The Uniform CPA Examination19th Brazilian Accounting CongressAugust 27, 2012

Dr. Craig N. Mills

2The Uniform CPA Examination™

The U. S. CPA License

The license is granted by individual states• Education: 150 hours of college credit

with a certain amount in accounting• Experience: 1 year• Examination: Pass all 4 sections of the

U.S. Uniform CPA Examination within an 18 month period

3The Uniform CPA Examination™

Continuing Professional Education

Required to keep the license• Average is 40 hours per year• States audit a sample of license holders

to check their Continuing Professional Education

• People who do not pass the audit usually have their license suspended for at least a year and have to pay a penalty

About the Uniform CPA Examination

5The Uniform CPA Examination™

Protect the Public InterestContent Design for Uniform CPA Examination:• Required knowledge and skills for entry-level

CPAs • Ensures protection of public interest

Criteria for determining knowledge/ skills• Relevance to work of entry-level CPAs

- Importance to work of entry-level CPAs- Frequency of use by entry-level CPAs

6The Uniform CPA Examination™

Uniform CPA Examination Structure

4 Sections• Audit and Attestation (AUD)• Business Environment and Concepts

(BEC)• Financial Accounting and Reporting

(FAR)• Regulation (REG)

7The Uniform CPA Examination™

Uniform CPA Examination Structure

SectionTime

(Hours) Content

AUD 490 Multiple Choice Questions 7 Task Based Simulations

FAR 490 Multiple Choice Questions 7 Task Based Simulations

REG 372 Multiple Choice Questions 6 Task Based Simulations

BEC 372 Multiple Choice Questions 3 Essays

Uniform CPA Examination Trends and Volume

9The Uniform CPA Examination™

107,954

178,266

202,354

224,494

247,351

307,573

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Total Volume Calendar Year Total Volume

2004 (Apr-Dec) 2005 2006 2007 2008 2009 2010 2011

266,874248,374

Domestic Volume Domestic Volume

13.5% Increase

10.2% Increase

10.9% Increase

7.9% Increase

15.3% Increase

19.2% Decrease

10The Uniform CPA Examination™

Uniform CPA Examination Pass Rates (%)

  2010 2011

AUD 47.80 45.62

BEC 47.29 47.13

FAR 47.81 45.57

REG 50.66 44.22

IFRS and the Uniform CPA Examination

12The Uniform CPA Examination™

IFRS on the Uniform CPA Examination

IFRS is already entry-level practice and many CPAs are now using IFRS• CPAs who work for companies in the U.S.

that are owned by foreign IFRS entities.• CPAs who work for companies in the U.S.

that own foreign entities reporting in IFRS.• Auditors who audit companies that report

under IFRS, or who audit their subsidiaries who report under IFRS.

13The Uniform CPA Examination™

Sample IFRS Question #1

On July 1, year 2, a company decided to adopt IFRS. The company’s first IFRS reporting period is as of and for the year ended December 31, year 2. The company will present one year of comparative information. What is the company’s date of transition to IFRS?

A) January 1, year 1.

B) January 1, year 2.

C) July 1, year 2.

D) December 31, year 2.

14The Uniform CPA Examination™

Sample IFRS Question #1

On July 1, year 2, a company decided to adopt IFRS. The company’s first IFRS reporting period is as of and for the year ended December 31, year 2. The company will present one year of comparative information. What is the company’s date of transition to IFRS?

A) January 1, year 1. See Note A

B) January 1, year 2.

C) July 1, year 2.

D) December 31, year 2.

Note A: The date of transition is the beginning of the earliest period for which an entity presents full comparative information under IFRS in its first IFRS Financial Statements (IFRS 1, Appendix A).

15The Uniform CPA Examination™

Sample IFRS Question #2

A company determined the following values for its inventory as of the end of its fiscal year:

  Historical cost $100,000

Current replacement cost 70,000

Net realizable value 90,000

Net realizable value less a normal profit margin 85,000

Fair value 95,000

Under IFRS, what amount should the company report as inventory on its balance sheet?

A) $70,000

B) $85,000

C) $90,000

D) $95,000

16The Uniform CPA Examination™

Sample IFRS Question #2

A company determined the following values for its inventory as of the end of its fiscal year:

  Historical cost $100,000

Current replacement cost 70,000

Net realizable value 90,000

Net realizable value less a normal profit margin 85,000

Fair value 95,000

Under IFRS, what amount should the company report as inventory on its balance sheet?

A) $70,000

B) $85,000

C) $90,000

D) $95,000

Inventories are measured at the lower of cost and NRV (IAS 2, par. 9).

International Administration of the Uniform CPA Examination

18The Uniform CPA Examination™

International Delivery – 12Q1 Pass Rates

AUD BEC FAR REG0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

JapanMiddle EastDomestic

New Test Questions

20The Uniform CPA Examination™

Original MCQ

21The Uniform CPA Examination™

MCQuel Item, Sample: Time value of money calculation

22The Uniform CPA Examination™

MCQuel Item, Sample: Time value of money calculation

23The Uniform CPA Examination™

MCQuel Item, Sample: Time value of money calculation

24The Uniform CPA Examination™

MCQuel Item, Sample: Time value of money calculation

25The Uniform CPA Examination™

MCQuel Item, Sample: Time value of money calculation

Thank YouCraig N. Millscmills@aicpa.org