The current pathway to becoming a licensed CPA requires candidates to achieve a passing score across four separate competencies: audit (AUD), regulation (REG), financial accounting and reporting (FIN), and business environmental concepts (BEC). These competencies have been tested for more than 20 years, although the specific testing mechanisms (e.g., pencil and paper, online delivery), topical composition of the exam, and specific questions may vary from year to year (AICPA, Uniform CPA Examination Blueprints, May 31, 2018, http://bit.ly/2MZKW5I).
Leaders in the profession, however, have begun to question whether the competencies currently tested on the CPA exam reflect those needed by contemporary accounting and financial services professionals (“President’s Memo,” NASBA State Board Report, January 2019, http://bit.ly/2N4h3kI). This perspective was raised at regional National Association of State Boards of Accountancy (NASBA) conference meetings during the summer of 2018, and discussions regarding whether the current pathway to become a licensed CPA should be modified have been ongoing. In November 2018, the AICPA and NASBA formed a CPA Evolution Working Group to continue to examine alternatives to the current licensure model (“CPA Regulators and Profession Jointly Explore Evolving Licensure Model,” news release, Nov. 29, 2018, http://bit.ly/31HLbGK). Practitioners’ perspectives on changing the pathway to becoming a licensed CPA, however, have not been fully examined.
In light of these discussions, this article investigates accounting practitioners’ views, presenting the results of a survey that examined practitioners’ opinions of the competencies currently tested on the CPA exam. The goal of this article is to examine whether accounting practitioners believe the pathway to becoming a licensed CPA needs modification.
Profile of Participants
The authors surveyed accounting practitioners during continuing professional education courses held in July and August 2018. Among the 334 practitioners surveyed, 79.6% reported being licensed CPAs, and the average public accounting experience of each respondent was 14.3 years. About one-third of participants (34.4%) reported audit as their primary practice area, while almost half (49.4%) reported tax as their primary practice area. The remaining 16.2% reported advisory as their primary area of practice. With respect to job title, 29.9% indicated they were partners, 35.6% were managers, 14.1% were senior accountants, and 20.4% were staff accountants. Thus, survey respondents were relatively experienced accounting professionals. Exhibit 1 provides a detailed description of the demographics of survey respondents.
Exhibit 1
Demographics of Survey Respondents
The survey was a handout containing 17 questions; 11 questions pertained to practitioners’ sentiments on current and proposed pathways to becoming a licensed CPA, while 6 questions pertained to practitioners’ demographics. Practitioners answered the pathways questions by using a 1-to-5 point scale, ranging from completely disagree (1) to completely agree (5).
Survey Results
Should it be possible to become a CPA without passing all four of the competencies currently tested on the CPA exam?
Practitioners expressed very strong support for keeping the four competencies currently tested on the CPA exam; practitioners did not, however, agree that it should be possible to obtain the CPA credential without passing all four of those competencies currently tested. The average practitioner response on this question was 1.71. Exhibit 2 illustrates these results.
Exhibit 2
Exclusion of Exam Parts
Should specific, individual competencies be removed from the CPA exam?
Practitioners were asked to indicate individually whether they supported removing each currently tested competency from the CPA exam. Practitioners objected most strongly to removing FIN, though relatively similar levels of resistance were found for removing each competency, as illustrated in Exhibit 3. Of particular interest, practitioners on average disagreed with the idea that any of the four competencies currently tested on the CPA exam should be removed.
Exhibit 3
CPA Exam Part Removal
Does practice area affect an individual’s opinion?
To determine whether respondents’ practice area affected their opinions, the authors analyzed practitioners’ responses by practice area; for example, would a tax practitioner be more resistant to removing REG than AUD? The analysis found no material differences among survey respondents by practice area, although it did find some immaterial variations among practice areas. Exhibit 4 provides a detailed description of practitioners’ response by practice area.
Exhibit 4
CPA Exam Part Removal, by Area of Practice
Of particular interest is the fact that all three practice areas were more resistant to removing FIN than their own respective areas of practice. This seems to indicate that accounting practitioners feel financial accounting reporting is the single most important competency tested on the CPA exam. Advisory practitioners were the most open to removing a specific section from the CPA exam, though their 2.22 level of support for removing REG is still below the neutral level (i.e., 3.00). In sum, no practice areas supported removing any specific competency currently tested on the CPA exam, as all mean response values equated to “disagreement” with the idea of removing a specific competency.
Should additional competencies be tested on the CPA exam?
Although practitioners strongly supported keeping the four competencies currently tested on the CPA exam, how do they feel about testing additional competencies? Some additional competencies might include data skills, such as process automation and data analytics; others might focus on data security and an entity’s capability to protect and preserve the privacy and integrity of data in the entity’s possession and control. Yet another competency might include the variety of issues related to blockchain and artificial intelligence involved in an entity’s information system. This is by no means an exhaustive (or even accurate) list of potential additional competencies, and this article does not attempt to address what those additional competencies might ultimately be.
Survey respondents were relatively neutral regarding whether additional competencies should be tested on the CPA exam, with responses indicating support of 3.20 on a 5-point scale. While this suggests practitioners are not resistant to adding additional competencies, these results cannot be interpreted as support for testing additional competencies. Examining practitioner responses more closely reveals some indication that opinion on the matter may be more polarized than the average scores suggest. Specifically, 33% of respondents “somewhat agree” that they would support adding one or more competencies to the CPA exam, while 7% “completely agree” that they would support adding more competencies. Exhibit 5 presents these findings graphically.
Exhibit 5
Additional Competency Testing
Should there be a pathway for becoming a CPA without taking an examination?
Accordingly, the authors examined whether current accounting practitioners believe that an individual should be able to become a CPA without taking a formal examination. Practitioners overwhelmingly believe that it should not be possible, as the average response was 1.41 (Exhibit 6).
Exhibit 6
CPA Credential without Exam
Discussion of Results
Regardless of their area of practice, practitioners do not support removing any one of the four existing competencies—AUD, REG, FIN, or BEC—that are currently tested on the CPA exam.
Practitioners are relatively neutral with regard to whether additional competencies should be added to those currently tested on the CPA exam, and it is unclear which specific additional competencies they would like to see added.
Practitioners also overwhelmingly disagree with the idea that an individual should be able to become a CPA without taking a formal examination.
Broadly speaking, the survey results indicate that current accounting practitioners do not believe major changes to the CPA exam are necessary at this time, casting doubt on whether they would support the AICPA’s proposal to permit alternative pathways to becoming a CPA.
It is worth noting that the number of CPA exam candidates in 2017 (the most recent year for which data has been released by NASBA) was 95,650, down from a peak of 102,320 in 2016. This trend has prompted concern regarding the number of new candidates (Sean McCabe, “NASBA Releases 2017 CPA Exam Data,” Accounting Today, Aug. 21, 2018, http://bit.ly/2OTom14). The authors speculate that part of this drop-off is caused by some degree of dissatisfaction with the current exam format. The survey results above suggest that the partial dissatisfaction observed is not with the current exam parts tested, but rather with the lack of items that should be tested but are currently not.
The authors hope these survey results will serve as food for thought as to which revisions and additions should be made to the current CPA exam. Overall, the authors believe the CPA profession, including the joint AICPA/NASBA CPA Evolution Working Group, will benefit from further discussion about the future of the CPA credential.
