CPA Evolution: The Rationale for the CPA Exam Changes In 2024

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The CPA Evolution initiative, jointly undertaken by the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), sought to revamp the Certified Public Accountant (CPA) licensure framework to reflect the evolving demands of the accounting field.

The growing complexity of accounting regulations, concepts, and standards, along with the shifting roles of newly licensed CPAs, necessitated a broader knowledge base. The CPA Evolution model introduces a core foundation of essential topics for all CPA candidates. This allows candidates to specialize in one of three Disciplines:

Business Analysis and Reporting (BAR)
Information Systems and Controls (ISC)
Tax Compliance and Planning (TCP)

In 2024, NASBA and AICPA plan to launch the CPA Evolution-aligned CPA exam, which includes both core sections (AUD, FAR, and REG) and the chosen Discipline.

A Quick Breakdown of the CPA Exam Changes coming in 2024

After December 15, 2023, BEC will no longer be a testable section
In its place, there are the three Disciplines mentioned above, BAR, ISC, and TCP. Candidates only need to pass ONE (1) of these sections
AUD, FAR, and REG, referred to now as “Core Sections” will be changing, but are of course somewhat similar to the 2023 versions.

IT/Technology will now be part of each of the three Core Sections.

The New Discipline Sections Defined

1. The BAR (Business Analysis and Reporting) Discipline is tailored to candidates interested in assurance or advisory services, financial statement analysis and reporting, technical accounting, and financial and operations management. This Discipline may emphasize data analytics, covering topics like financial risk management and financial planning techniques, including projections.

BAR is expected to delve into advanced technical accounting and reporting subjects at higher skill levels, encompassing areas such as revenue recognition, leases, business combinations, derivative and hedge accounting, and employee benefit plan financial statements. Notably, BAR may also include coverage of state and local government accounting, addressing content and skills that are currently part of the Financial Accounting and Reporting (FAR) section in the existing CPA Exam.

2. The Information Systems and Control (ISC) Discipline is designed for candidates interested in assurance or advisory services related to the intersection of technology and business processes. ISC emphasizes areas such as information systems, information security and governance, and IT audits. This Discipline's content may revolve around IT and data governance, internal control testing, and information system security, encompassing topics such as network security, software security, access controls, and endpoint security.

ISC is expected to cover the performance of SOC (System and Organization Controls) engagements, making it a comprehensive choice for candidates aiming to specialize in technology-driven aspects of accounting and auditing.

3. The Tax Compliance & Planning (TCP) Discipline is tailored to candidates seeking expertise in taxation, offering a comprehensive curriculum that covers both advanced individual and entity tax compliance. In addition to taxation, TCP includes content focusing on personal financial planning and entity planning. For individual tax planning, TCP encompasses topics such as inclusions and exclusions to gross income and gift taxation compliance and planning. Advanced entity tax compliance coverage delves into complex areas, including consolidated tax returns, multijurisdictional tax issues, and transactions between entities and their owners. TCP addresses entity planning, providing insights into the tax implications of business entity formation and liquidation.

TCP also includes coverage of property transactions, such as like-kind and involuntary exchanges, and related party transactions, making it a comprehensive choice for candidates specializing in tax compliance and planning.

CPA Exam Changes Mean A New Exam Format

All exams will be 4 hours.

AUD: 78 multiple-choice questions (MCQs) and 7 task-based simulations.
FAR: 50 MCQs and 7 task-based simulations.
REG: 72 MCQs and 8 task-based simulations.
BAR: 50 MCQs and 7 task-based simulations.
ISC: 82 MCQs and 6 task-based simulations.
TCP: 68 MCQs and 7 task-based simulations.

Final Exam Dates for BEC

Mark your calendars with two crucial dates if you plan to take BEC:

November 15, 2023: NASBA will cease processing authorizations for the BEC exam. To secure your seat for the BEC exam, your application and Notice to Schedule (NTS) must be approved before this date.
December 15, 2023: This is the final testing day under the current 4-part CPA exam model. No exams will be available from December 16 to December 31. Consequently, you have 15 fewer days this year to schedule and take your exams. Be mindful of this cutoff date as you plan your exam strategy.

Credit Extensions

NASBA recommended a credit extension to all state boards of accountancy. The extension was defined as:

“Any candidate with Uniform CPA Examination credit(s) on January 1, 2024, will have such credit(s) extended to June 30, 2025”.

Based on this information from NASBA, it appears that all state boards of accountancy have accepted this recommendation.

Score Release for 2024

While the dates are subject to change, as of now, these are the Sore Release dates AICPA has given for the first half of 2024. Note that there will be different Score Release dates for Core exams and Discipline exams.

NINJA’s Plan for 2024 As a Result of the CPA Exam Changes

For those who plan to take one of the Core sections (AUD, FAR, REG) in 2024, NINJA materials will be available starting in November 2023. Anyone purchasing a subscription to a Core section in November will have access to both the 2023 versions as well as the 2024 versions of the materials.

For the Discipline sections (BAR, ISC, TCP), NINJA will also have the majority of that content available in November 2023.