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CPA Exam Changes: Your Guide to CPA Exam Changes 2020 – 2021

CPA Exam Changes: Your Guide to CPA Exam Changes 2020 – 2021

Last Updated on March 22, 2020 by Stephanie Ng

CPA Exam changes 2020 is one of the most popular searches that CPA candidates make. (And for good reason.) Now, the CPA Exam is changing in 2020 and 2021 to ensure newly licensed CPAs continue to possess the knowledge and skills necessary to protect the public interest. I’ll also report on essential non-content related changes too.

COVID-19 CPA Exam Updates

Due to the novel coronavirus or COVID-19, Prometric testing centers, where the CPA Exam is taken, have temporarily closed.

Here’s What You Need to Know

Prometric testing centers are closed through April 15, 2020. No one can take the CPA Exam until testing centers re-open.
It is possible that Prometric Testing Centers will be closed beyond April 15, 2020; however, no decisions have been made at this time.
If you have a CPA Exam testing date scheduled and Prometric is or will be closed on your exam date, you will not have to pay a rescheduling fee. Further, you’ll receive an email with information on how to complete CPA Exam rescheduling.
If you have an NTS that expires between April 1 and June 30, 2020, you may receive an extension. NASBA is encouraging boards of accountancy to extend NTSs through September 1, 2020, if they would have expired 4/1/20-6/30/20.
Further, if you have a CPA Exam section credit that is expiring from 4/1/20-6/30/20, you also may be eligible for an extension.
Whether any extensions will be granted greatly depends on your state board of accountancy’s acceptance of NASBA’s recommendation to extend affected candidates’ expiration dates through September 1, 2020.

The Prometic closure status is likely to evolve. I’ll update this article with any new information as I have it. Please be safe.

The Purpose for the CPA Exam Changes 2020

Specifically, newly licensed CPAs will be required to demonstrate increased knowledge and skills related to distinct technology. So, if your journey to becoming a CPA includes taking an exam section during this time, then it is my pleasure to share what I know about the proposed changes to help you PASS.

The mission of the CPA Exam is to provide reasonable assurance to boards of accountancy that candidates passing the exam possess the minimum level of technical knowledge and skills necessary for a newly licensed CPA to protect the public interest in today’s business and financial environment. To ensure the knowledge, skills, and tasks assessed on the CPA Exam continue to reflect the current practices of newly licensed CPAs, the AICPA’s Board of Examiners (BOE) conducts periodic practice analyses.

In 2019, the BOE conducted its most recent practice analysis:

(1) to explore the impact of technology on the work of newly licensed CPAs, and

(2) to identify areas where the CPA exam has become too broad and not sufficiently focused on the core knowledge and skills required of newly licensed CPAs.

What the 2019 BOE Practice Analysis Revealed

The practice analysis identified several findings related to technology’s impact on newly licensed CPAs. Additionally, these findings broadly demonstrated a need for newly licensed CPAs to possess increased knowledge and skills related to the following three areas:

Understanding the business (specifically, understanding business processes, information systems, data flows, and risks and related controls)
Digital and data-driven mindset including data analytics (this mindset includes understanding the completeness, accuracy and relevance of data)
Reliance on System and Organization Controls (SOC 1) reports (as businesses are increasingly outsourcing their business processes and information systems to third parties)

Accordingly, content will be added to the CPA Exam in response to the technology findings above.

The practice analysis also identified several findings related to areas where the CPA exam was too broad and not sufficiently focused on the core knowledge and skills required of newly licensed CPAs. Therefore, in response to these findings, the applicable content will either be removed from the CPA exam or assessed at a more appropriate skill level (i.e., remembering and understanding, application, analysis, evaluation).

The Dates for the CPA Exam Changes 2020 & 2021

Date	Description
April 2020	Updated Blueprint published (audit data analytics)
July 2020	Updated sample tests available
October 2020	New AUD CPA exam released (audit data analytics task-based simulations)
January 2021*	Updated Blueprint published (in response to the 2019 practice analysis)
July 2021*	Next version of AUD, BEC, FAR, REG CPA exams released (in response to the 2019 practice analysis)

*Note: The AICPA’s Board of Examiners could potentially approve the Blueprint changes in 2020 Q3. If this occurs, the Blueprint will be published in 2020 Q4, and the next version of the CPA Exam will be released in April 2021.

Overview of the CPA Exam Changes

Since the CPA Exam is changing both in 2020 and 2021, I’ve broken out the changes by year.

2020 CPA Exam Changes

AUD	Audit data analytics (ADA) task-based simulations (TBS) will appear on the AUD exam. These TBS will require the use of Microsoft Excel® (Excel) to sort, filter, and compare data sets to determine trends, identify missing or duplicate transactions, or highlight anomalies within data.
BEC	No changes in 2020
FAR	No changes in 2020
REG	No changes in 2020

In summary, BEC, FAR, and REG are not changing in 2020. However, AUD is impacted by the 2020 CPA Exam changes.

CPA Exam Changes 2021

The CPA Exam changes planned for 2021 affect every section. In contrast, only AUD changes in 2020.

AUD	There are 22 high-level changes to AUD. As presented in further detail below, these changes include the following: Certain higher skill level content will be removed or reassessed at a lower skill level Certain Groups and Topics will be removed because they are not critical to the work of newly licensed CPAs (e.g., derivative instruments) New content will be added related to understanding the business (business processes, information systems, data flows, and risks and related controls) New content will be added on SOC 1 reports New content will be added on using audit data analytic techniques
BEC	There are 7 high-level changes to BEC. As presented in further detail below, these changes include the following: “Area I: Corporate Governance” will be renamed as “Area I: Business Process, Risks, and Controls.” Certain higher skill level content will be removed or reassessed at a lower skill level New content will be added on SOC 1 reports New Group titled “Data” will be added to Area IV: Information Technology Content on macroeconomics will be removed
FAR	There are 10 high-level changes to FAR. As presented in further detail below, these changes include the following: Certain Groups and Topics will be removed because they are not critical to the work of newly licensed CPAs (e.g., content on going concern, differences between IFRS and US GAAP) Certain higher skill level content will be removed or reassessed at a lower skill level (e.g., derivatives and hedge accounting)
REG	There are 7 high-level changes REG. As presented in further detail below, these changes include the following: Certain Groups and Topics will be removed because they are not critical to the work of newly licensed CPAs (e.g., federal securities regulation, estate taxation, alternative minimum tax)

AUD will face the most changes in 2021. However, FAR receives the most changes after AUD, and BEC changes are not immaterial either. Moreover, there are a material amount of REG changes, but these changes are likely very positive for candidates who struggled with taxation.

What Is Not Changing on the 2020 and 2021 Versions of the CPA Exam?

There will not be significant CPA Exam changes to any of the following:

Aggregate CPA Exam Time

For better or worse, the total time per CPA Exam section remains the same in 2020 and 2021.

Section	Section Time
AUD	4 hours
BEC	4 hours
FAR	4 hours
REG	4 hours

Content allocation ranges

The AICPA is not expecting to significantly change the content allocation ranges in 2020 or 2021. Therefore, the current content allocation ranges for each section appear below. If any changes occur to these ranges in 2020 or 2021, such changes will be communicated when the new Blueprints are published. And the new Blueprints will be published in April 2020 (for the new AUD Exam in 2020), and no later than January 2021 (for the new CPA Exam in 2021).

AUD

Content area		Allocation
Area I	Ethics, Professional Responsibilities and General Principles	15-25%
Area II	Assessing Risk and Developing a Planned Response	20–30%
Area III	Performing Further Procedures and Obtaining Evidence	30–40%
Area IV	Forming Conclusions and Reporting	15-25%

BEC

Content area		Allocation
Area I	Corporate Governance*	17–27%
Area II	Economic Concepts and Analysis	17–27%
Area III	Financial Management	11–21%
Area IV	Information Technology	15-25%
Area V	Operations Management	15-25%

*In 2020, the name of Area I will continue to be “Corporate Governance.” In 2021, however, the name of Area I will change to “Business Process, Risks and Controls.”

FAR

Content area		Allocation
Area I	Conceptual Framework, Standard-Setting and Financial Reporting	25–35%
Area II	Select Financial Statement Accounts	30–40%
Area III	Select Transactions	20–30%
Area IV	State and Local Governments	5–15%

REG

Content area		Allocation
Area I	Ethics, Professional Responsibilities and Federal Tax Procedures	10–20%
Area II	Business Law	10-20%
Area III	Federal Taxation of Property	12–22%
Area IV	Transactions Federal Taxation of Individuals	15-25%
Area V	Federal Taxation of Entities	28-38%

Skill allocation ranges

Similar to the content allocation ranges, the skill allocation ranges for each section of the CPA Exam are not expected to change significantly in 2020 or 2021. Therefore, the current skill allocation ranges for each section are presented below. However, if any changes occur to these ranges in 2020 or 2021, such changes will be communicated when the new Blueprints are published. Consequently, the AICPA publishes the Blueprints in April 2020 (for the new AUD Exam in 2020), and no later than January 2021 (for the new CPA Exam in 2021).

Section	Remembering and Understanding	Application	Analysis	Evaluation
AUD	30-40%	30-40%	15-25%	5-15%
BEC	15-25%	50-60%	20-30%	–
FAR	10-20%	50-60%	25-35%	–
REG	25-35%	35-45%	25-35%	–

CPA Exam Score Reporting

It is anticipated that the CPA Exam changes will not result in delayed score reporting. Therefore, you can utilize our CPA Exam score release schedule regardless of when you sit for the exam.

Extent of the 2021 CPA Exam Changes

The extent of the 2021 CPA Exam changes for each section are presented in detail below. So, in total, there are 46 high-level changes to the CPA Exam divided as follows:

AUD	22
BEC	7
FAR	10
REG	7
Total	46

The main takeaways include the following:

All sections either had content removed or reassessed at a lower skill level to better reflect the work of a newly licensed CPA.
AUD and BEC were the sections most affected by the addition of new content related technology.
Specific topics in FAR no longer assess the preparation of journal entries.
REG no longer assesses estate taxation, alternative minimum tax, or certain topics related to trusts.

AUD Proposed Blueprint Changes

Change Number	Area/Group/Topic	Proposed Changes
	AREA I — ETHICS, PROFESSIONAL RESPONSIBILITY AND GENERAL PRINCIPLES
	Group B: Ethics, independence and professional conduct.
1	Topic 3: Requirements of the Government Accountability Office and the Department of Labor.	Remove: content assessed at the application skill level (two tasks). Apply the ethical requirements and independence rules of the Government Accountability Office Government Auditing Standards to situations that could present threats to compliance during an audit of, or attestation engagement for, a government entity or an entity receiving federal awards. Apply the independence rules of the Department of Labor to situations that could present threats to compliance during an audit of employee benefit plans.
	Group C: Terms of engagement.
2	Topic 1: Preconditions for an engagement.	Remove: entire topic (four tasks). Identify the preconditions needed for accepting or continuing an audit or non-audit engagement. Perform procedures to determine whether the preconditions needed for accepting or continuing an audit or non-audit engagement are present. Perform procedures to determine whether the financial reporting framework to be applied to an entity’s financial statements is acceptable. Perform procedures to obtain the agreement of management that it acknowledges and understands its responsibilities for an audit or non-audit engagement.
	Group E: Communications with management and those charged with governance.
3	Topic 3: All other matters.	Remove: entire topic (three tasks). Identify matters, other than those related to the planned scope and timing or deficiencies, and material weaknesses in internal control that should be communicated to management and those charged with governance for an audit or non-audit engagement. Identify matters that should be communicated to component auditors in a group audit engagement. Identify matters that should be communicated to parties other than management and those charged with governance (e.g., communications required by law or regulation) for an audit or non-audit engagement.
4	Group F: Communication with component auditors and parties other than management and those charged with governance.	Remove: entire group (two tasks). Identify matters that should be communicated to component auditors in a group audit engagement. Identify matters that should be communicated to parties other than management and those charged with governance (e.g., communications required by law or regulation) for an audit or non-audit engagement.
5	Group G: A firm’s system of quality control, including quality control at the engagement level.	Revise: entire group (two tasks). Group G will be revised to focus only on engagement-level quality control. The actual revisions are unknown at this time, but will be communicated when the updated Blueprint is published.
	AREA II — ASSESSING RISK AND DEVELOPING A PLANNED RESPONSE
	Group A: Planning an engagement.
6	Topic 2: Developing a detailed engagement plan.	Remove: content assessed at the analysis skill level (1 task). Develop or modify a detailed engagement plan for an audit or non-audit engagement based on planning inputs and constraints.
	Group B: Understanding an entity and its environment.
7	Topic 1: External factors, including the applicable financial reporting framework.	Expand: scope of Topic 1 to emphasize technology as an external factor.
7	Topic 2: Internal factors, including nature of the entity, ownership and governance structures and risk strategy.	Expand: scope of Topic 2 to include content on the following: Understanding and documenting significant business processes, IT system infrastructure, and data flows (e.g., revenue, production, expenditures, payroll, etc.). Identifying significant business processes and related IT systems, and how data generated from those business processes flows through the systems.
	Group C: Understanding an entity’s internal control.
8	Topic 1: Control environment and entity-level controls.	Revise: to include IT general controls and associated documentation (moved from Group C, Topic 4 below).
	Topic 2: Flow of transactions and design of internal controls.	Revise: content on internal control walkthroughs and documenting the flow of transactions will be revised to include significant business processes and how they relate to the financial statements, as well as examples of types of documentation (i.e., flowcharts, process diagrams, etc.). Add: content relating to obtaining an understanding of the IT systems that are used for financial reporting. Revise: content on identification and documentation of key controls will be revised to include Manual controls, IT general controls, application controls, and how they relate to specific business processes and their impact on the financial statements The effect of these controls on the completeness and reliability of data (moved from Group C, Topic 4 below) Revise: content on evaluating internal controls and whether the internal controls are effectively designed and placed in operation will be revised to include reference to manual and application controls.
	Topic 3: Implications of an entity using a service organization.	Add: content regarding SOC 1 (Type 2).
	Topic 4: Information Technology (IT) general and application controls.	Remove: Topic is eliminated, and its content will be moved to Topics 1 and 2 above.
	Group E: Identifying and assessing the risk of material misstatement, whether due to error or fraud, and planning further procedures responsive to identified risks.
9	Topic 3: Further procedures responsive to identified risks.	Add: content regarding the use of audit data analytic techniques to identify transactions that may have a higher risk of material misstatement.
10	Group G: Planning for and using the work of others, including group audits, the internal audit function and the work of a specialist.	Remove: content related to the use of the internal audit function (two tasks). Identify the factors to consider in determining the extent to which an engagement team can use the work of the internal audit function in an audit or non-audit engagement. Determine the nature and scope of the work of the internal audit function that can be used in an audit or non-audit engagement. Add: content related to using the work of an IT auditor .
	Group H: Specific areas of engagement risk.
11	Topic 3: Related parties and related party transactions.	Remove: content assessed at the analysis skill level (1 task). Analyze the potential impact of related party relationships and transactions on the risk of material misstatement for an audit or non-audit engagement, including consideration of significant unusual transactions and transactions with executive officers.
	AREA III — PERFORMING FURTHER PROCEDURES AND OBTAINING EVIDENCE
12	Group A: Understanding sufficient appropriate evidence.	Revise: change Group A title to “Sufficient appropriate evidence.” Expand: scope of Group A to include content focused on determining the sources of sufficient appropriate evidence and identifying procedures to validate the completeness and accuracy of data. Add: content on the use of professional skepticism and judgment in analyzing corroborating or contradictory evidence and evaluating whether sufficient appropriate evidence has been obtained.
13	Group B: Sampling techniques.	Revise: change Group B title to “General procedures to obtain sufficient appropriate evidence.” Add: the concept of using automated tools and audit data analytics in audit sampling. Add: content related to the use of automated tools and techniques related to recalculation. Add: the following content will be added from Group C Inquiry of management (Group C, Topic 3) Observation and inspection (Group C, Topic 4) Recalculation and reperformance (Group C, Topic 5)
14	Group C: Performing specific procedures to obtain evidence.	Revise: change Group C title to “Specific procedures to obtain evidence.” Remove: Topics 3-5 will be moved to Group B above. Remove: Topic 6 (All other procedures) is eliminated. Add: new Topic titled “Audit data analytics.” Added content includes Working with data sets and encompassing tasks requiring the use of Excel (i.e., sorting, classifying, summarizing, and comparing data) Analyzing the results of an audit data analytic procedure and understanding the significance of notable or unusual items.
	Group D: Specific matters that require special consideration.
15	Topic 1: Opening balances.	Remove: entire Topic (1 task). Test whether prior-period closing balances have been correctly brought forward to the current period or restated in the audit of an issuer or nonissuer, including investigation of differences.
16	Topic 2: Investments in securities and derivative instruments.	Remove: derivative content. (I Pass note: it should follow that the title of Topic 2 should be revised accordingly; however, a proposed title change has not yet been communicated)
17	Topic 4: Litigation, claims and assessments.	Remove: content assessed at the analysis skill level (1 task). Analyze management’s estimate of the liability associated with litigation, claims and assessments in an audit of an issuer or nonissuer.
18	Topic 5: An entity’s ability to continue as a going concern.	Remove: content assessed at the application skill level (1 task). Perform procedures related to the assessment of management’s evaluation and conclusion regarding an entity’s ability to continue as a going concern in an audit of an issuer or nonissuer.
19	Group F: Written representations.	Remove: content assessed at the application skill level (1 task). Assist in the preparation of required written representations that should be obtained from management or those charged with governance in an audit or non-audit engagement.
20	Group G: Subsequent events and subsequently discovered facts.	Revise: change Group G title to “Subsequent events.” Remove: content on subsequently discovered “facts.”
	IV — FORMING CONCLUSIONS AND REPORTING
21	Group D: Reporting on compliance.	Remove: content assessed at the application skill level (2 tasks). Prepare a draft compliance report for an attestation engagement to report on an entity’s compliance with the requirements of specified laws, regulations, rules, contracts or grants starting with a report example (e.g., an illustrative report from professional standards). Prepare a draft compliance report when reporting on compliance with aspects of contractual agreements or regulatory requirements in connection with an audit of an entity’s financial statements starting with a report example (e.g., an illustrative report from professional standards).
22	Group E: Other reporting considerations.	Remove: Topics 5 (Single Statements), 7 (Letters for underwriters and filings with the SEC), and 8 (Alerts that restrict the use of written communication) will be eliminated.

BEC Proposed Blueprint Changes

Change Number	Area/Group/Topic	Proposed Changes
23	AREA I — CORPORATE GOVERNANCE	Rename: “Area I: Corporate Governance” will be renamed as “Area I: Business Process, Risks, and Controls.”
	Group A: Internal control frameworks.	Revise: to include the Sarbanes-Oxley Act of 2002 as a new Topic (moved from Group C below)
	Group C: Other regulatory frameworks and provisions.	Remove: current content on the Sarbanes-Oxley Act of 2002 will be moved to Group A above as a new Topic. Add: new Group C titled “Business processes and transaction level-risks and controls.” Content added to this new group includes the following Describing business processes and flows of transactions including enabling technology Identifying opportunities to improve efficiency Identifying and designing transaction-level controls Use of SOC 1 reports from service providers Identifying risks and control gaps Using data and business intelligence Current process and transaction-level risks and controls content moved from the following areas Area I, Groups A and B Area IV, Group A (Topics 2 and 3), Group B (Topic 3), Group C (Topic 1)

24	AREA II — ECONOMIC CONCEPTS AND ANALYSIS
	Group A: Economic and business cycles – measures and indicators.	Remove: general macroeconomics content.
	Group B: Market influences on business.	Remove: general macroeconomics content.
	AREA III — FINANCIAL MANAGEMENT
25	Group A: Capital structure.	Remove: content assessed at the analysis level (1 task). Compare and contrast the strategies for financing new business initiatives and operations within the context of an optimal capital structure, using statistical analysis where appropriate.
	AREA IV — INFORMATION TECHNOLOGY
	Group A: Understanding of information technology (IT).
26	Topic 1: Organization and governance.	Add: content on understanding the need for SOC 1 reports for outsourced IT functions.
27	Topic 3: Data.	Add: Topic 3 – Data will become its own Group, and expanded to include content on Data management Data governance Data relationships Extracting and loading data Transforming and working with data and data relationships
28	Group B: Risk associated with IT.
28	Topic 2: System development and maintenance.	Revise: Topic 2 will focus on concepts related to controls over software changes, and will be assessed at the remembering and understanding skill level instead of the application skill level.
29	Group C: Controls that respond to risks associated with IT.
29	Topic 4: Continuity and recovery plans.	Revise: Topic 4 will focus on recalling concepts related to business resiliency, and will be assessed at the remembering and understanding skill level instead of the application skill level.

FAR Proposed Blueprint Changes

Change Number	Area/Group/Topic	Proposed Changes
	AREA I — CONCEPTUAL FRAMEWORK, STANDARD-SETTING, AND FINANCIAL REPORTING
	Group B: General-purpose financial statements: for-profit business entities.
30	Topic 8: Discontinued operations.	Remove: Topic 8 will be removed, and discontinued operations will be added to Topic 2 (Income statement/statement of profit or loss) as an example to the multi-step income statement task statement.
31	Topic 9: Going concern.	Remove: Topic 9 will be removed.
32	Group E: Financial statements of employee benefit plans.	Remove: content assessed at the application skill level (2 tasks) Prepare a statement of changes in net assets available for benefits for a defined benefit pension plan and a defined contribution pension plan. Prepare a statement of net assets available for benefits for a defined benefit pension plan and a defined contribution pension plan.
	AREA II — SELECT FINANCIAL STATEMENT ACCOUNTS
	Group K: Compensation and benefits.
33	Topic 1: Compensated absences.	Remove: Topic 1 will be removed, and content on vacation accruals will now be assessed under Area II, Group G (Payables and accrued liabilities).
34	Topic 2: Retirement benefits.	Remove: Topic 2 will be removed.
	AREA III — SELECT TRANSACTIONS
35	Group D: Derivatives and hedge accounting (e.g., swaps, options, forwards).	Remove: content assessed at the application skill level (2 tasks) Prepare journal entries for hedging transactions. Prepare journal entries for derivative financial instruments (swaps, options and forwards).
36	Group L: Differences between IFRS and U.S. GAAP.	Remove: Group L will be removed.
	AREA IV — STATE AND LOCAL GOVERNMENTS
	Group B: Format and content of the financial section of the comprehensive annual financial report (CAFR).
37	Topic 1: Government-wide financial statements.	Remove: content assessed at the application skill level (2 tasks) Prepare the government-wide statement of net position for a state or local government from trial balances and supporting documentation. Prepare the government-wide statement of activities for a state or local government from trial balances and supporting documentation.
38	Topic 2: Governmental funds financial statements. Topic 3: Proprietary funds financial statements. Topic 4: Fiduciary funds financial statements.	Revise: Topics 2-4 will be combined to form a new Topic titled “Fund financial statements.” Remove: content assessed at the application skill level, which required the preparation of specific financial statements.
38	Group C: Deriving government-wide financial statements and reconciliation requirements.	Remove: Group C will be removed. Content will be moved to Group B as a new Topic, and will be assessed at the remembering and understanding skill level instead of the application skill level.
39	D. Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements
	Topic 1: Net position and components thereof. Topic 2: Fund balances and components thereof. Topic 5: Interfund activity, including transfers.	Revise: content will move to Group B, and will be assessed at the remembering and understanding skill level instead of the application skill level.
	Topic 8: Special items.	Remove: Topic 8 will be removed.
	Topic 3: Capital assets and infrastructure assets. Topic 4: General and proprietary long-term liabilities. Topic 6: Nonexchange revenue transactions. Topic 7: Expenditures and expenses. Topic 9: Budgetary accounting and encumbrances.	Revise: these Topics will no longer assess the preparation of journal entries.

REG Proposed Blueprint Changes

Change Number	Area/Group/Topic	Proposed Changes
	AREA II — BUSINESS LAW
40	Group C: Debtor-creditor relationships.
40	Topic 1: Rights, duties and liabilities of debtors, creditors and guarantors. Topic 2: Bankruptcy and insolvency. Topic 3: Secured transactions.	Remove: content assessed at the application level in Topics 2 and 3. Revise: the content in Topic 1 and the remembering and understanding skill level content from Topics 2 and 3 will be combined in Group C. There will no longer be separate topics in Group C.
	Group D: Government regulation of business.
41	Topic 1: Federal securities regulation.	Remove: Topic 1 will be removed.
	AREA III — FEDERAL TAXATION OF PROPERTY TRANSACTIONS
42	Group C: Estate and gift taxation.	Rename: Group C will be renamed “Gift Taxation.” Revise: There will no longer be separate topics in Group C. Remove: content on estate taxation.
	AREA IV — FEDERAL TAXATION OF INDIVIDUALS
43	Group H: Alternative minimum tax	Remove: Group H will be removed.
	AREA V — FEDERAL TAXATION OF ENTITIES
44	Group C: C Corporations.
44	Topic 2: Net operating losses and capital loss limitations.	Remove: content assessed at the analysis skill level (2 tasks). Analyze the impact of the charitable contribution and/or dividends received deductions on the net operating loss calculation of a C corporation. Analyze the impact of net operating and/or capital losses during tax planning for a C corporation.
45	Group G: Trusts and estates.
	Topic 2: Income and deductions.	Remove: Topic 2 will be removed.
	Topic 3: Determination of beneficiary’s share of taxable income.	Remove: Topic 3 will be removed.
46	Group H: Tax-exempt organizations.
	Topic 2: Obtaining and maintaining tax-exempt status.	Remove: Topic 2 will be removed.
	Topic 3: Unrelated business income.	Revise: Topic 3 will be limited to assessing the understanding of unrelated business income for a tax-exempt organization rather than calculating it.

Conclusion

In conclusion, while the CPA Exam changes are always a cause for concern, I do not anticipate that these changes will make the exam any more difficult. And I also doubt that we’ll see any material changes in the CPA Exam pass rates as a result of these changes.

In fact, for those CPA candidates who despise REG, you may even find that the 2021 version is less difficult than the previous one. So, in this case, the REG changes to remove testing on AMT and more are especially positive.

Additionally, updating an exam to test on technology and analytics is becoming more commonplace. What’s more, it’s also becoming the norm to remove irrelevant content from exams that covers principles or areas that accountants aren’t using on a frequent basis.

Changes to Accounting Exams Becoming the Norm

For instance, in 2019, the IIA released CIA exam changes that aligned the exam content with more relevant technology information. Similarly, the ICMA published CMA exam changes that allowed the exam to focus more on technology and analytics. Also, the CMA exam dropped topics that weren’t considered relevant for CMAs, like internal auditing. So, what the AICPA is doing to update the CPA Exam is quite expected at this point.

Planning for the CPA Exam Changes

Now, should these changes cause you to plan your exams any differently? Not really. However, I recommend you personally assess how the proposed changes may affect you and plan accordingly. For example, if the changes will give you an advantage, then wait to take the exam until the changed version becomes available. Conversely, if the changes would put you at a disadvantage, plan to take the exam(s) before the changes take effect.

About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try.Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight.Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!

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