State Board Report

July 2010

How NASBA, the AICPA and Prometric are working together to build a continually improving examination process was discussed at the Eastern and Western Regional Meetings. Walter Davenport (NC), chairman of NASBA’s CPA Licensing Examination Committee (CLEC) , reported that through NASBA’s proposed Guam Customer Service Center, candidates will be able to have up to 16 hours of customer service daily, thanks to the time zone difference with the Nashville headquarters. He also stressed that State Boards need to give added consideration to submitting the names of nominees for the Board of Examiners (BOE), as the new examination contract calls for more State Board representatives on the BOE.

AICPA President Robert Harris said, “We look forward to the next 15 years [the duration of the new contract] to continue to build the examination into something we are continuing to be proud of. “ He told the Western Regional Meeting: “We look forward to strong State Boards,” and he voiced his appreciation for the relationship AICPA and NASBA have developed.

NASBA Senior Vice President and COO Ken Bishop, “We are pleased with the contract we signed on March 4. We were able to achieve all of the terms and conditions the State Boards wanted in the domestic contract including having a majority of members of the BOE and at least half of the BOE’s Executive Committee with State Board experience.” The process for completing a contract for administering the Uniform CPA Examination internationally has proved to be “more complex” than originally anticipated, Mr. Bishop said, “but we are anticipating having a contract signed by late summer.” He stressed, “We want to make sure the U.S. credential remains strong.”

Douglas Warren, BOE chairman, said CBT‐e, the next phase of the evolution of the examination will be launched on January 1, 2011. It will include shorter “task‐based simulations,” moving all essays into BEC, shortening Auditing by 30 minutes while lengthening BEC by 30 minutes, and a new calculator, improved spreadsheets and a new research item type.

Several State Boards have questioned why IFRS will be included in the new examination when it has not been adopted by the SEC. Mr. Warren said the content of the examination is not based on SEC actions, but rather reflects entrylevel practice. The inclusion of IFRS resulted from a practice analysis done two years ago, which showed that IFRS is being used by entry‐level CPAs. He showed attendees a college textbook that he had just purchased in the University of Charleston bookstore which included material on IFRS as a demonstration that IFRS is being addressed in the curriculum. He stated that BOE representatives would be willing to come to a State Board’s meeting to discuss the inclusion of IFRS on the examination. Ken Clark, chair of the Content Committee, told the Western Regional: “I don’t think the SEC Road Map matters. IFRS is here and it is being used in this country for different types of activities.”

Prometric continues to carefully monitor its examination sites, Prometric’s Kim Farace and Victory Carter—Bey told the Regional Meetings. Patterns remain the same: Candidates come in more frequently at the beginning and end of each testing window. Ms. Farace advised: “Tell your candidates to test in the middle of the window because it is less busy.” Mr. Carter‐Bey stated: “We realize CPA is a world‐class license and we take our mission seriously to protect the CPA exam.

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