CPA Evolution: Moving forward with the new licensure model

January 12, 2021

The CPA Evolution initiative aims to transform the CPA licensure model to recognize the rapidly changing skills and competencies that the practice of accounting requires today and will require in the future.

A joint effort of the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), the new licensure model is designed to equip new professionals to meet the demands of the constantly changing, technology-driven marketplace.

The AICPA Governing Council and the NASBA Board of Directors have both voted to support advancing the CPA Evolution initiative. NASBA and the AICPA will move forward with implementing a new core plus discipline CPA licensure model, with the goal of launching a new Uniform CPA Exam in 2024.

As part of the CPA Evolution initiative, the leadership of NASBA, in collaboration with the AICPA, determined that the Uniform Accountancy Act Model Rules around educational requirements for licensure needed to be updated to incorporate additional subjects and skills reflective of the evolving profession, and create more consistency. In October, NASBA Board of Directors approved the amended rules.

Why now?
Technological innovation is changing the profession and creating new demands. Clients are expecting more services and new technology from their CPAs and these expectations have changed the hiring trends by firms. As new skills are required to meet emerging marketplace demands, firms are looking beyond accounting majors to fulfill their needs.

Accounting firms hired 29% fewer accounting graduates between 2014 and 2018 according to the AICPA 2019 Trends Report. In fact, 31% of firms’ 2018 hires were non-accounting degree graduates, up 11% from 2016. These other degreed hires exhibit the necessary technology skills to reform firms' services and data to meet new demands.

What can we do?
The CPA Evolution initiative started three years ago and over that time has received feedback from more than 3,000 stakeholders. There is strong support and recognition of a need to change the licensure model to position CPAs for the future and bring needed skills to the profession while also highlighting that the model needs to be adaptive to future changes in the profession.

Core plus model
After careful consideration of a variety of models, the one best suited for adaptability features a core of fundamental content areas plus three additional discipline skill areas for which the candidate will choose one. Selecting a discipline section of the exam to meet licensure requirements will not limit a career focus. It is simply a choice of where the candidate wishes to demonstrate a higher level of knowledge and skills. The goal is to launch the new exam by January 1, 2024.

Candidates would still need to pass the four parts of the exam and sections can be taken in any order. Once a section is passed, the candidate has 18 months to pass the remaining three sections. There are no new experience requirements, and the exam will continue to be designed for individuals with one to two years of experience as it is today. Candidates will not have the option to show competency in multiple disciplines. Once a discipline section is passed, no other discipline sections will be available for testing. There will be no differentiation on the license based on the discipline test chosen. A CPA is a CPA.

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