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Cramming on keyboards

Computer-based CPA exam debuts in April, and so far it's passing the test

By Bill Sheridan
MACPA E-Communications Manager

There was something in the air when Alicia Foster arrived at Baltimore's Civic Center in 1978 to take the CPA exam. Nervousness, tension, excitement — the air was thick with them as she and hundreds of other CPA candidates sharpened their pencils and waited for the marathon three-day exam to start.

But there was something else, too. The smell of ... elephants? Or was it lions?

An ear-splitting roar solved the mystery. It was lions, after all.

Or maybe it was tigers. Who could tell? Things get a bit confusing when the biggest, most stressful test of your life is being interrupted by the sounds and smells of the Barnum & Bailey Circus, which often invaded the Civic Center each year at the same time as the exam.

"The noises (the animals) made were a bit disconcerting, and the odors just permeated the place," laughed Foster, audit director and founding partner of Abrams, Foster, Nole & Williams in Baltimore. "I remember feeling a little disoriented, and the circus didn't help. But in a sense, it might have been the distraction we needed so that we wouldn't feel as nervous about taking the exam."

Welcome or not, such legendary distractions are things of the past. The CPA exam, with its colorful history and quaint remember-whens, is getting a futuristic facelift.

New format, new content

In April, the exam officially moves to an exclusively computerized format. The computer-based exam — administered by the AICPA, the National Association of State Boards of Accountancy and Baltimore-based Thomson Prometric, which delivers Web-based exams in 26 languages and 134 countries — will focus less on memorization and more on the application of technical knowledge to real-world examples. Strong emphasis will be placed on the analytical, communication and research skills that are critical in today's business environment.

Candidates will have greater flexibility in taking the test. While the paper-and-pencil exam was given just twice each year, candidates now will be able to take any or all four sections of the exam during four yearly testing "windows." Each window will consist of about 60 days during each calendar quarter.

Perhaps best of all, the exam will be delivered in temperature-controlled, well-lit, well-ventilated testing labs with private carrels — and definitely no circus animals.

"I'm really envious of the fact that (candidates) have the opportunity to sit for the exam when they're ready, and that they can sit for one part at a time — which is very humane," Foster said. "They won't feel that they're under as much pressure to study for all parts at once. Not that it will be easier — they'll still have to study and prepare."

Foster serves on NASBA's Computer-Based Testing Implementation Task Force, which for the past two years has repeatedly revised and tested the exam to ensure as smooth a transition as possible. She said results of the test will be reviewed quarterly to make sure the technology is running smoothly. "If there are any glitches," Foster said, "we will try to correct them in such a way that there aren't any disruptions in the process."

Thus far, all systems are "go." A national pilot version of the exam was held late last year in New York City and received high marks from participating candidates. Said one: "(The test) reflects the way we have to think and access information in the real world, and it's going to make for better CPAs."

Locally, Loyola College held a "pre-test" in November that highlighted the new format, giving candidates a valuable preview of the computer-based test.

"I've grown up in a computer age, so I feel very comfortable taking a computerized exam," said Laila Burruss, a Loyola graduate and associate auditor at PricewaterhouseCoopers. "I'm glad I took the pre-test because it gave me a feel for what the exam is going to be like."

Reflecting the profession

According to Maryland's accounting educators, changes in the exam's content might be even more important than the new format. The four sections of the exam have been revised to include the following:

• Auditing and attestation, including knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements.
• Financial accounting and reporting, including knowledge of generally accepted accounting principals for business enterprises, not-for-profit organizations and governmental entities.
• Regulation, including knowledge of federal taxation, ethics, professional and legal responsibilities, and business law.
• Business environment and concepts, including knowledge of underlying business reasons for and accounting implication of business transactions.

Brian Loughlin, academic director of accounting at the University of Maryland University College, applauded the new content, saying it closely mirrors trends in the CPA profession.

"The updated content specifications bring the exam closer to what the profession is currently doing," Loughlin said. "That's more important than the fact that the exam is computerized."

Equally important, he said, is the move away from memorization.

"The profession is so codified and technical now," Loughlin said. "We don't want to emphasize memorization. We want the emphasis to be on, 'Can you research this topic?' The ability to research is an attribute the profession needs."

The new content also more closely aligns the exam with what accounting students are learning and what new CPAs need to know. According to Loyola College professor Jayne Maas, accounting curricula have changed over the last 20 years to include more professional skills and competencies — for instance, computer and communication skills, team and group tasks, and case-approach teachings that encourage critical thinking. Over the same period, though, the CPA exam wasn't updated to reflect those changes.

"At Loyola, and I think at most institutions, there is a strong sense that we don't teach to the exam but that we should develop the professional skills and competencies accounting majors need to be successful," Maas said. "The fact that the (exam's new) format now more closely represents the skills and competencies demanded in the professional environment makes it easier to rationalize that accounting programs should change without worrying about teaching to the exam.

"I think the exam is finally moving in the right direction," she added. "Eventually, after the changes to accounting programs are phased in and the (exam) is fully phased in, perhaps the gap (between what students learn and what the profession requires) won't be as great. That is a good thing for all of us."

Loughlin agreed.

"To get an accounting degree you have to have a broad business perspective outside of just auditing, accounting and taxes," he said. "For the first time, (candidates) are now being tested on it. That is a major improvement in the exam."

Improvements aside, Maas worries that placing too much emphasis on the exam will scare some students away from the profession.

"I think students are frankly overwhelmed by the whole thing," she said. "It's a bit frightening to incoming first-semester juniors, who have declared accounting majors, to look at the scope of the (exam) requirements.

"I think we have to be very careful about how many more demands we place on accounting majors," she added. "It is a delicate balance. … Even though (the number of) majors is on the rise, I think there is some risk that too much emphasis on (the exam) will scare away majors, if the 150-hour requirement does not do the trick. We try to educate students on the exam, but in a low-key way, by telling them, 'It's in your best interest to look at the exam now and begin to become familiar with what it's all about.' That way, by the time they graduate and take the exam, it's not a total shock."

'It's the right time'

As the countdown to the first computerized exam continues, 123 new CPAs are celebrating their place in the profession's history. They are the final group of people to pass Maryland's paper-and-pencil CPA exam. Grades to that final exam — held Nov. 5-6 at the Maryland State Fairgrounds in Timonium — were posted in early February

Among those who passed is Jay Drury, a senior staff accountant at Hertzbach & Company in Owings Mills and, at 63, the oldest person to sit for the November 2003 exam. Before the exam began, Drury said, the proctor spent some time reminiscing with candidates about exams from yesteryear — the bad lighting, the sounds and smells of circus animals, the haze of cigarette smoke that used to hang in the air.

"It sounds like conditions (for the computerized exam) are going to be better," Drury said. "You'll probably be sitting at a cubicle with good lighting, and you won't have to worry about the roof leaking. The test isn't going to be any easier, but it's probably going to be better for the profession. It's going to make you better qualified to be a CPA."

Foster agreed: Sometimes, change is a good thing — and this, she said, is one of those times.

"The profession was wise to make this decision and move forward," she said. "It makes sense. It's the right time."