Is the CPA exam changing in 2021? Yes.
Every year the AICPA approves various changes and updates to the CPA exam. In 2021 there are changes to all four sections of the exam, with significant changes occurring in the AUD and BEC sections. You can ensure you are prepared for the exam by taking a closer look at these 2021 changes.
Overall, the CPA exam will retain the same section structure and will still be tested in four 4-hour sections (for 16 hours total). These sections will continue to assess higher-order skills such as:
- Critical thinking
- Problem-solving
- Analytical ability
Most of the 2021 updates involve:
- Understanding of business processes
- Digital mindset and data analytics
- Increased reliance on SOC 1® Reports on Controls at a Service
Organization Relevant to User Entities’ Internal Control Over Financial Reporting
AUD Changes
The AUD section of the 2021 CPA exam will undergo some content and skill weighting changes.
- Content weighting
- Area II (Assessing Risk and Developing a Planned Response) will be increased from 20%–30% to 25%–35%
- Area IV (Forming Conclusions and Reporting) will be decreased from 15%–25% to 10%–20%
- Skill weighting
- Remembering and Understanding will be decreased from 30%–40% to 25%–35%
- Analysis will be increased from 15%–25% to 20%–30%
Other changes made to the AUD section include:
- Added content relating to the understanding of business processes including consideration of IT systems, IT controls (general and application), manual controls, and transaction-level risks and controls.
- Added content covering audit data analytics at the application and analysis skill levels, incorporating basic data validation, performing analysis on audit data output, and interpreting the results.
- Added content relating to service organizations to enable understanding differences between SOC 1 and SOC 2® engagements and the utilization of SOC 1 reports in audits of user entities.
- Removing content related to use of the internal audit function, opening balances, derivatives, and comfort letters and SEC filings.
- Eliminating analysis or application-level testing of audit plan development, related party identification, litigation, claims, and assessments, and preparation of compliance reports.
BEC Changes
The BEC section of the 2021 CPA exam will also undergo some content weighting changes, but skill weighting will remain the same.
Content weighting
- Area I (Enterprise Risk Management, Internal Controls and Business Processes) will increase from 17%–27% to 20%–30%
- Area II (Economics) will decrease from 17%–27% to 15%–25%
- Area III (Financial Management) will decrease from 11%–21% to 10%–20%
Other changes made to the BEC section include:
- Extensive revision of Area I, formerly “Corporate Governance” and now titled “Enterprise Risk Management, Internal Controls and Business Processes,” to incorporate new content areas and add analysis-level skill testing.
- Added accounting and financial reporting information systems content including tools and software, business process controls, transaction flows, and key risk identification.
- Added data management and relationships content that covers topics related to data governance, extracting, transforming, and loading data, and visualizations.
- Added SOC 1® reports content relating to user entity’s perspective including consideration of the period covered and any complementary user entity controls.
FAR Changes
Content and skill weighting will also remain the same for the FAR section of the 2021 CPA exam.
Notable changes to the FAR section include:
- Removing content related to discontinued operations, going concern, compensated absences, retirement benefits, and the differences between IFRS and U.S. GAAP.
- Removing application-level testing of content related to derivatives and hedge accounting.
REG Changes
Content and skill weighting will also remain the same for the REG section of the 2021 CPA exam.
Notable changes to the REG section include:
- Removing groups and topics that are no longer vital for newly licensed CPAs to know such as estate taxation, federal securities regulation (i.e., the ‘33 and ‘34 Acts), alternative minimum tax, trust income and deductions, and content related to obtaining and maintaining tax exempt status.
- Eliminating analysis-level testing of net operating losses and capital loss limitations.
Long-term Changes
In a few years, the CPA licensure model will be fully updated to reflect the evolving skills and competencies needed to be successful in accounting. These upcoming changes are called the CPA Evolution.
With the CPA Evolution, the CPA exam will be restructured and updated to a Core + Discipline Licensure Model. In this model, the core elements that everyone will be tested on are accounting, auditing, tax, and technology. And candidates will also get to choose one of three discipline areas to demonstrate deeper knowledge. These discipline areas are:
- Tax compliance and planning
- Business analysis and reporting
- Information systems and controls
The CPA exam will still have four parts, it will just be updated to include the three core parts plus one discipline specific part. The exam will continue to be 16 examination hours total. There will be no designation of which discipline area you chose.
The newly structured CPA exam launches in January 2024, so depending on when you plan to schedule your CPA exam, the CPA Evolution may or may not affect you as it relates to the CPA exam.
Wondering how long you should study for the CPA exam? Our answer is roughly 400 hours—give or take 100 hours depending on your education, how long you’ve been out of school, work experience, etc.
Why Does the CPA Exam Change?
The knowledge and skills needed to be successful as a newly licensed CPA (nlCPA) change over time as the industry changes and different regulations, laws, and codes, etc., are updated. In order to ensure the CPA exam is preparing nlCPAs properly and testing on relevant skills and knowledge, the AICPA revises the CPA exam to ensure nlCPAs are being prepared adequately. These revisions can be large or minor and can include anything from adding new topics, to removing outdated information, to improving the testing experience.
What are the AICPA Exam Blueprints?
The CPA Exam Blueprints are documents that outline the minimum knowledge and skills nlCPAs need to be proficient in their industry. These blueprints are used to update the CPA exam as they summarize the scope and content of each section that is covered in the exam.
The new set of CPA Exam Blueprints released by AICPA in late 2020 go into effect on July 1, 2021. These changes are what dictate the 2021 CPA exam changes in AUD, BEC, FAR, and REG. New blueprints are released yearly or multiple times per year, but fortunately, CPA exam review prep courses like Wiley CPA keep track of these changes and account for them when developing CPA exam study material, so you have less to worry about.
Final Thoughts on the 2021 CPA Exam Changes
As you review upcoming changes to the 2021 CPA exam, you are probably wondering how prepared you are to sit for the exam. Well, we have good news because you can take Wiley’s Free CPA Practice Exam to see exactly where you stand. Developed in consultation with subject matter experts from Wiley CPA Exam Review, this free CPA practice exam is helpful for both individuals considering taking the CPA exam and those currently studying for the exam.
