until next year ahead of the CBT-e changes, REG would definitely be it.
Good luck and we’ll see you on Friday!
Oh and in case you didn’t get the memo, if you have a CPA exam question for us (for example, which part can I procrastinate on until the very end of 2011?, Is farting allowed at Prometric?, How can I tell my girlfriend to leave me the hell alone and let me study? etc etc), do get in touch.