According to Dr. Hillison, professor at Florida State, “The biggest change is to the auditor’s report. The new report will have headings for each section and will be more explicit in defining the responsibilities for the financial statements and for the audit. Additionally, the term ‘unqualified opinion’ will be replaced with the term ‘unmodified opinion.’

CPA candidates can expect that AICPA will have questions using the old standards in order to trick candidates.

There will also be a new standard on ‘group audits and component auditors’ that will replace the existing standard on the use of ‘other auditors.’

The term ‘explanatory paragraph,’ which is currently used to draw attention to special items, is replaced with either an ‘emphasis-of-matter’ or ‘other-matter’ paragraph. No longer will the standards refer to ‘special reports.’ These are subsumed into various other standards on reporting responsibilities.”

These changes may seem like nothing more than name changes but I’m sure that test takers will get tripped up on the new definitions. For example, after July 2013, the AUD multiple choice questions will most likely mix in some of the old standards in an effort to confuse test takers. Since many people, especially those taking the test for a second time, will be familiar with the old terms it will be easier for someone to choose the wrong multiple choice answer.

If you are planning on taking the AUD exam after July 2013, it is highly recommended that you use up to date materials. With our AUD exam materials, candidates are given free lifetime updates for all study material, practice exams and flashcards.

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According to AICPA there are 377,000 CPA’s in the United States.  However, the growth rate of CPA’s been a paltry 0.35% over the last decade despite the fact that the passing rates are higher than before.

The reason is largely due to the fact that less and people are actually sitting for the CPA exam.

A lot of people would like at this chart and think that it is a bad time to attain the professional designation.

My gut feeling is that the number of people sitting for the CPA has fallen due to more lucrative career paths in the financial services industry. Why become a CPA when you can make a lot more money as an investment banker? Why work for KPMG when you can work for a high frequency trading hedge fund with bonuses that would make any accountant red with envy?

However, it is more likely that there will be a supply crunch of qualified and experienced CPA’s in the coming years.

If we take a look at the demand side of the equation, there appears to be strong growth in tax regulations. Especially after Enron, the need for quality accountants and auditors is paramount.

Ask yourself a simple question, do you think that tax regulation will be more simple in 2020 or more complicated?

The trend is clearly favoring more complexity and the dim finances of the U.S. government most likely means more and more taxes.

A major blow to the industry would be the introduction of a flat tax or a consumption tax to replace the income tax.

However, if both the supply of CPA’s and the growth of regulations continues on the current trajectory, the CPA designation could be a more lucrative career path as there will be a shortage of experienced CPA’s in the coming years.

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In this blog post, I will list 2 hacks that should increase your scores by 10% at a minimum.

1. Don’t Cram

Most people studying for the CPA exam end up cramming. The reason for this is simple – you can get away with cramming in college. Almost everyone forms the habit because even top students can ace exams with a weekend of Red Bull fueled studying. However, the CPA exam is a different animal due to the volume of content. There are no final exams in college that cover the same quantity of information as the CPA exam. Most students still end up cramming but you really should plan out a study schedule.

On a day to day basis, you should create short blocks of study. Generally we recommend the Pomodoro method that includes 25 minute study sprints with five minute breaks. If you have a large body of information to study, you should try and break it down into a dozen chunks that you can bang out in 25 minutes.

2.  Form a Study Group

Masterminds have been proven to work for entrepreneurs and study groups work for test takers.  The main benefit of a study group is that you can have someone explain a difficult concept. For example, you can go through FAR simulations as a group and designate one member to explain the right answer. Secondly, when you have to explain a concept to a colleague you actually end up improving your own understanding.

Study groups also keep your motivation at a higher level. Let’s face it, it’s tough to be motivated to study Sarbanes Oxley on a nice summer day. However, if your study group expects you to explain Sarb-Ox concepts you will not want to let them down.

It is easy to find a study group in most cities in the U.S. There are over 50,000 people taking the CPA exam and it easy to find a local study group in most cities with over 500,000 people.

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The CPA exam study schedule that we promote in our CPA study guides is based on a 30 day block of time. Candidates are required to commit 2-3 hours each day during the week and another 4-5 hours on the weekend. We have found that most students can pass the CPA exam in as little as 30 days.  However, the schedule is strict because if you decide to take off a weekend and go to Las Vegas, you’ll have 12 hours of lost study time that you will have to make up. It is extremely difficult to make up lost ground when using a compressed study schedule. 

Another key point that I should mention is that not every section will require the same amount of study time. For example, many candidates schedule twice as much study time for the FAR section as the BEC section of the exam. However, coming up with a rock solid benchmark for a CPA exam study schedule is difficult because candidates vary so much. Some students have a broad educational history and only have to refresh certain concepts that were already learned in university. Conversely, some students have limited experience with Auditing concepts or current Regulations and need more time to study because they actually have to learn something new.

However, one of our mottoes is not to focus on the total time spent on CPA exam studying but rather focus on the quality of your study time. Listening to notes on your I-Pod while at the gym is not the same as taking an entire afternoon to sit in front of a quiet desk. A qualitative self assessment can help you determine the ideal schedule for the CPA exam.

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International CPA Candidates will have to send your residency information to NASBA prior to the test day. On the actual day of the exam, you will need to bring a major form of ID (usually a passport).

AICPA released some guidelines for residents of the following nations:

1. Japan

a. Eligible candidates: US citizens, citizens of Japan, long-term residents

b. ID Required: Passport for citizens, passport plus valid Japanese ID (ex: driver’s license, Alien Registration Certificate) providing proof of residence for non-citizens

2. Bahrain, Kuwait, Lebanon, and the United Arab Emirates

a. Eligible candidates: US citizens, citizens of these four testing countries, long-term residents

b. ID Required: Passport for citizens, Passport plus valid national ID providing proof of residency for non-citizens

3. Middle East Extended Eligibility (for testing at locations in Bahrain, Kuwait, Lebanon, and the United Arab Emirates)

a. Eligible candidates: Citizens and long-term residents of Egypt, Jordan, Oman, Qatar, and Saudi Arabia

b. ID Required: Passport for citizens, Passport plus valid national ID providing proof of residency for non-citizens

Other test takers will be required to take the test in the United States and meet the state eligibility requirements.

You will probably notice that international test centers have much tighter security measures than U.S. based centers. The reason for this is that only recently have candidates had the privilege of taking the test overseas. AICPA is still working out the kinks and is obviously concerned that candidates might be more likely to cheat in jurisdictions that are known for corruption. However, AICPA is committed to creating a global brand of CPA’s and a designation that is similar to the CFA designation. Thus, you can expect more and more international testing centers for the CPA exam in 2014.

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Here are some cost saving tips:

1. You can buy used materials on E-bay and Craigslist. The 2012 version of the Becker course is $775 on Ebay which is a huge cost savings. If you live in a major city, Craigslist might be an even better option. Some students are worried about not having the updated materials. However, the CPA exam has not changed much since 2011. Thus, you could theoretically buy the 2011 materials and still be prepared for the exam.
2. The best value for a CPA Review course is probably Wiley. You can buy all four sections for $230. Of course, you will also want to buy some practice questions as well. Again, you can probably buy the 2012 version as a used book through Amazon.com. The main difference with the Wiley course is that you will largely have to study from text. The other courses like Yaeger give you video and audio presentations. If your learning style is comfortable studying from a book and you find video presentations slow and boring, Wiley is a good option that will save you money on your CPA Review Course.
3. You should also look for promo codes for each CPA Review Course. You would do a Google search for the CPA Review Provider + Discount/Promo code. For example you would search for “Yaeger CPA + Promo Code.” You will then see a listing for a coupon site like retailmenot.com with various coupon codes. Once you check out, you simply enter the coupon code and receive the discount. The discounts can be 10-20% so it is worth your time.  CPA Review providers often run specials and promotions. It is a competitive industry and I’ve often found that they run a special all year round of some sort.

If you follow these three cost saving tips you can sign up for a CPA review course without breaking the bank.

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Anyone who has already completed the academic requirements with hundreds of hours of accounting classes is more than prepared for the academic rigor of the exam. The difference between the CPA exam and a regular college exam is the sheer volume of the material. Since most people are accustomed to cramming a day or two before college classes, this habit creeps into CPA study time.  The candidate tries to memorize hundreds of pages of auditing standards on a short timeline or new regulations and finds that there is simply not enough time to cram so much material into your brain.

AICPA recommends that students allocate 300-400 hours of study time. I would be willing to bet that only 5% of all students actually hit that number of cpa study hours.

The key to the CPA exam is to understand that it is a volume based test and you need to budget for the right amount of study time. This is why we created a 30 day CPA study program to keep students on track.

Every CPA candidate has to balance life, work and other responsibilities. The successful candidates do not put too much on their plate at one time. In order to fight through all the CPA material you need hours and hours of prep time. I don’t think that there are any shortcuts.

Once you understand that you’ll need 250+ hours of study time, the next question is to honestly assess in what time frame you can cram in the study time. 3 months? 6 months? 9 months?

Let’s go through an example. Joe wants to crank out the CPA exam in 3 months. To hit the 250 hour minimum target he would have to average 2 hours and 40 minutes of study time per day. Assuming he takes some breaks and goofs off a little bit (X Box!) he will probably need about 3.5 hrs per day for 7 days/wk. Now when was the last time you studied for 90 days straight? If you miss a weekend of study time, you would have to study for 9 hours on one day to make it up!  This is how people get thrown off track. They simply underestimate the time needed to study for the CPA exam.

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BEC is all about the devil in the details. You must pay close attention to BEC you must pay attention exactly what the question is asking. BEC is tricky because the questions feel like they can come from almost anywhere. I’ve known candidates that have had a solid understanding of most of the materials but when the test came around they were tested on some minor concepts that they overlooked. Subsequently, they failed despite knowing more than 80% of the material in our BEC study guide package.

First of all, you must practice the writing component. Most candidates simply practice multiple choice questions and their essay answers are sub-par.  The key is to frame your argument correctly. BEC essays are largely about format and using the right industry jargon in your answer.

A lot of accounting students have no experience with IT. Subsequently, IT related questions tend to throw these students for a curve.  It’s usually a weakness but many candidates choose to pretend as though it won’t be on the exam.

Surprisingly, Economics related questions also pose difficulty. For example, for macroeconomic questions you’ll want to understand what conditions are beneficial to domestic producers. For example, an exporter would benefit from a lower currency.One would expect that a lot of potential CPA’s would have studied Economics but many candidates have a hard time writing out economics essays. Again, you have to focus on your weaknesses in order to improve your CPA score.

Many candidates sloppily overlook project management fundamentals. For example, you’ll have to know the role of a project manager vs. a project sponsor.

Lastly, there seem to be a lot of questions about conflicts of interest. For example, you might have to identify and explain why a board member would have a conflict of interest with a C level executive.

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One of the things that you will notice is that each of your individual actions will either take you closer or further away from your specific goals. For example, let’s assume that your individual goal is to score a 79 on AUD section by November 7, 2012. You have a subset of goals that you want to score over 80 on 3 practice exams scheduled on October 22, October 28 and November 1, 2012.

As you are going through your day to day routine, you need to constantly ask yourself if you are moving closer or further away to this specific goal. Staying out at the pub until 1:30 in the morning will most likely take you away from your goal of passing the AUD section with 79 score. Conversely, waking up at 6:30 in the morning will most likely take you closer to your ultimate goal.

As you work through each and every day in your study schedule you need to ask yourself whether or not the specific action that you are currently taking is taking you further or closer to your ultimate goal. Unfortunately, what you’ll find is that you have procrastination habits. There’s nothing wrong with these procrastination habits as we all suffer from them. However, it is important to recognize these bad habits before you try to eliminate them.

Some CPA exam candidates like to write down their specific goal and create a Post-It note on their laptop or put up a note on the fridge. Subsequently, when you are munching on a snack or surfing the Internet, your eye will see the specific goal and also see the magic question – “is what I am doing right now, taking me closer or further away from my goal of achieving 79 on the AUD section on November 7, 2012?”

You will be amazed at how powerful these little reminders can be when you are studying for the CPA exam.

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