computerizing the cpa examination presented to the 2003 aplg meeting by richard devore
TRANSCRIPT
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Computerizing the CPA Examination
Presented to the
2003 APLG Meeting
by
Richard DeVore
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Agenda
• Computerizing the CPA Exam• Examination Structure,
Content, and Length• Transitioning and
Conditioning• Overview of CBT• Demonstrations of Simulation
Prototypes
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CPA Examination Mission Statement
“To admit individuals to the profession only after they have demonstrated the entry-level knowledge and skills necessary to protect the public interest in a rapidly-changing business and financial environment.”
Continue To Protect The Public Interest
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Periodic Changes Needed
• Maintain the confidence of various constituencies
• Provide a comprehensive assessment of the entry-level knowledge and skills required by CPAs in changing business and financial environment
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What’s Changed?
• Rapidly Changing Business World
• Rapidly changing role of the CPA– Demands for broader-based financial services
– Expansion of the attest function
– Need for professional adaptability and flexibility
– Rapidly-changing technology environment
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Change in Entry-Level Practice
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What We Need FromA New Exam
• The Ability to Test:– Recall of foundational
knowledge– Research skills– Analytical skills– Integrated knowledge and skills
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What We Need FromA New Exam (cont’d)
• The Availability of:– Access to authoritative literature– Current technological tools– Secure computerized test system– Secure administrative conditions– Year-round testing
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Responsibility for Decisions
• AICPA Board of Examiners– Content Committee
• Preparations Subcommittees
– Psychometric Committee– Education Task Force– Communication Task Force– Systems Oversight Task Force– Other task forces and working
groups
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Outreach to Stakeholders
• Mechanisms to Guide Policy– Exposure Draft on Structure and
Content (Feb 2001)
– Briefing Paper #2 (Mar 2001)
– Exposure Draft on Transitioning & Conditioning (Nov 2001)
• Focus groups of students and young professionals (Summer 2001)
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Outreach to Stakeholders
• Education Task Force– Working with AAA– Looking at curriculum and
other academic-related issues– Help students and educators
prepare for the transition to CBT
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Outreach to Stakeholders
• Ongoing Communications– New Web site with practice
materials and tutorials• (www.CPA-exam.org)
– Exam Alert• (contact [email protected])
– E-mail updates to stakeholders
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BOE Decisions
Examination Structure, Content
and Length
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Examination StructureChanges
• New mix of content groupings• New section• Testing of skills• Testing of knowledge integration• Length of Exam
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Examination Structure
• 4 Independent Sections– Auditing & Attestation
– Financial Accounting & Reporting
– Regulation
– Business Environment & Concepts
(NB: Full Content Specs available on website)
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Auditing & Attestation
• Auditing Procedures• Generally Accepted Auditing
Standards• Other Standards Related to Attest
Engagements• Skills Needed to Apply That
Knowledge
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Financial Accounting & Reporting
• Generally Accepted Accounting Principles for:– Business enterprises– Not-for-profit organizations– Government entities
• Skills Needed to Apply That Knowledge
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Regulation
• Federal Taxation• Ethics• Professional and Legal
Responsibilities• Business Law• Skills Needed to Apply That
Knowledge
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Business Environment & Concepts
• Knowledge of Underlying Reasons and Implications of Business Transactions
• Skills Needed to Apply That Knowledge in Audit and Attest Engagements
• To Be Tested In Context of Entry-Level CPA Practice
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Business Environment & Concepts (2)
• Economics
• Planning and budgeting
• Corporate financial management
• Cost measurement and pricing
• Management
• Information identification, control, and analysis
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Comparison to Current Exam
AUDIT Audit & Attest
LPR Regulation
FARE Account & Report
ARE – Tax Regulation
ARE – Govt Account & Report
ARE – Mngrl Business Environ
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Examination Length
• 14 Hours– In Total for Four Sections
• Primary Considerations– Psychometric Reliability– Adequate Content Coverage
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Proposed Section Lengths
• Auditing & Attestation – 4.5 hours
• Accounting & Reporting– 4 hours
• Regulation– 3 hours
• Business Environment & Concepts– 2.5 hours
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Examination Format
• Multiple-Choice Questions• Case-Based simulations
– Test integrated knowledge
– More closely replicate real world
– Assess research, analytical skills
– Various question formats
– Business simulations 2005
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Exam Expectations
• Exam success will require less memorization, more application
• Candidates expected to do their work on a computer
• Candidates expected to have technology knowledge, as well as computer skills
• Candidates expected to integrate across accounting areas
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Conditioning and Transitioning
Recommendations,Rationale,
&Benefits
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Conditioning Policy
• Candidates can sit for each section individually and in any order
• All 4 sections – including the first one taken – must be passed within a “rolling” 18 month period
Conditioning
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Conditioning Policy(cont’d)
• No minimum score requirement for failed sections
• Failed section(s) cannot be retaken within same window
• Credit for passed section(s) retained for 18 months
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Major Benefits of Conditioning Policy
• Protects the Public– Tests breadth of knowledge &
skills within a reasonable time period
• Increases fairness to candidates by eliminating minimum scores– Each section is independent
• Increased flexibility for candidates
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Major Benefits of Conditioning Policy (2)
• Allows Candidates to Focus Their Study and Prepare For Each Section
• Overall Cost to Candidate is Reduced– Not required to sit for sections not
prepared to pass
– No retake of passed sections due to score on failed sections
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Transitioning
• How do you equate the current sections of the CPA exam to the revised sections?
• Upon launch, how do you treat candidates who have conditioned under the paper & pencil test?
Issues to
Consider
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Transitioning
Policies
Paper-Based CBT1. Audit 1. Audit & Attest
2. Fin’l. Acctg. 2. Fin’l. Acctg. and Reporting and Reporting
3. Acctg. and 3. Regulation Reporting
4. Law & Prof. 4. Bus. Environ & Responsibilities Concepts
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Transitioning
• Conditioned candidates have same number of testing opportunities within same time period remaining
• Candidate can establish credit for sections passed under CBT even if paper and pencil conditioning is lost
Policies(cont’d.)
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Moving Forward
Getting
From Here
To There
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Launch Date
• November 2003 -- Last Pencil and Paper Administration
• Early 2004 -- First CBT Administration Window
• Will Exams Run in Tandem?– No
Getting from here to there
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Computer-Based Testing
• Roles and Responsibilities of State Boards of Accountancy and AICPA Basically Unchanged
• AICPA Remains the Examination Provider
• State Boards of Accountancy Determine if a Candidate has met Requirements to Test
How CBT Will Work
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The Testing Process
• CPA Examination Delivered at Prometric and State-Operated Testing Centers
• Candidate Registers with Prometric (phone or web)
• Candidate Takes the CPA Examination at a Prometric or State-Operated Testing Center
How CBT Will Work
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The Testing Process
• The Process (continued)– Prometric Forwards Results to
AICPA
– AICPA Compiles and Forwards Advisory Grades and Diagnostics to Jurisdiction
– State Board Advises Candidate of Grades
How CBT Will Work
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Examination SecurityIn A CBT Environment
• Test Administration– 2 IDs– Double log-on to computer– Candidate sees only one item
at a time– Video camera and walk through
surveillance– Exit checks
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Critical Path Issues
• Key Milestone Areas Include:– Item Development & Pretesting– Tutorials & practice materials– Systems Development– Communications– Legislation
Getting From HereTo There
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Simulations
• Definition:
Assessment of knowledge and skills in a context approximating that found on the job through the use of realistic scenarios and tasks, and access to normally available and familiar resources.
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Simulation Question Types
• MC • Drop-down selection lists• Check boxes• Spread sheets (enter, drag & drop,
formula)• Forms completion• Written communication• Research (access to standards,
codes, search engines)
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Advantages of Simulations
• Affordable performance testing• Skills assessment• Integration of content • Multiple correct answers • Partial credit• Access to resources• Innovative item types• Workplace realism
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Simulations Design
• 20 – 40 minutes in length• Complementary to MC portion of
test• Aimed at entry-level• Developed by educators and
practitioners• Approved by practitioners• Practice related
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Simulations Interface
• Tab–style screens• Consistent across simulations and
tests• Mouse-driven response• Full-screen on 17” monitors• On-line resources available• Split-screen capabilities• Review capabilities within a
simulation
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Simulations Scoring
• Multiple points per task/question• Contingent scoring accommodated• Partial credit possible• Variable credit per task possible
(i.e., credit related to importance)
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Demonstrations of Simulation Prototypes
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AND NOW...