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Curious CPA Exam Candidate Wants the Scoop on Simulations

I’m digging deep in the mailbag for this one, only because you kids have been awfully quiet lately (a sure sign that we’re in a blackout month). If you have a CPA exam question, comment or complaint for us, please let it launch. Come on, you’re going to be sitting around for the next 2 – 3 weeks waiting for your scores, might as well.


I was wondering if you could go over what the simulations entails in FAR. I understand that the multiple choice contains 30 questions, and that there are 3 testlets. However, does the break down for the 7 simulations include more than one part.

For example, I know you will have a problem say leases, maybe a research question…but is that 1 simulation or is that 2 of 7?


Recent Grad…miserable studying…

Let’s defer to the good ole AICPA on this one, you can never go wrong getting info straight from the source. From How the CPA Exam Is Scored:

In addition to multiple-choice questions, the AUD, FAR, and REG sections also contain task-based simulations. Task-based simulations are case studies that allow candidates to demonstrate their knowledge and skills by generating responses to questions rather than simply selecting the correct answer. Task-based simulations typically require candidates to use spreadsheets and/or research authoritative literature provided in the Exam.

Well that’s not very helpful, is it?

In FAR, you’ll encounter 7 task-based simulations, of which 6 will be graded. You don’t know which TBS is pre-test so you have to go into it as if they are all graded.

Assume that each of your simulations will be on a different topic and will only require you to complete one tab. You may see more than one research question so be sure to get in some practice in that area (and access your free 6-month subscription to the authoritative literature if you haven’t already – note that you must have a valid NTS to sign up for this).

In previous versions of the exam, one simulation consisted of several tabs. You’d have to get through two of them in 45 minutes a piece and hope you filled in enough tabs to pass. In the latest incarnation of the exam, however, you will receive more varied topics. This works in your benefit as you have a better chance of getting TBS problems on areas you feel comfortable in, whereas in the old exam you had to hope and pray you didn’t get a simulation on a topic you didn’t study well or suck hard in, as you were just about guaranteed to bomb it.

Then again, in the old exam you could blow the sims and still have a chance to pass. Nowadays, however, you don’t have that luxury as simulation problems carry a heavier weight point-wise.

That said, you’ll want to do the tutorial on the AICPA’s website. While review course materials can come close to simulating the actual exam environment, the CPA exam remains the intellectual property of the AICPA, therefore no review course can copy simulation problems exactly. But since the AICPA provides that tutorial, it has the exact look and feel of the questions you will see on the exam.

CPA Exam Candidate Is Worried About IFRS in AUD

The gmailmen have delivered the following reader question:

Hey Adrienne,

I have already passed BEC back in November 2010, and am sitting for AUD next week. I know with IFRS now being included in the curriculum, I can expect to see a few questions related to IFRS topics. I only have 2009 study materials, so they do not include IFRS.

I know with FAR and REG I will most likely need to either A) Buy new materials or B) borrow another coworker’s, but as far as the AUD test, how much emphasis should I put on studying the IFRS material at this point a week before my exam. I figure a day or 2 to skim through the IFRS stuff should suffice?

Thanks in advance for the advice!

Let’s once again for the 10,000th time consult the CSOs (Content Specification Outlines) for the information we need. When in doubt, this is your go-to for what will be covered on the exam and in what concentrations. While the AICPA doesn’t give exact figures (such as “you’ll get 15 bonds questions per FAR exam”), it is a great tool for figuring out what you can blow off and what you’re going to see a lot of. Hint: no matter what the CSOs say, your particular exam will probably contain an unusually large number of questions on whichever topic you chose not to study.

That being said, the good news is that IFRS has very little relevance in Audit at all (in comparison to FAR, as you pointed out). However, international auditing standards will be tested in AUD, and that part you are going to need to know.

Can you study from outdated AUD materials and still pass? It’s certainly possible. New material only makes up 5 – 10% of the 2011 exam by my estimation (based on the CSOs, my gut feeling and feedback from candidates who have sat for the exam this year), so it’s not all that crazy to suggest that you could do really, really well on old material and still pass. Keep in mind, however, that most people do not do really, really well on any material, new or old.

I would suggest, at a minimum, picking up a used 2011 textbook from Amazon and flipping through the new material. Entire sections have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.

Think about it: the exam changes twice a year. So if you have materials from 2009, the exam has changed 4 or 5 times since then, once significantly. Normally this might mean missing a handful of questions but in the case of CBT-e, I suspect the AICPA will be testing larger numbers of new questions going forward as they get more comfortable with the new format.

Good luck!

Q1 CPA Exam Pass Rates Worst in Three Years

Jeff shared some pretty depressing news on Another71 yesterday, it looks like pass rates are down. Way down:

Auditing and Attestation:
2009 Q1: 47.61%
2010 Q1: 46.86%
2011 Q1: 43.88%

AUD passing rates are down 7.8% over 2009 and 6.4% over 2010.

Business Environment and Concepts:
2009 Q1 46.23%
2010 Q1: 46.59%
2011 Q1: 42.32%

BEC passing rates are down 8.5% over 2009 and 9.2% over 2010.

Financial Accounting and Reporting:
2009 Q1 45.54%
2010 Q1: 44.95%
2011 Q1: 42.43%

FAR passing rates are down 6.8% over 2009 and 5.6% over 2010.

2009 Q1: 47.96%
2010 Q1: 49.00%
2011 Q1: 41.28%

REG passing rates are down 13.9% over 2009 and 15.8% over 2010.

What’s strange about this is that REG was the section least changed in CBT-e, leading us to wonder if some CPA exam candidates were, in fact, better at written communication than they thought. Taking these easy 10 points out of FAR, AUD and REG could have something to do with the first quarter’s awful scores, or it could be that candidates were not familiarized enough with the new format to do smashingly this time out.

One commenter on Another71 said “I took REG and felt like I studied for the wrong exam when I saw the questions,” which I’ve heard a lot about BEC but never about REG. In fact, for the last four years I have consistently told candidates that REG is the easiest for some candidates simply due to the cut-and-dry nature of tax and business law. It is not as large and all-encompassing as FAR, nor does it require all the extensive calculations. But this information could be game-changing.

The other strange fact here – and I have no specific numbers on this, going on my perception based on comments I have received from candidates who tested last quarter – is that for those who did pass, it seemed like many of them scored in the high 80s and 90s, as opposed to the usual large number of 75 – 79s like I usually see from passing candidates. Since I didn’t actually aggregate any real data, it’s hard to say whether or not this is an important point to mention. Perhaps I’ll try harder next quarter to get some actual numbers.

It’s also important to recall my conversation with the AICPA earlier this year when we discussed the possibility of changing the passing score in 2011. The exact statement was “In terms of the score reported to candidates, right now the passing score on that reported scale is a 75 and it’s going to remain there because we want to have consistency over time” from John Mattar, Director of Psychometrics and Research. What I took that to mean was that a 75 last year may or may not be the same as a 75 last year, which could explain why more candidates missed the mark this time around.

What do you think?

AICPA Updates Their 2011 Score Release Timeline

A few months back, we got a few moments with the AICPA examinations unit for insight on CBT-e and, most notably, the updated score release plan for this year.

Now it looks like the AICPA has updated their 2011 score release timeline with more details on changes to scoring later in the year, specifically an improvement that will allow them to release scores earlier for the October/November testing window which we first told you about in January. At that time, we were forbidden from telling you how frequently the AICPA wanted this to be but now that they’ve updated the FAQ, this information is all yours to enjoy:

Q. When can I expect to receive my scores after October 2011?

A. During the 2006-2010 testing windows , candidate scores were released in two rounds: The first round approximately one week before the end of the testing window, and the second approximately two weeks after the end of the testing window. In addition, not all candidates who tested early in a window were eligible for the first round of score release. Candidates who took test forms with new test content that required additional analysis and review before scoring were not eligible for the first round of score release.

With CBT-e, improvements have been introduced into the process. Beginning with the October/November 2011 testing window, scores will be released faster and more frequently.

The first round of score release will be approximately one month after the beginning of the testing window. Subsequent score releases will be made every two weeks after the initial release.

In addition, with very few exceptions (see below), candidates who test early in a window will be eligible for the first round of score release.

What are those exceptions? Amazingly, those taking BEC should not expect to get their scores early. The AICPA states that candidates taking BEC will have to wait a little longer for their scores just in case their written communication problems need to be analyzed by the AICPA’s skilled team of robots and/or human beings. They have always been (purposely?) vague about how written communication is graded and we will have to wait for a later talk with their examinations unit to see if we can get more insight on this process, specifically whether or not it will be changing with CBT-e.

Q. Are there any differences in score release by Exam section (AUD, FAR, REG, BEC)?

A. Yes. Candidates who take the BEC section may get their scores in a subsequent release due to additional analyses that may be required for the written communication tasks. Also note that written communication tasks now appear in the BEC section only.

Don’t get disappointed; overall, changes to scoring will improve over previous years and this is a work in progress, meaning the AICPA is working to tweak the candidate experience for the better based on their analysis throughout the year and beyond.

CPA Exam Debuts Internationally in August

For those of you interested in taking the CPA exam in wild locales such as Bahrain or Kuwait, wait no longer, the CPA exam is officially international beginning August of 2011.

Initially announced along with CBT-e, international testing appeared to be slated to begin in January but security issues and further testing necessitated the delay.

So far Bahrain, Kuwait, Japan, Lebanon, and the United Arab Emirates (UAE) are the only countries in which the exam will be administered. After a long two year analysis, NASBA, AICPA and Prometric determined those areas to meet their stringent safety and security guidelines.

We know what you’re thinking. Bahrain?! According to the three agencies, candidate volume demand as demonstrated by candidates from those countries taking the exam in the United States was a huge factor in deciding where to administrate the exam. Sure, Japan seems like a no-brainer but up until now, international candidates have been forced to obtain a visa to physically appear in the United States for their exams, often for marathon sessions of more than one test in a two or three day period.

Other factors in deciding which countries included:

• The ability to deliver the Exam without legal obstacles.
• Security threat to the Exam (both physical security at test center and intellectual property security of Exam content) assessed at levels equivalent to those presented domestically.
• Existence of established Prometric test centers.

Other countries were analyzed ahead of this announcement but I know of at least a handful that were determined unfit for test administration based solely on security issues in those countries. Being proprietary and more heavily guarded than Colonel Sanders’ 11 herbs and spices, protecting CPA exam content was likely one of the largest concerns involved in taking the exam international.

While candidate volume and interest in the exam is also high in countries like India and Korea, security concerns are equally as high (if not higher), therefore excluding these areas for the time being. My understanding is that the AICPA is open to expanding international testing in the future and just with CBT-e, will be monitoring the situation closely after launch, ready to adjust based on results. International candidates will still have to apply with the state board of their choice and are invited to use NASBA’s Accounting Licensing Library to search for a jurisdiction in which to apply.

The AICPA Talks to Going Concern About the New CPA Exam

Because I genuinely care about the well-being of you little CPA exam candidates out there, I recently put aside the inflammatory nonsense for a moment and took some time out of my busy schedule to chat with the AICPA about the new CPA exam that they were proud to say launched early this month without a hitch. We’re pretty excited about that too, mostly because it means we can finally stop talking about 2011 changes and get back to talking CPA exam strategy, which is largely unchanged as a result of CBT-e.

We here at Going Concern value reader input (even if we do value chastising said reader just as equally) and therefore reached out t//”>your input on the sorts of questions we should ask. You spoke and we listened so let’s cut right to the chase and give you some answers.

John Mattar, Ed.D., Director of Psychometrics and Research and Mike Decker, Director of Operations and Development, both of the AICPA Examinations Team, were kind and brave enough to speak with me and give me plenty of insight on the brain behind the new CPA exam.

First of all, we need to talk scoring as that’s the one thing you guys have complained about consistently since the exam went computerized in 2004 (except for written communication but that is an entirely different issue). We’re proud to tell you that we can finally say with certainty that the AICPA will not be changing the passing score from 75 moving forward. That’s right, put down your flaming pitchforks, all you 74s who were ready to flip should the score have been lowered to 70. “In terms of the score reported to candidates, right now the passing score on that reported scale is a 75 and it’s going to remain there because we want to have consistency over time,” John told us.

That means a 75 last year might not necessarily be the same as a 75 this year but a 75 is still passing and that’s what matters. As we all know, the AICPA uses a complicated and mysterious psychometric formula to determine weights for each question and bases a candidate’s score on this formula. It isn’t for you, little candidate, to worry about how they come up with their numbers nor should you feel as though the AICPA gets some sick thrill out of seeing you get a 74. Believe it or not, they’re neutral. They don’t care if you pass or fail, they only care about overseeing a professional examination that successfully tests the knowledge base of entry-level CPAs in the United States. That’s it.

Second, while the AICPA will be using a single score release formula for at least the first three testing windows of the year, candidates can anticipate a new and improved score release system that will hopefully be introduced by the end of the year. This means all candidates who test early in their window will be eligible to receive their scores in the first release and all other candidates can expect to receive their scores in more frequent batches through the end of that window’s blackout month. So forget the Wave 1/Wave 2 nonsense. “Due to a lot of the work we’re doing on the backend, we’re going to be able to release scores faster. We’re not actually going to be able to release the scores earlier until the 4th quarter because we need to do a greater analysis in the first three quarters,” Mike said. So while you guys see the new simulations and international content on the frontend, it’s important to remember that a lot of time and effort went into improving the backend of the CPA exam and faster scoring is one such improvement that we can expect to see by the end of the year. But these changes come at a price so be patient while the AICPA works through the first three windows of this year to finalize their new scoring process.

If you haven’t already, I recommend you check out How the CPA Exam is Scored for more details on this process. Expect an update to that document when new scoring takes effect later in the year.

As for CBT-e content, I initially congratulated the AICPA for finally streamlining some questionable areas of the exam (especially BEC) in the updated CSOs/SSOs but forgot that they don’t actually come up with content on their own. You can thank an extensive practice analysis and subsequent input from practicing CPAs for the CPA exam you know and love today, a process that takes into account input from the profession on what entry-level CPAs should know. That means the introduction of international financial reporting and auditing standards is entirely independent of the SEC’s do-we-or-do-we-not IFRS roadmap. This should be a comfort to some of you who are wondering just how much IFRS will appear on the exam in coming windows as it means the exam will most likely continue to test remedial international content and will mostly focus on major differences between IFRS and GAAP. Entry-level CPAs in the U.S. are not expected to be experts in IFRS, just as they are not expected to be experts in cost accounting, government accounting, non-profit accounting or any number of areas that have been consistently tested on the CPA exam for years now.

The best news is that though the e in CBT-e stands for evolution, those expecting to take the exam in 2012 or beyond shouldn’t expect such a large overhaul as we just saw any time soon. “We don’t plan to change the exam,” John said. “What we plan to do is keep the exam current with the profession to protect the public interest. If we do have significant changes in test content we would have to let candidates know in advance.”

That being said, the largest takeaway I got from my conversation with the AICPA was that they are simply interested in providing a consistent examination that continues to evolve to meet the needs of the profession. I swear to you that they really don’t get a sick thrill out of torturing you guys with changes, scoring delays and new content though it may appear that way sometimes, especially if you’re in the 74 x 3 club. It’s their job to make sure that the CPA exam represents the best interests of the profession, which means revising their strategy to keep up with the evolution of the industry.

We applaud the AICPA on a job well done and congratulate them for a successful CBT-e launch. So far, candidate feedback I have gotten on the new exam format has been mostly positive, which means that their hard work was totally worth it.

The AICPA, NASBA and Prometric Announce Successful Launch of the New CPA Exam

Even though only two testing days passed from the time CBT-e launched and the time the press release came out, the AICPA, NASBA and Prometric are very excited to announce the successful launch of the new CPA exam.

Via the AICPA:

The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy, and Prometric today launched the new Uniform CPA Examination, called CBT-e, which includes for the first time questions on International Financial Reporting Standards among other sweeping and significant changes.

Changes were approved by the AICPA Board of Examiners based on input from state boards of accountancy in response to an Invitation to Comment, and a Practice Analysis designed to ensure the exam tests the modern knowledge and skills that are relevant for today’s entry-level CPAs. The new IFRS questions and other changes to the exam are the first major revisions since the CPA exam was computerized in 2004.

Overall, more emphasis is being placed on skills assessment using case study-based questions known as Task-Based Simulations. Authoritative literature in the CPA exam incorporates use of new Financial Accounting Standards Board codifications of U.S. Generally Accepted Accounting Principles. Professional responsibilities including ethics and independence have been added to the Auditing and Attestation section.

“The testing of IFRS knowledge and other international standards is a response to change in the business world in which new CPAs operate,” said Craig Mills, vice president of examinations for the AICPA. “We are proud and excited to be introducing innovations in this evolution of the computer-based test that both validate and update the content of the exam and improve the experience for candidates. The exam is one of three key requirements, along with education and experience, that help state boards and the profession maintain the highest standards and protect the public interest.”

In related news, I will be speaking with the AICPA this afternoon about the new exam and thanks to your input, will be interrogating them on score releases, potential changes to passing scores, the integrity of the exam (since the old timer paper and pencil folks continue to rag on the new exam as too easy) and the continued evolution of exam content beyond 2011. I’d like to ask them when the hell BEC is going to be more than a junk drawer but having seen some of the new 2011 content on that section, I have to say it looks like they are working on consolidating the most random CPA exam section into a more streamlined piece of psychometric awesomeness. It isn’t too late to get me your questions for the AICPA’s exam unit so if you have one that you haven’t gotten to me yet, get on that or drop it in the comments and I’ll try to sneak it in.

I’ve also spoken to at least a handful of candidates who tested last week and so far feedback is positive on the new format as I suspected it would be. For the love of Excel, please don’t get stressed out over international standards as you shouldn’t expect to receive an exam made up of 70% new content. Try 5 – 10% max.

Update to come on Friday.

What Would You Ask the AICPA About the New CPA Exam?

Lucky me, I’ll be speaking with the AICPA about the successful launch of CBT-e as well as grilling them about the new format, their motivation behind the change, and all this nonsense about changing the passing score from 75.

Because you guys are the ones taking the exam and I’m just the one writing about it, I figured it would be appropriate to give you all the opportunity to weigh in on what I should ask. I swear I’m not being lazy as I have plenty of my own questions to ask but thought it might be nice for all of you with questions to have the chance to get them answered directly from the source.

You’re welcome to put your suggestions in the comments or, if you’re embarrassed because your question also makes you look like a big fat failure, please feel free to email me and I promise I’ll guard your identity like Caleb guards his yoga mat.

Don’t Wait at the Mailbox for Your CPA Exam Score This Year

On top of content and cosmetic changes for the CPA exam in 2011, the AICPA has pledged to deliver scores more quickly and efficiently by replacing the current random two wave system with a simple, single release during the blackout month.

Here’s how it has worked up until now: depending on when you sit for the exam, you can get your scores in either Wave 1 or Wave 2. Wave 1 includes most people who tested early in the window and Wave 2 is (supposed to be) released before or during the blackout month (that’s March, June, September and December) so you can get a new NTS and reschedule a failed part in the next window. Anyone who has waited for a score in the last few windows can tell you this system is flawed and obviously under quite a bit of pressure with increased applicant volume in recent months.

But for the first three windows on 2011, the AICPA is going to try out a new score release system that would mean those who test in January/February will receive their scores in one release in March. Apr/May will be released in June and July/Aug will be released in September. That means California applicants better hope scores come out early in the blackout so they have time to submit a reapplication and wait for a new NTS as the Board of Accountancy there has been overwhelmed with new applicants and current CPA exam candidates, with three fewer days a month to process everyone thanks to Furlough Friday. Unfortunately for them, it looks like scores will be released at the end of each blackout month.

For now, a passing score is still 75 but the AICPA plans to take data from the first window of the year as it considers changing that going forward. Better get in those exam parts while you can!

The AICPA claims that those testing in the fourth quarter can expect an accelerated release but with all these changes and fancy new tricks up the AICPA’s sleeve, I wouldn’t hold my breath.

Making CPA Exam Resolutions for 2011

I can’t believe the year is over and have already gotten my 2010 CPA exam rant out of the way so the following is specifically for those of you excited to get started on the brand-spanking new (not so new) CBT-e CPA exam that launches anew on January 1 or, more specifically, January 3rd, 2011. Or maybe January 4th. Anyway…

Last year, you probably swore up and down you’d be done with all four parts AND the ethics exam (for those of you who actually have to take one) by now but life happens and your plans fell through so instead of making unrealistic resolutions only to be disappointed, let’s tackle this the conservative way.

Don’t bite off more than you can chew One part per window is reasonable unless you are going to end up fired or divorced if you don’t get your CPA in the next two months. If you want to be ambitious and take two in a window that’s fine but the easiest way to get through it is by taking it slowly and carefully. Give each section the time it needs to get embedded in your brain just long enough for you to spit it all out, pass, and move on to the next section. There are always exceptions to the rule (and I’m sure they are going to take this opportunity to remind us how exceptional they are in the comments) but odds are you aren’t the exception so don’t try to overachieve, you don’t get bonus points for most failed attempts or most parts attempted in one testing window.

Plan! I can’t say it enough: if you don’t have a plan, you’re going to bomb miserably unless you’re one of those fantastic freaks who somehow pulls it off despite all your best procrastinating. If you’ve ever made a New Year’s resolution to lose weight, think of your CPA exam plan in the same way you might approach weight loss. If you don’t plan out a specific diet and exercise plan, you’ll be shoveling cookies down your pie hole within a week.

Schedule. As in right now. If you wait until the last minute to schedule your exams (you know who you are, I talk to you all the time and you’re always sort of generally scheduled to take the exam “at the end of the window”), you’re missing an important motivator that can actually encourage you to study. If you schedule early, you’ve got actual dollars invested in an exam part and a big fat carrot to dangle in front of your face when you’re in the mood to blow off studying. Not just that but you have an actual day to circle on the calendar, which will help you when you’re planning how much time to spend studying in the days before.

Hope that helps and Happy New Year to all of you, see you next year!

P.S. – Please get in touch with us after the 4th with any and all (legal) feedback on the new CPA exam format, we’re excited to hear your thoughts on the AICPA’s exam makeover!