cpa evolution - nasba.org · • paper exam offered twice annually • take all un-passed sections...
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CPA EvolutionLaurie J. Tish, CPA, Vice Chair, NASBA
William L. Reeb, CPA, CITP, CGMA, Chair, AICPA
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Technological innovation
New marketplace demands
THE CHANGING MARKETPLACEHaving the resolve to regulate in an era of rapid change.
Pipeline and hiring trends
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A combined NASBA-AICPA initiative aimed at evolving CPA licensure to reflect the skills and knowledge CPAs increasingly need in a technology-driven marketplace
CPA Evolution
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Jan.-Oct. ‘18 Today
Drafted guiding principles
Circulated/discussed conceptual licensure model
Leveraging feedback to inform an evolving licensure model
Exposed draft guiding principles; received feedback
Working Group formed; provided perspective
Spring ‘19Feb. ‘19Nov. ‘18-Jan. ‘19
Build out model, gather feedback and finalize
2020
CPA Evolution progress
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Draft Guiding Principles• We must adapt quickly• Technological expertise is essential• Licensure requires rethinking• We must expand our view of the
CPA candidate−All must demonstrate core
competencies• Change should be rapid yet
deliberate
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Principle #4 Revision• The profession, and therefore entry into
the profession, must be redesigned to attract individuals with technological and analytical expertise. This includes non-CPA professionals whose technology and analytics skills are critical to the performance of assurance and other core services, as well as non-accounting major students. All must demonstrate minimum required competencies necessary to perform the evolvingprofessional accounting services as a CPA.
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2,000+stakeholders gave feedback
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NASBA and AICPA stakeholder outreach
Boards ofAccountancy
NASBABoard
Volunteer committees
AcademiaFederalregulators
State Societies
Technology experts
CPAs in business and
industry
Students
AICPACouncil
Young professionals
Firms of all sizes
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Support for: A model that will:
Need to change
Bigger technology emphasis
Position CPA for the future
Bring needed skills to the profession
Protect the public interest
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What we heardFocus on…• A core that includes accounting,
auditing, tax and technology• Education that aligns with the core• Experience requirements that support
audit quality• Supporting existing CPAs
• Reskilling• Promoting emerging services
…while developing appropriate messaging to modify licensure in current environment
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This should be about more than just technology.
To future-proof the profession and regulation of the profession,
we must think differently.
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Body of knowledge for newly licensed CPAs is growing…
Core
Compared to 1980, today there are:
3X as many pages in the Internal Revenue Code
4X as many accounting standards
5X as many auditing standards
Body of knowledge
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Body of knowledge for newly licensed CPAs is growing…
Core
CPA firms told us:
• Procedures historically performed by newly licensed CPAs are being:o Automatedo Off-shoredo Performed by paraprofessionals
Result: Newly licensed CPAs need to know more earlier in their career
CoreBody of knowledge
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Body of knowledge for newly licensed CPAs is growing…
Core
Demands of practice require deeper skillsets
• Critical thinking• Professional judgment/skepticism• Problem solving• Understanding of business
o Systems, controls, risk• Data management and analysis• SOC engagements
CoreBody of knowledge
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…but Exam stays the same size.
Exam
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What is the exam like today?Then• Paper exam offered twice
annually• Take all un-passed sections at
each sitting• Multiple choice, problems and
essays• Exams were taken on piers, in
gymnasiums
Now• Computerized exam offered
280 days annually• Take one section at a time• Multiple choice, task-based
simulations, constructed response questions
• Exams taken in Prometric testing centers
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What we did
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Stretch to cover more material with less depth
Exam and Education
Impact• Requirements for licensure are watered down• Candidates know less about what matters most
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Increase Exam and curriculum hours
Exam and Education
Impact• Increases barriers to entry, impacting pipeline• Unsustainable approach over long term
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Other models considered• CPA – Audit, CPA – Tax, etc.• Two tier • Medical• Legal• Engineering
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Other models considered• CPA – Audit, CPA – Tax, etc.• Two tier • Medical• Legal• Engineering
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Other models considered• CPA – Audit, CPA – Tax, etc.• Two tier • Medical• Legal• Engineering
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Other models considered• CPA – Audit, CPA – Tax, etc.• Two tier • Medical• Legal• Engineering
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Other models considered• CPA – Audit, CPA – Tax, etc.• Two tier • Medical• Legal• Engineering
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Engineering Model
Fundamentals
Mechanical
Electrical
Industrial
NuclearChemical
Structural
Civil
Professional Engineer (PE)
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Engineering Model
Fundamentals
Mechanical
Electrical
Industrial
NuclearChemical
Structural
Civil
Competence
PEWith signing authority
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NASBA-AICPA leadership current thinking
NASBA volunteer leadershipAICPA volunteer leadership
State Board and State Society leadershipSenior NASBA and AICPA staff
Small firmTop 100 firm
Big 4 firmTechnology expertise
Tax expertiseA&A expertise
Governmental expertiseConsulting expertiseRegulatory expertise
Testing/Exam expertise
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Possible model for discussion
CPA=CoreCOREACCT : AUDIT : TAX : TECH
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• Strong core with accounting, auditing, tax and technology
• Deeper knowledge in three primary disciplines
• Reflects reality of practice
• Adaptive and flexible
• One CPA license
• Enhances public protection
CoreCOREACCT : AUDIT : TAX : TECH
Possible model for discussion
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CoreCOREACCT : AUDIT : TAX : TECH
For example…*
Advanced accounting
Advanced tax EthicsTax fundamentals
Audit and attest
Advanced analytics
Advanced info systems
Fundamentals of info
systems, analytics
Finance* Content would be determined by formal practice analysis
EconomicsBusiness law
Principles and intermediate accounting
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CoreCOREACCT : AUDIT : TAX : TECH
For example…*
Advanced accounting
Advanced tax
Advanced analytics
Advanced info systems
* Content would be determined by formal practice analysis
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CoreCOREACCT : AUDIT : TAX : TECH
For example…*
* Content would be determined by formal practice analysis
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Where do we gofrom here?
• Discussion and feedback at breakout sessions tomorrow morning
• Build model and continue to seek feedback• Continuing dialogue into 2020
• NASBA Executive Directors Conference• AICPA Regional & Spring Council • State Boards and State Societies• NASBA Regional Meetings• NASBA and AICPA Boards of Directors
• Goal: Finalize model in summer 2020• Plan and map out implementation
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Regional Breakout Breakfasts
• Interactive exercises• Opportunity to provide feedback
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Thank you