CPA Exam Preparation Blog

Coming Changes to the CPA Exam

2010-03-12T09:59:00.000-08:00

As many of you may know, January 1st, 2011 will bring new changes to the CPA Exam. Some of these changes include:

The larger simulations in the AUD, FAR, and REG sections will now be smaller task based simulations (TBS)
All written communication will be contained in the BEC section
New Content will be introduced into the various sections including the introduction of International Financial Reporting Standards (IFRS) to FAR

For more details, watch our video with Mitra Wilson as she explains everything you need to know about what the exam will look like in 2011!

NASBA, AICPA, and Prometric extend contract by 10 years

2010-03-09T13:16:00.000-08:00

The three organizations that jointly administer the Uniform CPA Examination have extended their contract to 2024. The American Institute of Certified Public Accountants , the National Association of State Boards of Accountancy , and Prometric , have been administering the exam for the past six years.

Barry Melancon, AICPA president and CEO said, "The CPA exam is the gateway to the accounting profession and under this arrangement we have seen the exam improve and grow. About 93,000 candidates took the examination in 2009 – a record."

In order to receive licensure as a CPA in the United States you must pass the Uniform CPA Examination. The exam consists of multiple choice questions, essays, and simulations that replicate work place situations. April of 2004 marked the beginning of the exam being administered using computer-based testing and the exam is set to undergo additional changes and improvements to be implemented in 2011.

Make sure to check out the Become a CPA section of our website to get more details on this process.

CPA Review: Methods of Accounting for Investments

2010-02-15T17:18:00.001-08:00

Roger Philipp, CPA discusses the three methods of accounting for investments. This brief excerpt from the FAR section of the Roger CPA Review Online and USB course introduces the concepts of Cost Method or Marketable Securities, the Equity method and Consolidation. The excerpted text below comes straight from Roger's Financial Accounting and Reporting textbook.

An investor may acquire equity securities (common or preferred stock) debt securities (bonds) and derivatives (stock rights) in other companies. When a company acquires common stock, we need to determine the appropriate method of accounting for the investment, and this will depend primarily upon the amount of stock that is owned by the investor.

0-20%: Cost Method or Marketable Securities
The implication is that no influence over the investee company exists.

If the security isn't marketable, use the cost method.

20-50%: Equity Method (One-line consolidation)
The implication is that the investor has significant voting influence over the investee.

50% or more: Consolidation
The implication is that the investor has control over the investee.

Members of the investor company constitute a majority of the board of directors of the investee.

Help the AICPA! New Passing Scores Evaluated Under CBT-e

2010-02-05T13:09:00.001-08:00

In yet another huge announcement from the AICPA this morning, Roger CPA Review was told that panels are being formed in order to determine a new passing score for each section of the exam. This is in conjunction with the new CBT-e changes that are set to occur 01/01/2011.

Before you start freaking out and signing up for all your exams at once, worrying that the passing rate will be pushed up to 100 points and you will have to get each and every question right - consider that the reasoning behind this review process is to protect the public interest and make the CPA designation stay as prestigious as it is. The AICPA will ensure that the exam is still fair and completely passable. In fact, there is the chance that the passing score will even remain the same.

So if you know of any particularly awesome CPAs, or want to become more involved yourself, volunteer to help the AICPA. The work of the panels will be extremely important to the continued success of the CPA Examination and its role in the CPA licensure process.

From the AICPA:

"When the new Uniform CPA Examination is launched on January 1, 2011, changes in content, format, and structure will be introduced. These changes will require the current passing score to be re-examined. The process to do so will include convening four panels of CPAs – one for each examination section – to prepare the groundwork for the passing score decision by the AICPA Board of Examiners. A new passing score determination is necessary in conjunction with the new examination to ensure that legally defensible CPA Examination pass/fail decisions continue to be made in protection of the public interest.

Panel Nominees
The AICPA is seeking nominations for passing score panel membership. Nominees should be CPAs who:
• have been licensed for between 3 and 5 years
• have supervised entry-level CPAs during the past year
• have NO affiliation with CPA Examination review courses, and
• are willing to participate in an August 2010 two-day meeting in Chicago, IL at the expense of the AICPA.

The selection of panelists from among qualified nominees will be made to ensure broad representation from all segments of the profession and demographic categories. Panelists will be given training at the August meetings on their responsibilities as panel participants.

Submitting Nominations
Nominations may be submitted online at http://vovici.com/wsb.dll/s/4e5ag3f124 or the forms completed and returned by FAX to 609-671-2922. Or, the names and contact information of nominees may be sent by e-mail to passingscorepanel@aicpa.org The information collected about nominees will be used only for the purpose of selecting panel participants..

The deadline for submitting nominations is MARCH 31, 2010.

Final review by the BOE and the determination of the new passing score will take place in the spring of 2011, after scores from the first 2011 testing window become available.

Thank you in advance for helping to identify CPAs who have both the required qualifications and the willingness to contribute their time and expertise to standard-setting"

Regulation CPA Exam Review: Explanation of Cash Basis Accounting

2010-01-25T13:40:00.000-08:00

Roger Philipp, CPA describes Cash Basis accounting, which is the standard reporting method for individual taxpayers. Follow along closely, as Roger explains which entities and organizations are prohibited from using this method. As an added bonus, Roger clarifies the successful construction of a written communication... a very important element of the CPA Exam. This video is an excerpt from the REGULATION portion of the Roger CPA Review Online/USB course.

For more information, please visit http://www.rogercpareview.com/cpa-exam-review-course-overview.cfm

------Companion text from the Roger CPA Review REGULATION Text Book------

Cash Basis

Most individuals use the Cash basis of accounting, however the accrual method is required for purchases and sales of inventory.

Service type businesses whose gross receipts do not exceed $10M may use the cash basis. This includes:
- Most individuals, S-corps and individually owned Partnerships

Some entities that are prohibited from using the cash basis include:

C corporations with gross receipts exceeding $5M
Partnerships that have a C corporation as a partner exceeding $5M
Tax shelters
Certain trusts

Cash Basis:

Recognize Income
- Cash or property received
- Actually or Constructively received(made available – earlier of two)
Report Deductions
- Cash or check is disbursed
- Expense charged on a credit card

Resolve to Stick With Your Resolutions

2010-01-20T10:00:00.000-08:00

Now that it is well into January, we thought we might give you a little reminder of those little things called New Year's Resolutions. You know... all those promises you made to yourself the week in between inhaling candy canes and popping those loud cardboard popper things. Still don't remember? How about "This year, I resolve to study at least 50 hours a week and pass all four parts of my CPA exam on the first try."? Remember that promise to yourself?

Only 8% of people ever reach their New Year's resolutions. And less than half of people are still trying past the end of January. But not you - no, you know that the reasons for becoming a CPA far outweigh the costs and you are going to stick to your goals like gum in your 5 year-old kid's hair. That's why we are offering this small little reminder of ways that you can keep your resolutions - we want you to hit those books, stick to your schedule, and reach your dream career.

Write it down. Even if you didn't write it down and track your progress from the 1st of the year, writing down your goals will give you small milestones to aim for, a reminder in your bathroom mirror, and solidify your renewed vigor at conquering the exam.

Tell your plan to the people closest to you. Then, make sure that they keep you accoutable and on track.

Don't forget to reward yourself. Get in 3 hours of studying every day and 2 practice exams this week? Treat yourself to a little something-something. This will help keep you motivated and rev-up your engines for the next small goal.

Expect setbacks. Just because you didn't meet a small goal does not mean to need to beat yourself up and give-in. Life happens, and sometimes there is nothing you can do to change circumstances. Just wake up the next day and go at it full-force again. There's no reason to let one bad day or week keep you from fulfilling your accomplishment

Start a New Year's Resolution today. Who says you have to make an irrevocable decision on the 31st of the year? Make the decision today to start studying more, getting help when you need it, practicing your simulations, and buckling down.

Live Tomorrow - Ask Roger all of your CPA Exam Questions!

2010-01-18T09:00:00.000-08:00

We here at Roger CPA Review are crazy excited to a announce our first scheduled CPA Exam Chat on Tuesday January 19th from 11am to 12pm PST. (That's tomorrow!) Roger will be available on the CPA Exam Club site to take questions, discuss study methods, and talk over anything and everything Exam related.

In the words of CPA Exam Club:

Roger Philipp, CPA of Roger CPA Review will be taking your questions!!!

Are you struggling with a particular exam question, topic or section? Curious about the 2011 exam changes? Trying to figure out how to choose exam materials? Our exam chat is a great place to have your questions answered.

Don't forget! You need to be a member of CPA Exam Club to participate in Tuesday's chat, so if you haven't already joined, please do so now so you are all set for Tuesday's chat. (Join Here)

The Chat link will be available via the CPA Exam Club home page about 15-20 minutes prior to chat time. Once chat is available, you will see a long bar at the bottom of the home page with a button to connect to Chat.

Find out more information here.

So join in on the fun and get your questions and concerns answered- see you all tomorrow!

2010 Window One Scoring Info

2010-01-11T11:43:00.000-08:00

We know that it is only the second full week of the first testing window of 2010, but we also know that people are already curious about score releases and when they can expect their results.

Last week, CPA Zone published a great post on expected Window 1, Wave 1 & 2 scoring predictions and estimates. In fact, we thought that it was so good that we would share their predictions and add some key take-away points.

The Wave 1 cutoff is predicted to be February 5th. This means that if you want your scores to be included in Wave 1, you need to sit for the exam on or before February 5th.

The AICPA releases scores to NASBA, or directly to the state if it is a non-NASBA jurisdiction. Individual states release their scores via Board of Accountancy websites, email, or snail mail. NASBA posts scores 24-48 hours after receiving them from the AICPA, generally around 9pm EST.

Wave 1 scores are generally released around the 15th of the second month of the window and conclude around the 22nd or 23rd.

Wave 2 scores are generally released 2 weeks after the end of the window, in the third blackout month, and conclude around the 22nd or 23rd.

The order of score releases is historically BEC, REG, AUD, FAR or BEC, AUD, REG, FAR

CPA Zone's scoring predictions, which we here at Roger agree with, are as follows:

WAVE 1 Jan/Feb 2010 Window
Score Release Start - Week of February 15th
Score Release Finish - Week of February 22nd

WAVE 2 Jan/Feb 2010 Window
Score Release Start - Week of March 15th
Score Release Finish - Week of March 22nd

As the only CPA Review provider with the RealResults® system, and the highest passing rates in the industry (86%!), we know that our students are able to worry a bit less when it comes to the score waiting game.

Want more? Learn more about passing the CPA Exam.

*image credit: pbo31

CPA Exam Changes in 2011

2010-01-07T15:16:00.000-08:00

The CPA Exam will undergo some dramatic changes and updates as it makes the transition to CBTe, or "computer based testing evolved," beginning on January 1st, 2011. Start your preparation now with Roger CPA Review! Join CPA Exam Advisor Mitra Wilson as she describes the major new features and changes you can expect to see on the CPA Exam. Find out what you'll need to be ready for when you sit for the CPA Exam. Don't be caught by surprise!

Happy New Year!

2009-12-31T10:00:00.000-08:00

Happy New Year from Roger CPA Review.

2009 has been filled with historic moments, poker faces, a struggling economy, the death of a king, remarkable heroes, and singing sensations. It's been wild. We have had an amazing year here at Roger. We released our flash drive cram course, launched a new website, and opened up classrooms in Portland, Costa Mesa, San Diego, Ontario, and Sherman Oaks (all while helping our students succeed in their goal of becoming a CPA).

We want to take this opportunity to thank both our current and former students, our friends at the Big 4, all the the smaller firms we work with (whose support over the years has been amazing), our partner organizations like CalCPA, CSCPA, MACPA, ASWA and Beta Alpha Psi, and the professors who help get our information and courses to students.

The large framework of our supporters, clients, friends, and students help us each day to grow, expand, and continue to offer the most energetic and affordable CPA Review out there. We thank you for all that you do - and look forward to sharing even more success with you in 2010.

Happy New Year - and we'll see you in class!

This Holiday Season: Give Your Time

2009-12-29T10:00:00.000-08:00

We blogged about this last year here on the CPA Exam Preparation Blog, but we've decided that it is important enough to repeat (and you probably forgot).

Tax-Aid is looking for volunteers.

Founded in 1988 by a coalition of accountants and lawyers, Tax-Aid, a 501(c)3 non-profit, has served thousands in the Bay Area with an emphasis on increasing access to the Earned Income Credit and the Child Tax Credit. Its mission is to provide free income tax preparation to low-income families throughout the Bay Area.

In 2009 Tax-Aid prepared 4,020 returns. These taxpayers received over $4,090,069, with some refunds even over $4,500! That is huge considering San Francisco is the second most expensive city in the country!

Tax-Aid coordinated 72 free tax preparation programs. In 2009 the combined campaigns served over 19,000 clients helping them to receive more than $19,800,000 in federal and state refunds.

Tax-Aid also serves as the lead agency for the United Way of the Bay Area's "Earn It! Keep It! Save It!" campaigns in San Francisco and San Mateo counties, promoting financial literacy and stability for working families.

Tax-Aid's more than 1,000 volunteers come from all types of organizations and professional backgrounds. Plus, even though tax expertise is always in demand, there are other jobs you can volunteer for that do not require any technical knowledge. Volunteers are asked to attend a two-hour training session on Tax-Aid's process, and also need to volunteer for at least one session. Most Tax-Aid volunteers donate around eight hours over a few weeks - just a little bit of your time goes a long way toward helping others.

If you would be interested in participating (accounting and law students are encouraged to volunteer), contact the program directly us-tax-aid@kpmg.com

So offer up a lending hand and do a good deed. Not only can you gain tax experience, but you are sure to increase your positive karma too. And, if you don't live in or around the bay, look up a place to use your talents in your area. Similar programs exist everywhere, and most are consistently accepting volunteers.

Have a CPA Review Holiday Season!

2009-12-24T10:00:00.000-08:00

Have a safe and happy holiday weekend - from all of us here at Roger CPA Review!

and remember to study, study, study... :)

Top 5 Things Accountants are Thankful For

2009-12-22T15:22:00.000-08:00

Join Roger CPA Review this holiday for a look at the Top 5 Things Accountants are Thankful For. An insightful list of items like Excel formulas, the 10 key and coffee will bring a smile to the face of any CPA or accountant as we close out the books for 2009. What will take our number 1 spot as the thing that accountants are most thankful for? Find out as your host, Morgan Ives, counts down the list. Featuring festive holiday music and graphics, this video is a warm and toasty companion to your hot cocoa and candy canes. Happy Holidays from Roger CPA Review!

Decision Making

2009-12-15T16:32:00.001-08:00

(Excerpted from the 2010 Roger CPA Review BEC Textbook)

A primary purpose of cost measurement is to allocate the costs of production (direct materials, direct manufacturing labor, and manufacturing overhead) to the units produced. It also provides important information for management decisions, such as product pricing decisions.

Cost Definitions

y = A + Bx [ TC = Fixed + Var (X) ]

In this formula:
The y is equal to total cost and is referred to as the dependent variable since its amount is dependent on the other factors.

The x is equal to volume and is referred to as the independent variable since it can be increased or decreased at the company's discretion. This is also often referred to as the cost driver as the amount of costs incurred will be largely dependent on the volume of this variable.

The A is equal to fixed costs and remains constant at any volume as long as the company is operating within a given range of volume.

The B is equal to the variable cost per unit.

Note: Theses cost assumptions only remain valid within the Relevant Range.

(The following are not discussed in the video excerpt. For a full explanation, please enroll in any format of our BEC course.)

Mixed cost (Semi-Variable – Fixed and Variable Component)

High-Low Method – This method computes the slope for the variable rate based on the highest and lowest observations. The difference in cost is divided by the difference in activity to obtain the variable cost.

State Societies: Get Involved

2009-12-14T13:59:00.001-08:00

Imagine for a moment that you have unparalleled access to a secret society, organized to support its members as they meet various professional challenges unique to their industry. You don't have to imagine… these societies are real, and they aren't even secret. There's no password, no secret handshake, and no initiation. In fact, with a minimum of effort, you can find one near you right now.

We're talking about your State Societies of CPAs. These indispensible organizations can be found in almost every jurisdiction. Let's take a closer look at how joining your State Society of CPAs can benefit you.

Networking

Networking, as we've said a million times on this blog, is an essential part in finding a job and maintaining professional contacts as an accountant. The people that you meet in a State Society come from a variety of backgrounds, experience levels and job profiles. Each member offers their own unique take on the accounting industry. These peers can be invaluable as resources, especially to CPA Exam candidates trying to pass their exams.

Resources

Besides networking, State Societies offer conferences, seminars, webinars, CPE classes, and other educational benefits to those members. Additionally, they are often up to date on all CPA laws and regulations in your state as well as on all accounting industry news. For example, the Maryland Association for CPAs lists news directly on their homepage and runs a fabulous blog to keep their members updated. The resources that a State Society can provide you are only limited by the needs that you need met and the extent to which you utilize their services.

Discounts

Our personal favorite part of joining State Societies is that they often offer CPA Exam Review discounts. Roger CPA Review partners with the OSCPA, CalCPA, MSCPA, and many many others, to provide our energetic, comprehensive CPA Review to their members. Not every society allows members that are CPA exam candidates, but, those that do offer great resources and discounts on passing the CPA Exam and gaining licensure in your state.

So, contact your state society through their webpages, your campus, on their twitter accounts & blogs, or through any other medium.

To get you started, we found this pretty list of societies by state. No need to thank us :)

Times, they are a-changin’! New Exam Durations and Scoring Weights Announced!

2009-11-30T10:09:00.001-08:00

In another huge announcement, this morning the AICPA released their final changes to the amount of time given to each exam, as well as the scoring weights (the value given to each question type) given to the sections within the exams. These changes come on the heels of the announcement in September that the CPA Exam will be heavily changing on 01/01/2011 with the implementation of CBT-e. Make sure that you familiarize yourself with these changes, especially if you are planning to sit for any section of the exam past December 31^st of 2010. Our advice? Start the CPA Exam Review process now and be finished with the exam before any of these changes are implemented. But if that isn't a feasible option for you, make sure that you familiarize yourself with these changes and use a review course who can teach you what types of adjustments to make to studying and preparing in order to conquer the new structure and new question types.

We've compiled these bullet points as a quick overview to the most important changes. Take a look at the charts below for more detailed information on the exact changes to each part of the exam.

Time Changes:

AUD will now be 4 hours instead of 4.5
BEC will now be 3 hours instead of 2.5

Structure Changes:

AUD and REG will have 7 task-based simulations while FAR will have 6 task-based simulations
BEC will now include 3 written communication tasks

Changes to Scoring Weights:

For AUD/FAR/REG, the MCQs will account for 60% and TBS will account for 40%
For BEC, the MCQs will account for 85% and the new written communication tasks will account for 15%

Structure/Time Changes

AUDIT AND ATTESTATION

Current Structure	New CBTe Structure
3 MCQ testlets with 90 questions total	3 MCQ testlets with 90 questions total
2 Simulations in (long) current format	1 testlet with 7 shorter Task-Based Simulations and the research question in a new format
2 written communication tasks	No written communication
TOTAL TIME: 4.5 hours	TOTAL TIME: 4 hours

BUSINESS ENVIRONMENT AND CONCEPTS

Current Structure	New CBTe Structure
3 MCQ testlets with 90 questions total	3 MCQ testlets with 72 questions total
	3 written communication tasks on BEC topics
TOTAL TIME: 2.5 hours	TOTAL TIME: 3 hours

FINANCIAL ACCOUNTING AND REPORTING

Current Structure	New CBTe Structure
3 MCQ testlets with 90 questions total	3 MCQ testlets with 90 questions total
2 Simulations in (long) current format	1 testlet with 7 shorter Task-Based Simulations and the research question in a new format
2 written communication tasks	No written communication
TOTAL TIME: 4 hours	TOTAL TIME: 4 hours

REGULATION

Current Structure	New CBTe Structure
3 MCQ testlets with 72 questions total	3 MCQ testlets with 72 questions total
2 Simulations in (long) current format	1 testlet with 6 shorter Task-Based Simulations and the research question in a new format
2 written communication tasks	No written communication
TOTAL TIME: 3 hours	TOTAL TIME: 3 hours

Weight Changes

AUD/FAR/REG

Item	Current Weight	New CBTe Weight
Multiple Choice (MCQ)	70%	60%
Simulations	20%	40%
Written Communication	10%	n/a

BEC

Item	Current Weight	New CBTe Weight
Multiple Choice (MCQ)	100%	85%
Simulations	n/a	n/a
Written Communication	n/a	15%

Studying Over the Holidays? Read This!

2009-11-25T12:50:00.000-08:00

If you are like many CPA exam candidates, you'll be spending this weekend cramming for one last section before the final window of 2009 closes on Monday.

Lucky for you, Going Concern has some suggestions for fighting off that the turkey hangover and getting through the holidays without blowing your study routine:

For CPA exam candidates, the final few weeks of the year can be a time of extreme pressure and/or procrastination. I won’t name names and bust any of our CPA Review students out (you know who you are) but I can tick off at least 25 people taking the exam today and next Monday, trying to squeeze in one last part before the New Year.

So how exactly is one supposed to show up for an exam the Monday after Turkey Day before the Tryptophan coma has worn off?
• Plan better next time: This is a terrible time of year to be sitting for the exam but unfortunately it’s also the busiest. More candidates cram into the final testing window of the year than any other window so if you’re testing in the 4th quarter next year, keep that in mind when you’re scheduling your exams. Schedule early and don’t get stuck testing the week after Thanksgiving.

• Prioritize: Do you really need to hit your parents house, your in-laws’ house and your best friend’s grandma’s house for Thanksgiving? If you’re really serious about preparing through the weekend (which you should have already been doing weeks before this), cut dinner short, stick to one holiday meal and spend your Black Friday studying instead of getting trampled in the Wal-mart parking lot. It’s better for your brain and better for your wallet.

Those are just a few, head over to GC for the rest.

Some other suggestions that GC may have missed would be to take care of yourself this winter; taking the exam can take a lot out of you, and with the added stress of the holidays, you can easily find yourself exhausted and spread far too thin. Take the time you need for yourself to refresh and recharge but don't allow yourself to be distracted by the time of year. Remember: the CPA exam is not an IQ test, it's a test of discipline and that means even during vacations and holiday time off.

Happy Turkey Day to everyone from your friends at Roger CPA Review! Now get back to studying!

The Sims: Not just a Popular Video Game

2009-11-16T10:00:00.000-08:00

Many CPA Exam candidates feel that the simulation portions of the AUD, REG, and FAR exams are one of the hardest parts. According to cpa-exam.com, "Simulations are condensed case-studies designed to test the knowledge and skills that are required of entry-level CPAs." Unlike the multiple choice questions, where one can simply guess if they do not know the answer (which you should always do!), the simulations are more action-based and require a deeper level of logical thinking. Furthermore, as the 10 points from each simulation, plus the 10 points from one of the written communication sections, combine to equal 30 points. This is a hefty chunk of your score, so it is important to not just nail the MCQs, but ace these problems as well.

Simulations are designed to test candidates on their analysis, judgment, communication, and research. They are structured to be a series of tasks that the candidate must complete that may include spreadsheets or forms, research on a topic, written business communication, and problem solving.

Structure of Simulations
Information Tabs.

The information tabs consist of information that you will need throughout the case study. The directions tab will lay out the tabs and their purposes. The resources tab will provide you with formulas and information that will help you complete your tasks. Additionally, on your actual simulation there may be other tabs besides these two – such as a "company profile" page. Basically these tabs should be used as references to help you solve the overall simulation tasks.

Work Tabs.

The work tabs are where you will actually be completing your tasks. These differ across exams and simulations based on what you are asked to do. On these tabs, you must complete all the given tasks in order for you to receive credit – so make sure you triple check your work if time allows. In fact, this is when time management becomes essential as you near the end of the exam.

This is where the written communication portions of the exam lay. Candidates will need to read a description or document, and construct a response to the situation. Your answer must be relative to the topic and use correct business writing, grammar, and organization. Get some more tips on the written communication section. Keep in mind that only one of these is graded.

Authoritative Literature.

According to cpa-exam.org, "the reference materials consisting of AICPA Professional Standards, FASB Current Text and Original Pronouncements, and the Tax Code are referred to collectively as "authoritative literature." Here, you will need to use search and research skills to sift through documents and find the right answer to a prompted question. Points are given for correctly selecting the appropriate document that contains the right answer. This tab is worth the least amount of points, so if you are strapped for time, make sure you do it last.

For more information on simulations, see our walkthrough of the exam.

Did I Pass? Did I Pass? Playing the Score Release Waiting Game

2009-11-09T10:04:00.001-08:00

While taking the CPA Exam is likely the most stressful part of becoming a CPA, waiting for your scores to come out can be equally as nerve-racking. We've put together some fast facts regarding the AICPA scoring process to help ease test-takers nerves and shed some light on how the exam experts grade your performance.

Point allocation. For FAR, AUD and REG, 70% of your score is based on the multiple choice questions. The other 30% is based on your simulation sections, 10% of which is based on the written communication portion of the simulations. For BEC, 100% of your score is based on your multiple choice performance.

Points Needed. All scores are determined by the AICPA and range from point values (not percents) of 0 to 99. A passing score is a 75 or higher, a failing score is 74 or below. Scoring is completely automated for every section of the exam, with the exception of the written communication portion of the simulations. Some written communication responses are graded by humans deemed fit to score by the AICPA, while other written communication responses are scored using an automated process. Regardless of whether a human or machine grades an exam, scores are verified throughout the scoring process.

Points standards. Contrary to popular belief, the CPA Exam is not graded on a curve. The exam is graded against pre-determined standards. According to cpa-exam.org, "every candidate is judged against the same standards, and every score is an independent result." The difficulty level of the question, as well as the pattern of correct and incorrect responses, is taken into account during the scoring process.

Releasing Your Score. Scores are released in two waves for each quarter or testing window, usually between 3 and 6 weeks after the date you take your exam. Scores for exams taken during the first month of a window are usually released in the second half of the second month of the window, while exams taken during the second month of the window are released the second half of the third month of the quarter (the blackout month).

The AICPA releases scores to all jurisdictions, and then it is up to each jurisdiction to notify their test takers. This notification happens either through posting online on the state board website, through the NASBA website or through traditional mail. Each state is different, so check with your state board or NASBA.org for exact details for your jurisdiction.

Waiting for your score can sometimes feel as though it is harder than the test itself - but knowing how the scoring process works and when you can begin to expect score releases can ease some of the tension… hopefully keeping you from checking your computer every few hours for two straight months.

Accountants on Twitter? You Better Believe It!

2009-11-06T09:00:00.000-08:00

Pic credit: Our Geek Life

One of the greatest resources for today's CPA is social media, we've been telling you that from the beginning. A few years ago you had to dig hard and deep to find CPAs using social media but now they are everywhere from blogs to Twitter to Facebook.

Shameless self-promotion disclaimer: You can also find your Roger CPA exam experts at @Kristin_Lynes, @Willard_Monroe, @morganives, and @Adrigonzo. If you have a CPA exam question for any of us, feel free to write post@cpaexamexpert.posterous.com and we might address it on CPA Exam Expert!

In the interest of connecting future CPAs with the resources and connections they need to help them in their careers, we've decided to share a little list of who's who among tweeting accounting professionals. Keep in mind that this list is by no means comprehensive and if we missed anyone, please be sure to let us know in the comments! And don't forget to follow Roger on Twitter!

First of all, the state societies of CPAs (in alphabetical order):
Alabama Society of CPAs @alabamacpa
California Society of CPAs @Cal_CPA
Colorado Society of CPAs @CSCPA
Connecticut Society of CPAs @ConnecticutCPAs
Florida Institute of CPAs @FICPA
Illinois CPA Society @IllinoisCPA
Indiana CPA Society @incpas
Maryland Association of CPAs @MACPA
Michigan Association of CPAs @MichiganCPAs
New York State Society of CPAs @NYSSCPA
Ohio Society of CPAs @OSCPA
Oklahoma Society of CPAs @OklahomaCPAs
Oregon Society of CPAs @OregonCPAsNews
South Carolina Association of CPAs @scacpa
Tennessee Society of CPAs @TSCPA
Utah Association of CPAs@UACPA
Virginia Society of CPAs @VSCPANews (@FinancialFit)
Washington Society of CPAs @WSCPA
Wisconsin Institute of CPAs @WisCPAs

But that's not all, let's not forget about the accounting firms!
Deloitte
Ernst & Young
PwC
KPMG
RSM McGladrey
Grant Thornton
MGO
Perkins & Co.
D'Arcangelo & Co.
Skoda Minotti
Purk & Associates

And then there are some of our favorite accounting people (definitely not in order as we can't choose favorites):
@taxgirl
@taxtweet
@RonLedford_CPA
@exuberantacct
@retheauditors
@Rivescpa
@DeantheCPA
@tomhood (of the Maryland Association of CPAs and @AccountingWeb's CPA Association Leader of the Year!)
@BillSheridan
@accountingelf (who can also be found blogging over at Accounting Elf)
@JodyPadarCPA
@danielhoang
@GubinskyCPA
@JasonMBlumer
@CLT_CPA
@OmahaCPA
@sequenceinc
@bftcpa
@rockstarcpa
@jhamiltononcpa
@JeffJacksonCPA
@CharlotteCPA
@EdithO
@bonniemann
@ronaldbaker
@nikrama
@Bruce_taxguy
@mpolino
@numbersnerd
AICPA Chairman Robert Harris
Former AICPA chairman Ernie Almonte

Even some of your favorite accounting publications, blogs, and resources are getting in on the action:
AICPA's Journal of Accountancy
AICPA's Young CPA Network
Going Concern
CFO Magazine
CPA Trendlines
WebCPA
CPA Letter Daily
Stuff Accountants Like
FEI Financial Reporting Blog
Footnoted
Re: the Auditors
CPAnet

And a few bonuses in the interest of cooperation and globalization, some of our favorite non-US accounting enthusiasts on Twitter:
@PromisedMePie (who most of you know as Krupo)
@feicanada
@darlasycamore
@dahowlett
@paulney
@thunderror

Did we miss anyone? Who or what are some of your favorite accounting resources on Twitter?

Internal Control: Objectives and Components

2009-11-04T11:12:00.001-08:00

(Excerpted from the 2009 Roger CPA Review AUDIT text book)

Management is responsible for the establishment and maintenance of Internal controls. We want Reasonable assurance that Internal controls are achieving certain Objectives (ACE):
- Accurate & Reliable financial reporting
- Compliance with laws and regulations
- Effectiveness and efficiency of operations

The mnemonic ACE will remind management that it should try to establish a strong internal control structure so as to have an ACE in the hole.

The primary interest of the outside auditor is in the first objective, accurate and reliable financial reporting which relate to the fair presentation of the financial statements being audited. The second goal, compliance with laws and regulations, is primarily relevant to compliance auditing, which may occur in connection with audits under government auditing standards. The third goal, promoting effectiveness and efficiency of operations, is of little interest to an outside auditor except in the case of rarely-performed operational audits.

The auditor should obtain an understanding of the 5 components of internal control in order to evaluate the design of relevant controls and determine whether they have been implemented, assess the risk of material misstatement and design the nature, timing and extent of further audit procedures.

Elements of internal control: (CRIME)

Control activities
- Policies and procedures that help ensure that management directives are carried out.
  - Performance reviews – actual vs. budget, P/Y, financial to non-financial
  - Information processing – (IT) General vs. Application controls
  - Physical controls – Access to assets
  - Segregation of duties includes assigning different people the responsibilities of authorizing transactions, recording transactions, maintaining custody of assets, and performing comparisons. It is intended to reduce the opportunities to allow any person to be in a position to both perpetrate and conceal errors or irregularities in the normal course of their duties.
    - Authorization of transactions
    - Recording (posting) of transactions
    - Custody of assets
    - Comparisons
Risk assessment
- An entity's risk assessment for financial reporting purposes is its identification, analysis, and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP. Risk assessment includes risks that may affect an entity's ability to properly record, process, summarize, and report financial data. Risk assessment, for example, may address how the entity considers the possibility of unrecorded transactions or identifies and analyzes significant estimates recorded in the financial statements.
  
  Risks relevant to financial reporting include external and internal factors such as the following:
  - Changes in operating environment
  - New personnel
  - New or revamped information systems
  - Rapid growth
  - New technology
  - New lines of business, products or activities
  - Corporate restructurings
  - Foreign operations
  - Accounting pronouncements
Information and communication
- Refers to the I.D, retention, and transfer of information in a timely manner allowing personnel to perform their responsibilities.
  - Info system consists of the methods and records used to record, process, summarize and report Co.'s transactions and to maintain accountability for the related accounts
  - Communication involves establishing individual duties and responsibilities relating to internal control and making them known to involved personnel.
Monitoring
- An important management responsibility is to establish and maintain internal control. Management monitors controls to consider whether they are operating as intended and that they are modified as appropriate for changes in conditions. Monitoring is a process that assesses the quality of internal control performance over time.
Control Environment (CHOPPER)
The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control, providing discipline and structure. Control environment factors include the following:
- Commitment to competence - Effective control requires a sincere interest on the part of the employees in performing good work.
- Human resource policies & practices - A company can minimize the control difficulties created by new employees by sound hiring and training policies for employees.
- Organizational structure - A company that operates all over the world has different internal control problems than one operating entirely within a single building.
- Participation of those charged with Governance - An audit committee of the board of directors that actively monitors the internal audit function produces a more attentive management on such matters.
- Philosophy of management & operating style - The belief (or lack of it) in the importance of internal control by management will affect the seriousness with which is taken by the rest of the employees. This is especially the case when decision-making in the company is dominated by a single individual.
- Ethical values & Integrity - Honest employees will be less likely to cause internal control difficulties related to fraud and improve the opportunity for those resulting from errors to be effectively detected.
- Responsibility assignment - The manner in which authority, responsibility and accountability is assigned to different employees determines the controls that will be needed. Again, the domination of decision-making by a single individual holds significance, since such power makes it extremely difficult for internal control to be trusted.

The mnemonic CRIME reminds management that it would be a crime not to consider all of the internal control elements when designing the system.

For more great information on the CPA Exam, presented using Roger's RealResults® method, visit our website and request a FREE one hour long demo of our course today!

Then to Now: Use your college study skills to help you pass the exam

2009-11-02T10:00:00.000-08:00

Besides being filled with Ramen noodle dinners and crazy roommates, college is a time of tough work, diligence, time management, and hard studying. CPA Candidates who have been out of school for a few years often find it hard to transition back into that "school mode" of cracking the books. The study techniques learned in college can be applied years after the fact to help you get the most of your study time and put your nose to the grind.

Make it pop. Highlight the importance concepts on the page. Dragging a yellow or orange highlighter over key information, you make it easier to go back and review without having to re-read the entire book. Also, your mind will register the information as more important and recall it better later. Allan Mundsack, James Deese, Ellin K. Deese offer a step by step guide on how to highlight in their book How to Study. They suggest highlighting on your second time through and not highlighting complete sentences.

Jot it down. Yes, that's right – take notes. By making an outline of the material, you can both condense the information for later review and reinforce the concepts by writing them down. Additionally, taking notes during Roger's Lectures will help you determine what the most important concepts are, remember mnemonics, and focus on areas where you may need work.

Split it up. While some people are okay sitting down and plowing through lecture after lecture and homework problem after homework problem, most people benefit from small breaks. Try setting a goal for yourself – 2 straight hours or 100 multiple choice questions. Then give yourself a 30 minute break to eat, play with your kids, or catch up on the Office. But after the break, it's back to work!

Just say no. It will be just as hard now as it was in college to say no to late night drinks, a friend's birthday bash, or joining the Ultimate Frisbee team. For the weeks leading up to the exam, most of your extra time will be consumed with lectures and practice questions. It is important to know the difference of having an hour to spare, and when you need to say no and crack down on yourself. Try making these fun events a reward for meeting your weekly study goals. Lastly, make sure you plan a celebration after you've taken the test to see all of the people you will be neglecting – I'm sure they will appreciate it.

Ask questions. In college, when you struggled with a concept you could meet with (or email, for us in generation y) your professors to ask for help. But after college, people often forget that there are still resources to help them if they are struggling. Email your CPA review company, ask your twitter followers, or post a question to a forum like CPAnet. There are plenty of people that are willing to help you on your journey and want to see you succeed – so take advantage.

Exclusive Video Content - You Know You Want It

2009-10-27T13:13:00.000-07:00

Just a short little message today to check out our latest podcast! In addition to all the great videos we put up on the blog and youtube, our podcast subscribers will be the first to get some of our exclusive video content each month (For October that means first look at our new video on the 10 things you may not know about the CPA Exam).

Podcasts are a great way to get exciting, up to date information that you can watch at the gym, on the subway, or waiting for your pumpkin spice latte.

Check it out here: CPA Exam Preparation Podcast

ps. It's got a special theme - have a Happy Halloween!

Four Steps to Becoming a CPA

2009-10-21T17:04:00.000-07:00

A must watch for CPA Exam Candidates! Becoming a CPA is difficult, but you can make it easier by breaking the process down into its four basic steps. Learn what it takes to become a licensed CPA, from qualifying to take the CPA Exam, to applying and meeting state requirements. Discover the basics of taking the CPA Exam and find out how to gain licensure. Filmed in the style of classroom and instructional videos from the 1970's, Four Steps to Becoming a CPA is certain to be an educational classic for years to come.

Brick by Brick: The Structure of the CPA Exam

2009-10-19T10:00:00.000-07:00

For all of the CPA Exam tips, tricks, news, debates, updates, information, etc. etc. etc. that we provide our readers here at the CPA Exam Preparation Blog, I don't think that we have ever truly broken down the structure of the CPA Exam and what makes up the grueling 14 hours that students will have to endure in testing.

The CPA Exam is a highly serious, structured exam administered at Prometric sites around the country. Just like other standardized tests – the format does not change from person to person (although the entire exam is being reformatted for 2011, see below). Although most people are familiar with the overall structure of the exam, we thought we would explain the parts of the exam in more detail for our readers who are just starting out their CPA process. In order to conquer the exam, it is not only important to have a firm understanding of the accounting principles and concepts, but it is also essential to understand how the test is comprised and administered so that you are not surprised.

The CPA Exam is really four distinct exams: Auditing and Attestation, Financial Accounting and Reporting, Regulation, and Business Environment and Concepts. The total length of the exam is 14 hours, but each separate test is a different length – AUD: 4.5 hours; FAR: 4 hours; REG: 3 hours; BEC: 2.5 hours.

The structure of the CPA Exam is built around three question types.

1. Multiple Choice Questions: Most of us remember these from high school - Pick the best response from a list of options. These questions are scored automatically by the computer and are allotted different values based on a variety of factors including difficulty level.

2. Simulations: Often people worry about this section the most. Simulations are case study examples of situations in which a candidate must demonstrate a wider array of skill sets. Rather than choosing from a list, candidates must create their own responses based on the information given. Most simulations will require several responses, which is what makes them so daunting. Simulations are also scored automatically.

3. Written Communication: This portion of the test requires a candidate to demonstrate their writing skills. In response to a case study, the candidate must prepare a response to a variety of professional documents. The key here is just to make sure that your response is on topic, regardless of if your answer is 100% correct. Responses should also be well organized and meet conventional business English standards. Not all written communication sections are scored by computers; some responses are scored by a network of readers who are also CPAs.

The Financial, Auditing, and Regulation exams are made up of five "testlets". The first three testlets consist of either 24 (REG) or 30 (FAR, AUD) multiple choice questions and the last two testlets are simulations. The Business Environment and Concepts Exam consists only of three testlets of 30 multiple choice questions.

The multiple choice questions account for 70% of a candidate's final score. Simulations account for 30% of a candidate's final score, 10% of which focuses on written communication.

AUD, FAR, & REG: 70% Multiple Choice, 30% Simulations; 10% of simulations are related to effective written communication

BEC: 100% Multiple Choice

On January 1, 2011, significant changes will be made to the structure of the CPA Exam. The AICPA is going to be releasing updates throughout 2010 as they finalize the details, but here is the gist of what we think you can expect:

AUD, FAR, REG:

Two longer simulations will turn into six or seven shorter task-based simulations. No more written communication.
2 of the 6 or 7 smaller simulations will not be graded (pretested only)
Can re-enter each TBS (can jump back and forth)

BEC:

The addition of three smaller written communication sections.
Only 2 of 3 written communication tasks scored (1 thrown out)
Written communication make-up between 10%-20% of score
Additional time may be moved from AUD to BEC

Understanding the structure of the CPA Exam ensures that you are not surprised come exam day. By knowing exactly what sort of questions to expect, and in what order, you can focus solely on making sure that you get the right answer.