What You Need To Know About The Revised CPA Exam . . . A Webcast for Employers

The views expressed by the presenters do not necessarily represent the views, positions, or opinions of the AICPA or the presenters’ respective organizations What You Need To Know About The Revised CPA Exam. . . A Webcast for Employers

Program Objectives This program is designed to: • Inform employers about the changes in the computerized Uniform CPA Examination • Communicate best practices from other professions • Discover practical ways to motivate your employees to become CPAs Slide 2

Diane Rubin, CPA Partner Novogradac & Company, LLP -------- John C. Riina Vice President Legg Mason -------- Arleen R. Thomas, CPA Vice President American Institute of CPAs -------- John F. Hudson, CPA Moderator Hudson Consulting Group, LLC -------- Today’s Speakers Slide 3

6 Months to Launch • Historic change • Last paper and pencil exam is over • CBT launches on April 5, 2004 • Major milestones have been met/cooperative effort among AICPA, NASBA and Prometric Slide 4

Getting Started • Contact State Board to determine eligibility • CBT will be administered in secure Prometric centers • Eligible candidates will receive a Notice to Schedule (NTS) Slide 5

National Candidate Database • New system created by NASBA • Designed to track each candidate with unique national ID • All candidate data maintained within the NCD • Ensures only eligible candidates test at appropriate times • Secures candidate data, including grades Slide 6

Dates to Test OpenClosed April – May June July – August September October – November December January – February March Slide 7

Taking the Exam Upon completion of check-in, the candidate: • is seated at a designated workstation • begins the exam after proctor launches • is monitored • is video taped Slide 8

At Completion Upon completion of the examination, the candidate: • signs-out • collects his/her belongings • turns in scratch paper • is given a Post Exam Information sheet Slide 9

The Examination • Four Sections • Auditing and Attestation (4.5 hours) • Financial Accounting & Reporting (4 hours) • Regulation (3 hours) • Business Environment & Concepts (2.5 hours) • 14 hours total length Slide 10

Business Environment & Concepts • Business Structures • Economic Concepts • Financial Management • Information Technology • Planning and Measurement Slide 11

Transitioning Recommendations Slide 12

Granting of CreditImpact on Candidates • Candidates have more flexibility in terms of scheduling to test • Candidates can focus study on a section(s) as they feel comfortable • Can take one or more sections within a month, window or longer period Slide 13

Employer Resources • CBT Tutorial available on www.cpa-exam.org • Provides guided tour of revised exam • Demonstrates look and feel and available tools • Allows users to try functionality themselves Slide 14

Employer Resources • Practice samples available in early 2004 • Condensed set of multiple choice and simulations • Will be downloadable from website • Replicate look and feel of CBT Slide 15

Multiple Choice Questions Slide 16

Simulations Slide 17

CBT from the CPA Firm Prospective • The passage of the CPA exam is critically important to CPA Firms • Quality Control • All managers must have passed the CPA Exam prior to promotion to manager • Indicates that candidate has at least the knowledge required for licensure • Commitment to the Profession • Separates you from your peers and puts you on the Road to Success • Important in obtaining new clients Slide 25

Building Awareness in the Firm • Recognition and congratulations to those who have passed • Allow time off to take the Exam • Passage of Exam is a prerequisite to promotion to Manager • Discussion of changes from paper and pencil exam to new computer based Exam • Discussion of changes in State Board of Accountancy Rules Slide 26

Best Practices on Discipline to Sit • Plan ahead • Determine the dates to sit for the Exam • Decide whether to take all parts at once or one or two at a time • Select a review course or start a study group • Start studying months before you take the Exam • Schedule time off in advance so that you are available • Set your targets for passage as soon as you join the firm Slide 27

Promoting Studying for the Exam • Take a review course and study with a colleague • Use available time, if any, to study for the Exam • When recruiting we determine candidate’s interest in and plans for taking and passing the Exam • In house training helps in studying for the Exam Slide 28

Current Recruiting Efforts • Ascertain that recruit has enough hours to sit for the Exam • Determine whether the recruit has sufficient accounting classes to sit for the Exam • Determine whether the recruit is planning to take the Exam and when • Determine through review of GPA, transcripts, and discussions with candidate whether the recruit will have a reasonable chance to pass the Exam Slide 29

Communications to Recruits • When speaking at Beta Alpha Psi or Accounting Association meetings discuss the importance of the Exam • Discuss the State Board of Accountancy rules relating to requirements to sit for the Exam and requirements for licensure • Discuss the changes in paper and pencil and CBT • Refer recruits to www.cpa-exam.org Slide 30

The Buzz on the Street • More convenient scheduling options • Candidate can take one part at a time which might make it easier to study for and pass • Simulations are an unknown at this time and some candidates are unsure of their difficulty • Most believe that taking the test on a computer will not be more difficult than paper and pencil • The new section, Business Environment and Concepts, worries some • There has been little change in the number of candidates sitting for the last paper and pencil test in 11/03 vs. 11/02 Slide 31

AICPA Student Affiliate Membership • Available to students and recent graduates • Subscription to the Journal of Accountancy and CPA Letter • $40 subscription to reSOURCE online • Access to AICPA web site and special student page located at www.aicpa.org/nolimits • Scholarship opportunity through AICPA/Accountemps • Discounted subscription to The Tax Adviser Slide 32

AICPA Student Affiliate Membership • CPA2BIZ Web Site • Significant discounts on publications, software, professional development courses and conferences • AICPA Competency Assessment Tool • Access to AICPA Antifraud & Corporate Responsibility Center • AICPA Member Elite Values Program • Access to AICPA’s Technical Information Hotline (Recent Grads only) Slide 33

A Case in Point . . .Experiences within the Securities Industry Slide 34

Professional Alliance Group Legg Mason’s Alliance Program Create alliances with accounting firms to provide their clients with a broad array of financial services through a team-work approach or referral process. CPAs remain in a counseling role within our program and clients benefit through a coordinated financial strategy. Slide 35

Legg Mason Legg Mason Background • NYSE Broker Dealer • SEC Registered Investment Advisory Firm • Manage $215 billion • Advising investors since 1899 • 130 offices, 1300 Financial Advisors • Alliance programs since 1990 Slide 36

Securities Industry Broker Dealer Registration • Tests – Series 6, 7, 8, 9, 24, 26, 63 Investment Advisor Registration • Tests – Series 65, 66 Slide 37

Central Registration Depository • NASD tracks each candidate with a unique national ID – CRD Number • All candidate data is maintained within the CRD System • Ensures only eligible candidates test at appropriate times • Secures candidate data, including grades Slide 38

The Examination • 8 hours total length • The test is created by the computer • selects questions from each category • creates a unique exam from a pool of thousands of questions • Multiple choice questions • True – False questions • Pick all that apply • Distinct topics are mixed throughout Exam Slide 39

Securities Exam Preparation • Establish a 120 day window by completing and filing a form U-4 • Receive a CRD number –ID within the NASD • Study for Exam – Schedule your study time for several weeks • Call Prometric 3 weeks prior to preferred exam date • You can change date within window – 3 days prior Slide 40

Securities Exam Preparation Study Process • Read selected chapter • Take chapter test – CD Rom • Continue process throughout book • Take full practice exams until scoring 80% • If you don’t take the exam during your window, you must pay for another window to take the exam in the future Slide 41

Best Practices For Exam Day • Sleep well • Arrive early • Review highlight sheets • Bring ID • Dress comfortable – Layers • Leave materials in car • Pack your lunch Slide 42

Taking the Exam Upon completion of check-in, the candidate: • is seated at a designated workstation • begins the exam after proctor launches the session • is monitored by a Test Center Administrator • is video taped • calculators and paper are provided Slide 43

At Completion Upon completion of the Examination, the candidate: • signs-out • collects his/her belongings • is given a Post Exam Information Sheet Slide 44

Continuing Education Requirement CBT – Computer Based Training • 2nd Anniversary • Every 3rd anniversary thereafter • 120 day window to complete Slide 45

Best Practices for Personnel Policies • Compensated for study time? • Compensated to sit for the exam? • Reimbursement of Prometric Seat Charges – “window” • Reimbursement of NASD fees Slide 46

General Reactions to Computerized Exams • Securities exams have been computerized for several years • Provides a flexible study and testing process • Provides ability to become licensed in a relatively short period of time Revenue producing employee Slide 47

General Reactions to Prometric Testing Centers • Convenient • Professionally Run • Secure Slide 48

Summary & Questions Slide 49

Thank You For Participating! Slide 50

What You Need To Know About The Revised CPA Exam . . . A Webcast for Employers