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Core Changes to the CPA Exam and Profession

Gusto Editors  
Man sitting in a study area preparing for exam

The accounting world is evolving just like any other industry, as is the CPA exam and certification process. So how will CPA exam changes and shifts in the profession affect your career?

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Here at Gusto, we’re committed to keeping CPAs ahead of the curve. So we’re thrilled to share with you the latest changes sweeping the industry.

Our webinar: “Love and the CPA Exam: How to Build an Emotional Support System in Your Firm,” presents insights into running a thriving accounting firm, including how to best support candidates for the exam.  In the webinar, speaker Amber Setter laid out a few significant winds of change impacting the accounting industry and how they’ll play out in the exam. Amber is a leadership coach, an actualization coach, and a certified, non-practicing CPA. Her unique offerings center around her ability to bring a truly holistic model of awareness to organizations in tangible ways. We couldn’t be happier with Amber’s insights because they deeply align with Gusto’s vision—to support your professional well-being through education about changes in the industry.

Amber is highly experienced in working with accounting firms in multiple capacities. She coaches professionals in conscious leadership and wellness initiatives, and having taken the CPA exam herself, Amber was excited to share her knowledge with emerging accountants everywhere. 

What’s driving changes in the accounting industry?

Amber expertly explained two significant shifts impacting the exam: the AIPCA’s Practice Analysis and the NASBA’s Evolution Initiative. But before we dive in, it’s important to understand what changes to the profession are driving this evolution of the exam. And most importantly, how that affects your career.

“Both of these changes really are the reaction to how the work of the CPA has changed and how it will continue to change. There’s advances in technology, data analytics, and process automation, and that has led to changes in the skills presently required of newly licensed CPAs. And as we can all likely attest to, we know even greater changes are coming. We need to be having these conversations about also, not just what’s going on for staff accountants coming into the profession now, but what’s the evolution going to look like.”

– Amber Sutter

It’s a great time to be very aware of how the profession is evolving, so you can make the best choices for the future. And it should come as no surprise that technological acumen will play a bigger role in the profession. Knowledge of digital processes and data analysis, such as predictive analytics and information security, is critical. Yet they are not currently being taught as much as they should be in school, according to some research. Education and certification are getting a refresh to better prepare candidates for the realities of the job. But here comes a very familiar refrain: Will technology take over?

“The thing that I want to challenge you and challenge all the stakeholders with is: Where’s the humanity? Where are we teaching people how to be human? When all the computers are doing all the work, what are you doing to make sure that people are able to cross that threshold to being a trusted business advisor? That it’s not all about giving, giving, giving expertise, but it’s about questioning and active listening.”

– Amber Sutter

Amber is the advocate the profession needs. And her sentiment is true: being a CPA requires two-way communication based on much more than data. How this tradition of CPAs being a trusted advisor will play out in the future is uncertain, but CPAs can adapt to change in the industry now.

Two story open space library with students studying below for exams

AICPA’s practice analysis

The AIPCA responded to changes in the industry in an Exposure Draft titled Maintaining the Relevance of the Uniform CPA Examination. The document solicits input from stakeholders in the accounting profession while recommending exam updates that better reflect current industry practices. This includes exam content that should be added, changed, or deleted.

“This targeted practice analysis is to really assess the impact of audit analytics and technology on the work performed by CPAs. And the AICPA examination unit also re-examined the assessment of core accounting competencies that all CPAs must possess in order to practice, bearing in mind always to protect the public interest.

– Amber Setter

Research from the exposure draft began in 2019 and incorporated stakeholder feedback. The final version detailed consistency between input and recommendations in several areas. As documented in the report, these findings include:

  • Business processes such as automation, risk identification, and internal control mapping.
  • The need for a digital and data-driven mindset, including the use of data analytics. 
  • Increased reliance on System and Organization Controls for Service Organizations.

The overall goal of these recommendations is, of course, to truly train candidates for the realities of being a certified public accountant—and to trim back on outmoded education.

Today’s candidates…they’re asked to study things like, how do you amortize a bond or a lease by hand? And I get that it’s important to know some of that stuff in the back of your mind, but if you learned it in your accounting coursework, does it really make sense to be studying that now, [when it’s] something that a computer can do in a fraction of a second? Or should we really be equipping newly licensed CPAs with information that’s way more relevant, that’s going to meet the demands of how the profession has changed and how it will continue to change?– Amber Sutter

What is the CPA Evolution Initiative?

The CPA Evolution Initiative appears to be a more robust measure, taking into account changes across every aspect of the accounting profession:

“At a high level, the CPA Evolution initiative is exploring changes to licensure structure in the future, including the exam, the experience, and the education one needs to meet, to be approved to sit for the exam. Any new exam structure resulting from CPA Evolution will ultimately require a much more significant different practice analysis.”

– Amber Setter

In the summer of 2019, NASBA and the AICPA worked together to develop five guiding principles to inform the creation of a new license model. Amber explains them as the following: 

  • We must adapt quickly.
  • Technology expertise is essential.
  • Licensure requires rethinking.
  • We must expand our view of the CPA exam candidate. 
Young male sitting in library study for exam on his laptop

These principles reflect a response to a changing accounting ecosystem. Amber shared that the big four firms are not just about accounting and tax and audit work anymore. They include a high degree of significant advisory practices, who are not hiring CPAs, CPA-eligible people or accounting majors. Young professionals working in the advisory practices often desire to become certified CPAs but aren’t able to due to lack of educational requirements. Amber shared how the upcoming shifts will accommodate these advisors:

“What we’re really doing is honoring the people working in firms doing this type of work. [It] really is an ecosystem. How do we bring everybody in and prepare everybody for the way the profession is evolving?”

– Amber Setter

The CPA Evolution Initiative was created using feedback from stakeholders across the profession, including the AICPA council, state CPA societies, boards of accountancy, firms of all sizes, academia, volunteer committees, federal regulators, students, technology experts, CPAs, working in business, and young professionals. 

So what’s the breakdown of the CPA Evolution Initiative? It’s still being worked out, but follows a basic model: core skills and specialized disciplines.

Candidates will be required to know and be tested on the core skills of accounting, audit, taxes, and technology.

Next, each candidate would choose a discipline in which to demonstrate deeper skills. This could be Business Reporting and Analysis, Information Systems and Controls, and Tax Compliance and Planning. Regardless of the chosen discipline, following this model leads to CPA licensure with rights and privileges consistent with any CPA. Additionally, a candidate is not limited by their chosen discipline in the future. It’s like choosing a major, and they will still be a certified CPA who can leverage all that that entails later in their career.

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Learn more about changes to the CPA exam and profession

Significant changes are sweeping the accounting industry, and this is being reflected in the exam and licensure process. In response to increased automation and technology, candidates seeking certification will soon need a different set of skills to perform their accounting services.

The changes at present consist of the AIPCA’s Practice Analysis and the NASBA’s Evolution Initiative. The Practice Analysis refers to a study in which core aspects of accounting education and training were assessed. It incorporated data and feedback from a number of sources to determine what should stay, change, or go. Among the biggest findings was the need for training in data analysis, predictive analytics, and system security.

The Evolution Initiative is an attempt to accommodate shifts in the profession while including advisors who traditionally would not have been able to seek CPA certification. In this initiative, candidates would need to learn core skills while also choosing a discipline to focus on. The end result for all students, however, would be the same—CPA licensure.

Here at Gusto, we’re committed to keeping you on top of every trend that affects your career.  Be sure to check out our upcoming article: “Building a Support System for Your CPA Candidates.” 

Our goal is always to create a world where work empowers a better life. Our people platform can make payroll, benefits, taxes, and health insurance easier for employers and their accountants.

And as a Gusto partner, you’ll also get tools to help you expand your accounting practice and offer your clients new insights, plus a free payroll subscription for your own accounting firm. Sign up today! 

Updated: November 9, 2021

Gusto Editors
Gusto Editors

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