CPA Exam Myths Debunked: My Interview with the AICPA

29 Apr 2009

CPA Exam Study Tips

By Jeff


In my request for questions for the NASBA interview, I received a lot of good questions that were better suited for the AICPA. So, I submitted these questions to the AICPA via Rick Telberg at CPA Trendlines on April 10, 2009.

The AICPA has answered them and I hope that you find their answers helpful in answering some of your questions.

The Maryland Association of CPAs is featuring the article, as is their sister site CPA Success.

Thank you for your question submissions. Thank you also to the AICPA for the interview.



1. A Curve on the CPA Exam? A common myth that circulates among CPA exam candidates is that CPA exam scores are curved according to the performance of other candidates taking the same section. Is a candidate's score entirely independent of the performance of other candidates? Does the AICPA employ any curving mechanism to keep pass rates at their historical levels of 45 to 50 percent on average per section?

AICPA: The CPA exam is not curved. And yes, every candidate's score is entirely independent of other candidates' examination results.

The CPA exam is a criterion-referenced examination, which means that it rests upon predetermined standards. Every candidate's performance is measured against established standards to determine whether the candidate has demonstrated the level of knowledge and skills that is represented by the passing score. Every candidate is judged against the same standards, and every score is an independent result.

2. BEC – Why the wait? A widely held frustration among people who sit for BEC is that they don't get their score right away. Since there are no subjective elements to BEC since it is 100 percent multiple choice (currently), why is a candidate not given at least a “preliminary” score with the caveat that it is subject to review?

AICPA: Scores — even preliminary ones — cannot be released without state board review and the application of standard quality control procedures. For these reasons, issuing scores at test centers is impractical and the possibility is not being considered.

3. Re-score: Worth the hassle (and time and money)? When candidates score a 74 on an exam, the inevitable question that they ask is, “Should I apply to get it rescored?” In 2008, approximately how many candidates submitted applications to have their exams regraded? What percentage of those applications had a score that changed due to the regrading process? How many candidates went from fail to pass due to submitting an application for a regrade?

AICPA: There is no such thing as a rescore or a regrade. The service available is “score review,” an automated score verification process. It involves making certain that the approved answer key was used in scoring and that it was correctly applied. In 2008, score review requests did not result in any score changes.

4. Grading Transparency A common complaint about both the grading process and score reporting process for the CPA exam is that they are not very transparent. Candidates feel very much left in the dark. What steps is the AICPA taking to improve the transparency of these processes and to keep candidates better informed?

AICPA: When it comes to scoring, “How is the CPA exam scored?” is a very successful AICPA effort to bring transparency to the process. It is a non-technical overview providing insight into scoring without the use of psychometric jargon. The technical aspects of scoring are, of course, much less accessible to the layman. However, for those who wish to tackle the technical, a wealth of information is readily available on the Internet about Item Response Theory (IRT), the psychometric model that is the basis of CPA exam scoring.

The current score reporting in two waves seems to be well understood by candidates but much more needs to be done to erase candidate misconceptions about why some scores are released earlier than others. For example, candidates need to know that those who are presented with simulations that have not been tested previously will receive their scores in the second wave, even if they test at the beginning of a testing window. A sufficient number of responses to new simulations must be available for psychometric analysis before scoring can begin. and it is impossible to predict who will receive new simulations as simulations are assigned at random.

5. Real-time scoring in the works? Currently, scores are released in two waves per testing window — commonly referred to as Wave 1 and Wave 2. A candidate who sits for an exam early in the testing window and does not get their score in Wave 1 has to wait for yet another month to get their score and oftentimes their study progress and motivation wanes because of it. Are there plans in the future for the AICPA to move to real-time score reporting to better serve the candidates?

AICPA: Faster and more frequent score release will be introduced after the implementation of CBT-e — a program of major CPA exam improvements. However, “real-time” score reporting is not a realistic option and is not being considered. (Refer to the response in question 2.)

6. Borderline Candidates? Another widely held sentiment about score releases is that if a candidate doesn't receive their score in Wave 2 of a testing window, then they are “borderline” — i.e., 72-77. Would you say that in general, the most candidates who don't receive their score by Wave 2 are “borderline?”

AICPA: There are several possible reasons why some scores are released faster than others. If psychometric analysis is required, for example, the scores of all candidates who took a articular examination version — whether passing, failing or on the brink — are held until the analysis is completed. For those who took AUD, FAR or REG, the “second reads”of written communication responses may also be a factor. “Second reads” are additional reviews of essays for candidates whose scores are close to passing.

7. Is a raw score possible? Another question that candidates have in regard to score reporting is the fact that they leave a testing center with little more than a ventured guess as to how they performed. Has the AICPA looked into a reporting format that gives a candidate their raw score on the exam prior to leaving the testing center or soon thereafter?

AICPA: As indicated previously, plans are in place to introduce faster and more frequent score reporting after CBT-e, the new CPA exam, is implemented. There are no plans, however, to provide candidates with raw scores — or any other kinds of scores — at the test center. (See response to question 2.)

8. 18 Month Rule In regard to the “18-month rule,” candidates often feel they are at a disadvantage due to a relatively slow score reporting process. For instance, if a candidate sits for FAR on Day 1 of the testing window and misses the cut for the Wave 1 score release in the second month, by the time they get their score in Wave 2 of the third month, nearly three months of their 18-month window has expired. If you count the fact that four of those 18 months are not testable months, they have even less time left. Has there been any discussion of expanding the arbitrary 18-month timeframe to 24 months?

AICPA: Perhaps the real issue here is the test-taking strategy. A better approach might be to take two sections in the first window, two in the next, and use the remaining four windows to retake any sections failed on the first attempt.

Photo courtesy of Flickr user moonjuice under this Creative Commons license.

Leave a Reply


Norm 15 years ago

The response to that last question on the month rule is astounding. Instead of admitting they have a problem, the AICPA is turning it around and placing blame on the test-taker. Remarkable.

Baba 15 years ago

With regards to the last question, I guess it means that we (candidates) should just shut up, prepare for the exam and quit whining like babies.

Bradd 15 years ago

For Baba & Norm. While I don't like the answer to the final question either, I absolutely see where they are coming from. 18 months is a very long time in which to pass all 4 sections of the exam. Using myself as an example, I've managed to schedule all 4 sections of the exam within a 6 month period while working full time (and going through a very busy audit time and tax season). There has to be a point where they say we can't do any more for you, you have to do it yourself. I had classmates in college who would beg and bother our accounting professors for extra credit, test answers, etc. There has to be a point where you say "This is supposed to be hard for a reason!". The "CPA" title would mean so much less if the AICPA were to bend to everyone's demands and make the test (or test environment) easier / more accommodating. A strategy for opening up that 18 months would be to take FAR (arguably the hardest section) first, putting those months (3.5 for me) outside of your 18 month window. Just some thoughts. Cheers, Bradd

Jim 15 years ago

The thing I find the most interesting is the curving. I have been taking this test for 6 years now and always thought it was curved. So what I don't understand now is this: My last 3 Audit results have all been 74s. When I look at the results, if I take a weighted average using the middle percents (with a total of 100%) my score was always around 77 - 79. I know this isn't a perfect science but I just figured it was being curved because the column for passing scores were so high. Guess the areas I did poorly on where just more heavily weighted.

Captain Fancypants 15 years ago

Interesting. As chance would have it, I am watching the FAR Cram DVD by Yaeger CPA Review and Dr. Phil Yaeger just said (he recorded this in January 2009) at the 01:47:21 point of the electronic media file "20080118-1.0.flv": "Please remember...the passing rates are based on how you do in comparison to everyone else."

NY Audit sucks 15 years ago

More people fail or lose credits, AICPA(or nasba?) makes more money.

Jeff R. 15 years ago

"More people fail or lose credits, AICPA(or nasba?) makes more money." Both are not for profit entities. They can't "make money." It isn't the AICPA's or NASBA's job to make sure that you pass; that is YOUR job. The AICPA and NASBA are only responsible for preparing and grading a tough but fair exam.

Norm 15 years ago

Brad, I appreciate what you're saying. No one is asking AICPA to make the exam any easier. However, there simply is no logical reason to withhold a score for such a long period of time after test-taking. During this time of uncertainty one doesn't know whether to concentrate on studying the next exam or work on the previous exam. This is time that is not being used as efficiently as it could be. You were able to wrap up all four exams within 6-months? Good for you. Really. Not everyone is a great test taker though and might need a little more time.

15 years ago

I'm totally agree with Norm. I just can't concentrate on the next section until I know for sure I passed the one I sat for.

Patrick 15 years ago

The whole 18 month thing, as it currently stands, is total BS. The response to that question was snarky, exactly what I would expect from the AICPA. #1, there's too much uncertainty regarding your scores, and it takes too long to get the official reports. #2, it takes too long to get a NTS. Add in state boards of accountancy that DON'T want to help you (:cough....Florida....cough:), and you have an unacceptable time lag. It took me 4 months to get a NTS for REG and BEC. Bothered Florida, they didn't want to help me, were incompetent, or both. Bothered NASBA, bothered Florida, bothered NASBA some more, and finally got the NTS. The time covered by the NTS included the date of my initial application, which, obviously, was months ago. Unacceptable. What's going to happen when I apply for a NTS covering FAR and AUD?

alexbmn 15 years ago

there's no curve but the passing percentage is always somehow quite similar.

alexbmn 15 years ago

here's a question How come the most time is given for the easiest exam ? Audit that is.

Cajun Public Acct. 15 years ago

I find it contradictory that the AICPA states that "every canidates score is entirely independent of other candidates? examination results". While "Those who are presented with simulations that have not been tested previously will receive their scores in the second wave, even if they test at the beginning of a testing window. A sufficient number of responses to new simulations must be available for psychometric analysis before scoring can begin." Doesn't this imply that other students scores are driving the pschometric analysis and therefore not independent of one another? Any thoughts?

Jeff - 15 years ago

Great point Cajun

Hit the wall 15 years ago

@ Norm - The length of time that the scoring process takes is a known factor. If you don't use that time efficiently, it's on you. There's enough information out there about what to expect that you should be able to put together a strategy that uses your time efficiently. @ Patrick - I know it's fun to hate NASBA, your state board, and the AICPA for the hoops that you are having to jump through, but just remember that the reason you are doing it is because having a CPA license is valuable to you. The reason it's valuable is because those organizations make all candidates jump through a lot of hoops to get it. If it wasn't hard, a CPA license would mean about as much as a driver's license.

anonymous 15 years ago

Do you know if the passing scores listed on the grading report are the same for each state? Or, is it graded by state?

Norm 15 years ago

@ Norm - The length of time that the scoring process takes is a known factor. If you don?t use that time efficiently, it?s on you. There?s enough information out there about what to expect that you should be able to put together a strategy that uses your time efficiently. Hit The Wall....yes, it is on me. You fail to make an argument as to why it should be on me though. The AICPA has more than sufficient time to grade the exam and return a score to the test-taker. There simply is no logical reason to withhold a test score for so long.

15 years ago

100% agree! NASBA is mentally torturing us!!!

MW 15 years ago

Tell me about "Torturing" on the top of sleepless long late night, morning, weekend... (you name it) studing with Caffeine the score waiting period is really painfull. Hope it all worth it.

Justin 15 years ago

AICPA and NASBA may be Not for Profits, but take the time to look at their financial statements and you'll see surpluses, and you'll also see that NASBA has increased fixed assets by a large amount in recent years. Why do they need fancy offices and company vehicles? Is their job not just to administer this (and other) exams?

Tdoggg 15 years ago

I have a total solution to the CPA exam, All of the canditates should get together and file a class action lawsuite and charge then AICPA with a RECO violation. They make the test so difficult that no one can pass and all they do is collect fees, this is a money generator for the AICPA

Norm 15 years ago

Justin, You make a very valid point for non-profit excesses. ETS, the "non-profit" organization that administers the SAT and many other tests, has a rather swanky campus for its offices. It sits on several hundred acres of manicured lawns with a dozen or so buildings. It also has its own volleyball court and outdoor swimming pool.

CPA WantaBe 15 years ago

Tdogg - AICPA is a non-profit. There is no incentive for them to make a profit. Maybe making the test difficult is a way to make the CPA designation more selective.

Cassandra9120 15 years ago

It seems like the AICPA is very rigid and unwilling to realize that their grading system and testing administration is inefficient and completely archaic. Ridiculous!

Trying to Pass in TX 15 years ago

Cajun, I had the same thoughts when I read that. I also looked at my BEC score which, as we all know, is only multiple choice. I made a 76 on it. I took my 5 section scores and tried several weighted averages, including putting the lower weights in the sections I did worse and the higher weights in the sections I did beter in. That should have given me the highest average, and it did. But, the highest percentage I got was a 69.9. Now, tell me, how is that not curved? I suck at math, so please correct me if I am doing this wrong, but I would like to see how other peoples BEC score work out.

Brendan 15 years ago

I think that some people may be missing the real issue with the 18 month rule which is why is there an 18 month rule anyways? The fact that it is shortened by our lack of studying due to the delayed reporting process is another story unto itself. But the real question is what creditability does it add to CPA license? Does that fact that I passed four sections of an exam within 18 month for some reason mean that I am more competent? The CFA exam, which according to some, is more difficult to pass than the CPA does not require any charter member to pass all three sections of their exam within any time period in order to gain membership. Albeit it takes at least two years to complete the exam to begin with, but still, I think the point still rings true, that this 18 month window is BS and its purpose is still unbeknownst to most. Even despite the AICPA?s ?witty? response.

Kate 15 years ago

Brendan - I believe that 18 month rule is related to the fact that all sections used to have to be taken in one sitting. Without some sort of a time limit people could study for a single section for an excessive amount of time (i.e. one full year to study for a single section). Without some sort of time limit the CPA exam becomes even less competitive and selective.

Dawn 15 years ago

Non-profit is still "for-profit" except for they do not distribute the earnings; instead, they use the money for nice salaries and other improvements.

Ryan 15 years ago

Or here's another option: You could not try to be a CPA.

K 15 years ago

The comments on fees are what really urks me the most personally. 18 mo's is no fun but can be done, however the fees are insane. The "Scheduling" fees are ludicrous, for PA at least, there is a flat fee no matter how many parts you take and the exam itself is simply overpriced. In 2001 when I came out of college, all 4 parts were given (by paper) at a price of $200. Now you can't even consider taking the 1 part for under $300. 3 parts down after many years of on and off attempts but still getting slammed with these insane fees to sit for the exam and the applicable study materials.

Can'tPassAgain 15 years ago

Looking at these comments takes me back. I last sat for the X-AM in the 90's. My washout came when candidates (myself included) who had "conditioned" (passed two parts) past a certain date were, retroactively, allowed fewer sessions to complete the other sections than previously. Any time lost not sitting was gone forever. Tell that to two ARMY Guard soldiers stuck in IRAQ at the time. They got washed-out too. I gave up after this mid-course change of the rules. Funny, I figured I actually knew more than some passing candidates after sitting 1/2 dozen times - I studied 1,000s of questions - just didn't get enough correct come exam time. Most lawyers, nurses, physicians, etc. pass their boards (eventually)..they get winnowed-out up front; you either get into professional school or you don't. CPA candidates are forced to put up with almost as much but with an uncertain outcome. Interestingly, the CPAs I respect the most do not actually practice anymore. They've moved on to recruiting, went to law school, started businesses, etc. Turns out they were all smart enough, anyhow. The CPA turned out to be just a feather in their caps.

KR 15 years ago

This Rick Telberg character doesn't appear to be a CPA (I couldn't find anything on the CPA Trendlines site saying he was). That's exactly the type of person I want answers like this from! So he's basically saying 'I've never taken the exam, but I think you should study for two parts in each window. Who needs to study more than a month for each part? This stuff is easy.' Does anyone recall the expiration process from the paper & pencil version of the exam? Personally, I don't think there should be any expiration. If you knew one part well enough to pass it at any point in time, why should you lose it just because you're having trouble passing other parts. It just seems like a way to get more money out of us to me. If it had to do with material being updated, I could understand, but since licensed CPAs never have to take any exam portions to be sure they know updated information, I'm pretty sure that's not the reasoning.

Jeff - 15 years ago

Rick Telberg didn't answer the questions...the AICPA Exam team did...Rick Telberg is a friend of the site who set up the interview, for which I am grateful. -Jeff

Andrea 15 years ago

I'm a little late to respond, but I feel like adding my 2 cents about the 18 month window. There is a time limit in which you have to pass all 4 because the accounting material being tested changes. If someone takes FAR in 2000 and then takes AUD in 2009, they do not have current knowledge of accounting because of all the changes in those years. And because they weren't a CPA for those years, they didn't have to do any CPE courses to stay on top of the changes. The CPA designation isn't to prove that you knew something about accounting once, it's to assure the public that you have thorough and current knowledge of accounting, which is also why there are continuing education requirements after you get your license. 18 months is arbitrary; I don't think making it 24 months would make a difference, but to argue that there should be no limit completely defeats the purpose of the exam.

goingnuts 15 years ago

I don't necessarily have a problem with the 18 month window; however, the current slow reporting system could be much improved. The CPA exam has gradually made improvements to its testing methodology. Unfortunately, possibly reflecting the culture of accounting (I have a masters, so I am knocking on my own, I know), we can tend to be very conservative when it comes to making changes to our profession. I am a bit tired of people apologizing for the AICPA.

Have we forgotten these are the same people who didn't bat an eye when auditors were making more money on consulting fees than auditing? They are not perfect.

Now, my wife is a nurse, and her test was an adaptive multiple choice exam. Some of the questions were just completely bizarre, but I guess for any professional you have to know some really obscure details. Anyway, nurses are able to pay a nominal fee that allows them to have their results expedited. Think about it, they just pay the additional cost of getting a quick result. Of course, nursing educators/certification boards appear to try to stay on top of technological changes. Their profession depends on being up-to-date on the latest and greatest.

Why does the AICPA not allow us to pay them to expedite the process? Because they have created an exam that has unnecessary complications. Many other certification exams are able to report results relatively quickly EVEN THOUGH their exams are different almost every time a candidate sits (nurses, for example, would probably never retake the same exam twice due to its changing and adaptive nature). The AICPA still hasn't made BEC adaptive. Are you kidding? It's 2009! Get with the times! The simulations aren't even adaptive! So, depending on your exam, you either get really easy sims and research questions or not (just ask people who have taken and passed the exam).

I realize that time is money, so I would be willing to pay to find out if I passed. They could use any profits from the fees to improve the efficiency of the grading process. They would simply have to remove archaic/unnecessary testing methodologies that are blocking the way to making the exam as efficient and effective as it could be.

Let's stop apologizing for the AICPA and demand that they modernize the testing system. They are getting there, but the changes are happening too slow. Sounds like the accounting industry, after all.

Note: I have only taken one section and may or may not have passed, so I am not bitter b/c I have failed the exam, in case anyone was wondering.

goingnuts 15 years ago

To clarify my "making more money on consulting fees" comment, I was referring to the fact that some engagements made more money off of consulting than auditing. I was not implying that the entire auditing profession was making more money off of consulting than auditing. Thought I'd clarify that before someone pointed that out.

time2pass 15 years ago

@goingnuts - I TOTALLY agree with your assessment. This exam and the grading are just arbitrary and crazy!!! For anyone wondering, I am bitter. I've taken three parts and not passed one. I did extremely well in school; however, I did graduate in 2003 and I just started preparing to test and I know I am intelligent enough just by reading the blogs. Some of the pain and suffering of this exam is just unnecessary. I have been working on projects with many lawyers and the efficiency of their exams has not taken any credibility from that profession!

Name 15 years ago

In 18 months that is 8 months of busy for anyone in public accounting that is effectively 10 months...but after the grind of busy season are you ready to stare at books for the next x months?

Name 15 years ago

In 18 months that is 8 months of busy for anyone in public accounting that is effectively 10 months...but after the grind of busy season are you ready to stare at books for the next x months?

Todd 14 years ago

I'm late to this party as well, but the biggest problem I have with this interview also is with the testing window and score reporting. I love that they basically say it's the candidate's fault if there are any problems with time constraints for passing all parts, "maybe you should just do it differently, that's the REAL problem". I was lucky enough to pass all on the first try, 3 in one window and one at the beginning of the next, but even though I was done at the very beginning of October, I still didn't know about the last section until Christmas. That's ridiculous, it should not take that long to grade a test that's primarily multiple choice. At the very least, I can see the essays taking longer, but it should be fairly easy to determine what questions are thrown out and which aren't counted and go from there efficiently. Also, I believe the essay questions are at least partially auto-graded are they not? That should make it that much easier to compress the reporting time down. If we have to be efficient to take all the parts in the time frame, there should be a requirement on their part to act in a similar manner.

Dalamar 14 years ago

I fully support the difficulty to pass the CPA exam. I pass Regulation and am working on Financial now. What is the logical reason for making CPA candidates wait months (I waited 4) to discover their grade? Whom does the AICPA serve? CPAs and future CPAs or itself? The AICPA is a self-perpetuating marketing machine.

joe 13 years ago

I agree with Norm on that last response. What a joke...

Trav 10 years ago

I understand that but you can also take 150 credits in college and 50 years late, you will still have 150 credits in college in shit you dont even know one thing about. The CPA is a joke. You dont have to have a CPA in order to prove that you are a good accountant. I know plenty of non-CPA's who are smarter than CPA's overall knowledge. Everything is relative.