Posted on 26th Apr 2010 @ 12:46 PM

CPA Exam Basics

Contributed by Lambers CPA Review

I.
The majority of the computer-based CPA examination (70-80 percent) is made up of multiple-choice questions. Each section of the exam will consist of “testlets” which are the multiple-choice questions, and two “simulations.”

Part Four, Business Environment and Concepts (BEC), has no simulations, only multiple-choice questions. BEC simulations will be added later.

According to the AICPA web site:

“The multiple-choice portion of the examination will appear as sequential testlets. Testlets are groups of questions that are constructed to appear together. Each exam section will include approximately three multiple-choice testlets. Each testlet will contain approximately 25 operational items (questions).”

The testlets will be “tracked” in that the second and third testlet will be adjusted by the computer to an easier or harder version. This will be based on the candidate’s performance on the first testlet. The candidate won’t know what version is on his/her computer screen. The third testlet may or may not be adjusted up or down. The system is equitable because the grading is also adjusted according to the track of the questions; if the student has a hard track, fewer questions need to be answered correctly; likewise, an easy track requires that more answers be correct.
 
The CPA Exam consists of the following number of multiple-choice questions:

AUDITING & ATTESTATION (90)
REGULATION (72)
FINANCIAL ACCOUNTING & REPORTING (90)
BUSINESS ENVIRONMENT & CONCEPTS (90)

During the exam, within each testlet, you may review and change any of your answers. Once you have exited the testlet, you will not be able to access your answers to any of the questions. The same is true for the simulations portion of the exam. Note that the time clock on the screen is “cumulative” and indicates the time left for the entire exam, not just a portion.

II.
While the majority of the test is multiple-choice questions, a key part of the exam are the “simulation” questions. According to the AICPA web site, simulations “are condensed case studies that will test candidates’ knowledge and skills using real life work-related situations.” The CPA exam candidate can expect two simulations to appear in each section with the exception of Part Four—Business Environment and Concepts. The simulations will take an estimated 35-45 minutes to complete, and will require the following:

“CPA candidates are expected to know how to use common spreadsheet and word processing functions, including writing formulae for spreadsheets. They must also have the ability to use a four-function calculator or a spreadsheet to perform standard financial calculations. In addition, candidates will be asked to use online authoritative literature. Many of the question types used in the simulations are based on familiar computer interface controls (e.g., text entry, mouse clicks, highlighting, copy and pasting). In order to become familiar with the electronic tools provided for research questions, further practice may be required.”
 
Available resources during the test will depend on the simulation that the candidate receives.

Incorporated into the simulation portion of the revised exam will be an assessment of written communication skills. The exam will test typical communications an entry-level CPA would write on the job, such as memoranda, client letters, etc.

To become familiar with navigating the computerized exam screen, it is strongly advised that the candidate visit the AICPA web site tutorial.

Entry-level CPA skills to be measured:

1. Analysis: The ability to organize, process, and interpret data to develop options for decision making.
2. Judgment: The ability to evaluate options for decision-making and provide an appropriate conclusion.
3. Communication: The ability to effectively elicit and/or express information through written or oral means.
4. Research: The ability to locate and extract relevant information from available resource materials.
5. Understanding: The ability to recognize and comprehend the meaning and application of a particular matter.

Writing skills to be graded:
1. Coherent Organization. Candidates should organize responses so ideas are arranged logically and the flow of thought is easy to follow. Generally, short paragraphs composed of short sentences, with each paragraph limited to the development of one principal idea, can best emphasize the main points in the answer. Each principal idea should be placed in the first sentence of the paragraph, followed by supporting concepts and examples.

2. Conciseness. Candidates should present complete thoughts in the fewest possible words while ensuring important points are covered adequately. Short sentences and simple wording also contribute to concise writing.

3. Clarity. A clearly written response prevents uncertainty about the candidate’s meaning or reasoning. Clarity involves using words with specific meanings, including proper technical terminology. Well-constructed sentences also contribute to clarity.

4. Use of Standard English. Responses should be written using Standard English. Standard English is used to carry on the daily business of the nation. It is the language of business, industry, government, education, and the professions. Standard English is characterized by exacting standards of punctuation and capitalization, by accurate spelling, by exact diction, by an expressive vocabulary, and by knowledgeable choices.

5. Responsiveness to the Requirements of the Question. Answers should address the requirements of the question directly and demonstrate the candidate’s awareness of the purpose of the writing task. Responses should not be broad expositions on the general subject matter.

6. Appropriateness for the Reader. Writing appropriate for the reader takes into account the reader’s background, knowledge of the subject, interests and concerns. Some questions may ask candidates to prepare a document for a certain reader, such as an engagement memorandum for a CPA’s client.

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