September 27, 2017

2017 CPA Exam Update

© 2017 Becker Professional Education Corporation. All Rights Reserved.

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Agenda:

The New CPA Exam - Where We Are Today

Upcoming CPA Exam Changes

CPA Exam Candidate Pipeline – How You Can Help

Q&A

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The New CPA Exam – Where We Are Today

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Exam Overview

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CPA Exam Blueprints

http://www.aicpa.org/BECOMEACPA/CPAEXAM/EXAMINATIONCONTENT/Pages/default.aspx

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Exam Structure: Financial (FAR)

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Exam Structure: Auditing (AUD)

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Exam Structure: Regulation (REG)

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Exam Structure: Business (BEC)

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2017 & 2018 Testing Windows

2017 Testing Windows 2018 Testing Windows

Jan Feb Mar

Apr May Jun

Jul Aug Sep

Oct Nov Dec

OPEN OPEN

OPEN OPEN

OPEN OPEN

OPEN OPEN

CLOSED

Jan Feb Mar

Apr May Jun

Jul Aug Sep

Oct Nov Dec

OPEN OPEN

OPEN OPEN

OPEN OPEN

OPEN OPEN

1st Qtr Window

2nd Qtr Window

3rd Qtr Window

4th Qtr Window

Open first10 days

Open first10 days

Open first10 days

Open first10 days

Open first10 days

Open first10 days

Open first10 days

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Q4 2017 and Q1 2018 Score Release Timelines

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2017 Pass Rates

Section Q1 Q2 Q3 Q4 CumulativeAUD 43.47% 52.00%BEC 50.39% 55.09%FAR 43.14% 43.76%REG 46.10% 48.32%

AICPA Commentary:• Candidate reactions to the new Exam were positive with no significant operational issues reported.• The '17Q2 Exam is a new exam with a new passing standard. Comparisons to past years and past quarters are of

limited value due to the changes in the Exam.• '17Q2 candidate performance may not be representative of future performance.• Candidates’ performance on the Exam may improve over time as candidates become more familiar with the

structure and content of a new exam.

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The Importance of a CPA Exam StrategyThursday, September 28th11am (PST), 12 pm (MST), 1 pm (CST), 2 pm (EST)

Information session with the team who develops the Exam, focusing on:• Exam content and structure• Common Exam FAQs• Key strategies for making through the Exam journey

https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=1481910&sessionid=1&key=D37E74DB4034F33B44607EF7D834E53C&deletecookie=true&sourcepage=register

AICPA/NASBA CPA Exam Candidate Webcast

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Upcoming CPA Exam Changes

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Accounting and auditing pronouncements are eligible to be tested on the Uniform CPA Examination in the later of:

1) the first testing window beginning after the pronouncement’s earliest mandatory effective date, or

2) the first testing window beginning six (6) months after the pronouncement’s issuance date.

In either case, there is a simultaneous introduction of content related to the new pronouncement and removal of content related to the previous pronouncement.

AICPA Policy on New Pronouncements – FAR & AUD

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Testability of New Pronouncements – FAR (2018 – 2020)FASB Pronouncement Issue Date Effective Date Date Testable Becker Unit

ASU 2014-09 - Revenue from Contracts with Customers (Topic 606) and related pronouncements 2015-14, 2016-08, 2016-10,2016-12

May 2014 December 15, 2017 January 1, 2018 F1

ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

January 2016 December 15, 2017 January 1, 2018 F4

ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities August 2016 December 15, 2017 January 1, 2018 F8

ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

March 2017 December 15, 2017 January 1, 2018 F7

ASU 2016-02, Leases (Topic 842) February 2016 December 15, 2018 January 1, 2019 F6

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities August 2017 December 15, 2018 January 1, 2019 F6

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments June 2016 December 15, 2019 January 1, 2020 F4

ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 2017 December 15, 2019 January 1, 2020 F4

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Testability of New Pronouncements – AUD (2018 - 2020)

AICPA/PCAOB Pronouncement Issue Date Effective Date Date Testable Becker Unit

SAS 132, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern February 2017 December 15, 2017 January 1, 2018 A1

SAS 133, Auditor Involvement With Exempt Offering Documents June 2017 June 15, 2018 July 1, 2018 A1

PCAOB Release No. 2017-001, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion

June 2017

December 15, 2017 (except CAM)

June 30, 2019 (CAM)

January 1, 2018

July 1, 2020

A1, A5

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Changes in the federal taxation area, the Internal Revenue Code and federal taxation regulations are eligible to be tested in the later of the testing window beginning six months after the change’s:

• effective date, or• enactment date.

For all other subjects covered in the Regulation (REG) and Business Environment and Concepts (BEC) sections, materials eligible to be tested include:

• Federal laws in the window beginning six months after their effective date, and• Uniform acts in the window beginning one year after their adoption by a simple

majority of the jurisdictions.

AICPA Policy on New Pronouncements – REG & BEC

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Testability of New Pronouncements – REG & BEC

Regulation Adoption Date Effective Date Date Testable Becker Unit

Regulation D, Rules 504 and 505 October 2016 January & May 2017 July 1, 2017 R8

Framework Issue Date Effective Date Date Testable Becker Unit

COSO Enterprise Risk Management Framework September 2017 NA April 1, 2018 B1

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2018 CPA Exam User Experience (UX) Redesign• AICPA is launching new, user-friendly CPA Exam software in 2018• Exam candidates can take part in the final testing of the software’s

functionality in a live test environment:– October 4 – 25 at Prometric test centers in Alabama, California, DC,

Illinois, Massachusetts, New York, New Jersey, Ohio, Pennsylvania and Virginia

– 90-minute time commitment – Candidates will experience the Exam’s new functionality, simulations in a

modernized format, and the integration Microsoft Excel. – Candidates will receive a "items correct report" a few weeks following the

preview.• To register, submit name and contact information to:

CPAExamPreview@prometric.com

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CPA Exam Candidate Pipeline – How You Can Help

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Accounting Grads vs. New CPA Candidates

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Overall CPA Exam Pass Rates

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Study found that environment drives the pathway to CPA:

• Strongest drivers for those who graduate and plan to pursue CPA:

– On-campus recruitment– Specialized majors– Pro-CPA campus culture

• Strongest factors for those who actually sit for the CPA Exam:

– Workplace requirement– Employer covers cost– Workplace encouragement and flexibility

ARC Candidate Conversion Research Findings

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Recommendations for Colleges and Universities

• Monitor students’ CPA Exam sit and pass rates

• Structure accounting programs, especially at the graduate level, to provide

students with the credits needed to sit for the CPA Exam

• Encourage students to take the exam as soon as possible after graduation

• Acknowledge students who pass the exam

• Employ faculty who are CPAs

AICPA Candidate Success Research Findings

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Recommendations for Colleges and Universities

• Invite CPAs to speak to students

• Promote free AICPA Student Membership (ThisWayToCPA.com)

• Provide student access to accounting clubs (e.g. Beta Alpha Psi)

• Tailor curriculum toward CPA Exam content and competencies

• Have faculty/staff who are knowledgeable about state CPA Exam and licensure requirements

(Source: AICPA CPA Candidate Success Research Findings, http://www.aicpa.org/InterestAreas/AccountingEducation/NewsAndPublications/DownloadableDocuments/19635-824_CPA-Candidate_success-research-findings_WEB.PDF)

AICPA Candidate Success Research Findings

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Best Practices for Improving Exam Success

• Create a study room on campus and a practice testing computer lab (if possible)

• Designate a faculty member to be the academic champion for the CPA Exam

• Offer CPA review classes on campus

(Source: Journal of Accountancy, “How Accounting Programs Can Help Students Pass the CPA Exam,” September 1, 2017)

AICPA Recommendations

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Review Designed to Fit Any Lifestyle

Focused Content Flexible Learning Options

The most currentcontent on the Exam

Relevant questions

Integratedlearning platform

Materials that mirrorthe CPA Exam

Online LiveLiveOnline

FastPass®Mobile

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Q&A

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