The Accounting Profession: Certified Public Accounting
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The Accounting Profession: Certified Public AccountingJaniela LindsayProfessor Adela DurhamPrinciples of Accounting ONF1- 22712/10/2016 Accounting, as stated in the business encyclopedia, is define as the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information. The role of accounting in business is to help interested parties, both internal and external, to make business decisions. The accounting process consists of measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers. It is a way of assessing the assets, liabilities and cash flow, or the future of an entity for all present and future investors. An accountant is a practitioner of accounting whose primary role and responsibility is to manage, update, correct, and report an organizations accounts, or in shorter terms is classified as the “keeper of the accounts”. Their disclosure of assurance about financial information assists managers, investors, tax authorities, etc., to make decisions about allocating resources. Professional accountants in business often find themselves being at the frontline of safeguarding the integrity of financial reporting. While management is responsible for the financial information produced by the company, professional accountants in businesses have the task of defending the quality of financial reporting at the source where the numbers and figures are produced. Professional accountants take on a massive range of other roles in businesses of all sorts including in the public sector, not-for-profit sector, regulatory or professional bodies, and academia. To become a professional accountant however, one must pass the “The Certified Public Account Exam” (CPA) to obtain a license. The CPA Examination protects the public interest by ensuring that only the qualified individuals become licensed as U.S. Certified Public Accountants. The CPA examination is created and scored by the American Institute of Certified Public Accountants (AICPA) with significant contribution and assistance by the National Association of State Boards of Accountancy (NASBA) and state boards of accountancy. It is created to assess the knowledge and skills entry-level CPAs need to practice public accountancy. The CPA Exam is used by all fifty states as well as the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands and the Northern Mariana Islands. In order to sit for the Uniform CPA Exam, one must be declared eligible to do so by one of the 55 state boards of accountancy in the United States. Requirements of state boards vary, but almost always include a U.S. bachelors degree and a certain amount of accounting course credits. Some states require that candidates have completed an additional year of study before sitting the exam and almost every state requires that the additional year of study be completed before awarding certification. Fees to sit for the Uniform CPA Exam vary by state. The CPA Exam is a computer-based test comprised of four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), Regulation (REG). The current exam administered by the AICPA takes a total of 14 hours for all four parts. Each applicant may take each part of the exam in any order they choose, as long as all four sections are completed within 18 months. The minimum passing score is 75.
It is necessary to earn a CPA license to become a professional accountant. This can open doors in the job market which can lead to higher salary potential, and may improve promotion prospects within an existing company. The opportunities of CPAs are demanding, but rewarding. While it is a difficult course of study, the professional responsibility and career possibilities are unparalleled. CPAs continue to maintain and update their skills as part of their commitment to a truly dynamic profession; they are considered the most trusted advisors in business. Most CPAs found it easier to get business loans, negotiate contracts, or be respected by almost anyone that they encounter that are aware of the difficulty of attaining the certification. The American Institute of Certified Public Accountants (AICPA) is launching a new version of the Uniform CPA Exam on April, 2017. The changes CPA Exam are based on the results of a research project launched in 2014. According to the AICPA, professional content knowledge will remain fundamental to protecting the public interest. However, in addition, it is critical that those seeking licensure as a CPA must be competent in: recognizing issues, identifying errors, challenging assumptions, applying both professional judgement and skepticism. In order to test these competencies, the CPA Exam will have an increased emphasis on testing higher order skills. More task-tasked based simulations will be used and the length of the CPA Exam will increase from 14 to 16 hours – four sections of four hours each. The exam will also be slightly more expensive. The 2017 Exam will continue to have its four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), Regulation (REG). A comparison of the current and new version of the CPA exam from ‘Gliem Exam Prep’ is listed below.Current VersionNext Version (April 2017)CPA Exam assesses remembering and understanding and application skill levels equally.CPA Exam will shift to test higher order skills like analysis and evaluation and will no longer assess the remembering and understanding and application skill levels equally.There are 4 sections: Auditing and Attestation (AUD), Business Environment and Communication (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).No changes.BEC includes 72 multiple-choice questions and 3 written communications.BEC will include task-based simulations in addition to multiple-choice questions and written communications.Total CPA Exam testing time is 14 hours.Total testing time will be 16 hours – 4 sections of 4 hours each.The CPA Exam includes either 72 or 90 multiple-choice questions, depending on the section.The exam will include 62 BEC multiple-choice questions, 66 FAR multiple-choice questions, 72 AUD multiple-choice questions, and 76 REG multiple-choice questions.The CPA Exam includes 6, 7, or no task-based simulations, depending on the section.The CPA Exam will include 5 task-based simulations for BEC and 9 task-based simulations for AUD, FAR, and REG.The CPA Exam does not include Document Review Simulations.The CPA Exam will include Document Review Simulations (DRS), a new type of task-based simulations.AUD, FAR, and REG scoring weights are as follows: 60% multiple-choice and 40% task-based simulations.BEC scoring weights are 85% multiple-choice and 15% written communications.For AUD, FAR, and REG, the scoring weights for both the multiple-choice questions and the task-based simulations will be 50%.The scoring weights for BEC will be 50% for multiple-choice, 35% for task-based simulations, and 15% for written communications.Scores are released within an average of 20 days.No changes.Generic spreadsheets are provided at the testing center during the exam.No change for 2017, but Microsoft Excel might replace the generic spreadsheet tool in 2018.Exam fees currently vary by state.Exam fees will continue to vary by state, but BEC and REG will increase by $20 per section.Breaks count toward the total exam time allotted to candidates.A new standardized 15-minute break that will not count against testing time will be available to candidates during each exam section.