The CPA Evolution will launch on Jan. 1, 2024, transforming the licensure exam from four core components (AUD, FAR, BEC and REG) to three core components (AUD, REG and FAR; with technology and digital acumen incorporated into each) and a candidate-chosen discipline for the fourth section. The candidates’ options are Business Analysis and Reporting (BAR), Tax Compliance and Planning (TCP) or Information Systems and Controls (ISC). While this change is transformational for exam candidates, the AICPA and NASBA have finalized the CPA Evolution blueprint for January 2024 and candidates can now have confidence in its content and format.
The CPA Evolution will impact all current accounting students from freshmen through graduate students, as they will likely be the first cohorts to take the CPA Exam with the evolved content.
To follow is what educators can do now to prepare for 2024, from the simplest to most difficult transition.
Audit-focused changes: SOC, risk, controls and systems
The audit section of the Evolution exam will have an increased focus on SOC engagements and business risks, systems and controls. Educators should begin discussing them in audit and information systems classes at an understanding level:
- What are SOC engagements?
- How are they performed?
- What do auditors need to do to assess a SOC report from a service auditor?
- What are the responses if the SOC report identifies control deficiencies with the service organization?
Technology-focused changes: Data analysis, management and digital acumen
Data analysis and management skills are more difficult for educators to build into their curricula. Digital acumen is a new addition to the exam and focuses on the candidates’ identification, use and ability to respond to emerging technologies in accounting. Most of the action items in the Model Curriculum and final Evolution blueprint require candidates to “recall” or “identify” various emerging technologies, trends and applications. Luckily, this lower level of earning, as compared to “apply” or “implement,” is easier to incorporate into a variety of classes.
Achieving these learning objectives could be done by explaining various accounting technologies to students and describing their use cases. Students could extend their learning by participating in case studies that describe an audit, financial reporting or tax situation; the student can then identify the best accounting technology to use and explain why that technology is best. For example, students could explain what workflows they would create during journal entry testing on an audit by listing the parameters they would set and what technology they would deploy to perform the test.
For data analytics and management skills, educators don’t need to create a separate course to address these topics. Instead, because technology will be integrated across all exam parts, educators should take a similar approach in the classroom and integrate technology and data analysis tools across their curriculum in as many as courses as possible. Introductory classes should begin by incorporating Excel. Intermediate classes should include assignments related to Alteryx, Tableau, Microsoft Power BI or other similarly advanced tools. Robotic process automation tools are perfectly suited to be introduced in audit (e.g., practice control testing over signatures or three-way matches) and tax compliance (e.g., pulling data from the same source for input onto a tax return or schedule). Upper-level courses and graduate courses could expand upon these tools to deepen the skill set or continue to seek the latest emerging technologies for introduction, matching the “recall” or “identify” tasks in the Model Curriculum and Evolution blueprint.
Regardless of the chosen approach, educators should not expect that they will become overnight experts in data analytics and digital acumen if it hasn’t traditionally been their specialty.
“Some of the highest learning will occur when students work through difficulties on their own and understand the solution enough to walk other students through the problem without the professor,” said Jack Castonguay, Vice President of Strategic Content Development at Surgent Accounting and Financial Education.
The breadth of resource guides, videos and instruction manuals offered by each of the emerging technology providers gives students ample resources to complete tasks without heavy direct involvement by the faculty member. In fact, faculty can use this to incorporate problem-solving by having students solve the case study, assignment or project in a self-paced manner using the product’s resources. This independent learning and troubleshooting will further prepare students for the day-to-day professional demands of accounting firms because many senior firm staff and partners are unlikely to be experts in the same emerging technologies the frontline staff are using. The firms will expect their employees to take the initiative and learn to adapt; an expectation educators can foster in the classroom.
Skills-focused changes: Critical thinking and problem-solving
Most educators know some of the most sought-after skills are those that are hardest to teach, such as critical thinking and problem-solving. To address these skills, accounting educators need to find ways to move beyond strict binary choice content. Instead of asking for journal entries of an operating lease, give the student the fact pattern for the lease and let them determine its classification and annual expense. Or ask them to determine given certain debt covenants: How would a company ideally want to structure their lease? These questions require more critical thinking and less memorization of accounting rules.
Additionally, the incorporation of emerging accounting technologies into the curriculum presents many opportunities for students to use problem-solving skills without clear guidance. In these assignments, less attention should be paid to the answer and instead more to the thought process and logic that led to the students reaching their answers. By focusing on their logic and not their outcome, critical thinking is directly addressed and improved. Understanding the “why” and “how” becomes more central to student learning than the “what.”
The CPA Evolution will undoubtedly change what content accounting departments can teach, how they combine new and legacy content, and how they increase the prevalence of digital acumen and technology content across the overall accounting curriculum. While it will require a new curriculum to address the changing nature of the profession, educators and faculty should begin making changes today to respond to the evolved exam in 2024. Bite-sized introductions and self-paced projects will be the most beneficial until a full curriculum change can be established. No solution will cover all topics or be perfect. But any solution should try to match the needs of the profession with the rigorous 2024 exam content, all with the ultimate goal of training the most well-prepared students for their first few years in the accounting industry.
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