Accounting Educators’ Role in the CPA Evolution
As we draw ever nearer to the launch of the new CPA exam, accounting faculty must be given the right tools to change their curricula to meet the shifting requirements of the profession today.
Digital Exclusive - 2021
Both CPAs and academics are paying close attention to the CPA Evolution proposed by the AICPA and NASBA, with some saying the proposed changes to the CPA exam are the most drastic since its digitization in 2004 or the 1994 switch to a four-part exam. With so many imminent shifts set to affect both accounting students and the faculty that guide them, are accounting faculty aware of and prepared for these changes? Let’s take a look.
The New CPA Exam
The AICPA and NASBA launched the CPA Evolution Initiative in 2018 to “recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future.” As a result, the new Uniform CPA Examination is expected to launch in January 2024 pending approval from the AICPA Governing Council and the NASBA Board of Directors. The new CPA exam will follow a core-plus discipline licensure model created after outreach to more than 3,000 stakeholders in the CPA profession, with most indicating the need for a “greater emphasis on technology skills and knowledge as a prerequisite for licensure.”
The new CPA exam model includes three required parts (the core) and one specialization (the plus). The core portion focuses on accounting, auditing, tax, and a deeper technology emphasis, which is intended to ensure that candidates are prepared not just for technological changes but also for the increasing number of standards and the tax code they must master. Technology was added to the core because of the increasing emphasis on data analytics and emerging technologies among disciplines in the profession, as well as hiring trends showing that accounting firms are reducing the number of accounting students they hire at the same time as they’re increasing the number of hires from students in tech fields. Not only do students need to understand emerging technologies, firms say, they must also know how these technologies apply to the profession. Beyond technology, stakeholders have also noted that CPAs need to expand their skills in areas such as critical thinking, problem solving, professional judgement, data management, business understanding, and performance of system and organization controls engagements.
In addition to the core, candidates will choose one of these anticipated disciplines in which to further test their skills and knowledge:
- Business analysis and reporting.
- Information systems and controls.
- Tax compliance and planning.
This fourth part of the exam allows candidates to demonstrate deeper knowledge in a specialized area. CPA candidates that pass the new Uniform CPA Examination will be able to apply for full licensure and won’t be limited to the discipline area they choose to test in when practicing as a licensed CPA. Students seem willing to embrace this shift: The AICPA and NASBA surveyed more than 600 university students and recent graduates and discovered that 90 percent of respondents would feel comfortable choosing a specialized area for the new CPA exam.
In anticipation of the new CPA exam, the AICPA and NASBA released the CPA Evolution Model Curriculum for accounting faculty and institutions in June 2021. This curriculum recommends topics that should be covered in accounting curricula to prepare students for the new CPA exam and the changing profession. For each topic, the curriculum suggests a class in which to include the topic, an estimated time it will take to cover, and a list of learning objectives related to the topic. It also provides three potential program structures that could be adopted by institutions working to adapt their programs to these upcoming changes.
Are Faculty Ready for Change?
To discover how prepared faculty and institutions are to respond to the proposed model curriculum, survey responses from 238 U.S. accounting faculty were analyzed. The survey found that, overall, faculty don’t seem to possess detailed knowledge of the proposed CPA exam changes despite the fact that the changes are less than three years from taking effect. In fact, 13 percent of respondents stated that they hadn’t yet reviewed the new CPA licensure model at all, and an additional 21 percent indicated they only reviewed it a little. Only 14.3 percent said they reviewed it in great detail and 66 percent indicated they reviewed the model more than a little. These numbers seem low when almost 84 percent of respondents stated that the new CPA exam would influence their department’s curriculum design at least a moderate amount.
When asked about the proposed model curriculum, 56.7 percent of faculty indicated they reviewed it at least a moderate amount while 18.5 percent indicated they haven’t reviewed it at all. This is interesting as 83.6 percent indicated that the model curriculum would be somewhat, very, or extremely useful in designing the accounting curriculum at their institution.
Will Curriculums Change?
Overall, the majority of accounting faculty seem to understand that they must make changes to their accounting curriculum to effectively respond to the changes to the CPA exam. In fact, only 6.3 percent of respondents indicated they wouldn’t change their curriculum and 16.4 percent didn’t know if they would. This is in contrast to the 65.1 percent that said their department plans to make changes. More promising still, of the faculty that reviewed the model curriculum, a significant majority agree with the content suggested, and most of those that don’t agree with the model curriculum stated that they neither agreed nor disagreed. When asked if they agreed with the time allotted for the topics that they teach, there were some higher levels of disagreement, but the majority still agreed with the model curriculum.
Out of the respondents who said that their institutions would make changes to the accounting curriculum, about 58 percent said they would be changing the content of courses as well as course offerings. A quarter of respondents said they would be changing the content of their courses already offered but not offering additional courses. When asked how important these curriculum changes in response to the new CPA exam are, 76.4 percent said they’re a top priority, while 19.4 percent said it’s their most important priority. Similar results were received when asking about changes in curriculum due to the new model curriculum.
When it came to a timeline for making these curriculum changes, only a small portion of institutions said they’re planning to make changes for the 2021-2022 academic year. The vast majority stated that they’ll make changes in the 2022-2023 academic year, while a third said they’ll make their changes slowly over the next few years. About 14 percent are unsure when they’ll make changes.
It’s clear that increased awareness of both the changes to the CPA exam and the availability of the CPA Evolution Model Curriculum is needed amongst faculty. Since a significant majority of faculty respondents expect the new CPA exam to influence their curriculum design, it would be helpful to develop additional methods of communicating upcoming changes to faculty. While some faculty said that they don’t “teach to the test,” it’s important to prepare students for the demands of the new CPA exam and for what’s expected of them the profession.
What remains a reality, and a challenge, is that accounting departments cannot continue to add content to programs without removing existing content. To best navigate these decisions, institutions must continue to have conversations with their students’ future employers, who provide crucial information as to the expectations students will face after graduation and the areas of expertise that they’re seeking. With 20 percent of accounting programs surveyed indicating that changing their curricula is their top priority, these conversations become all the more important.
Truthfully, it should be concerning to all accounting stakeholders that more faculty haven’t reviewed all the CPA Evolution Initiative’s proposed changes. As the CPA pipeline continues to face challenges, accounting faculty are valuable and necessary allies. If faculty fail to address and evolve with the CPA exam and the profession, their students may graduate with an accounting degree but be unable to pass the CPA exam or contribute meaningfully in the workplace—or they may switch majors altogether. Accounting stakeholders must reach out to educators to ensure that our profession meaningfully evolves and continues to deliver value for generations to come.
Olivia Melton, CPA, MAcc is an assistant professor of accounting at Augustana College in Rock Island, Ill.