IFRS to Appear on CPA Exam Under Proposed Changes

If the American Institute of Certified Public Accountants (AICPA) has its way, International Financial Reporting Standards (IFRS) could be making an appearance on a future Uniform CPA Examination.

Inclusion of IFRS was among the proposed changes included in an exposure draft issued by the AICPA Board of Examiners in May.  The proposal also includes changes to the content specification outlines (CSOs) and the introduction of expanded skill specification outlines (SSOs).

“The CPA Examination tests the knowledge and skills that are relevant for entry-level CPAs.  In doing so, the public is protected,” said Craig Mills, Executive Director of Examinations for the AICPA.  “That’s why the AICPA Board of Examiners, which oversees the exam, is already assessing strategies to incorporate IFRS into the exam.”

The exposure draft proposes the inclusion of topics related to the IFRS conceptual framework, standard-setting processes and regulatory filing requirements for financial statements.  Additional testing of international standards would occur if IFRS becomes generally accepted in the United States.

On the current exam, the Financial Accounting & Reporting (FAR) section tests knowledge and understanding of U.S. generally accepted accounting principles.  However, the exposure draft states that “growing acceptance of IFRS in the financial reporting community, as well as recent actions of the Securities and Exchange Commission (SEC) are indicators that IFRS could become a body of accounting principles generally accepted in the United States of America.”

The proposal also calls for updated CSOs to be implemented within the current examination structure of four separately scored sections:
• Auditing & Attestation
• Financial Accounting & Reporting
• Regulation
• Business Environment & Concepts

Finally, the proposed new SSOs reflect several changes from the current skill specifications, which are defined only in general terms within the current CSOs.  The exposure draft provides for more in-depth descriptions and outlines the skills in three new, broader categories:
• Knowledge and understanding
• Application of the body of knowledge, including analysis, judgment, synthesis, evaluation and research
• Evaluation and research

Comments on the exposure draft are due by July 31.  The exposure draft is available at http://www.cpa-exam.org/cpa/exposure_draft.html.  The new specifications will be scheduled for implementation after they have been approved and will be available to students, educators and other interested parties well in advance of the effective date.