Few state boards of accountancy have the resources to evaluate the psychometric quality and content of a licensing examination or to review its development, scoring and administration. Moreover, few boards have the resources to evaluate the security and integrity of the electronic architecture and data communications surrounding a computer-based test (CBT). Because such evaluations and reviews are highly technical and time consuming activities, they can be performed more effectively by a single agency acting on behalf of all state boards of accountancy. Recognizing this need, the CPA Examination Review Board (ERB) was established and reports directly to the boards of accountancy.
The ERB benefits from the involvement of partner-level CPAs from public accounting firms and other industry experts, many of whom have a long history with NASBA. After a re-organization in 2010, the ERB now consists of five volunteer members who serve rolling three year terms. Currently, those members are Sandy Wilson (chair), Nick Mastracchio (vice chair), Wes Johnson, Chuck Talbert and Dave Vaudt. These members utilize a full-time staff, and consultants as necessary, to accomplish audit procedures planned and overseen by the ERB.
“The ERB is unique to NASBA in certain respects,” says Toerien DeWit, CPA, Director of ERB Operations. “The ERB is different in that its charge is stipulated in NASBA’s bylaws and the CBT Agreement between NASBA, the American Institute of Certified Public Accountants (AICPA) and Prometric.”
The ERB submits an annual report to NASBA’s member boards of accountancy describing the results of its reviews and evaluations. “Our charge is to review, evaluate and report on the appropriateness of the policies and procedures that are utilized in the preparation, grading and administration of the Uniform CPA examination and other examinations in general use by the boards of accountancy for the licensing of Certified Public Accountants,” says DeWit. “We examine such records and make such observations, inspections and inquiries as we deem necessary to carry out our responsibilities. We report annually to the boards of accountancy whether we believe the boards of accountancy may rely on the examinations. We are viewed as the ‘auditors’ of the examination.”
With respect to the audit process, Onita Porter, CPA, Audit Manager, says the ERB follows a risk-based approach. “We ask ourselves at each stage in the process ‘What can go wrong?’” she says. “We consider these risks in developing an integrated audit plan that covers the exam from start to finish. This year, we are focusing efforts on understanding the changes brought about by the new exam version called CBTe. Another area of specific focus revolves around the international delivery of the CPA Examination. We performed a deep dive review to understand and test the security implications of administering the CPA examination internationally.”
“The exam was paper and pencil until CBT, the computer-based test, was launched in 2004,” adds Shawn Jackson, CPA, CISA, Senior IT Auditor. “In CBTe, the AICPA updated a lot of the mechanics of the exam. From a candidate’s perspective, the exam will not be very different, but the mechanics behind the scenes have been updated.”
DeWit, Jackson and Porter cite the Business Environment and Concepts (BEC) portion of the exam as a major change in CBTe. This module used to be a purely multiple-choice module, but now includes a three-question essay called Constructed Responses.
“That’s probably the most significant change from a candidate’s perspective,” Porter says. She also said the BEC section now requires more time from candidates. “Constructive responses have always been included on the exam, but were spread among the other three sections: FAR, AUD and REG. Now that they are all housed in the BEC section, other sections can focus on research and real world problems for their simulations.”
In the end, the ERB works to provide assurance that no matter what the changes and upgrades are, the boards of accountancy can rely upon the Uniform CPA Examination.