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Description of Exposure DraftThis Exposure Draft (ED) presents an informed andthoughtful proposal for the 2024 CPA Exam basedon research and input from the profession and otherinterested stakeholders. Accordingly, this ED outlinesproposed 2024 CPA Exam changes using languagethat presumes those changes will be implementedafter review of feedback to the ED and, ultimately,upon the BOE’s approval.This ED, including the draft Uniform CPA ExaminationBlueprints (the CPA Exam Blueprints) in AppendixA, which are an integral part of this ED, presents thefindings and conclusions of a PA conducted by theAICPA over the past two years under the oversightof the BOE and its Practice Analysis Sponsor Group.This PA focused on aligning the CPA Exam to the CPAEvolution licensure model. See further discussionbelow under Practice Analysis Process in Appendix B.Following consideration of comments received,the final CPA Exam Blueprints are expected to beapproved in December 2022 and published in January2023 with a planned Exam launch in January 2024.This will provide Exam candidates, colleges anduniversities, firms, review course providers, and otherstakeholders about a year to plan for the 2024 CPAExam as more fully described in the draft CPA ExamBlueprints in Appendix A.2024 CPA Exam Transition PolicyIt is important to be aware that there will be a hardcutover from the current CPA Exam sections tothe 2024 CPA Exam sections on the January 2024launch. None of the sections of the current CPA Examwill be available for testing after December 2023.Accordingly, it is necessary to have a transition policyfor mapping credit for CPA Exam sections passedunder the current CPA Exam to credit under the 2024CPA Exam. Transition policies like this have beennecessary at other times when significant changeswere made to the CPA Exam, such as when it wascomputerized in April 2004.The CPA Exam transition policy was recommendedto the Boards of Accountancy by the NASBA CBTAdministration Committee after development andmuch deliberation by a task force with state boardrepresentatives from the BOE, sitting state boardmembers, and executive directors from multiplestates. The Boards of Accountancy have agreed thistransition policy best serves the candidates, the stateboards, and the public interest.The transition policy is quite simple. Candidates whohave credit for AUD, FAR, or REG on the current CPAExam will not need to take the corresponding newCore section of AUD, FAR, or REG on the 2024 CPAExam. Candidates who have credit for BEC on thecurrent CPA Exam will not need to take any of thethree Discipline sections.If, however, a candidate loses credit for AUD, FAR,or REG after Dec. 31, 2023, they then must takethe corresponding new Core section of AUD, FAR,or REG. A candidate who loses credit for BECafter Dec. 31, 2023 must select one of the threeDiscipline sections to be tested. See Transition PolicyAnnounced for the 2024 CPA Exam Under the CPAEvolution Initiative on NASBA’s website.Uniform CPA Examination BlueprintsThe CPA Exam Blueprints are the official documentapproved by the BOE presenting the contentknowledge and skills required of nlCPAs for protectionof the public interest and eligible for assessment onthe CPA Exam.The purpose of the CPA Exam Blueprints is to: D ocument the minimum level of knowledgeand skills for initial licensure. A ssist candidates in preparing for theCPA Exam by outlining the knowledgeand skills that may be tested. A pprise educators about the knowledge and skillscandidates will need to function as nlCPAs. Guide the development of CPA Exam questions.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 5

The CPA Exam Blueprints contain an introduction toeach CPA Exam section which provides (i) a summaryof what is eligible for assessment in the section, (ii)content allocations by area, (iii) skill2 allocations for thesection, and (iv) reference materials for the section.The detailed blueprints are organized by content area,content group, and content topic. Each group or topicincludes one or more representative tasks that an2nlCPA may be expected to complete in practice.The representative task statements combine boththe applicable content knowledge and the skillsrequired in the context of the work that an nlCPAwould reasonably be expected to perform. Thus,the assigned skill level is a direct result of the taskthat an nlCPA would reasonably be expected toperform in a given area. The AICPA adopted a skill framework for the CPA Exam based on the revised Bloom’s Taxonomy of Educational Objectives. Bloom’s Taxonomy classifies a continuum of skills thatstudents can be expected to learn and demonstrate. For more information, see the Introduction portion of the CPA Exam Blueprints in Appendix A.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 6

Request for CommentThe AICPA values the views of all CPA Examstakeholders and is seeking comments on thequestions listed below. In your response, pleaseindicate whether the response represents the officialresponse of a State Board of Accountancy, stateCPA society, or regulator. Otherwise, please advisewhether the response is on behalf of a firm, business,college or university, government, other organization;or represents your individual views. The AICPA willmake all comments publicly available by posting theresponses to its website for one year.The AICPA will consider all responses received onor before Sept. 30, 2022. Email your submission [email protected] CPA Exam is designed to assess the knowledgeand skills of nlCPAs in their role to protect the publicinterest. For the purpose of identifying the domain oftasks, knowledge and skills necessary to protect thepublic interest, an nlCPA is defined as someone whohas fulfilled the applicable jurisdiction’s educationaland experience requirements, has the knowledgeand skills typically required by a person with one totwo years of experience, and has passed the Exam.Core Exam sections assess the knowledge and skillsuniversal (common) to all nlCPAs. Discipline Examsections assess the knowledge and skills in therespective Discipline domain applicable to nlCPAs.1. D o the Core Exam Blueprints include theknowledge and skills required of all nlCPAsto protect the public interest? If not:a. I s there content missing from the CoreExam Blueprints? If so, please explainwhat content you believe should be added,including examples of how this is affectingnlCPA practice.b. I s there content included in the Core ExamBlueprints that is not relevant to nlCPA practicethat should be removed? If so, please providethe details of what content you believeshould be removed and why it should not beconsidered nlCPA practice.2. D o each of the Discipline Exam Blueprints includethe knowledge and skills required of an nlCPA toprotect the public interest? If not:a. I s there content missing from the DisciplineExam Blueprints? If so, please explainwhat content you believe should be added,including examples of how this is affectingnlCPA practice.b. I s there content included in the DisciplineExam Blueprints that is not relevant to nlCPApractice that should be removed? If so, pleaseprovide the details of what content you believeshould be removed and why it should not beconsidered nlCPA practice.Guide for RespondentsComments are requested on the 2024 CPA Exam asdefined by the draft CPA Exam Blueprints included inAppendix A. Comments are most helpful when theyrefer to specific content in the CPA Exam Blueprintsto be added or deleted, including the rationale for theresponse. When a respondent agrees with proposalsin the ED, it will be helpful for the AICPA to be madeaware of this view. Written comments on this ED willbecome part of the public record of the AICPA andwill be posted on its website for one year. Responsesshould be sent to [email protected] andreceived no later than Sept. 30, 2022.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 7

Background and IntroductionSince 1917, the CPA Exam has a trusted history asone component of the CPA licensing process. Themission of the CPA Exam is to provide reasonableassurance to Boards of Accountancy that individualsseeking licensure have demonstrated the minimumknowledge and skills necessary for an nlCPA toprotect the public interest in today’s business andfinancial environment. The CPA Exam is the sameexam for every CPA candidate in all 55 United Stateslicensing jurisdictions.The AICPA develops, maintains, and scores the CPAExam. The BOE, a senior volunteer committee of theAICPA, is responsible for the establishment of policiesgoverning the development, maintenance, andscoring of the CPA Exam in accordance with legal andpsychometric standards as they apply to licensureexaminations. The BOE also has the responsibility forstrategic planning and risk assessment to ensure thatthe CPA Exam continues to fulfill its mission.To remain relevant to a dynamic profession andcurrent with the real-world demands on nlCPAs, theCPA Exam must continually evolve. The periodicexecution of a PA is necessary to ensure that theCPA Exam: S upports the profession’s commitmentto protecting the public interest; R emains current, relevant, reliable, psychometricallyvalid, and legally defensible; and F ulfills the needs of the Boards of Accountancy incarrying out their licensing responsibilities.The BOE policies require a PA to be conducted at anytime the changes in the profession are significantenough to indicate the CPA Exam needs to beupdated (for a single CPA Exam section or the CPAExam as a whole). However, at a minimum, a PAwill be completed no less than every seven years.As discussed below, PAs have been completedmore frequently. Between PAs, the BOE overseescontinuous maintenance of the CPA Exam. The CPAExam Blueprints are modified as necessary to remaincurrent with new standards and laws and revisionsare also made to improve the clarity, organization,and the content assessed.Recently Completed Practice AnalysesThe two previous PAs laid the foundation for theCPA Exam Blueprints including the testing ofhigher order skills, increased focus on understandingthe business, testing of data analytics and technology,and increased focus on the reliance on SOC 1 Reporton Controls at a Service Organization Relevant toUser Entities’ Internal Control over Financial Reporting(ICFR) – Guide (SOC 1 ).Practice Analysis Completed in 2016A PA was launched in 2014 and completed in2016. The findings were implemented in the CPAExam in 2017. The PA completed in 2016 resultedin an increased focus on testing higher order skillsby increasing the number and scoring weight ofsimulations. The need to test higher order skillswas identified in the research as it was deemedcritically important that nlCPAs are competent inrecognizing issues, identifying errors, challengingassumptions, and applying both professionaljudgment and skepticism.To assist CPA Exam candidates, educators, andother Exam stakeholders, the AICPA published thefirst CPA Exam Blueprints in 2016.Practice Analysis Completed in 2020The PA launched in 2019 and completed in 2020focused on technology’s impact on nlCPA practice.Several findings were identified in the technologyresearch including that nlCPAs need to haveincreased knowledge and skills related to: U nderstanding the business – nlCPAs need tounderstand the business, including its operations,information systems, underlying businessprocesses, information and data flows, and risksand related internal controls. Newly licensed CPAsroles in understanding the business include:º U nderstanding the source of entity financialand tax information,º U nderstanding procedures in manual andautomated systems by which transactionsare initiated, authorized, processed, andrecorded in general ledgers, andMaintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 8

º M apping internal controls in both manual andIT systems. In particular, nlCPAs need to beable to understand the flow of transactionsfrom start to finish, inclusive of both manualand automated systems, along with therelated control activities. D igital and data-driven mindset including dataanalytics – A digital and data-driven mindsetincludes understanding the potential sources ofdata as well as the completeness, accuracy, andrelevance of the data.º T his mindset is related to the initial findingidentified above, understanding the business.Newly licensed CPAs should understandthe flow of transactions within businessprocesses and information systems; thiswill lead to understanding the availabilityand reliability, i.e., completeness and accuracyof the data. R eliance on SOC 1 reports – significantlyincreased reliance on SOC 1 reports givenhow businesses are increasingly outsourcinginformation systems and business processesto third parties and storing data in the cloud.º T his finding is also an extension ofunderstanding the business. An auditor’sneed to understand a client’s businessprocesses and information systems extendsto outsourced processes or systems thatcould impact the financial statements.The PA completed in 2020 supported the need forstrong foundational knowledge and skills. Therewas universal support that technology advancesrequire nlCPAs to have a clear understanding ofbasic accounting, auditing, and taxation skills aswell as professional skepticism. The findings wereimplemented in the CPA Exam in 2021.CPA Evolution Practice AnalysisIn mid-2020, the BOE launched this current PA toalign the CPA Exam with the CPA Evolution licensuremodel. Under the CPA Evolution licensure model,all candidates will be required to pass three CoreExam sections covering: AUD, FAR, and REG. Eachcandidate will also choose a Discipline (i.e., BAR, ISC,and TCP) to demonstrate knowledge and skills inthat particular domain. The Disciplines will focus ontopics that apply to nlCPAs engaged in those areasof practice and are less likely to be encountered byCPAs who are not focused in those areas of practice.Regardless of a candidate’s chosen Discipline, theCPA Evolution model leads to CPA licensure, withrights, privileges, and responsibilities consistent withthe present CPA license.The PA research sought to understand the scopeof the initial NASBA and AICPA vision around theCore and Discipline model, which then providedguiding principles for the research. The three CoreExam sections will assess the knowledge and skillsrequired by all nlCPAs and the Disciplines Examsections will assess knowledge and skills requiredof nlCPAs in that particular domain.The PA research was conducted in two phases:(i) the Exploration Phase and (ii) the ConfirmationPhase. The AICPA was assisted by a third-partyresearch firm in conducting focus groups andsurveys in both the Exploration and Confirmationphases.The Exploration Phase research captured valuableinformation about the Core and Discipline Examsections utilizing surveys and focus groups,respectively. Additional follow-up interviews withfocus group participants provided further informationabout some of the new areas of content that wouldbe assessed in the Discipline Exam sections. TheExploration Phase also included multiple meetingswith AICPA and NASBA leadership and frequentdiscussions with the BOE and its Content Committeeand Content Subcommittees.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 9

The Confirmation Phase research collected importantquantitative and qualitative feedback on the CPAExam Blueprints from licensed CPAs working in allareas of the profession. These CPAs participated insurveys where they provided ratings and commentson groupings of task statements. These taskstatements were developed using the results of theExploration Phase research, and were reviewed,modified, and approved by the BOE and its ContentCommittee and Content Subcommittees. TheConfirmation Phase research provided the AICPA, theContent Committee, and the Content Subcommitteesadditional information about content and skillsin the Core and Discipline Exam sections, whichwas considered and incorporated into the draftCPA Exam Blueprints in Appendix A that wereapproved by the BOE.For further discussion of the breadth and depthof the Exploration and Confirmation Phaseresearch, see the Practice Analysis Process inAppendix B below.Realignment of Existing Exam ContentThe creation of three Core Exam sections and threeDiscipline Exam sections, as outlined in the CPAEvolution licensure model, required realignmentof some existing Exam content and identificationof new content to be assessed on the 2024 CPAExam. Substantially all of the content previouslyassessed in the BEC section, with the exception ofthe written communication item that will be removedconcurrent with the launch of the 2024 CPA Exam,3has been included in the AUD, FAR, BAR, and ISCExam sections. A de minimis amount of content wasremoved from the Exam as more fully described inthe Practice Analysis Process in Appendix B.3Additionally, certain content previously assessed inthe FAR and REG sections will now be assessed in theBAR and TCP Discipline Exam sections, respectively.Further, the PA identified new content requiringassessment. For more information on the contentcontained in each of the Core and Discipline Examsections, see Exam Section Commentary below. For further information on the removal of the written communication item, see the Infrastructure-changes-to-the-cpa-exam-in-2024 document.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 10

New Exam Content Identifiedby the Practice AnalysisNew exam content was identified during the PA andis primarily in the ISC and TCP Discipline sections.Personal Financial Planningand Tax PlanningSOC EngagementsThe PA research indicated that nlCPAs play animportant role in advising clients on the basics ofpersonal financial planning and tax planning. The PAresearch indicated that nlCPAs are often involved intax compliance and they naturally progress into moreholistic work involving tax planning and personalfinancial planning for clients.The PA Research identified a significant increase inSOC 2 Report on Controls at a Service OrganizationRelevant to Security, Availability, ProcessingIntegrity, Confidentiality or Privacy — Guide (SOC 2 )engagements. The PA research identified that nlCPAsare performing procedures in recurring SOC 1 andSOC 2 engagements. As more fully described belowunder Exam Section Commentary, the ISC DisciplineExam section will cover aspects of: IT infrastructure, platforms, and services; Security, confidentiality and privacy; and Considerations for SOC engagements.The ISC Discipline Exam section will assess theunique aspects of planning and reporting on bothSOC 1 and SOC 2 engagements, the systemdescription criteria used in SOC 1 and SOC 2 engagements, and how the Trust Service Criteria areused in a SOC 2 engagement when evaluating thesuitability of the design and operating effectivenessof controls relevant to the security, availability, orprocessing integrity of information and systems,or the confidentiality or privacy of the informationprocessed by the systems at an entity.All nlCPAs must understand internal controls overfinancial reporting and the implications of relyingon SOC 1 reports. This was identified in the PAcompleted in 2020. Reliance on SOC 1 reports willcontinue to be covered in the AUD Core Exam section.Newly licensed CPAs have been identified asbeing involved with individual tax planningconsiderations for gross income, adjusted grossincome, taxable income, and estimated taxes; gifttaxation; and specific personal financial planningconcepts including: U nderstanding qualified retirement plans, suchas traditional IRAs, Roth IRAs, 401(k)s, annuities,and employer sponsored plans and preparingschedules used in the decision-making processto select a retirement plan from among multipleoptions and identifying the related advantagesand disadvantages. U nderstanding the risks associated with varyinginvestment options, including equity securities,corporate bonds, and municipal bonds andcalculating the ROI for different investmentoptions, net of the tax impact. P lanning for funding post-secondary educationusing qualified tuition programs, student loansand grants, and scholarships. U nderstanding the use of insurance to mitigaterisk, including life insurance, long-term careinsurance, and umbrella policies.Maintaining the Relevance of the Uniform CPA Examination – Aligning the Exam with the CPA Evolution Licensure Model 11

Data and Technology ConceptsData and technology concepts will be assessed in allCore and Discipline Exam sections. This includes: A focus on understanding how data is structuredand information flows through underlying ITsystems and business processes. D etermining methods to transform data to makeit useful for decision-making. V erifying the completeness and accuracy ofsource data. U sing the outputs of automated tools,visualizations, and data analytic techniques to:º A ssist in risk assessme

Exam as more fully described in the draft CPA Exam Blueprints in Appendix A. 2024 CPA Exam Transition Policy It is important to be aware that there will be a hard cutover from the current CPA Exam sections to the 2024 CPA Exam sections on the January 2024 launch. None of the sections of the current CPA Exam